Haleon (NYSE:HLN) executives told investors the company made progress on its “Win as One” strategy in 2025, but acknowledged that organic revenue growth fell short of medium-term expectations as category growth slowed and consumer confidence weakened in several key markets.
2025 results: slower top-line, strong margin and cash performance
Management reported full-year 2025 organic sales growth of 3%, below the company’s medium-term guidance range of 4% to 6%. The company attributed the shortfall primarily to lower-than-historical category growth tied to its winter season portfolio and multi-year low consumer confidence in some major geographies. Haleon also pointed to a weaker cold and flu season, which management said reduced full-year organic revenue growth by about 40 basis points and lowered fourth-quarter growth by about 150 basis points.
Despite the slower top line, executives emphasized profitability and cash generation. The company reported:
- 220 basis points of gross margin improvement in 2025
- 10.5% organic operating profit growth
- 60 basis points of operating profit margin improvement at reported rates, with operating profit margin of 22.9%
- Free cash flow of GBP 1.9 billion, supported by an 11-day reduction in working capital
- Leverage of 2.6x net debt to adjusted EBITDA
Reported revenue declined 1.8%, which management said reflected a 2% drag from divestments and a 2.8% foreign exchange headwind.
Investment and productivity: cost savings and higher brand spending
Haleon leaders said they continued investing behind innovation and brand building while expanding margins through productivity. Advertising and promotion (A&P) spending increased 7.5% at constant currency to 20.5% of sales, while R&D spending rose 7.7% at constant currency. Management said it is also working to improve spend efficiency and ROI.
On productivity, executives highlighted progress on an GBP 800 million gross cost savings program, which helped drive operating leverage in 2025. The company also said it is tracking toward targets to reduce SKUs, packaging, and formulations by about 30% over the next three years, and that multi-sourcing of ingredients has increased to around 90%.
Separately, management discussed financial impacts tied to a new operating model. While noting that cost savings are not the primary driver, Haleon said the changes are expected to deliver GBP 175 million to GBP 200 million of gross annualized savings, weighted approximately one-third in the first year and two-thirds in the second year. One-time costs to achieve the savings are expected to be roughly 1:1 versus savings, with a higher weighting of cost in the first year and with the majority expected to be cash-related.
Category performance: oral health a standout, respiratory pressured
Management pointed to oral health as a consistent outperformer. For 2025, oral health grew 7.9%, which the company said was about 1.5 times the market. Executives cited high single-digit growth in Sensodyne and double-digit growth in parodontax, supported by execution, expert recommendation, and innovation.
Haleon also reviewed performance in other categories:
- Vitamins, Minerals and Supplements (VMS): up 1.9%, with “good performance outside the U.S.” and mid-single-digit growth driven by premium innovation, including Centrum Daily Kits in China and Korea and Centrum Kids in the Philippines. North America VMS was impacted by a softer multivitamin category and distribution losses that management said have been addressed.
- Pain relief: up 2.3%, with Panadol showing mid-single-digit growth driven by Optizorb activation and the Dual Action launch. Voltaren patches in Europe and a 2% formulation in China were cited as improving trends, and Advil Liqui-Gels Minis in the U.S. was described as showing early positive signs.
- Respiratory health: down 1.9%. Otrivin nasal mist was described as growing the category, with repurchase intent above 80%, but results were more than offset by a challenging U.S. environment in Smokers’ Health, which declined double-digit for the year, and by a slower-than-normal start to cold and flu in Q4.
- Digestive health: up 0.5%, driven by TUMS Gummy Bites innovation and Benefiber’s campaign, offset by a decline in Nexium.
- Therapeutic skin health and other: up 2%, with strength in XERAC partly offset by a decline in Fenistil.
Regional trends: North America declines, Asia Pacific leads growth
By region, North America remained the key laggard in 2025. The company said category growth was soft and consumer confidence low, with shoppers seeking value and convenience. North America organic revenue declined 0.4% for the year (including 1% price and a 1.4% decline in volume/mix). In the fourth quarter, the region posted a 1% organic revenue decline. Management attributed the quarter’s performance to pricing and oral health outperformance, offset by the weaker cold and flu season, the lapping of Eroxon selling, and proactive inventory reductions in the drug channel, which it said is now at a more appropriate level.
EMEA and Latin America delivered organic revenue growth of 4.7%, driven mostly by price. Executives described Europe as resilient despite fragile consumer confidence, cited a positive economic picture in the Middle East and Africa, and said the macro backdrop in Latin America—particularly Brazil—was increasingly challenging. Asia Pacific grew 5.2% organically, with management stating that 80% of growth came from volume. China grew mid-single-digit, and India delivered double-digit growth, supported by expanded distribution and in-market execution.
Capital allocation and 2026 outlook
On capital returns, the company said it returned GBP 1.1 billion of cash to shareholders in 2025 and completed its China JV acquisition. For 2026, Haleon announced an allocation of GBP 500 million to share buybacks. The board also proposed a final dividend of 4.9 pence, lifting the total dividend for the year by 7.6% to 7.1 pence.
Looking ahead, management said it is not planning for a material improvement in global category growth in 2026 and expects consumers in some markets to remain cautious. The company guided to 3% to 5% organic revenue growth in 2026, supported by an expected return to growth in North America, continued strength in emerging markets, and resilience in Europe, while noting a more challenging macro environment in Brazil. Haleon also expects another year of high single-digit adjusted operating profit growth at constant currency, supported by gross margin improvement of 50 to 80 basis points.
Executives reiterated confidence in the medium-term target of 4% to 6% annual organic revenue growth with high single-digit adjusted operating profit growth at constant currency, citing ongoing brand investment, productivity initiatives, and an operating model designed to increase agility and speed of execution.
About Haleon (NYSE:HLN)
Haleon plc (NYSE:HLN) is a global consumer healthcare company formed through the separation of a large pharmaceutical group’s consumer health business in 2022. Headquartered in the United Kingdom, Haleon develops, manufactures and markets a broad portfolio of over‑the‑counter medicines, oral health products, vitamins, minerals and supplements, and other consumer health goods designed for daily self‑care and symptom relief.
The company’s product mix spans categories such as oral care (toothpastes and sensitivity treatments), pain relief and analgesics, respiratory remedies, digestive health products, topical treatments and nutritional supplements.
