(Reuters) -Advil maker Haleon, the world’s largest standalone consumer healthcare firm, on Wednesday raised its annual revenue growth forecast, betting on demand for its oral and respiratory health products despite a cost-of-living squeeze.
Consumers are prioritising money towards essential, daily-use products amid an inflation crisis in some parts of the world, boosting sales for companies such as Haleon.
U.S.-based rival Kenvue, the former consumer health unit of Johnson & Johnson that makes Tylenol and Benadryl, forecast full-year profit above market estimates in July.
Haleon now expects full-year organic revenue growth of between 7% and 8%, compared with an earlier forecast of the top-end of a 4% to 6% range. Analysts on average expect growth of 6.2%, according to company-supplied estimates.
The company, whose products include Sensodyne toothpaste and Centrum multivitamins, also forecast adjusted operating profit growth of 9% to 11% for the year.
The results come after GSK last week raised its full-year profit and sales outlook, lifted by strength in its shingles vaccine Shingrix and HIV medicines, helping to revive investor confidence in CEO Emma Walmsley.
Both sets of results highlight the benefits of Haleon’s spin off from the British drugmaker company last year.
Meanwhile, organic revenue for the six-month period ended June 30 was up 10.4%, beating analysts’ expectations of 8.2%.
Volumes were up 2.9% in the same period on a 7.5% increase in the price mix.
“With price being the main contributor to growth, it was pleasing to see that volume was also in positive territory,” said Derren Nathan, head of equity analysis at Hargreaves Lansdown.
In contrast, consumer companies like Unilever, Nestle and Reckitt Benckiser, which continued to raise prices in the second quarter to minimise damage to profits and margins, recorded a drop in volumes.
Haleon’s respiratory health business especially benefited from strong sales of Theraflu during the period, due to a rise in cough, cold and flu cases globally. The segment posted organic revenue growth of 22%.
Adjusted operating profits grew 8.9% to 1.27 billion pounds ($1.62 billion) in the first-half of the year.
Haleon launched a cost-cutting programme in March, aiming at saving 300 million pounds over the next three years, saying it expected to record about 150 million pounds in restructuring costs in full year 2023 and 2024.
($1 = 0.7817 pounds)
(Reporting by Eva Mathews in Bengaluru; Editing by Sherry Jacob-Phillips, Jamie Freed and Sharon Singleton)
