Haleon, the FTSE 100 consumer healthcare giant behind Nurofen and Day Nurse, reported a dip in first-quarter sales volumes due to what it called a "weak cold and flu season." The company said overall organic revenue grew 2.2%, driven by a 2.4% price increase, but sales volumes fell 0.2% as cold and flu products saw a double-digit decline.
Oral health shines
Despite the seasonal headwinds, Haleon's oral health business performed strongly, led by Sensodyne toothpaste, which posted a 10% sales increase. The company also reported a return to growth in North America, albeit at a modest 1%.
Chris Beckett, consumer staples analyst at Quilter Cheviot, commented: "Haleon has a strong performing asset in Sensodyne toothpaste. The problem is that it is only firing on two cylinders and its other categories aren't doing as well as they could or should be."
London roots and global ambitions
Haleon traces its origins to a Quaker apothecary shop in Lombard Street, London. Its modern portfolio includes household names like Centrum, Voltaren, Theraflu, and Panadol. The company was spun out of GSK in 2022 in Europe's largest IPO in a decade, with a current market value of around £31bn.
CEO Brian McNamara said: "We delivered a competitive performance in a challenging market, with North America returning to growth and oral health again performing strongly."
Haleon has expanded its toothpaste brands to India, where smaller, cheaper packages have made it the second-largest market for Sensodyne after the US.
Market reaction
Shares fell 3% to 341p on Wednesday, down over 5% in the past year but still above the 330p IPO price. Hedge fund Marshall Wace disclosed a short position in May 2024 when shares were near their peak of 419.5p.
Beckett concluded: "If everything was sharper, it would add up to a much better growth figure and a more attractive narrative for investors. Haleon isn't a million miles away from being a very good story, but it needs more than the toothpaste business to start performing."
