Haleon misses Q3 forecasts on weak Panadol sales, stronger pound
FY forecast maintained
Shipment delays & client destocking partly hurt painkiller sales
Shares down 2.4%
Recasts lead, adds analyst comment in paragraph 5, updates shares
By Yamini Kalia
Oct 31 (Reuters) -Haleon HLN.L missed third-quarter revenue and profit expectations on Thursday, hit by a stronger pound and lower sales of its painkiller Panadol in Australia and the Middle East.
The company, spun off from British drugmaker GSK GSK.L in 2022, maintained its annual profit and revenue forecast though, citing strength in "power brands" like Sensodyne toothpaste and anti-inflammatory drug Advil.
Panadol use is down after elevated demand last year due to COVID-19 and normal flu, Haleon CFO Tobias Hestler told Reuters, adding that the company underestimated the effect of those trends normalising this year.
There were also shipping delays caused by the Middle East conflict and a big retail customer destocking in Australia, Hestler noted.
"We think consensus earnings are unlikely to move much on this update, but the margin leverage/volume miss will weigh a little today," said Jefferies analysts.
Haleon expects a negative currency impact of about 4% on revenue and about 6%-6.5% on adjusted operating profit for 2024.
Shares in the FTSE 100 .FTSE firm, which have gained about 16% so far this year, were down 2% at 366.1 pence by 1243 GMT.
Third-quarter revenues of 2.78 billion pounds ($3.61 billion) missed expectations of 2.83 billion pounds, despite a 6.1% growth in organic revenue.
Adjusted pre-tax profit fell by 7.2% to 639 million pounds and missed estimates of 675 million pounds.
Haleon reported more balanced growth in sales and prices this quarter, a trend also seen at consumer firms Unilever ULVR.L and Danone DANO.PA.
"We're back to a balance of price and volume. That's what we want to have longer term," Hestler said, adding that the company has moderated price increases.
($1 = 0.7711 pounds)
Reporting by Yamini Kalia in Bengaluru; editing by Sumana Nandy and Elaine Hardcastle
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