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Former GSK consumer arm Haleon has posted double-digit growth in its first financial results as a listed company, although it expects growth to slow in the second half.

The group saw organic revenue growth of 11.6% in the first six months of the year, with growth of its key power brands ahead of this at 13.4%.

Organic growth consisted of 3.7% growth in price and 7.9% volume/mix.

The group said it saw strong growth and market share through increased household penetration, winning new consumers with product innovation and activation, as well as channel expansion and geographic expansion.

In oral health, where revenue grew 5.1% organically, the group saw sales double the growth rate of the overall market, mainly driven by improved penetration of Sensodyne, particularly in e-commerce in the US and Parodontax in major markets.

Vitamins, minerals and supplements saw organic revenue growth was 11.9%, with increased share overall including in the US and China.

Pain relief saw organic growth of 11.7% driven by Panadol and respirator health saw a 46.7% jump in organic growth reflecting the strong cold and flu season.

Digestive health and other saw organic revenue growth of 3.5% as more challenging conditions in the preventative antacid market adversely impacted Nexium.

Reported operating profit increased 22.1% to £900m in the first half, with margin 17.3% up 120bps.

In the first half, Haleon managed to offset 40% of cost inflation through forward buying and other initiatives, as well as having hedged or locked through contracts 90% of materials in the second half.

For the rest of the year, 2022 revenue and adjusted operating margin guidance remains unchanged.

Organic revenue growth is expected to slow to 6-8%, while adjusted operating margin in is expected to be slightly down at constant currency on last year.

It said strong growth, the Pfizer synergies, pricing and ongoing supply efficiencies, will largely offset Haleon standalone costs (£175-£200m), continued investment, inflationary cost pressure and the impact of Russia and Ukraine.

Separation and admission costs are now expected to be approximately £0.5bn from 2022 to 2024, with 80% of costs incurred in 2022.

CEO Brian McNamara commented: “I am incredibly proud that in the first half Haleon successfully completed its separation from GSK and became an independent listed company.

“Haleon performed strongly in the first half of the year with double digit revenue growth, importantly with a healthy balance of price and volume/mix reflecting brand strength across our portfolio. Furthermore, we gained or maintained share in most of our business, demonstrating that continued investment is driving sustainable growth, even in difficult market conditions. I am also pleased that we delivered margin expansion in the first half despite significant cost inflation and absorption of standalone costs for the business.

“Whilst navigating the current macro-economic challenges and uncertainties, positive momentum in our business has continued into the second half. This combined with the strength of the business reinforces our confidence that we are well positioned to deliver on guidance this year and over the medium term.”

Haleon shares are up 1% to 262.1p so far this morning.

Morning update

German consumer group Henkel has raised its outlook for the current year amid stronger than expected sales.

Henkel now expects organic sales growth of 5.5% to 7.5%, up from 4.5% to 6.5%.

Henkel CEO Carsten Knobel said: “In view of the continued strong sales growth in Adhesive Technologies, today we have updated the outlook for fiscal 2022 for both the Adhesive Technologies business unit and the Henkel Group.

“In addition, we are continuing to work intensively on comprehensive measures to compensate as far as possible the impact of the drastic increase in raw material, logistics and energy costs on our earnings development.”

For Beauty Care, Henkel continues to expect organic sales growth of -3%% to -1% due to the implementation of the portfolio measures announced for 2022.

For the Laundry & Home Care business unit, Henkel continues to expect organic sales growth of 4% to 6%.

The expectation for adjusted return on sales (EBIT margin) at group level remains unchanged in the range of 9% to 11%.

At a capital markets day today Henkel highlighted the growth and earnings potential of the two business units, Adhesive Technologies and the future Consumer Brands business.

In implementing the new organisational structure, Henkel is already ahead of the originally announced timeframe.

Adhesive Technologies and Consumer Brands are well positioned for capturing future growth and profit opportunities, the group said.

On the markets this morning, the FTSE 100 is up 0.4% to 7,264.8pts.

Early risers include Bakkavor, up 4.7% to 92.3p, Diageo, up 1.7% to 3,809.5p and McBride, up 1.7% to 24.4p.

Fallers include THG, down 8.6% to 39.4p, Just Eat Takeaway.com, down 6.8% to 1,390.2p and Ocado, down 5.4% to 634.8p.

This week in the City

The shortened week in the UK sees few company updates, although the economy will be the focus at the end of the week with the emergency mini-budget announcement from the new Chancellor on Friday.

Friday also brings the latest monthly GFK consumer confidence figures, while Nielsen’s grocery market share data is published on Wednesday.

In company news, Supermarket Income Reit posts full year results tomorrow, PZ Cussons has its annual earnings on Wednesday, while in the US General Mills and Costco update the market tomorrow and Wednesday respectively.

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