Haleon launches buyback and hikes dividend after strong year
Consumer healthcare giant Haleon has reported a strong financial performance for 2024, with organic revenue growth of five per cent.
However, revenue declined by 0.6 per cent on a reported basis to £11.2bn, while adjusted operating profit increased 9.8 per cent to £2.5bn.
Haleon focuses on over-the-counter medicines, oral health, and vitamins, minerals and supplements. Its portfolio includes brands such as Sensodyne, Panadol, and Centrum.
The company’s Power Brands, including Sensodyne and Centrum, delivered 6.3 per cent organic growth.
Gross margin expansion and productivity savings helped the company increase its adjusted operating profit margin by 100 basis points to 22.3 per cent.
Adjusted diluted earnings per share rose 3.5 per cent to 17.9p.
Haleon generated £1.9bn in free cash flow, up £369m year-on-year. It reduced net debt to £7.9bn.
The company’s leverage ratio improved to 2.8 times net debt to adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).
A 10 per cent increase in the total full-year dividend was proposed, raising the payout ratio to 37 per cent, with a final dividend of 4.6p per share.
The firm allocated £500m to share buybacks for the year.
Haleon looks to growth in 2025
Looking ahead to 2025, Haleon expects organic revenue growth of between four and six per cent, with organic operating profit growth forecasted to exceed revenue growth.
Brian McNamara, chief executive officer, stated: “I am pleased with our performance in 2024 and the progress we are making to build Haleon into an agile, competitive and consumer-focused organisation.
“We are delivering against our growth plans, achieving five per cent organic revenue growth for the year with organic profit growth ahead of this at 9.8 per cent. Importantly, 71 per cent of our business gained or maintained share in the year, demonstrating the strength and appeal our brands continue to have with consumers around the world.”
He added: “We continued to generate strong cash flow, with net debt leverage now standing at 2.8 times, and returned over £1bn to shareholders in 2024 through dividend payments and our first-ever share buyback programme.
“We reinvested some of the proceeds from our divestments into our China Joint Venture, an important milestone in a key strategic market where we now have an 88 per cent stake with an option to acquire full ownership in 2025.”
McNamara concluded: “Looking ahead, we are well positioned to drive organic revenue growth within our medium-term guidance range, with strong organic profit growth in 2025.”