As filed with the Securities and Exchange Commission on September 29, 2022

Registration No. 333-266358

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

POST-EFFECTIVE AMENDMENT NO. 1

TO

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Haleon plc

(Exact name of registrant as specified in its charter)

 

 

 

England and Wales		2844		Not Applicable
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Building 5, First Floor, The Heights, Weybridge, Surrey,

KT13 0NY, United Kingdom Tel: +44 1932 822000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

GlaxoSmithKline Consumer Healthcare Holdings (US) LLC

184 Liberty Corner Road, Suite 200,

Warren NJ 07059, United States

Telephone: +1 908 293 4000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

John Horsfield-Bradbury Sullivan & Cromwell LLP 1 New Fetter Lane London EC4A 1AN, United Kingdom Tel.: +44 20 7959 8900		Audra D. Cohen Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004 Tel.: +1 212-558-4000		Bjarne P. Tellmann Senior Vice President and General Counsel Haleon plc Building 5, First Floor, The Heights, Weybridge, Surrey, KT13 0NY, United Kingdom Tel: +44 20 8047 5000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

Explanatory Note

This Post-Effective Amendment No. 1 to the Registration Statement on Form F-1 (File No. 333-266358), as amended (the “Registration Statement”) of Haleon plc (the “Company”), originally declared effective by the Securities and Exchange Commission (the “SEC”) on August 9, 2022, is being filed pursuant to the undertakings in Item 9 of the Registration Statement to include the information contained in the Company’s Report on Form 6-K that was furnished with the SEC on September 20, 2022, including the Company’s unaudited consolidated interim financial statements as of 30 June 2022 and for the six months ended 30 June 2022 and 2021. The information included in this Post-Effective Amendment No. 1 updates and supplements the Registration Statement and the Prospectus contained therein.

The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to completion, dated September 29, 2022

PRELIMINARY PROSPECTUS

Haleon plc

3,559,371,012 Ordinary Shares

295,506,362 American Depositary Shares, representing 591,012,724 Ordinary Shares

 

 

This prospectus relates to the offer and sale from time to time by the selling securityholders identified in this prospectus (collectively, the “selling securityholders”) of up to (i) 3,559,371,012 ordinary shares, nominal value £0.01 per share (“Ordinary Shares”) and (ii) 295,506,362 American Depositary Shares (“ADSs”), representing 591,012,724 Ordinary Shares, which were issued to the selling securityholders in connection with the Separation (as defined below).

This prospectus also covers any additional securities that may become issuable by reason of share splits, share dividends or other similar transactions.

Our registration of the Ordinary Shares and ADSs covered by this prospectus does not mean that the selling securityholders will offer or sell any of the Ordinary Shares and ADSs. The selling securityholders may sell the Ordinary Shares and ADSs covered by this prospectus in a number of different ways and at varying prices. For information on the possible methods of sale that may be used by the selling securityholders, you should refer to the section entitled “Plan of Distribution” beginning on page 284 of this prospectus.

All of the Ordinary Shares and ADSs offered by the selling securityholders pursuant to this prospectus will be sold by the selling securityholders for their respective accounts. We will not receive any of the proceeds from the sale of Ordinary Shares or ADSs by the selling securityholders.

We will pay certain expenses associated with the registration of the securities covered by this prospectus, as described in the section titled “Plan of Distribution”.

The Ordinary Shares are admitted to the premium listing segment of the Official List of the UK Financial Conduct Authority (“FCA”) and traded on the main market for listed securities of the London Stock Exchange plc (“LSE”) under the symbol “HLN”. The ADSs are listed on the New York Stock Exchange (“NYSE”) under the symbol “HLN”. On 28 September 2022, the closing sale price as reported on the LSE of the Ordinary Shares was £2.79 per share and the closing sale price as reported on the NYSE of the ADSs was $5.98 per ADS.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.

Our principal executive offices are located at Building 5, First Floor, The Heights, Weybridge, Surrey, KT13 0NY, United Kingdom.

Investing in our securities involves a high degree of risk. Before buying any securities, you should carefully read the discussion of material risks of investing in our securities in “Risk Factors” beginning on page 31 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Prospectus dated                 , 2022

TABLE OF CONTENTS

 

PRESENTATION OF FINANCIAL AND OTHER INFORMATION			1
PROSPECTUS SUMMARY			9
THE OFFERING			13
KEY FINANCIAL DATA			15
RISK FACTORS			31
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS			64
USE OF PROCEEDS			66
DIVIDEND POLICY			67
CAPITALISATION			68
BUSINESS			70
BUSINESS OVERVIEW			78
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			146
BOARD OF DIRECTORS AND SENIOR MANAGEMENT			206
COMPENSATION			223
DESCRIPTION OF SECURITIES			239
MEMORANDUM AND ARTICLES OF ASSOCIATION			247
EXCHANGE CONTROLS			253
AMERICAN DEPOSITARY SHARES			254
BENEFICIAL OWNERSHIP			266
SELLING SECURITYHOLDERS			270
MATERIAL CONTRACTS			272
TAXATION			286
PLAN OF DISTRIBUTION			292
SHARES ELIGIBLE FOR FUTURE SALE			297
EXPENSES RELATED TO THE OFFERING			299
LEGAL MATTERS			300
AUDITORS			300
EXPERTS			300
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT			301
WHERE YOU CAN FIND MORE INFORMATION			302

We and the selling securityholders have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.

Except as otherwise set forth in this prospectus, neither we nor the selling securityholders have taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States.

 

i

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form F-1 that we filed with the United States Securities and Exchange Commission (the “SEC”). The selling securityholders may, from time to time, offer and sell any combination of the securities described in this prospectus in one or more offerings on a delayed or continuous basis.

We will not receive any proceeds from the sale of Ordinary Shares or ADSs to be offered by the selling securityholders pursuant to this prospectus. We will pay the expenses, other than underwriting discounts and commissions, if any, associated with the sale of our Ordinary Shares or ADSs pursuant to this prospectus. To the extent required, we and the selling securityholders, as applicable, will deliver a prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is part, to update the information contained in this prospectus. The prospectus supplement or post-effective amendment may also add, update or change information included in this prospectus. You should read both this prospectus and any applicable prospectus supplement or amendment, together with additional information described below under the caption “Where You Can Find More Information.” We have not, and the selling securityholders have not, authorized anyone to provide you with any information or to make any representation other than those contained in this prospectus or in any free writing prospectuses we have prepared. The information contained in this prospectus is current only as of the date on the front cover of the prospectus, regardless of the time of delivery or of any sale of our securities.

No offer of these securities will be made in any jurisdiction where the offer is not permitted.

Unless the context indicates otherwise, the terms “Haleon” or the “Company” refer to Haleon plc, and “the Group,” “we,” “our,” “us” or like terms, when used is in the context of any period prior to Separation (including, for the avoidance of doubt, the periods covered by the Financial Statements and Interim Financial Statements (each as defined below)), refer to CH JVCo together with its consolidated subsidiaries and subsidiary undertakings from time to time, and when used in the context of any period following Separation, refer to the Company together with its consolidated subsidiaries and subsidiary undertakings from time to time.

References to “Pounds Sterling,” “pence,” “£” or “p” are to the lawful currency of the United Kingdom, references to “€” are to the common currency of the European Monetary Union, and references to “USD,” “$” or “cents” are to the lawful currency of the United States.

CERTAIN DEFINED TERMS

In this prospectus:

 

“Consumer Healthcare Business”

the business of researching and developing, manufacturing, distributing, marketing, selling, promoting and/or otherwise commercialising Consumer Healthcare Products, in each case as conducted by the Company and its consolidated subsidiaries and subsidiary undertakings, together with any assets and/or entities that will form part of the Group pursuant to the Asset Transfer Framework Agreement (as defined below) and other ancillary and implementing agreements;

 

“CH JVCo”

GlaxoSmithKline Consumer Healthcare Holdings (No. 2) Limited, the holding company for the Consumer Healthcare Business prior to the Separation (as defined below);

 

ii

“Demerger”

the demerger of the predominant part of GSK’s interest in CH JVCo and its consolidated subsidiaries, by way of an interim dividend (the “Demerger Dividend”), in specie, declared by the board of directors of GSK and satisfied on 15 July 2022 by the transfer by GSK of the GSKCHH A Ordinary Shares (as defined below) to the Company in consideration for the issuance by the Company of Ordinary Shares to the holders of GSK Shares as of the Record Time (as defined below) in accordance with the Demerger Agreement (as defined below);

 

“Deposit Agreement”

the deposit agreement entered into between the Company, JPMorgan Chase Bank N.A., as depositary, and all holders and beneficial owners from time to time of ADSs issued thereunder;

 

“Directors”

the directors of the Company as at the date of this prospectus, as set out in “Board of Directors and Senior Management—Directors,” as the context requires;

 

“EEA”

the European Economic Area;

 

“EU”	the European Union;

 

“EU Member State” or “Member State”

a member state of the EU;

 

“FDA”

the US Food and Drug Administration;

 

“FMCG”

fast-moving consumer goods;

 

“GSK”

GSK plc;

 

“GSK ADS Custodian”

JPMorgan Chase Bank N.A., custodian of the GSK Shares underlying the GSK ADSs;

 

“GSK Group”

GSK and its consolidated subsidiaries and subsidiary undertakings from time to time, excluding those companies which form part of the Group;

 

“GSK ADSs”

American depositary shares of GSK, each representing two GSK Shares;

 

“GSK Shares”

ordinary shares of GSK plc;

 

“GSKCHH”

GlaxoSmithKline Consumer Healthcare Holdings Limited, the GSK subsidiary which held GSK’s interests in CH JVCo

 

“GSKCHH A Ordinary Shares”

A Ordinary Shares in the capital of GSKCHH;

 

“GSKCHH B Ordinary Shares”

B Ordinary Shares in the capital of GSKCHH;

 

“GSKCHH C Ordinary Shares”

C Ordinary Shares in the capital of GSKCHH;

 

“ADS Custodian”

JPMorgan Chase Bank N.A., custodian of the Ordinary Shares underlying the ADSs;

 

iii

“Depositary”

JPMorgan Chase Bank N.A., as depositary for the ADSs;

 

“Haleon Shareholder”

a holder of Ordinary Shares from time to time;

 

“IFRS”

the International Financial Reporting Standards as issued by the International Accounting Standards Board and International Financial Reporting Standards as adopted by the United Kingdom;

 

“JVCo A Ordinary Shares”

A Ordinary Shares in the capital of CH JVCo of £1 each;

 

“JVCo B Ordinary Shares”

B Ordinary Shares in the capital of CH JVCo of £1 each;

 

“JVCo Preference Shares”

non-voting preference shares in the capital of CH JVCo of £1 each;

 

“LSE”

London Stock Exchange plc or the market conducted by it, as the context requires;

 

“Pfizer”

Pfizer Inc.;

 

“Pfizer Group”

Pfizer together with its subsidiaries and subsidiary undertakings from time to time;

 

“PFCHH”

PF Consumer Healthcare Holdings LLC, a wholly-owned subsidiary of Pfizer which held Pfizer’s interest in CH JVCo;

 

“SEC”

the US Securities and Exchange Commission;

 

“SLPs”

(i) GSK (No. 1) Scottish Limited Partnership, a private fund limited partnership registered in Scotland with registration number SL035527 and whose principal place of business is at 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ (“SLP1”); (ii) GSK (No. 2) Scottish Limited Partnership, a private fund limited partnership registered in Scotland with registration number SL035526 and whose principal place of business is at 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ (“SLP2”); and (iii) GSK (No. 3) Scottish Limited Partnership, a private fund limited partnership registered in Scotland with registration number SL035525 and whose principal place of business is at 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ (“SLP3”), being the Scottish limited partnerships that each received shares in the Company pursuant to the SLP Exchange Agreement, and “SLP” shall be construed accordingly.

 

“Separation”

the Demerger, Share Exchanges (as defined below), UK Admission (as defined below) and other steps pursuant to which, among other things, the Company became a listed company holding the Consumer Healthcare Business as of 18 July 2022;

 

“subsidiary”

a subsidiary as that term is defined in section 1159 of the Companies Act 2006 of the UK, as amended (the “Companies Act”);

 

“subsidiary undertaking”

a subsidiary undertaking as that term is defined in section 1162 of the Companies Act;

 

iv

“Record Time”

5 p.m. New York time for the GSK ADSs on 15 July 2022;

 

“UK Admission”

the admission of the Ordinary Shares to the premium listing segment of the Official List of the Financial Conduct Authority of the UK (the “Official List” and the “FCA,” respectively) and to trading on the LSE’s main market for listed securities, which occurred on 18 July 2022;

 

“United Kingdom” or “UK”

the United Kingdom of Great Britain and Northern Ireland; and

 

“United States,” “USA” or “US”

the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction.

 

v

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Overview

The audited consolidated financial statements for the years ended 31 December 2021, 2020 and 2019 (the “Financial Statements”) included in this prospectus and the related financial information presented herein have been prepared in accordance with IFRS and reflect the consolidated financial results of CH JVCo prior to Separation and the Consumer Healthcare Business that is consolidated under the Company as the new holding company of the Group after Separation.

The unaudited interim condensed financial statements for the six months ended 30 June 2022 and 2021 (the “Interim Financial Statements”) included in this prospectus and the related financial information presented herein have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”), and reflect the consolidated financial results of CH JVCo prior to Separation and the Consumer Healthcare Business that is consolidated under the Company as the new holding company of the Group after Separation.

Reporting Framework

The financial information presented in this prospectus reflects the operating and financial performance of the Group, its cash flows and financial position and resources. The Group’s results as reported in accordance with IFRS represent the Group’s overall performance. The Group also uses a number of adjusted, non-IFRS, measures to report the performance of its business, as described below.

The consolidated financial statements for the year ended 31 December 2020 included in the Financial Statements have been restated for adjustments related to receivables and cost of sales arising from transitional service agreements. See Note 1 to the Financial Statements.

Description of Key Line Items in the Group’s Financial Statements

The following descriptions of key line items in the Financial Statements are relevant to the discussion of the Group’s results of operations in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

Item		Represents
Revenue		Revenue from sales of goods to external customers against received orders. Revenue represents net invoice value including fixed and variable consideration. Variable consideration arises on the sale of goods as a result of discounts and allowances given and accruals for estimated future returns and rebates. Revenue is not recognised in full until it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The methodology and assumptions used to estimate rebates and returns are monitored and adjusted regularly in light of contractual and legal obligations, historical trends, past experience and projected market conditions. Once the uncertainty associated with the returns and rebates is resolved, revenue is adjusted accordingly. Value added tax and other sales taxes are excluded from revenue.
Cost of sales		Cost of sales includes all costs directly related to bringing products to their final selling destination. This includes purchasing and receiving costs and direct and indirect costs to manufacture products, including materials, labour and overhead expenses necessary to acquire and convert purchased materials and supplies into finished goods. Cost of sales also includes royalties on certain licenced products, inspection costs, freight charges, costs to operate equipment and depreciation and amortisation.

 

1

Item		Represents
Selling, general and administration (“SG&A”)		SG&A expenses comprise advertising and promotion costs, selling costs, warehouse and distribution costs, corporate overheads, other administrative expenses and depreciation and amortisation.
Research and development (“R&D”)		R&D expenditure comprises expenditure that is directly attributable to the research and development of new products, including the costs attributable to the generation of intellectual property and product registrations, and depreciation and amortisation of equipment, real estate and IT assets used by the R&D function.
Other operating (expense)/income		Other operating (expense)/income includes income and expense from all other operating activities which are not related to the ordinary course business of the Group, such as gains/ losses from disposals and transaction costs.
Net finance costs		Net finance costs comprise finance costs and finance income, including net finance costs in relation to pensions and similar obligations. Finance income includes income on cash and cash equivalents and income on other financial assets. Finance costs include interest costs in relation to financial liabilities. This includes interest on lease liabilities, which represents the unwind of the discount rate applied to lease liabilities.
Income tax		Income tax is the expense resulting from the corporate income tax payable in the different countries in which the Group operates.

Adjusted Results and other non-IFRS financial measures

This prospectus contains a number of non-IFRS measures to report the performance of the Group’s business. Non-IFRS measures exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS. Adjusted Results and other non-IFRS measures may be considered in addition to, but not as a substitute for or superior to, information presented in accordance with IFRS.

Management considers these metrics to be the non-IFRS financial measures used by the Group to help evaluate growth trends, establish budgets and assess operational performance and efficiencies. We believe that these non-IFRS financial measures, in addition to IFRS measures, provide an enhanced understanding of the Group’s results and related trends, therefore increasing transparency and clarity of the Group’s results and business.

There are no generally accepted accounting principles governing the calculation of these measures and the criteria upon which these measures are based can vary from company to company. The non-IFRS financial measures presented in this registration statement may not be comparable to other similarly titled measures used by other companies, have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Group’s operating results as reported under IFRS. We encourage investors and analysts not to rely on any single financial measure but to review the Group’s financial and non-financial information in its entirety.

 

2

The following non-IFRS measures are presented in this prospectus:

Measure

 

Adjusted EBITDA

Adjusted EBITDA is one of the measures used by management to assess the financial performance of the Group’s business. It is defined as profit after tax excluding income tax, finance income, finance expense, Adjusting Items (as defined below and further described in “Key Financial Data—Adjusting Items”), depreciation of property plant and equipment, impairment of property plant and equipment, right-of-use assets and computer software net of reversals, depreciation of right-of-use assets, and amortisation of software intangibles.

 

Adjusted EBITDA eliminates differences in performance caused by variations in capital structures (affecting net finance costs), tax positions (such as the availability of net operating losses against which to relieve taxable profits), the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortisation expense). Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating the Group’s operating results in the same manner as the Group’s management.

 

Adjusted EBITDA has limitations as a financial measure and investors should not consider it in isolation or as a substitute for analysis of the Group’s results of operations as reported under IFRS. In addition to the limitations inherent to all Adjusted Results (as defined below), some other limitations are:

 

•

Although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised may have to be replaced in the future and Adjusted EBITDA does not reflect capital expenditure requirements for such replacements or for new capital expenditure or lease extensions; and

 

•

Adjusted EBITDA does not reflect net finance expense/income, cash requirements for the Group’s working capital, transaction related costs, separation and admission costs and disposal costs.

 

Adjusted Results

Adjusted Results comprise Adjusted gross profit, Adjusted gross profit margin, Adjusted operating profit, Adjusted operating profit margin, Adjusted profit before taxation, Adjusted profit after taxation, Adjusted profit attributable to shareholders, Adjusted basic earnings per share, Adjusted diluted earnings per share, Adjusted cost of sales, Adjusted SG&A, Adjusted R&D, Adjusted other operating income, Adjusted net finance costs, Adjusted taxation charge, and Adjusted profit attributable to non-controlling interests. Adjusted Results exclude Net amortisation and impairment of intangible assets, Restructuring costs, Transaction-related costs, Separation and

 

3

Admission costs, and Disposals and others, in each case net of the impact of taxes (where applicable) (collectively, the “Adjusting Items”, which are described in “Key Financial Data—Adjusting Items”).

 

We believe that Adjusted Results, when considered together with the Group’s operating results as reported under IFRS, provide investors, analysts and other stakeholders with helpful complementary information to understand the financial performance and position of the Group from period to period and allow the Group’s performance to be more easily compared against the majority of its peer competitors. As Adjusted Results include the benefits of restructuring programmes but exclude significant costs (such as Restructuring costs, Transaction-related costs and Separation and Admission costs) they should not be regarded as a complete picture of the Group’s financial performance as presented in accordance with IFRS. In particular, when significant impairments, Restructuring costs and Separation and Admission costs are excluded, Adjusted Results will be higher than IFRS results. For information on the Adjusting Items and further commentary on Adjusted Results, see “Key Financial Data”).

 

Constant currency

The Group’s reporting currency is Pounds Sterling, but the Group’s significant international operations give rise to fluctuations in foreign exchange rates. To neutralise foreign exchange impact and to better illustrate the change from one year to the next, the Group discusses its results both on an “as reported basis” or using “actual exchange rates” (“AER”) (local currency results translated into Pounds Sterling at the prevailing foreign exchange rate) and using constant currency exchange rates (“CER”). To calculate results on a constant currency basis, prior year exchange rates are used to restate current year comparatives. The currencies which most influence the constant currency results of the Group and their exchange rates are shown in the below table.

 

		H1 2022				H1 2021				2021				2020				2019
Average rates:
USD/£			1.30				1.39				1.38				1.29				1.28
Euro/£			1.19				1.15				1.16				1.13				1.14
CNY/£			8.38				8.96				8.86				8.91				8.82
Swiss Franc/£			1.22				1.26				1.25				1.21				1.27

 

Free cash flow

Free cash flow is calculated as net cash inflow from operating activities plus cash inflows from the sale of intangible assets, the sale of property, plant and equipment and interest received, less cash outflows for the purchase of intangible assets, the purchase of property, plant and equipment, distributions to non-controlling interests and interest paid.

 

We believe free cash flow is meaningful to investors because it is the measure of the funds generated by the Group available for

 

4

distribution of dividends, repayment of debt or to fund the Group’s strategic initiatives, including acquisitions. The purpose of presenting free cash flow is to indicate the ongoing cash generation within the control of the Group after taking account of the necessary cash expenditures for maintaining the capital and operating structure of the Group (in the form of payments of interest, corporate taxation and capital expenditure).

 

Free cash flow conversion

Free cash flow conversion is calculated as free cash flow, as defined above, divided by profit after tax.

 

Free cash flow conversion is used by us to evaluate the cash generation of the business relative to its profit, by measuring the proportion of profit after tax that is converted into free cash flow as defined above.

 

Net capital expenditure

Net capital expenditure is calculated as purchases of property, plant and equipment and other intangible assets, net of sales of property, plant and equipment and other intangible assets.

 

Net capital expenditure is used by us to measure capital invested in the operating activities of the Group’s business.

 

Net debt

Net debt at a period end is calculated as short-term borrowings (including bank overdrafts and short-term lease liabilities), long-term borrowings (including long-term lease liabilities), and derivative financial liabilities less cash and cash equivalents and derivative financial assets.

 

We analyse the key cash flow items driving the movement in net debt to understand and assess cash performance and utilisation in order to maximise the efficiency with which resources are allocated. The analysis of cash movements in net debt allows us to more clearly identify the level of cash generated from operations that remains available for distribution after servicing the Group’s debt.

 

Organic revenue growth

Organic revenue growth represents the change in organic revenue at CER from one accounting period to the next.

 

Organic revenue represents revenue, as determined under IFRS and excluding the impact of acquisitions, divestments and closures of brands or businesses, revenue attributable to manufacturing service agreements (“MSAs”) relating to divestments and the closure of sites or brands, and the impact of currency exchange movements.

 

Revenue attributable to MSAs relating to divestments and production site or brand closures has been removed from organic revenue because these agreements are transitional and, with respect to production site closures, include a ramp-down period in which revenue attributable to MSAs gradually reduces several months before the production site closes. This revenue reduces the

 

5

comparability of prior and current year revenue and is therefore adjusted for in the calculation of organic revenue growth.

 

Organic revenue is calculated period-to-period as follows, using prior year exchange rates to restate current year comparatives:

 

•

current year organic revenue excludes revenue from brands or businesses acquired in the current accounting period;

 

•

current year organic revenue excludes revenue attributable to brands or businesses acquired in the prior year from 1 January to the date of completion of the acquisition;

 

•

prior year organic revenue excludes revenue in respect of brands or businesses divested or closed in the current accounting period from 12 months prior to the completion of the disposal or closure until the end of the prior accounting period;

 

•

prior year organic revenue excludes revenue in respect of brands or businesses divested or closed in the previous accounting period in full; and

 

prior year and current year organic revenue excludes revenue attributable to MSAs relating to divestments and production site closures taking place in either the current or prior year, each an “Organic Adjustment”.

 

To calculate organic revenue growth for the period, organic revenue for the prior year is subtracted from organic revenue in the current year and divided by organic revenue in the prior year.

 

By way of example:

 

•

The Pfizer Transaction (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key factors affecting the Group’s results of operations and financial position—Pfizer Transaction”) completed on 31 July 2019. Organic revenue growth for the period FY 2019 to FY 2020 excludes revenue attributable to brands acquired as part of the Pfizer Transaction in respect of the period 1 January 2020 to 31 July 2020.

 

•

The Group completed the disposal of Breathe Right on 1 October 2020. Organic revenue growth for the period FY 2019 to FY 2020 excludes revenue attributable to Breathe Right from the period 1 October 2019 to 31 December 2019. Organic revenue growth for the period FY 2020 to FY 2021 excludes revenue attributable to Breathe Right in FY 2020.

 

The Group believes that discussing organic revenue growth contributes to the understanding of the Group’s performance and trends because it allows for a year-on-year comparison of revenue in a meaningful and consistent manner.

 

6

Organic revenue growth by individual segment is further discussed by price and volume/mix changes, which are defined as follows:

 

•

Organic Revenue Price Growth (“Price”): Defined as the variation in revenue attributable to changes in prices during the period. Price excludes the impact to organic revenue growth due to (i) the volume of products sold during the period and (ii) the composition of products sold during the period. Price is calculated as current year net price minus prior year net price multiplied by current year volume. Net price is the sales price, after deduction of any trade, cash or volume discounts that can be reliably estimated at point of sale. Value added tax and other sales taxes are excluded from the net price.

 

•

Organic Revenue Volume/Mix Growth (“Volume/Mix”): Defined as the variation in revenue attributable to changes in volumes in the period. Volume/Mix excludes the impact to organic revenue growth due to changes in prices during the period. Volume/Mix is calculated as current volume minus prior year volume multiplied by prior year net price.

For a reconciliation of the closest measures prepared in accordance with IFRS to the applicable non-IFRS measures, see “Key Financial Data”.

Rounding of Figures

Certain financial information presented in tables in this prospectus has been rounded to the nearest whole number or the nearest decimal place. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this prospectus reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers. Certain percentage shareholdings have also been rounded and therefore totals of such percentage shareholdings may vary slightly from their actual arithmetic totals.

No Incorporation of Website Information

The contents of any website mentioned in this prospectus or any website, directly or indirectly, linked to these websites have not been verified and do not form part of this prospectus, and information contained therein should not be relied upon.

Market and Industry Data

Other than in respect of statements of the type described in the paragraph below, unless the source is otherwise stated, the market and industry data in this prospectus constitute our estimates, using underlying data from independent third parties. Such data includes market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications and surveys (including publications and data compiled by Nicholas Hall and Euromonitor). Estimates extrapolated from this data involve risks and uncertainties and are subject to change based on various factors.

Unless otherwise stated, statements of market position are on the basis of sales to consumers in the relevant geographical market or product category in 2021, as reported by: (i) in the case of statements relating to Over the Counter (“OTC”) medicines and Vitamins, Minerals and Supplements (“VMS”), Nicholas Hall’s DB6 Consumer Healthcare Database at manufacturer’s selling prices; and (ii) in the case of statements relating to Oral Health, Euromonitor Passport ‘Oral Care’ at retail selling prices. The value of a market or product category and market size are provided on the basis of sales to consumers in 2021 in the relevant geographical market or product category, as reported by: (i) in the case of statements relating to OTC/VMS, Nicholas Hall’s DB6 Consumer Healthcare Database at manufacturer’s selling prices; and (ii) in the case of statements relating to Oral Health, Euromonitor Passport ‘Oral Care’ at manufacturer’s selling prices.

 

7

The Group confirms that all third-party data contained in this prospectus has been accurately reproduced and, so far as the Group is aware and able to ascertain from information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading.

Where third-party information has been used in this prospectus, the source of such information has been identified. While industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, the accuracy and completeness of such information is not guaranteed.

This prospectus includes trade marks, trade names and trade dress of other companies. Use or display by us of other parties’ trade marks, other parties’ trade names or other parties’ trade dress or products is not intended to and does not imply a relationship with, or endorsement or sponsorship by the Group of, the trade mark, trade name or trade dress owners. Solely for the convenience of investors, the Group’s brands are referred to in this prospectus without the ^® symbol, but the absence of these references is not intended to indicate in any way that we will not assert our rights to these brands to the fullest extent permitted by law.

 

8

PROSPECTUS SUMMARY

This summary highlights certain information about us, this offering and selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in the securities covered by this prospectus. For a more complete understanding of our Company and this offering, we encourage you to read and consider carefully the more detailed information in this prospectus, and any related prospectus supplement, including the information set forth in the section titled “Risk Factors” in this prospectus and any related prospectus supplement in their entirety before making an investment decision.

Overview

The Group is a world-leading consumer healthcare business, with a portfolio of category leading brands and approximately 23,000 people worldwide engaged in the research and development, manufacture and sale of a broad range of consumer healthcare products. The Group conducts business internationally across five consumer healthcare categories: Oral Health, Pain Relief, VMS, Respiratory Health and Digestive Health and Other. The Group has a strong footprint in the world’s consumer healthcare markets, including a commercial presence in over 170 markets and a number one or two OTC/VMS market position in countries which represented over 70 per cent. of the world’s OTC/VMS markets by value in 2021.

Corporate Information

Our Ordinary Shares are admitted to the premium listing segment of the Official List of the FCA and trading on the main market for listed securities of the LSE under the symbol “HLN” and our ADSs are listed on the New York Stock Exchange (“NYSE”) under the symbol “HLN”. The Company is domiciled in England and Wales with its registered and head office at Building 5, First Floor, The Heights, Weybridge, Surrey, KT13 0NY, United Kingdom. The telephone number of the Company’s registered office is +44 1932 822000 and its website is www.haleon.com. The information on the Company’s website does not form part of this prospectus.

SUMMARY OF RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those highlighted in the “Risk Factors” section of this prospectus. These risks include the following, any of which could have a material adverse effect on our business, financial condition or results of operations and the price of our Securities:

Risks Relating to the Group’s Business and Industry:

 

•

The Group operates in a highly competitive market and failure to successfully compete with competitors could have a material adverse effect on the Group’s business;

 

•

The Group’s success depends on its ability to anticipate and respond to changes in consumer preferences and a failure to adapt its strategy appropriately may have a material adverse effect on the Group’s business and/or financial condition;

 

•

The Group’s business results are impacted by the Group’s ability to manage disruptions in the Group’s global supply chain and a failure to manage disruptions appropriately may have a material adverse effect on the Group’s business and/or financial condition;

 

•

Increasing dependence on key retail customers, changes in the policies of the Group’s retail customers, the emergence of alternative retail channels and the rapidly changing retail landscape may materially and adversely affect the Group’s business;

 

9

•

The Group may not be able to develop and commercialise new products effectively, which may materially and adversely affect the results of the Group’s operations and financial condition;

 

•

Failure to retain key personnel or attract new personnel may materially and adversely affect the Group’s business;

 

•

Damage to the Group’s reputation could have a material adverse effect on the Group’s business;

 

•

Failure to respond effectively to the challenges raised by climate change and other sustainability matters may have a material adverse effect on the Group’s business and results of operations;

 

•

The Group may not be successful in obtaining, maintaining and enforcing sufficient intellectual property rights to protect its business, or in avoiding claims that the Group infringes on the intellectual property rights of others;

 

•

The Group may incur liabilities or be forced to recall products as a result of real or perceived product quality or other product-related issues;

 

•

A cyber-security incident, data breach or a failure of a key information technology system could materially and adversely impact the Group’s business;

 

•

The Group relies on third parties in many aspects of its business and ineffective management of these relationships could increase the Group’s financial, legal, reputational and operational risk;

 

•

The Group faces various risks related to pandemics, epidemics or similar widespread public health concerns, the ultimate impact of which is outside the Group’s control and which may materially and adversely affect the Group’s operations, cash flows and financial condition;

 

•

The implementation of complex strategic, operational and/or change initiatives gives rise to significant execution risks, which may affect the operational capacity of the Group and may materially and adversely impact the Group if these initiatives fail to meet their objectives;

 

•

The Group’s business is affected by seasonality, which could have a negative impact on the Group’s financial condition;

 

•

The Group may not successfully acquire and integrate other businesses, licence rights to technologies or products, form and manage alliances, or divest businesses;

 

•

The Group’s leverage and debt service obligations could materially and adversely affect its business, financial condition or results of operations;

 

•

The Group’s business and results of operations are affected by fluctuations in interest rates; and

 

•

Goodwill and indefinite-life intangible assets are a material component of the Group’s balance sheet and impairments of these assets could have a significant impact on its results.

Risks Relating to Changes in Law and the Political and Environment, Regulation and Legislation:

 

•

The Group’s business is subject to legal and regulatory risks in all the markets in which it operates, which may have a material adverse effect on the Group’s business operations and financial condition;

 

•

The Group faces risks relating to the regulation and perception of the ingredients it uses in its products, which could materially and adversely impact the Group’s business, prospects, financial condition and results of operations;

 

•

The Group’s business is subject to market fluctuations and general economic conditions, including inflationary pressures, each of which may materially and adversely affect the Group’s business, financial condition, results of operations and prospects;

 

10

•

Litigation, disputes and regulatory investigations may materially and adversely affect the Group’s business, financial condition, results of operations and prospects;

 

•

The Group faces risks associated with significant international operations, which could negatively impact the Group’s business;

 

•

Volatility in material and other costs could materially and adversely impact the Group’s profitability;

 

•

The Group’s business may be impacted by the effects of Russia’s invasion of Ukraine;

 

•

Failure to comply with regulation regarding the use of personal data could lead to significant fines and regulatory action against the Group;

 

•

Failure to comply, or the costs of complying, with environmental and health and safety regulations could materially and adversely affect the Group’s operations;

 

•

The Group is exposed to risks relating to fluctuations in currency exchange rates and related hedging activities, which could negatively impact the Group’s financial condition and prospects;

 

•

Determinations made by the Group with respect to the application of tax law may result in challenges from or disputes with tax authorities which result in the payment of additional amounts for tax;

 

•

The Company is a foreign private issuer and, as a result, it is not subject to US proxy rules and is subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a US domestic public company; and

 

•

If the Company loses its foreign private issuer status in the future, it may incur significant additional expenses which could have a material adverse effect on the Group’s business, prospects, results of operations and financial condition.

Risks Relating to Separation:

 

•

The Group may fail to realise any or all of the anticipated benefits of Separation;

 

•

Following Separation, the Company operates as an independent publicly listed company and the Group could fail to meet the challenges involved in operating successfully as a standalone business;

 

•

For a period following Separation, the Company will be reliant on the GSK Group for the provision of certain services and any disruption to such services could be costly and materially and adversely affect the Group’s business, results of operations, financial conditions and prospects;

 

•

The Group has indemnification obligations in favour of the GSK Group and the Pfizer Group, which could be significant and have a material adverse effect on the financial condition, results of operations and/or prospects of the Group;

 

•

GSK and Pfizer may compete with the Group;

 

•

The Company’s status as a non-US corporation for US federal income tax purposes could be affected by a potential change in law; and

 

•

The Tax Covenant will restrict the Company’s ability to engage in certain transactions.

Risks Relating to the Ordinary Shares and ADSs:

 

•

An active trading market for the Ordinary Shares and the ADSs may not develop or be sustained;

 

•

The Pfizer Group retained a significant interest in the Company immediately after Separation and its interests may differ from those of the other holders of the Ordinary Shares and the ADSs;

 

•

There can be no assurance that dividends will be paid to holders of Ordinary Shares and ADSs;

 

11

•

The market price of the Ordinary Shares and the ADSs may fluctuate;

 

•

Future sales of Ordinary Shares and ADSs, or the perception such sales might occur, could depress the market price of the Ordinary Shares and the ADSs;

 

•

The Company may decide to offer additional Ordinary Shares (including in the form of ADSs) in the future, diluting the interests of existing holders of Ordinary Shares and ADSs and potentially materially and adversely affecting the market price of Ordinary Shares and ADSs;

 

•

Holders of the Ordinary Shares and the ADSs may not be able to exercise pre-emption rights or participate in certain future issues of Ordinary Shares;

 

•

The ability of holders of the Ordinary Shares and the ADSs outside the UK to bring actions or enforce judgments against the Company or the Directors may be limited;

 

•

Haleon Shareholders outside the UK may be subject to exchange rate risk;

 

•

Holders of the ADSs are not treated as holders of the Ordinary Shares;

 

•

Holders of the ADSs will not have the same voting rights as the holders of the Ordinary Shares and may not receive voting materials in time to be able to exercise their right to vote;

 

•

Holders of the ADSs may be subject to limitations on the transfer of their ADSs and the withdrawal of the underlying Ordinary Shares;

 

•

Holders of the ADSs may not receive distributions on the underlying Ordinary Shares or any value for them if it is illegal or impractical to make them available to holders of the ADSs;

 

•

Holders of ADSs may not be entitled to a jury trial with respect to claims arising under the Deposit Agreement, which could result in less favourable outcomes to the plaintiff(s) in any such action; and

 

•

Forum selection provisions in the Deposit Agreement could limit the ability of holders of ADSs to obtain a favorable judicial forum for disputes with the Company and the Depositary.

 

12

THE OFFERING

 

Issuer

Haleon plc, a public limited company incorporated in England and Wales.

 

Ordinary Shares offered by the selling securityholders

Up to 3,559,371,012 Ordinary Shares

 

Ordinary Shares outstanding

9,234,573,831 Ordinary Shares as of 15 September 2022

 

ADSs offered by the selling securityholders

Up to 295,506,362 ADSs (representing 591,012,724 Ordinary Shares)

 

ADSs outstanding

784,877,279 ADSs as of 15 September 2022

 

Use of proceeds

All of the Ordinary Shares and ADSs offered by the selling securityholders pursuant to this prospectus will be sold by the selling securityholders for their respective accounts. We will not receive any of the proceeds from such sales. See “Use of Proceeds.”

 

LSE ticker symbol for Ordinary Shares and NYSE ticker symbol for ADSs

“HLN”

 

13

RECENT DEVELOPMENTS

On 11 August 2022, the Company issued a statement regarding Zantac, in which the Company noted the recent volatility in its share price and that it was aware of market speculation on Haleon’s potential liability in respect of Zantac product liability litigation. In addition, the Company noted that:

 

•

Haleon was not aware of any material developments in relation to the Zantac litigation since the Haleon prospectus was issued on 1 June 2022.

 

•

Haleon was not a party to any of the Zantac claims.

 

•

Haleon never marketed Zantac in any form in the U.S.

 

•

Haleon was not primarily liable for any OTC or prescription claims.

 

•

To the extent GSK and/or Pfizer are held liable in respect of OTC Zantac during the periods outlined below, Haleon may be required to indemnify GSK and/or Pfizer, only if the following conditions are met:

 

•

GSK and/or Pfizer are unable to recover in respect of OTC Zantac from any third parties who are ahead of Haleon and who have given indemnities under previous transfers of rights to OTC Zantac; and

 

•

Haleon is determined to be liable under the indemnification provisions among Haleon, Pfizer and GSK.

The US proceedings are at an early stage and relate to both prescription and OTC Zantac. All rights and marketing of OTC Zantac in the US from 1996-1998 were through a joint venture between GSK and Warner Lambert until 1998 when the joint venture was terminated and, following which, Warner Lambert retained the exclusive rights to the OTC product. In 2000, Warner Lambert was acquired by Pfizer, and Pfizer marketed OTC Zantac from 2000-2006, when Johnson & Johnson acquired Pfizer’s OTC business.

 

14

KEY FINANCIAL DATA

Overview

The following unaudited interim consolidated income statement relating to the Group for the six-month periods ended 30 June 2022 (“H1 2022”) and 30 June 2021 (“H1 2021”) and the following unaudited interim consolidated balance sheet as at 30 June 2022 have been extracted from the Interim Financial Statements. The Interim Financial Statements have been prepared in accordance with IAS 34 and the Group’s accounting policies. The following selected consolidated financial data relating to the Group as at, and for the years ended, 31 December 2021, 31 December 2020 and 31 December 2019 has been extracted from the audited Financial Statements. The selected non-IFRS financial information and operating information relating to the Group set out below has been presented on the basis set out in “Presentation of Financial and Other Information”. The selected financial and operating information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Consolidated income statement

For the six-month periods ended 30 June 2022 and 30 June 2021 and for the years ended 31 December 2021, 31 December 2020 and 31 December 2019.

 

£m		H1 2022				H1 2021				2021				2020				2019
Revenue			5,188				4,575				9,545				9,892				8,480
Cost of sales			(1,977	)			(1,761	)			(3,595	)			(3,982	)			(3,678	)
Gross Profit			3,211				2,814				5,950				5,910				4,802
Selling, general and administration			(2,179	)			(1,978	)			(4,086	)			(4,220	)			(3,596	)
Research and development			(136	)			(109	)			(257	)			(304	)			(292	)
Other operating income/(expense)			4				10				31				212				(17	)
Operating profit			900				737				1,638				1,598				897
Finance income			43				9				17				20				24
Finance expense			(79	)			(10	)			(19	)			(27	)			(35	)
Net finance costs			(36	)			(1	)			(2	)			(7	)			(11	)
Profit before tax			864				736				1,636				1,591				886
Income tax			(320	)			(216	)			(197	)			(410	)			(199	)
Profit after tax			544				520				1,439				1,181				687
Profit attributable to shareholders			517				491				1,390				1,145				655
Profit attributable to non-controlling interests			27				29				49				36				32

 

15

Consolidated balance sheet

As at 30 June 2022 and 31 December 2021.

 

£m		H1 2022				2021
Non-current assets
Property, plant and equipment			1,659				1,563
Right of use assets			113				99
Intangible assets			28,543				27,195
Deferred tax assets			203				312
Post-employment benefit assets			29				11
Derivative financial instruments			14				12
Other non-current assets			45				8
Total non-current assets			30,606				29,200
Current assets
Inventories			1,149				951
Trade and other receivables			2,408				2,207
Loan amounts owing from related parties			9,211				1,508
Cash and cash equivalents and liquid investments			1,334				414
Assets held for sale			6				—
Derivative financial instruments			132				5
Current tax recoverable			159				166
Total current assets			14,399				5,251
Total assets			45,005				34,451
Current liabilities
Short-term borrowings			(332	)			(79	)
Trade and other payables			(3,546	)			(3,002	)
Loan amounts owing to related parties			(3	)			(825	)
Derivative financial instruments			(11	)			(18	)
Current tax payable			(236	)			(202	)
Short-term provisions			(71	)			(112	)
Total current liabilities			(4,199	)			(4,238	)
Non-current liabilities
Long-term borrowings			(9,918	)			(87	)
Deferred tax liabilities			(3,655	)			(3,357	)
Pensions and other post-employment benefits			(142	)			(253	)
Derivative financial instruments			(55	)			(1	)
Other provisions			(31	)			(27	)
Other non-current liabilities			(6	)			(8	)
Total non-current liabilities			(13,807	)			(3,733	)
Total liabilities			(18,006	)			(7,971	)
Net assets			26,999				26,480

 

16

£m		H1 2022				2021
Equity
Share capital			1				1
Share premium			70				—
Other reserves			(11,553	)			(11,632	)
Retained earnings			38,377				37,986
Shareholders’ equity			26,895				26,355
Non-controlling interests			104				125
Total equity			26,999				26,480

Selected balance sheet items

As at 31 December 2021, 31 December 2020 and 31 December 2019.

 

£m		2021				2020				2019
Non-current assets			29,200				29,122				29,900
Current assets			5,251				5,008				5,811
Total Assets			34,451				34,130				35,711
Current liabilities			(4,238	)			(4,014	)			(4,269	)
Non-current liabilities			(3,733	)			(3,893	)			(4,030	)
Total liabilities			(7,971	)			(7,907	)			(8,299	)
Net assets			26,480				26,223				27,412

Consolidated cash flow statement

For the six-month periods ended 30 June 2022 and 30 June 2021 and the years ended 31 December 2021, 31 December 2020 and 31 December 2019.

 

£m		H1 2022				H1 2021				2021				2020				2019
Cash flow from operating activities
Profit after tax			544				520				1,439				1,181				687
Adjustments reconciling profit after tax to cash generated from operations			274				(134	)			227				780				408
Cash generated from operations			818				386				1,666				1,961				1,095
Taxation paid			(138	)			(152	)			(310	)			(554	)			(309	)
Net cash inflow from operating activities			680				234				1,356				1,407				786
Net cash (outflow)/inflow from investing activities			(8,587	)			463				(33	)			1,030				291
Net cash (outflow)/inflow from financing activities			8,546				(716	)			(1,236	)			(2,437	)			(925	)
Increase/(decrease) in cash and cash equivalents and bank overdrafts			639				(19	)			87				—				152
Cash and cash equivalents and bank overdrafts at the beginning of the year			405				323				323				329				191
Exchange adjustments			22				(9	)			(5	)			(6	)			(14	)
Increase/(decrease) in cash and cash equivalents and and bank overdrafts			639				(19	)			87				—				152
Cash and cash equivalents and bank overdrafts at end of period			1,066				295				405				323				329

 

17

Non-IFRS financial measures

Adjusted Results

H1 2022 Adjusted Results

 

£M		IFRS Results				Net Amortization and Impairment of Intangible Assets				Restructuring Costs				Transaction Related Costs				Separation and Admission Costs				Disposal and others				Adjusted Results
Gross profit			3,211				40				8				—				—				(1	)			3,258
Operating profit			900				40				20				—				229				2				1,191
Profit before tax			864				40				20				—				229				2				1,155
Profit after tax for the period			544				34				16				—				192				124				910
Profit attributable to shareholders of the Group			517				34				16				—				192				124				883
Basic earnings per Share1			5.6p				0.4p				0.2p				—				2.1p				1.3p				9.6p
Weighted average number of shares (in million)			9,235																								9,235
Diluted earnings per Share1			5.6p				0.4p				0.2p				—				2.1p				1.3p				9.6p
Weighted average number of shares (diluted) (in million)			9,235																								9,235
The following adjustments are made in arriving at Adjusted gross profit
Cost of sales			(1,977	)			40				8				—				—				(1	)			(1,930	)
The following adjustments are made in arriving at Adjusted operating profit
Selling, general and admin			(2,179	)			—				13				—				229				7				(1,930	)
Research and development			(136	)			—				(1	)			—				—				—				(137	)
Other operating income			4				—				—				—				—				(4	)			—
The following adjustments are made in arriving at Adjusted profit before tax
Net finance costs			(36	)			—				—				—				—				—				(36	)
The following adjustments are made in arriving at Adjusted profit after tax
Income Tax			(320	)			(6	)			(4	)			—				(37	)			122				(245	)
The following adjustments are made in arriving at Adjusted profit attributable to shareholders
Profit for the period attributable to non-controlling interests			27				—				—				—				—				—				27

 

1	Earnings per share for the six-months ended 30 June 2022 reflects the number of ordinary shares outstanding for Haleon plc as a result of the Demerger activities that took place in July 2022. See Note 10 to the Interim Financial Statements.

 

18

H1 2021 Adjusted Results

 

£M		IFRS Results				Net Amortization and Impairment of Intangible Assets				Restructuring Costs				Transaction Related Costs				Separation and Admission Costs				Disposal and others				Adjusted Results
Gross profit			2,814				21				25				—				—				—				2,860
Operating profit			737				21				77				—				105				43				983
Profit before taxation			736				21				77				—				105				43				982
Profit after tax for the period			520				18				60				—				85				75				758
Profit attributable to shareholders of the Group			491				18				60				—				85				75				729
Basic earnings per Share2			5.3p				0.2p				0.6p				—				0.9p				0.8p				7.9p
Weighted average number of shares (in millions)			9,235																								9,235
Diluted earnings per Share2			5.3p				0.2p				0.6p				—				0.9p				0.8p				7.9p
Weighted average number of shares (diluted) (in millions)			9,235																								9,235
The following adjustments are made in arriving at Adjusted gross profit
Cost of Sales			(1,761	)			21				25				—				—				—				(1,715	)
The following adjustments are made in arriving at Adjusted operating profit
Selling, general and admin			(1,978	)			—				54				—				105				53				(1,766	)
Research and development			(109	)			—				(2	)			—				—				—				(111	)
Other operating income			10				—				—				—				—				(10	)			—
The following adjustments are made in arriving at Adjusted profit before tax
Net finance costs			(1	)			—				—				—				—				—				(1	)
The following adjustments are made in arriving at Adjusted profit after tax
Income tax			(216	)			(3	)			(17	)			—				(20	)			32				(224	)
The following adjustments are made in arriving at Adjusted profit attributable to shareholders
Profit attributable to non-controlling interests			29				—				—				—				—				—				29

 

2	Earnings per share for the six-months ended 30 June 2021 reflects the number of ordinary shares outstanding for Haleon plc as a result of the Demerger activities that took place in July 2022. See Note 10 to the Interim Financial Statements.

 

19

2021 Adjusted Results

 

£M		IFRS Results				Net Amortization and Impairment of Intangible Assets				Restructuring Costs				Transaction Related Costs				Separation and Admission Costs				Disposal and others				Adjusted Results
Gross profit			5,950				8				44				—				—				—				6,002
Operating profit			1,638				16				195				—				278				45				2,172
Profit before tax			1,636				16				195				—				278				45				2,170
Profit after tax for the year			1,439				24				159				—				231				(152	)			1,701
Profit attributable to shareholders			1,390				24				159				—				231				(152	)			1,652
Basic earnings per share			139,000p				2,400p				15,900p				0p				23,100p				(15,200	)p			165,200p
Weighted average number of shares			1,000,000																								1,000,000
Diluted earnings per share			139,000p				2,400p				15,900p				0p				23,100p				(15,200	)p			165,200p
Weighted average number of shares (diluted)			1,000,000																								1,000,000
The following adjustments are made in arriving at Adjusted gross profit
Cost of sales			(3,595	)			8				44				—				—				—				(3,543	)
The following adjustments are made in arriving at Adjusted operating profit
Selling, general and administration			(4,086	)			—				150				—				278				76				(3,582	)
Research and development			(257	)			8				1				—				—				—				(248	)
Other operating income / (expense)			31				—				—				—				—				(31	)			—
The following adjustments are made in arriving at Adjusted profit before tax
Net finance costs			(2	)			—				—				—				—				—				(2	)
The following adjustments are made in arriving at Adjusted profit after tax
Income tax			(197	)			8				(36	)			—				(47	)			(197	)			(469	)
The following adjustments are made in arriving at Adjusted profit attributable to shareholders
Profit attributable to non-controlling interests			49				—				—				—				—				—				49

 

20

2020 Adjusted Results

 

£M		IFRS Results				Net Amortization and Impairment of Intangible Assets				Restructuring Costs				Transaction Related Costs				Separation and Admission Costs				Disposal and others				Adjusted Results
Gross profit			5,910				81				89				91				—				2				6,173
Operating profit			1,598				97				411				91				66				(189	)			2,074
Profit before tax			1,591				97				411				91				66				(189	)			2,067
Profit after tax for the year			1,181				78				321				71				53				(120	)			1,584
Profit attributable to shareholders			1,145				78				319				71				53				(120	)			1,546
Basic earnings per share			114,500p				7,800p				31,900p				7,100p				5,300p				(12,000	)p			154,600p
Weighted average number of shares			1,000,000																								1,000,000
Diluted earnings per share			114,500p				7,800p				31,900p				7,100p				5,300p				(12,000	)p			154,600p
Weighted average number of shares (diluted)			1,000,000																								1,000,000
The following adjustments are made in arriving at Adjusted gross profit
Cost of sales			(3,982	)			81				89				91				—				2				(3,719	)
The following adjustments are made in arriving at Adjusted operating profit
Selling, general and administration			(4,220	)			—				314				—				66				21				(3,819	)
Research and development			(304	)			16				8				—				—				—				(280	)
Other operating income			212				—				—				—				—				(212	)			—
The following adjustments are made in arriving at Adjusted profit before tax
Net finance costs			(7	)			—				—				—				—				—				(7	)
The following adjustments are made in arriving at Adjusted profit after tax
Income tax			(410	)			(19	)			(90	)			(20	)			(13	)			69				(483	)
The following adjustments are made in arriving at Adjusted profit attributable to shareholders
Profit attributable to non-controlling interests			36				—				2				—				—				—				38

 

21

2019 Adjusted Results

 

£M		IFRS Results				Net Amortization and Impairment of Intangible Assets				Restructuring Costs				Transaction Related Costs				Separation and Admission Costs				Disposal and others				Adjusted Results
Gross profit			4,802				36				69				366				—				—				5,273
Operating profit			897				36				330				366				—				25				1,654
Profit before tax			886				36				330				366				—				25				1,643
Profit after tax for the year			687				31				271				285				—				4				1,278
Profit attributable to shareholders			655				31				271				285				—				4				1,246
Basic earnings per share			65,500p				3,100p				27,100p				28,500p				0p				400p				124,600p
Weighted average number of shares (basic)			1,000,000																								1,000,000
Diluted earnings per share			65,500p				3,100p				27,100p				28,500p				0p				400p				124,600p
Weighted average number of shares (diluted)			1,000,000																								1,000,000
The following adjustments are made in arriving at Adjusted gross profit
Cost of sales			(3,678	)			36				69				366				—				—				(3,207	)
The following adjustments are made in arriving at Adjusted operating profit
Selling, general and administration			(3,596	)			—				236				—				—				8				(3,352	)
Research and development			(292	)			—				25				—				—				—				(267	)
Other operating income			(17	)			—				—				—				—				17				—
The following adjustments are made in arriving at Adjusted profit before tax
Net finance costs			(11	)			—				—				—				—				—				(11	)
The following adjustments are made in arriving at Adjusted profit after tax
Income tax			(199	)			(5	)			(59	)			(81	)			—				(21	)			(365	)
The following adjustments are made in arriving at Adjusted profit attributable to shareholders
Profit attributable to non-controlling interests			32				—				—				—				—				—				32

Adjusting Items

Adjusted Results exclude the following items (net of the impact of taxes, where applicable):

Net amortisation and impairment of intangible assets

Impairment of intangibles and goodwill and amortisation of intangibles excluding computer software. Intangible amortisation and impairments arising from intangibles acquired in business combinations are adjusted to reflect the performance of the business excluding the effect of acquisition accounting.

 

22