2Q26 Results: margin beat

Research evidence excerpt

2Q26 Results: margin beat

UpdateMconsumer environment. Oral Health consumption outperformed the market

by >2x. Haleon continue to expects North America to improve in H2

underpinned by full benefits from shelf resets and distribution gains across

Oral Health, VMS, and Pain Relief, further supported by more innovation roll-

out and reduced Respiratory Health drag. The company continues to expect

stronger growth in H2.

• Challenging market backdrop flagged in Europe & Middle East. EMEA/

Latam Q2 OSG of +1.7% came in below cons at +2.1%, with LatAm Q2 +HSD

% (an acceleration vs Q1, leading to H1 +MSD%) benefitting from an

improved macro environment and stronger execution. Middle East/Africa

slowed to flat in Q2 (H1 overall +MSD%) impacted by weakness in UAE given

geopolitical conflicts. Europe showed modest growth in H1 reflecting a weak

consumer backdrop and an overall declining market.

• C&F still a drag: while a smaller quarter, the category still weighed on

growth (as with Reckitt also). During the quarter, APAC saw significant DD%

declines from lower levels of incidence, particularly in China. This resulted in

Respiratory Health -6.5% in Q2, taking H1 to 4.7%). Smokers Health saw a

moderation of its decline, which was -MSD% in Q2 vs -HSD% for H1.

• Oral Health the key driver again. Q2 OSG +6.2% representing a moderation

from Q1 +8.3%, though with strong market share gains in the half supported

by innovations and geographic expansion combined with strong execution.

By region, Oral Health was +MSD% in North America and EMEA/Latam and

+DD% in APAC.

• Margin beat. Adj EBIT margin was up +160bps y/y to 24.3% (+120bps at

cFX), well ahead of VA consensus assumption of an +100bps increase to

23.6%. Progression was primarily driven by adj gross margin expansion of