Haleon's 2024 Q4 Earnings Call: Contradictions in Growth Outlook, Inventory Management, and VMS Performance

These are the key contradictions discussed in Haleon's latest 2024Q4 earnings call, specifically including: Growth Outlook and 2025 Confidence, Inventory Management and Working Capital Efficiencies, Inventory Revaluation Impact, and VMS Category Performance:



Geographic Revenue Performance and Inventory Dynamics:
- Haleon's growth was skewed toward the second half of 2024, with soft performance in mature markets during the first half.
- This was primarily due to a low cold and flu season in the US and other markets, leading to an inventory build-up in the trade, which impacted respiratory health and other categories.

Oral Health and Clinical White Innovation:
- The Oral Health business showed strong performance, led by the Clinical White and Clinical Repair innovations.
- The success is attributed to the expansion of these offerings across multiple markets and dental recommendations from consumers.

Currency Exchange Impact and Capital Allocation:
- Haleon expected a currency headwind in 2025, with emerging market currency fluctuations impacting results.
- Despite this, the company announced a £500 million share buyback and maintained flexibility for bolt-on M&A opportunities.

Emergency Category and VMS Growth:
- The Emergency category, part of the VMS segment, reported high single-digit growth in 2024.
- While seasonal spikes affected performance, the company believes the VMS category is stable, thanks to the strong global presence of Centrum.

US Retail Environment and Inventory Valuation:
- The US retail environment faced pressure due to a few struggling drug channel retailers managing cash levels.
- Inventory revaluation impacts phasing between first and second halves, with benefits seen in the first half of 2024 and minimal impact expected in 2025.