Haleon Q1 results: Asia-Pacific VMS sees high single digit growth led by Centrum, Caltrate
Revenue from Centrum was up high-single digit, which the firm said was “due to strength in Asia Pacific, especially in China, South East Asia and Taiwan, and across Europe, Middle East, and Africa (EMEA).” Part of the contributing factor was due to successful consumer campaigns.
Caltrate, on the other hand, was also up high single digit, with good growth in China.
Haleon announced on May 3 that its Q1 revenue was up 13.7 per cent to hit 2.99bn euros (US$3.30bn).
Gross profit was 1.84bn euros (US$2.03bn), up from 1.61bn euros (US$1.78bn) last year, while profit attributable to shareholders was up from 343m (US$379.04m) euros to 389m euros (US$429.87m).
China, the firm’s second largest market, has reported nearly 30 per cent revenue growth.
“China, our second largest market overall was up nearly 30 per cent following the easing of COVID related restrictions and subsequent rising cases.
“Elsewhere as we expected, Australia and New Zealand declined high single digit given the high comparative last year from COVID related demand,” said Tobias Hestler, chief financial officer during the webcast of the results.
One of the strategies that the firm has adopted is to introduce both ‘power’ global brands and local brands in the regions that it operates in.
To which, the firm has been seeing a mixed performance for local VMS brands in Q1, Hestler said in response to analysts’ queries.
“As you've seen, Centrum and Caltrate are both very healthy, exactly what we've always said. Geographic expansion, activation of Centrum around the world, further innovation on the product…and also Caltrate doing well in China. So that covers the three largest brands in the categories.
“And I think then we have some local VMS brands that had a bit of a mixed performance in Q1.
“We had for example a brand like Scott's in Southeast Asia. Again, it’s over a lot of COVID related demand last year that came down.”
However, he believes that these are temporary declines that would rebound.
This is because trends from the past four years have seen that the brands have been growing due to new consumers.
“I think those are temporary declines that that will come back…Just take a four years step back on VMS, [you will see] seven per cent growth over four years on an annualised basis, which just shows you that we've been able to continue to grow the consumers that came into the category in addition to us driving growth from innovation and expanding the brand.”
In line with this strategy, the firm launched a series of new supplements under the brand Pana Natra for pain management in Australia during early April.
There are currently three SKUs addressing joint pain, muscle pain, and sleep. All three products are plant-based and come in either capsules or tablets.
Centrum, on the other hand, also developed products in the gummy format.
The company expects to deliver towards the upper end of the four to six per cent organic revenue growth guidance range for this year.
“Our strategy is delivering strong growth and our Q1 performance reinforces my confidence in our ability to deliver. Strong innovation and a continued focus on cost discipline underpins this confidence.
“As we shared at the AGM, for FY23 we expect to deliver towards the upper end of the 4-6 per cent organic revenue growth guidance range,” Haleon’s CEO Brian McNamara said.