Haleon Share Price Rallied 9.1% as Its FY ’23 Profits Soared High

The HALEON PLC (LON: HLN) share price rallied 9.1% after releasing its full-year results for the year ended 31 December 2023. The company reported that it experienced robust expansion, with organic growth observed across all product categories and geographical regions, alongside a favourable volume/mix impact.

The consumer healthcare company’s organic growth rate stood at 8.0%, driven by a 7.0% price increase and a 1.0% rise in volume/mix. The annual revenue rose by 4.1% to £11,302 million, though foreign exchange fluctuations trimmed revenue by 3.8%, and mergers and acquisitions had a minimal negative impact of 0.1%.

The company's Power Brands witnessed a 9.1% organic growth, with six out of nine Power Brands achieving double-digit growth. Approximately 58% of the business either gained or maintained its market share. 

A notable increase in the FY23 operating profit was attributed to positive operating leverage. The adjusted operating profit saw a 10.4% rise at constant currency to £2,549 million; excluding mergers and acquisitions, the increase was slightly higher at 10.8% at constant currency.

The adjusted operating profit margin improved to 22.6%, a 50 basis points increase at constant currency, and a 60 basis points rise when excluding mergers and acquisitions, despite a 70 basis points negative impact from foreign exchange.

The reported operating profit grew 9.4% to £1,996 million, as reduced separation and admission costs partially mitigated the negative impact on foreign exchange. The adjusted diluted earnings per share (EPS) decreased by 6.0% to 17.3p, mainly due to the annualisation of interest costs and unfavourable foreign exchange movements.

The firm demonstrated strong cash flow, which helped reduce leverage and facilitated increased dividends and a share buyback initiative. The net cash flow from operating activities for the fiscal year was £2,100 million, with a free cash flow of £1,575 million.

The company’s net debt as of 31 December 2023 was £8,514 million, equating to a net debt/adjusted EBITDA ratio of 3.0x. The company proposed increasing the dividend payout to 35% (up from 30% the previous year), with a final dividend of 4.2p per ordinary share. 

Haleon share price. 

The Haleon share price rallied 9.09% to trade at 342.1p from Wednesday’s closing price of 313.6p.