Haleon released its first earnings report since its split from GSK over the summer.
The newly independent company reported revenue growth of 13.4% in H1 2022, totaling £5.19 billion. Haleon’s reported operating profit in the first half of the year increased 22.1% to £900 million, while net cash from operating activities hit £680 million.
The company benefited from the strong performance of several key products, including Theraflu, Advil and Centrum, among others. Additionally, Haleon’s e-commerce unit accounted for 9% of total sales.
For the full year, Haleon projected organic revenue growth in the range of 6-8% while its operating margin guidance remains unchanged relative to its previous trading update. The company also stated that its separation and admission costs are estimated to be £500 million between fiscal years 2022 and 2024, though 80% of them were incurred this year.
The first half of 2022 was a busy time for Haleon, which made its split from GSK official in July, following a more than yearlong spin-off process. In that time, the British pharma giant received numerous bids for the consumer health unit and bestowed it with a new name. Meanwhile, Pfizer announced in June that it would divest its 32% stake in Haleon.
CEO Brian McNamara praised the company for achieving margin expansion during this period despite “significant cost inflation” and standalone costs.
“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,” McNamara said in a statement Tuesday. “Furthermore, we gained or maintained share in most of our business, demonstrating that continued investment is driving sustainable growth, even in difficult market conditions.”
Haleon released its earnings one day after Theravance Biopharma’s board of directors authorized a $250 million capital return program to purchase GSK’s equity stake in the company. The company stated that it plans to complete this buyback program by the end of next year.
Haleon also released a statement that it is not a party to ongoing liability litigation involving Zantac, notifying GSK and Pfizer that it rejects its requests for indemnification.
There are currently thousands of lawsuits filed charging that the once-popular heartburn drug contained a probable human carcinogen, N-nitrosodimethylamine (NDMA), at low levels. Recalls began in September 2019 before the Food and Drug Administration issued a market withdrawal of the product in April 2020.
In its statement, Haleon referred to the scope of the indemnities laid out in the joint venture agreement signed between the two pharma giants in 2018. Haleon said that this agreement only covers consumer healthcare businesses conducted when the JV was formed in 2018, adding that neither company marketed OTC Zantac in North America.