Filed Pursuant to Rule 424(b)(3)

Registration No. 333-266358

PROSPECTUS SUPPLEMENT NO. 3

(to the prospectus dated October 11, 2022)

Haleon plc

3,559,371,012 Ordinary Shares

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

This prospectus supplement (this “prospectus supplement”) supplements the prospectus dated October 11, 2022 (as supplemented to date, the “Prospectus”), which forms a part of our registration statement on Form F-1 (No. 333-266358). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Current Report on Form 6-K, filed with the Securities and Exchange Commission on March 2, 2023 (the “Form 6-K”), as attached to this prospectus supplement.

The Prospectus and this prospectus supplement relate to the offer and sale from time to time by the selling securityholders identified in the 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 in the Prospectus). The Prospectus and this prospectus supplement also cover any additional securities that may become issuable by reason of share splits, share dividends or other similar transactions.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. Any statement in the Prospectus that is modified or superseded hereby is not deemed to constitute a part of the Prospectus, except as modified or superseded by this prospectus supplement. Except to the extent that the information in this prospectus supplement modifies or supersedes the information contained in the Prospectus, this prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

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 March 1, 2023 the closing sale price as reported on the LSE of the Ordinary Shares was £3.266 per share and the closing sale price as reported on the NYSE of the ADSs was $7.92 per ADS.

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

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 the 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.

The date of this prospectus supplement is March 2, 2023

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2023

Commission File Number: 001-41411

Haleon plc

(Translation of registrant’s name into English)

England and Wales

(Jurisdiction of Incorporation )

Building 5, First Floor, The Heights,

Weybridge, Surrey, KT13 0NY

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒             Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

INCORPORATION BY REFERENCE

This report on Form 6-K shall be deemed to be incorporated by reference in the registration statement on Form S-8 (No. 333-267647) of Haleon plc and to be a part thereof from the date on which this report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBIT INDEX

Exhibit Number	Description
99.1	2022 Full Year Results Announcement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HALEON PLC
	(Registrant)
Dated: March 2, 2023	By:	/s/ Amanda Mellor
		Name:	Amanda Mellor
		Title:	Company Secretary

Exhibit 99.1

2 March 2023

2022 Full year results

Twelve months ended 31 December 2022 (unaudited)

Strong growth with a healthy balance of price and positive volume/mix

• FY Reported revenue +13.8% (£10,858m), organic growth +9.0% with 4.3% price and 4.7% volume/mix

• 2/3 of our business gained or maintained market share¹ in the 12 months ended 31 December 2022

Pricing and efficiencies offsetting inflationary pressures

• FY Reported operating profit increased 11.4% to £1,825m

• FY Adjusted operating profit increased 13.8% to £2,472m, up 5.9% constant currency

• FY operating profit margin 16.8%, down 40bps and Adjusted operating profit margin 22.8%, flat on a reported basis

Continued high cash generation

• FY net cash flow from operating activities was £2,063m, which included £435m related to the net cash outflow from separation, restructuring and disposals; FY 2022 Free cash flow of £1,579m

• Total borrowings as at 31 December 2022 were £10,440m, with 9.3x total borrowings/profit after tax. Net debt as at 31 December 2022 was £9,868m, with 3.6x net debt/adjusted EBITDA

• Inaugural final dividend proposed of 2.4p per share in respect of trading since demerger on 18 July 2022

Positive outlook for 2023⁵, settlement on majority of PPI cases

• FY2023 organic revenue growth expected to be 4-6%

• FY2023 adjusted operating profit margin broadly flat after adverse transactional FX of c. 40bps

• Settlement reached to resolve the vast majority of PPI cases (Nexium24HR and Prevacid24HR)

• Positioned well to deliver on medium term guidance

Reported results							Adjusted results
Twelve months ended 31 December	2022			vs 2021				2022			vs 2021
Revenue	£	10,858m			13.8	%	Organic revenue growth2					9.0	%3
Operating profit	£	1,825m			11.4	%	Adjusted operating profit2	£	2,472m			5.9	%3
Operating profit margin		16.8	%		(40	) bps	Adjusted operating profit margin2		22.8	%		(60	)bps3
Diluted earnings per share		11.5p			(23.8	)%	Adjusted diluted earnings per share2		18.4p			2.8	%
Net cash flow from operating activities	£	2,063m		£	707m		Free cash flow2	£	1,579m		£	406m

1. Market share statements throughout this report are estimates based on the Group’s analysis of third party market data of revenue for 2022 including IQVIA, IRI and Nielsen data. Represents % of brand-market combinations gaining or maintaining share (this analysis covers > 85% of Haleon’s total revenue).

2. Organic revenue growth, Adjusted operating profit, Adjusted operating profit margin, Adjusted diluted earnings per share and Free cash flow are non-IFRS measures; definitions and calculations of non-IFRS measures can be found on pages 23 to 30.

3. Change at constant currency.

4. The commentary in this announcement contains forward-looking statements and should be read in conjunction with the cautionary note on page 22.

5. Please note that we are unable to present reconciliations of forward-looking information for adjusted EBITDA, adjusted effective tax rate, adjusted operating profit margin, organic revenue growth and metrics presented at constant currency because we are unable to forecast accurately certain adjusting items required to present a meaningful comparable IFRS forward-looking financial measure.

Full year results announcement Twelve months ended 31 December 2022

Outlook

For FY 2023 the Company expects:

• Organic revenue growth of 4-6%

• Adjusted operating margin broadly flat after absorbing c.40 bps adverse transactional foreign exchange impact based on current market rates¹

• Net interest expense of c. £350m

• Adjusted effective tax rate of 23-24%

1. As at 10 February 2023

Please note that we are unable to present reconciliations of forward-looking information for adjusted EBITDA, adjusted effective tax rate, adjusted operating profit margin, organic revenue growth and metrics presented at constant currency because we are unable to forecast accurately certain adjusting items required to present a meaningful comparable IFRS forward-looking financial measure.

Haleon’s evolution into an agile Consumer Health organisation

As a standalone company we are now taking advantage of opportunities to evolve at speed across productivity, growth and portfolio.

• Increasing agility and productivity across the business: We have identified further opportunities to optimise existing processes and structures to become more agile. This will result in annualised gross cost savings of c. £300 million over the next 3 years, with the benefits largely in FY 2024 and FY 2025. We expect to incur c.£150m restructuring costs in both FY 2023 and FY 2024.

• Growth and portfolio: We have identified further opportunities to drive growth across our strong portfolio of brands and structural growth categories. We will invest behind these opportunities particularly in areas such as innovation and are targeting to grow A&P and R&D ahead of sales. Furthermore, we will be proactive in managing our portfolio and will remain rigorous and disciplined where there are opportunities for bolt-on acquisitions and divestment.

Taken together, these initiatives give us the capacity to invest and fuel our confidence in delivering 4-6% organic top line growth whilst delivering on our guidance of sustainable moderate margin expansion.

Update on litigation

The Group recently reached a settlement agreement with plaintiffs’ counsel to resolve the vast majority of PPI cases (Nexium24HR and Prevacid24HR) pending against the Group. The financial impact is included in the FY results and is not material to the Group’s financial position, results of operations or cash flows.

Dividend

Consistent with our previous guidance, the Board is declaring a FY 2022 dividend of 2.4 pence which represents approx. 30% of adjusted earnings for the period since listing.

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Full year results announcement Twelve months ended 31 December 2022

Subject to shareholder approval, this dividend will be paid on 27 April 2023 to holders of ordinary shares and US American Depositary Shares (ADS) on the register as of 17 March 2023 (the record date). The ex-dividend date is 16 March 2023. For ordinary shareholders wishing to participate in the Dividend Reinvestment Programme (DRIP), the election deadline for the DRIP is 4 April 2023.

Reflecting our stated priorities to invest into the business for growth and reduce leverage our current intention is, subject to Board approval, to maintain our pay-out ratio around the current level.

Subject to Board approval, future ordinary dividends are expected to be paid half-yearly with approximately one third of the dividend paid as an interim dividend, following the Company’s half-year results and paid in October, and the balance paid as a final dividend, subject to shareholder approval, following the Company’s Annual General Meeting.

Presentation for analysts and shareholders:

A recorded results presentation by Brian McNamara, Chief Executive Officer, and Tobias Hestler, Chief Financial Officer, will be available shortly after 7am BST (8am CET) on 2 March 2023 and can be accessed at www.haleon.com/investors. This will be followed by a Q&A session at 9:30am GMT (10:30am CET).

For analysts and shareholders wishing to ask questions, please use the dial-in details below which will have a Q&A facility:

UK:	0800 640 6441
US:	+1 646 664 1960
All other:	+44 203 936 2999
Passcode:	77 03 05

An archived webcast of the presentation will be available later on the day of the results and can be accessed at https://www.haleon.com/investors/

Enquiries

Investors		Media
Sonya Ghobrial	+44 7392 784784	Zoe Bird	+44 7736 746167
Rakesh Patel	+44 7552 484646	Nidaa Lone	+44 7841 400607
Emma White	+44 7792 750133	Louise Pyman	+44 7586 495121
Email: investor-relations@haleon.com		Email: corporate.media@haleon.com

About Haleon plc

Haleon (LSE/NYSE: HLN) is a global leader in consumer health, with a purpose to deliver better everyday health with humanity. Haleon’s product portfolio spans five major categories - Oral Health, Pain Relief, Respiratory Health, Digestive Health and Other, and Vitamins, Minerals and Supplements (VMS). Its long-standing brands - such as Advil, Sensodyne, Panadol, Voltaren, Theraflu, Otrivin, Polident, parodontax and Centrum - are built on trusted science, innovation and deep human understanding.

For more information please visit www.haleon.com

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Full year results announcement Twelve months ended 31 December 2022

Guiding strategy

Haleon is led by its purpose to deliver better everyday health with humanity.

A clear approach to deliver on our growth ambitions is built on a world class portfolio of category leading brands in a growing sector across an attractive geographic footprint. This leverages competitive capabilities combining human understanding with trusted science, brand building and innovation, leading route to market and leading digital capabilities.

Haleon aims to outperform through a focus on increasing household penetration and capitalising on new and emerging growth opportunities across channels and geographies, underpinned by a strong focus on execution and financial discipline to improve profitability and sustain reinvestment in growth. Critically, running a responsible business, which is integral to all that we do, allows Haleon to reduce risk and support performance.

Taken together, this is expected to drive 4-6% organic annual revenue growth, a moderate expansion in our margins while supporting our investment for growth, delivering consistent high cash conversion and maintaining a focus on our clear and disciplined capital allocation policy.

Business review - Delivering growth

The strength of Haleon’s portfolio resulted in 13.8% reported revenue growth and 9.0% organic growth during the year. Throughout the year, Haleon’s agility and strategy to outperform continued to deliver results through market share gains driven by increased household penetration driven by exciting innovations and activations. Across the portfolio and in the full year, two thirds of Haleon’s business gained or maintained market share.

Leading portfolio – performance driven by innovation, brand building and geographic and channel expansion

In Oral Health, where revenue grew 8.6% on a reported basis and 5.6% organically (excluding a 2.7% increase as a result of favourable foreign exchange rates and a 0.3% increase as a result of the effect of acquisitions), Haleon maintained its track record of market outperformance, with sales double the growth rate of the overall market, mainly driven by increased penetration resulting in market share gains across the portfolio, with all 3 Power Brands Sensodyne, parodontax and Polident/Poligrip outperforming. This growth was driven by strong brand building campaigns and activation, key innovations and geographic expansion. We launched a new formula with superior cleaning with Sensodyne Complete Protection, continued building and activating the successful Sensodyne Sensitivity & Gum across markets. The launch of parodontax Gum+ paste, targeting bacteria between teeth and using technology to neutralise bad breath in over ten markets, performed well, driving continued market share gain. The parodontax brand geographic expansion was also supported in India and South Africa leveraging investment in Expert marketing capability. In Dental Appliance Care, Poligrip Power Max Hold+ with a precision nozzle was launched in over 15 markets and is outperforming, growing the overall category.

In Vitamins, Minerals and Supplements, Haleon continued to see share gain with 11.6% revenue growth on a reported basis and 5.0% organic revenue growth (excluding a 6.4% increase as a result of favourable foreign exchange rates, a 0.3% increase as a result of the effect of acquisitions and a 0.1% decrease as a result of the effect of disposals). As expected, growth slowed in the second half as the Group lapped tough

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Full year results announcement Twelve months ended 31 December 2022

comparatives in the US from new capacity coming on stream and increased consumption during Covid waves in 2021. Importantly, underlying consumption remained broadly steady through the year. Centrum outperformed growing share driven by new engaging brand campaigns, new benefits innovations products centred around immunity with more natural and herbal ingredients saw strong growth from geographic expansion in Middle East and Latin America. Haleon continued to build on its trusted science, reinforcing brand differentiation, with the clinical study completed on Centrum Silver tablets, which demonstrated positive results on cognitive capabilities of adults 65 years and older, thereby providing a new claim and activation for the product. The brand also saw strong growth from geographic expansion in Middle East, LatAm, and in India we launched the brand in H2 and there remains significant headroom for increased penetration.

In the US, Emergen-C continued to see growth with younger and more diverse households through innovation such as Emergen-C Kidz. In China, a gummy innovation for Caltrate enabled the brand to reach new younger consumers. In addition, locally relevant brands such as Scotts, BeTotal and Calsource delivered double digit growth.

In Pain Relief, revenue on a reported basis grew 14.0% and organic revenue growth was 8.9% (excluding a 4.7% increase as a result of favourable foreign exchange rates, a 0.5% increase as a result of the effect of acquisitions and a 0.1% decrease as a result of the effect of disposals). A standout performer was Panadol which again gained share and saw organic growth in the high-teens percent. Given the prolonged and sustained cold and flu season and resulting increased demand for the brand through agility and execution in market the brand gained share overall. The Take care Panadol campaign was particularly successful, launched in over 10 markets amplifying brand activation and relevance during a key Covid vaccination period, driving brand growth and externally recognised with industry awards. Advil also saw strong growth benefitting from increased market activation and consumption during the cold and flu season. The topical market continues to see weakness largely due to strong consumption in the systemic analgesics market. That said, Voltaren was up low single digit overall helped by innovation leveraging clinical data.

In Respiratory Health revenue growth on a reported basis of 39.5% and organic revenue growth of 32.6% (excluding a 6.9% increase as a result of favourable foreign exchange rates) reflected the strong cold and flu season with sales significantly above 2019 levels in North America and Europe in Q4. Cold and flu added 3% to Group organic sales in 2022. Theraflu was supported by innovation launches including Theraflu Flu Relief and excellent commercial execution which enabled the brand to meet strong demand. Allergy was up mid-single digit driven by Flonase and we launched a differentiated multi-symptom formula innovation (pain reliever, antihistamine, decongestant) Flonase Flare Up Relief designed to attract consumers looking for rapid relief.

Digestive Health and Other saw growth in revenue on a reported basis of 7.4% and organic revenue growth of 2.9% (excluding a 6.7% increase as a result of favourable foreign exchange rates, and decreases of 1.4% and 0.8% as a result of the effect of MSAs and disposals, respectively). This business is split across three areas, c.50% digestive, c.25% skin health and c.25% smoking cessation brands. Challenging conditions in the preventative antacid market adversely impacted Nexium, although our brands in the immediate relief antacid category (e.g. Tums) saw growth. Skin Health saw high-single digit growth, helped by Chapstick following the addition of a new value distribution channel. In smoking cessation organic growth was slightly down primarily reflecting a number of large retailers reducing inventory towards the end of the year.

5

Full year results announcement Twelve months ended 31 December 2022

Innovation accelerating growth

The focus on innovation to accelerate growth continued and we strengthened the portfolio with new launches. During the year locally relevant propositions were launched across several markets, targeting a younger consumer base for whom relevance is increased with natural based propositions. These included Robitussin Elderberry, and Emergen-C botanicals in the US, and non-medicated Otrivin Breathe Clean and Theraflu Pro-Naturals in Central and Eastern Europe.

Marketing effectiveness

Haleon Advertising and Promotion (A&P) spend was up 4% at actual exchange rates (AER) and flat at constant currency (CER) for the year, with spend equally split between offline and online media channels. Importantly, consumer facing A&P spend excluding Russia was up 6% (CER) for the year. In addition, Haleon drove further efficiencies in A&P spend from bringing production in-house. Furthermore, spend declined in Russia.

Within our A&P spend, Haleon placed greater investment on streaming channels, retail media (commerce) and search directed towards e-commerce. Marketing to Healthcare professionals strengthened, with Haleon’s HealthPartner portal now live in 50 markets, having recorded over 10 million unique visitors. During the year, a number of successful marketing campaigns supported performance with Haleon winning multiple awards globally across creative and design.

Increased channel penetration

Within the channels there remains an opportunity for increased e-commerce penetration, and e-commerce grew 16% to 9% of total sales. Improved content, optimised media, increased investment in high traffic events as well as refreshed ‘brand stores’ contributed to growth. In the US and China, Haleon’s two largest e-commerce markets, sales grew 7% and 40%, respectively. Haleon also continues to invest in digital capabilities across the business and was recognised for the second year in a row at the Global Search Awards.

Supported by strong execution and financial discipline

The business remains focused on driving efficiency, effectiveness and agility to ensure investment delivers positive returns.

Haleon successfully separated from GSK in July 2022, including the completion of a technology systems cut over demonstrating strong execution and capabilities across the business, and successfully hiring and standing up all functions needed to operate independently. Since then, the business has operated successfully as a standalone company, with the total costs for this of c.£0.2bn incurred during the year, including costs related to software, the majority of which are in the cloud rather than on-premise.

The costs to run independently were partly offset by the incremental Pfizer synergies delivered during the year, taking the aggregate annual synergies to over £600m (increased from £500m at the Capital Markets Day in February 2022).

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Full year results announcement Twelve months ended 31 December 2022

The Group remains focused on maintaining an efficient business. Initiatives to drive value from third-party expenditure and offset headwinds from input prices and commodity inflation continue, including forward buying, value engineering and new supplier introduction, and initiatives to ensure continuity of supply. Over the year, Haleon managed to largely offset significant inflationary cost pressures particularly on raw materials through a combination of pricing, forward buying and other initiatives. That said, an increase in freight costs and commodity costs along with transactional FX losses resulted in adjusted gross profit margin across the business being down 50bps at AER to 62.4%.

Furthermore, across the business, Haleon also undertook SKU rationalisation, improved logistics productivity through warehousing and outbound freight consolidation which helped to partially offset freight and distribution cost inflation. Simultaneously, the business continued its insourcing initiatives, improved return on investment on promotional spend and optimised price-pack architecture across the portfolio.

At the demerger, Haleon had total borrowings of £11,765m and net debt of £10,707m. Strong cash generation since the separation from GSK, resulted in total borrowings and net debt at 31 December 2022 of £10,440m and £9,868m, respectively, which underpins Haleon’s confidence in its expectation to de-lever rapidly to an expected level of less than 3x net debt/Adjusted EBITDA during 2024. Following demerger, Haleon fully repaid £1.5bn of its term loan through a combination of operational cash flows and £0.3bn of commercial paper issuance in H2. Net debt at 31 December 2022 included £75m of adverse translation FX incurred since the demerger. As debt is largely matched to the regions where profit is earned, there is a natural hedge on foreign exchange movements over time. At 31 December 2022, 87% of debt was fixed with the balance being exposed to floating rates.

To further optimise its capital structure, on 2 March 2023, Haleon announced that it would exercise its option to redeem at par the $300m of Callable floating Rate Senior Notes due in 2024 on 24 March 2023.

Running a responsible business

Running a responsible business remains an integral part of our strategy. Haleon remains committed to reducing our environmental impact, making everyday health more inclusive, and operating with ethical and responsible standards of conduct.

Progressing against existing environmental targets

Haleon is on track to reduce its net Scope 1 and 2 carbon emissions by 100% by 2030 (versus its 2020 baseline). Initiatives in 2022 included the achievements of 100% renewable electricity across all Haleon sites which we directly control and of Haleon’s first carbon neutral site in Suzhou, China aligned with PAS 2060. Also in 2022, Haleon has announced its ambition to achieve Net Zero carbon emissions from source to sale by 2040 aligned to guidance from The Climate Pledge and Race to Zero, as well as submitted its Scope 1, 2 and 3 goals to the Science Based Targets Initiative for verification and has registered its commitment to Net Zero.

Haleon continues to develop solutions for all product packaging to be recycle-ready by 2025. Healthcare packaging currently has limited recyclability in the current waste infrastructure due to challenges associated with the collection and sorting of small formats. For this reason, our recycle-ready goal is a key milestone towards making all packaging recyclable or reusable by 2030, where safety, quality and regulations permit. Supporting initiatives in 2022 included the launch of ENO in a recycle-ready format in India. Haleon has also launched a new mouthwash bottle for Aquafresh in Europe that uses 20% less plastic and is recycle-ready. The roll-out of recycle-ready toothpaste tubes also continues across Oral Healthcare brands, with over 350 million recycle-ready toothpaste tubes launched in market in 2022.

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Full year results announcement Twelve months ended 31 December 2022

Opportunity to make a difference with health inclusivity

We believe that Haleon has a compelling opportunity to make a meaningful difference to helping improve health inclusivity. Haleon aims to empower 50 million people a year to be more included in opportunities for better everyday health by 2025. Haleon supported Economist Impact in its publication of the world’s first Health Inclusivity Index in October 2022. We have supported the creation of the Index to help governments, policymakers, health professionals, civil society organisations and other businesses take evidence-based actions to collectively help improve health inclusivity. By developing a deep understanding of what holds individuals back from getting the right treatment or appropriate level of care, we can understand and inform our own actions as Haleon to help people be more included in better everyday health.

An example of putting this into action is work that Haleon and Microsoft have collaborated on to expand the functionality of the Seeing AI app for use on our consumer healthcare product labels. This tool helps consumers who are blind, visually impaired or have difficulty with reading the labels of products due to low literacy to access Haleon’s product label information by scanning the barcode of Haleon products. Consumers can hear important use and safety information as narrated by the Seeing AI app.

Other brand initiatives focused on promoting health inclusivity in 2022 included Theraflu’s Rest and Recover Program in the US, and Otrivin’s National Schools Partnership on the ‘Actions to Breathe Cleaner’ program. The World Health Organisation estimates 93% of children are breathing polluted air every day, and the aim of Actions to Breathe Cleaner is to promote adoption of everyday actions that school children can take to reduce the impact of air pollution on their health. This includes in India, where Otrivin through the Actions to Breathe Cleaner program has provided 10,000 ‘pollution capture pencils’ to school children. The mixture used at the core of the pencils was made by mixing graphite with residue collected from twenty-two air purifiers installed by Otrivin at three schools with the poorest air quality in Bengaluru.

These examples represent only highlights of the ways our brands are bringing focus to Health Inclusivity through direct brand actions, support for Health Professionals and building actionable insights through research collaborations.

Building robust corporate governance

Haleon continues to build best practice corporate governance, in line with the requirements of a dual LSE premium listed and NYSE listed company. Board-level governance and committees have been established to ensure alignment with all applicable requirements of the UK Corporate Governance Code, Sarbanes-Oxley Act and New York Stock Exchange Listing Standards. The Group’s internal and external operational governance links in directly to the Board-level governance, enabling rapid escalation and visibility.

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Full year results announcement Twelve months ended 31 December 2022

Operational review

Category performance

Revenue by product category for the twelve months ended 31 December 2022:

	Revenue (£m)				Revenue change (%)
	2022		2021		Reported			Constant currency1			Organic1
Oral Health		2,957		2,724		8.6	%		5.8	%		5.6	%
VMS		1,675		1,501		11.6	%		5.3	%		5.0	%
Pain Relief		2,551		2,237		14.0	%		9.4	%		8.9	%
Respiratory Health		1,579		1,132		39.5	%		32.6	%		32.6	%
Digestive Health and Other		2,096		1,951		7.4	%		0.9	%		2.9	%
Group revenue		10,858		9,545		13.8	%		8.7	%		9.0	%

1. Definitions and calculations of non-IFRS measures can be found on pages 23 to 30.

Oral Health

• Revenue was £2,957m (2021: £2,724m), a growth of +8.6% on a reported basis (including exchange rate impact, with revenue growth on a constant currency basis of +5.8%) and +5.6% on an organic basis.

• Organic revenue growth was primarily driven by the same principal factors, but notably excluded a +2.7% increase in revenue growth as a result of favourable exchange rate movements (included in revenue at AER), among others.

• Growth in revenue at AER (in addition to the impact of foreign exchange rate movement noted above) CER and organic revenue was driven by Sensodyne, whose strong performance reflected its underlying brand strength, continued innovation and strong growth across key markets particularly India and Middle East & Africa. Organic sales in China declined mid-single digit driven by lockdown restrictions.

• Parodontax delivered high-single digit organic revenue growth, with low-teens percent organic revenue growth in North America. Throughout the year, consumption remain strong, running at approximately three times that of the global oral health market.

• Denture care organic revenue was up high-single digit as a result of strong growth in EMEA and LatAm driven by easing of lockdown restrictions coinciding with strong innovation and marketing around the product.

• In Q4 category growth was up double digit on a reported basis and mid-single digit organically, with weakness in Sensodyne in US and China offset by strong growth in India, Middle East Africa and Brazil.

VMS

• Revenue was £1,675m (2021: £1,501m), a growth of +11.6% on a reported basis (including exchange rate impact, with revenue growth on a constant currency basis of +5.3%) and +5.0% on an organic basis.

• Organic revenue growth was primarily driven by the same principal factors, but notably excluded a +6.4% increase in revenue growth as a result of favourable exchange rate movements (included in revenue at AER), among others.

• Growth in revenue at AER (including the favourable impact of foreign exchange rate changes), CER and organic revenue was driven by Centrum revenue’s mid-single digit growth reflecting good growth across Asia Pacific and EMEA & Latin America with global market share gains across the year.

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Full year results announcement Twelve months ended 31 December 2022

• Emergen-C revenue also grew organically by low-single digit with consumption skewed towards Covid related demand and benefiting from new innovations including Emergen-C Kidz.

• Caltrate saw organic revenue growth in mid-single digit given growth in China with a slight slowdown in December reflecting Covid lockdowns resulting in decreasing traffic to pharmacies.

• In Q4 revenue was up mid-single digit on a reported basis and declined low-single digit organically, with high-single digit growth in Emergen-C and mid-single digit growth in Caltrate partly offsetting the low-single digit decline in Centrum due to comparatives.

Pain Relief

• Revenue was £2,551m (2021: £2,237m), a growth of +14.0% on a reported basis (including exchange rate impact, with revenue growth on a constant currency basis of +9.4%) and +8.9% on an organic basis.

• Organic revenue growth was primarily driven by the same principal factors, but excluded, among others, a +4.7% increase in revenue growth as a result of favourable exchange rate movements (included in revenue at AER)

• Growth in revenue at AER (including the favourable impact of foreign exchange rate changes), CER and organic revenue was driven by Panadol revenue grew organically by high-teens percent with double digit growth organically across all three regions and particular strength in MEA, Australia and South East Asia and Taiwan.

• Advil organic revenue growth was in the low-double-digit percent benefiting from increased incidences of Flu, Covid and RSV. The latter particularly led to strong growth and market share gains for Advil Kids in the US.

• Low single digit organic revenue growth from Voltaren with high single digit organic revenue growth in US and mid-single digit organic revenue growth in China partly offset by a decline in Germany.

• Revenue on a reported and organic basis in Q4 was up double-digit and high single digit respectively. The latter driven by double digit growth in Panadol and Fenbid, with low single digit growth in Advil and Voltaren.

Respiratory Health

• Revenue was £1,579m (2021: £1,132m), a growth of +39.5% on a reported basis (including exchange rate impact, with revenue growth on a constant currency and organic basis of +32.6%).

• Organic revenue growth was primarily driven by the same principal factors, but excluded a +6.9% increase in revenue growth as a result of favourable exchange rate movements (included in revenue at AER).

• A strong cold and flu season, well ahead of the historically low season in 2021 underpinned the results across all regions with sales up c. 30% compared to 2019. This added 3% to Group revenue growth in 2022.

• Theraflu and Robitussin were up over 50% and Otrivin was up over 30%. Results were underpinned by a number of new innovations including the launch of Theraflu Max in the US which drove incremental share and penetration gain for Theraflu.

Digestive Health and Other

• Revenue was £2,096m (2021: £1,951m), a growth of +7.4% on a reported basis (including significant exchange rate impact, with revenue growth on a constant currency basis of +0.9%) and +2.9% on an organic basis.

10

Full year results announcement Twelve months ended 31 December 2022

• Organic revenue growth was primarily driven by the same principal factors, but excluded a +6.7% increase in revenue growth as a result of favourable exchange rate movements (included in revenue at AER) and decreases in revenue growth of 2.2% from the effect of acquisitions, 0.8% from the effect of disposals and 1.4% from the effect of MSAs.

• Growth in revenue at AER (including the favourable impact of foreign exchange rate changes), CER and organic revenue was driven by Digestive Health which is around half of this reported product category and saw growth in Eno. Smokers health revenues declined slightly and Skin health brands were up high-single digit.

Geographical segment performance

Performance by geographical segment for the twelve months ended 31 December:

	Revenue (£m)				Revenue change (%)
	2022		2021		Reported			Constant currency1			Organic1			Price1			Vol/Mix1
North America		4,116		3,525		16.8	%		5.6	%		5.9	%		2.9	%		3.0	%
EMEA and LatAm		4,270		3,877		10.1	%		10.0	%		10.9	%		6.4	%		4.5	%
APAC		2,472		2,143		15.4	%		11.6	%		10.6	%		2.6	%		8.0	%
Group		10,858		9,545		13.8	%		8.7	%		9.0	%		4.3	%		4.7	%

1. Price and Volume/Mix are components of Organic Revenue Growth. Definitions and calculations of non-IFRS measures can be found on pages 23 to 30.

Adjusted operating profit by geographical segment for the twelve months ended 31 December:

	Adjusted operating profit (£m)						YoY change			YoY constant currency1
	2022			2021			2022			2022
Group operating profit		1,825			1,638			11.4	%		2.3	%
Reconciling items between adjusted operating profit and operating profit2		647			534			21.2	%		17.0	%
Group Adjusted operating profit		2,472			2,172			13.8	%		5.9	%
North America		1,070			828			29.2	%		11.4	%
EMEA and LatAm		977			960			1.8	%		1.1	%
APAC		506			461			9.8	%		5.2	%
Corporate and other unallocated		(81	)		(77	)		5.2	%		0.0	%
Group Adjusted operating profit		2,472			2,172			13.8	%		5.9	%

1. Definitions and calculations of non-IFRS measures can be found on pages 23 to 30.

2. Reconciling items for these purposes are the Adjusting Items, which are defined under “Use of Non-IFRS Measures”. A reconciliation between Operating profit and Adjusted operating profit is included under “Use of Non-IFRS Measures”.

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Full year results announcement Twelve months ended 31 December 2022

Adjusted operating profit margin by geographical segment for the twelve months ended 31 December:

	Adjusted operating profit margin (%)						YoY change			YoY constant currency1
	2022			2021			2022			2022
North America		26.0	%		23.5	%		2.5	%		1.3	%
EMEA and LatAm		22.9	%		24.8	%		(1.9	)%		(2.0	)%
APAC		20.5	%		21.5	%		(1.0	)%		(1.2	)%
Group1		22.8	%		22.8	%		—	%		(0.6	)%

1. Definitions and calculations of non-IFRS measures can be found on pages 23 to 30.

2. Reconciling items for these purposes are the Adjusting Items, which are defined under “Use of Non-IFRS Measures”. A reconciliation between Operating profit and Adjusted operating profit is included under “Use of Non-IFRS Measures”.

North America

• Revenue was £4,116m (2021: £3,525m), a growth of +16.8% on a reported basis, driven largely by favourable exchange rate impact, with revenue growth on a constant currency basis of +5.6%. Revenue growth was +5.9% on an organic basis (with 2.9% price and 3.0% volume/mix), excluding, among others, an +11.2% increase in revenue growth as a result of favourable exchange rate movements (included in revenue at AER).

• During Q4, reported revenue growth was +14.1% and organic revenue growth was low single digits with low single digits price and a low single digit decline in volume/mix. The slight decline in Volume/Mix in Q4 reflecting the lapping of a tough comparative in 2021 where supply of Advil, Centrum and Emergen-C was increased, reduction in inventories for Sensodyne, in Smokers Health and a recall at Tums which has now been resolved.

• Drivers of revenue at AER (including the favourable impact of foreign exchange movements), CER and organic revenue included Oral Health, where reported revenue was up double-digit and organic revenue was flat with Sensodyne flat due to changes in retailer inventory patterns. Consumption of Sensodyne for the year was up mid-single digit. Low double-digit growth was seen in Parodontax and mid-single digit growth in Denture Care offsetting a decline in Aquafresh.

• In VMS, revenue declined low-single digit with low-single digit growth at Emergen-C offset by a modest decline at Centrum. Underlying consumption at Centrum has remained broadly steady throughout the year and the brand continues to see market share gains.

• High-single digit revenue growth in Pain Relief was underpinned by Advil benefitting from price increases and market activation combined with increased demand during periodic Covid waves. Voltaren was up high-single digit. In Respiratory Health, revenue was up mid-thirties percent underpinned by sustained incidences of cold and flu, including some benefit from new Covid variants with similar symptoms, and successful market activation. During Q4, elevated incidences of Cold and Flu led to mid-twenties percent growth across Respiratory Health, with the Cold and Flu sales being significantly ahead of 2019 levels. Theraflu and Robitussin were particularly strong helped by new innovations including Theraflu Max.

• In Digestive Health and Other, revenue was up low-single digit with strong growth in Chapstick offset by mid-single digit decline in Smokers Health and a slight decline in Digestive Health.

• Adjusted operating profit margin increased 250bps at AER to 26.0% and by 130bps at CER. Margin expansion was driven by pricing as well as benefits from productivity improvements, portfolio optimisation and strong cost management. This was partially offset by commodity and freight headwinds and costs incurred as a standalone company. The prior year reflected a favourable comparative following site investments and one time manufacturing write-offs.

12

Full year results announcement Twelve months ended 31 December 2022

Europe, Middle East & Africa (EMEA) and Latin America (LatAm)

• Revenue was £4,270m (2021: £3,877m), a growth of +10.1% on a reported basis, +10.0% on a constant currency basis and +10.9% on an organic basis (with 6.4% price and 4.5% volume/mix.), excluding an +0.1% increase in revenue growth as a result of favourable exchange rate movements (included in revenue at AER), and decreases in revenue growth of 0.4% from the effect of disposals and 0.5% from the effect of MSAs .

• During Q4, reported revenue growth was 9.8% and organic revenue growth was mid-to-high single digits with high single digits price and a low single digit decline in volume/mix. The decline in volume/mix in Q4 largely reflected declines in Russia.

• Drivers of revenue at AER (including the favourable impact of foreign exchange movements), CER and organic revenue included Oral Health, where revenue grew high-single digit with good parodontax growth, robust recovery in Denture Care and continued Sensodyne growth, up mid-single digit.

• In VMS, revenue up high-single digit driven by high-single digit growth in Centrum supported by entry into new markets including Egypt in November 2022 along with high single digit growth from local strategic brands.

• Pain Relief experienced mid-single digit revenue growth largely reflecting double-digit Panadol growth.

• In Respiratory Health – revenue up low-thirties percent due to a strong cold and flu season significantly ahead of 2019 levels. During Q4, revenue increased high-single digit reflecting strong comparators from prior year and higher seasonal sales in Q3.

• Digestive Health and Other experienced mid-single digit revenue growth with good results in all categories. Particularly strong double digit revenue growth in Latin America and Middle East & Africa underpinned FY2022 revenue.

• Regionally, particularly strong double digit revenue growth was seen in Latin America and Middle East & Africa underpinned FY revenue. Additionally, Europe saw high-single digit revenue growth in Northern Europe and Southern Europe, along with double digit growth across Central and Eastern Europe. This was partly offset by challenging performance in Germany, albeit with a marked improvement during the fourth quarter.

• Adjusted operating profit margin decreased by 190bps at AER or 200bps at CER largely driven by costs incurred as a standalone company and adverse transactional foreign exchange. Beyond this, higher commodity and freight costs were largely offset by pricing and operational efficiency improvements across the business.

Asia-Pacific

• Revenue was £2,472m (2021: £2,143m), a growth of +15.4% on a reported basis (including exchange rate impact of +3.8%, with revenue growth on a constant currency basis of +11.6%) and +10.6% on an organic basis, excluding the +3.8% exchange rate movement (included in revenue at AER) and included a one-off benefit of c.1% related to separation from changes in distribution in Vietnam, with 2.6% price and 8.0% volume/mix.

• During Q4, reported revenue growth was +12.2% and organic revenue growth was high single digits with low single digits price and mid-to-high single digit volume/mix.

• Drivers of revenue at AER (including the favourable impact of foreign exchange rate changes), CER and organic revenue included Oral Health where high-single digit revenue growth was underpinned by double digit growth in Sensodyne. Results reflected strong growth in India, partly offset by some weakness in China from Covid related lockdowns.

13

Full year results announcement Twelve months ended 31 December 2022

• In VMS, high-single digit revenue growth was supported by strong growth in China and South East Asia and Taiwan along with momentum following the launch of Centrum in India. Innovations around gender-based vitamins and probiotics contributed to growth. Caltrate continued to see strong growth with high single digit growth in China.

• Pain Relief saw revenue growth in the twenties percent, benefitting from over twenty percent growth across Panadol with strong growth in South East Asia and Taiwan, and Australia. Voltaren was up mid-single digit with good growth in China.

• In Respiratory Health, a rebound in cold and flu season resulted in revenue up mid-twenties percent.

• Digestive Health and Other revenue was slightly down due to weakness in Smokers Health and skin health brands.

• Performance in South-East Asia, Taiwan and India were particularly strong during the year, up over twenty percent. Revenue in China increased high single digit for the year reflecting softness in the second quarter from Covid related lock downs and a progressive recovery during the second half of the year.

• Adjusted operating profit margin decreased by 100bps at AER to 20.5% or 120bps at CER due to higher A&P investment and costs incurred to be a standalone company, more than offsetting positive operating leverage from strong revenue growth.

Summary of financial performance (unaudited)

Income statement summary

	2022 £m		2021 £m		% change
Total revenue		10,858		9,545		13.8
Gross profit		6,577		5,950		10.5
Adjusted gross profit1		6,772		6,002		12.8
Operating profit		1,825		1,638		11.4
Adjusted operating profit1		2,472		2,172		13.8
Profit before tax		1,618		1,636		(1.1	)
Adjusted profit before tax1		2,265		2,170		4.4
Profit after tax attributed to shareholders of the Group		1,060		1,390		(23.7	)
Adjusted profit after tax attributed to shareholders of the Group1		1,700		1,652		2.9
Diluted earnings per share2
Reported (p)		11.5		15.1		(23.8	)
Adjusted1 (p)		18.4		17.9		2.8

1. Definitions and calculations of non-IFRS measures can be found on pages 23 to 30.

2. Earnings per share calculation for the year ended 31 December 2021 have been adjusted retrospectively as required by IAS 33 “Earnings per share” due to the increase in the number of ordinary shares outstanding as a result of the Demerger activities that took place in July 2022. Diluted earnings per share for the year ended 31 December 2022 has been calculated after adjusting the weighted average number of shares used in the basic calculation to assume the conversion of all potential dilutive shares. There were no dilutive equity instruments for the year ended 31 December 2021.

Revenue

Reported revenue increased 13.8% and 9.0% organically to £10,858m (2021: £9,545m). Favourable foreign exchanged added £478m to total revenue, mainly due to strengthening of the US Dollar and Chinese Renminbi against Sterling.

14

Full year results announcement Twelve months ended 31 December 2022

Gross profit

Reported gross profit increased by 10.5% to £6,577m (2021: £5,950m) with gross margin down 170bps at 60.6%. Similarly, Adjusted gross profit increased by 12.8% with Adjusted gross margin of 62.4% (2021: 62.9%).

Gross profit growth and adjusted gross profit growth were each largely driven by pricing, favourable mix, Pfizer synergies and ongoing supply chain and manufacturing efficiency benefits. This was offset by higher commodity related costs and freight cost inflation along with transactional FX losses.

Operating profit

Operating profit increased by 11.4% to £1,825m (2021: £1,638m) and operating profit margin decreased by 40bps to 16.8% (2021: 17.2%). Adjusted operating profit increased by 13.8% to £2,472m (2021: £2,172m) and Adjusted operating profit margin at AER was flat at 22.8% and declined by 60bps at CER.

Adjusting items within operating profit totalled £647m in 2022 (2021: £534m), representing £41m (2021: £195m) of costs related to restructuring activities associated with the Pfizer Transaction at a reduced level as we concluded the programme, Separation and Admission costs of £411m (2021: £278m) represented the culmination of costs relating to separating the business from GSK and listing. Amortisation and impairment of £172m (2021: £16m) including Intangible amortisation of £43m (2021: £40m) and an Impairment charge of £129m largely relating to the Preparation H brand and a brand primarily sold in Ukraine. Disposals and others totalled £15m expense (2021: £45m expense) which included £20m of net gains related to the disposal of assets and business changes, offset by other items including a legal provision with respect to PPI litigation. Beyond this, transaction related costs were £8m (2021: £nil).

Adjusted operating profit growth was driven by strong revenue growth including a healthy balance of volume and price/mix, combined with Pfizer synergies partly offset by higher commodity related and raw material costs, freight cost inflation, incremental costs of operating as a standalone company and increased investment in R&D.

For the year, A&P spend was up 4% and flat at CER representing 18.7% of revenue (2021: 20.3%). A&P spend was flat due to scale benefits from bringing production in-house and ceasing advertising in Russia. Consumer facing A&P spend excluding Russia was up 6% (CER) for the year. R&D expenditure was £300m and Adjusted R&D expenditure totalled £303m, up 22.2% and 16.1% at CER (2021: £248m). R&D included the transfer of additional activities following the implementation of a new operating model in Q4 FY21.

Net finance costs

Net finance costs increased to £207m, reflecting interest of £258m primarily related to the issuance of £9.2bn in notes in March 2022 offset partly by interest income of £51m mainly related to the on-lend of funds to the GSK Group and the Pfizer Group before the demerger.

Tax charge

The statutory tax charge of £499m (2021: £197m) represented an effective tax rate on IFRS results of 31% (2021: 12%). The 2022 tax charge included a £102m non-cash charge due to the revaluation of US deferred tax liabilities given the increase in the blended rate of US state taxes expected to apply as a result of the demerger. In 2021 the tax charge included a £164m non-cash credit relating to an uplift in the tax basis of certain intragroup brand transfers. The tax charge on an Adjusted basis was £506m (2021: £469m) and the effective tax rate on an Adjusted results basis was 22% (2021: 22%).

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Full year results announcement Twelve months ended 31 December 2022

Net capital expenditure

Net capital expenditure of £292m (2021: £149m) included £328m (2021: £298m) related to the purchase of PP&E and software. Proceeds from disposals of intangible assets declined to £36m (2021: £137m). There were no proceeds from the sale of PP&E (2021: £12m).

Net debt

At 31 December 2022, the Group’s net debt was £9,868m, which included amounts raised as part of the pre-funding commitment for the demerger. Net debt is calculated as follows:

	As at 31 December 2022			As at 31 December 2021
	£m			£m
Cash and cash equivalents		684			414
Short-term borrowings		(437	)		(79	)
Long-term borrowings		(10,003	)		(87	)
Derivative financial assets		94			17
Derivative financial liabilities		(206	)		(19	)
Net Debt		(9,868	)		246

As of 31 December 2022, the Group’s senior unsecured long-term credit rating was BBB from Standard and Poor’s and Baa1 from Moody’s.

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Full year results announcement Twelve months ended 31 December 2022

CONSOLIDATED INCOME STATEMENT (unaudited)

FOR THE YEAR ENDED 31 DECEMBER

	2022			2021
	£m			£m
Revenue		10,858			9,545
Cost of sales		(4,281	)		(3,595	)
Gross profit		6,577			5,950
Selling, general and administration		(4,483	)		(4,086	)
Research and development		(300	)		(257	)
Other operating income		31			31
Operating profit		1,825			1,638
Finance income		51			17
Finance expense		(258	)		(19	)
Net finance costs		(207	)		(2	)
Profit before tax		1,618			1,636
Income tax		(499	)		(197	)
Profit after tax for the year		1,119			1,439
Profit attributable to shareholders of the Group		1,060			1,390
Profit attributable to non-controlling interests		59			49
Basic earnings per share (pence)1		11.5			15.1
Diluted earnings per share (pence)1		11.5			15.1

1. Earnings per share calculation for the year ended 31 December 2021 have been adjusted retrospectively as required by IAS 33 “Earnings per share” due to the increase in the number of ordinary shares outstanding as a result of the Demerger activities that took place in July 2022. Diluted earnings per share for the year ended 31 December 2022 has been calculated after adjusting the weighted average number of shares used in the basic calculation to assume the conversion of all potential dilutive shares. There were no dilutive equity instruments for the year ended 31 December 2021.

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Full year results announcement Twelve months ended 31 December 2022

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

FOR THE YEAR ENDED 31 DECEMBER

	2022			2021
	£m			£m
Profit after tax for the year		1,119			1,439
Other comprehensive income/(expenses) for the year
Items that may be subsequently reclassified to income statement:
Exchange movements on overseas net assets		598			(34	)
Exchange movements on overseas net assets of non-controlling interests		(10	)		—
Fair value movements on cash flow hedges		204			11
Reclassification of cash flow hedges to income statement		(18	)		—
Related tax on items that may be subsequently reclassified to income statement1		(44	)		(2	)
Total		730			(25	)
Items that will not be reclassified to income statement:
Remeasurement gains on defined benefit plan		123			27
Related tax on items that will not be reclassified to income statement		(29	)		(12	)
Total		94			15
Other comprehensive income/(expenses) net of tax for the year		824			(10	)
Total comprehensive income, net of tax for the year		1,943			1,429
Total comprehensive income for the period attributable to:
Shareholders of the Group		1,894			1,380
Non-controlling interests		49			49
Total comprehensive income, net of tax for the year		1,943			1,429

¹  Includes tax on fair value movements on cash flow hedges of £(48) million, netted off by tax on reclassification of cash flow hedges to the income statement of £4 million.

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Full year results announcement Twelve months ended 31 December 2022

CONSOLIDATED BALANCE SHEET (unaudited)

AS AT 31 DECEMBER

	2022			2021
	£m			£m
Non-current assets
Property, plant and equipment		1,757			1,563
Right of use assets		142			99
Intangible assets		28,436			27,195
Deferred tax assets		220			312
Post-employment benefit assets		25			11
Derivative financial instruments		44			12
Other non-current assets		132			8
Total non-current assets		30,756			29,200
Current assets
Inventories		1,348			951
Trade and other receivables		1,881			2,207
Loan amounts owing from related parties		—			1,508
Cash and cash equivalents		684			414
Derivative financial instruments		50			5
Current tax receivables		96			166
Total current assets		4,059			5,251
Total assets		34,815			34,451
Current liabilities
Short-term borrowings		(437	)		(79	)
Trade and other payables		(3,621	)		(3,002	)
Loan amounts owing to related parties		—			(825	)
Derivative financial instruments		(31	)		(18	)
Current tax payables		(210	)		(202	)
Short-term provisions		(71	)		(112	)
Total current liabilities		(4,370	)		(4,238	)
Non-current liabilities
Long-term borrowings		(10,003	)		(87	)
Deferred tax liabilities		(3,601	)		(3,357	)
Post-employment benefit obligations		(161	)		(253	)
Derivative financial instruments		(175	)		(1	)
Long-term provisions		(26	)		(27	)
Other non-current liabilities		(22	)		(8	)
Total non-current liabilities		(13,988	)		(3,733	)
Total liabilities		(18,358	)		(7,971	)
Net assets		16,457			26,480
Equity
Share capital		92			1
Share premium		—			—
Other reserves		(11,537	)		(11,632	)
Translation reserve		1,046			448
Retained earnings		26,730			37,538
Shareholders’ equity		16,331			26,355
Non-controlling interests		126			125
Total equity		16,457			26,480

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Full year results announcement Twelve months ended 31 December 2022

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

FOR THE YEAR ENDED 31 DECEMBER

																		Non-
	Share			Share			Other			Translation		Retained			Shareholders’			controlling			Total
	capital			premium			reserves			reserve		earnings			equity			interests			equity
	£m			£m			£m			£m		£m			£m			£m			£m
At 1 January 2022		1			—			(11,632	)		448		37,538			26,355			125			26,480
Profit after tax		—			—			—			—		1,060			1,060			59			1,119
Other comprehensive income/(expenses)		—			—			142			598		94			834			(10	)		824
Total comprehensive income		—			—			142			598		1,154			1,894			49			1,943
Issue of share capital of the former ultimate holding company		21,758			—			—			—		—			21,758			—			21,758
Capital reduction of the former ultimate holding company		(21,758	)		—			—			—		—			(21,758	)		—			(21,758	)
Transactions between the former ultimate holding company and equity shareholder		—			70			—			—		—			70			—			70
Effect of change of ultimate holding company		(1	)		(70	)		(47	)		—		—			(118	)		—			(118	)
Transactions with equity shareholders		—			—			—			—		(47	)		(47	)		—			(47	)
Distributions to non-controlling interests		—			—			—			—		—			—			(48	)		(48	)
Dividends to equity shareholders		—			—			—			—		(11,930	)		(11,930	)		—			(11,930	)
Issue of share capital		11,543			10,607			—			—		—			22,150			—			22,150
Capital reduction		(11,451	)		(10,607	)		—			—		—			(22,058	)		—			(22,058	)
Share based incentive plans		—			—			—			—		15			15			—			15
At 31 December 2022		92			—			(11,537	)		1,046		26,730			16,331			126			16,457

																	Non-
	Share		Share		Other			Translation			Retained			Shareholders’			controlling			Total
	capital		premium		reserves			reserve			earnings			equity			interests			equity
	£m		£m		£m			£m			£m			£m			£m			£m
At 1 January 2021		1		—		(11,652	)		482			37,281			26,112			111			26,223
Profit after tax		—		—		—			—			1,390			1,390			49			1,439
Other comprehensive income/(expenses)		—		—		9			(34	)		15			(10	)		—			(10	)
Total comprehensive income		—		—		9			(34	)		1,405			1,380			49			1,429
Contribution from parent		—		—		11			—			—			11			—			11
Distributions to non-controlling interests		—		—		—			—			—			—			(35	)		(35	)
Dividends to equity shareholders		—		—		—			—			(1,148	)		(1,148	)		—			(1,148	)
At 31 December 2021		1		—		(11,632	)		448			37,538			26,355			125			26,480

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Full year results announcement Twelve months ended 31 December 2022

CONSOLIDATED CASH FLOW STATEMENT (unaudited)

FOR THE YEAR ENDED 31 DECEMBER

	2022			2021
	£m			£m
Cash flows from operating activities
Profit after tax		1,119			1,439
Taxation charge		499			197
Net finance costs		207			2
Depreciation of property, plant and equipment and right of use assets		180			174
Amortisation of intangible assets		107			94
Impairment and assets written off, net of reversals		143			1
Gain on sale of intangible assets, property, plant and equipment and businesses		(30	)		(31	)
Other non-cash movements		24			(22	)
Decrease in pension and other provisions		(43	)		(36	)
Changes in working capital:
Increase in inventories		(292	)		(17	)
(Increase)/decrease in trade receivables		(85	)		14
Increase in trade payables		387			41
Net change in other receivables and payables		171			(190	)
Taxation paid		(324	)		(310	)
Net cash inflow from operating activities		2,063			1,356
Cash flows from investing activities
Purchase of property, plant and equipment		(304	)		(228	)
Proceeds from sale of property, plant, and equipment		—			12
Purchase of intangible assets		(24	)		(70	)
Proceeds from sale of intangible assets		36			137
Loans to related parties		(9,211	)		—
Proceeds from settlement of amounts invested with GSK finance companies		700			100
Interest received		19			16
Net cash outflow from investing activities		(8,784	)		(33	)
Cash flows from financing activities
Payment of lease liabilities		(45	)		(38	)
Interest paid		(163	)		(15	)
Dividends paid to shareholders		(2,682	)		(1,148	)
Distributions to non-controlling interests		(48	)		(35	)
Contribution from parent		18			4
Repayment of borrowings		(1,518	)		—
Proceeds from borrowings		11,004			8
Other financing cash flows		345			(12	)
Net cash inflow/(outflow) from financing activities		6,911			(1,236	)
Increase in cash and cash equivalents and bank overdrafts		190			87
Cash and cash equivalents and bank overdrafts at the beginning of the year		406			323
Exchange adjustments		15			(4	)
Increase in cash and cash equivalents and bank overdrafts		190			87
Cash and cash equivalents and bank overdrafts at end of year		611			406
Cash and cash equivalents and bank overdrafts at the end of year comprise:
Cash and cash equivalents		684			414
Overdrafts		(73	)		(8	)
Cash and cash equivalents and bank overdrafts at end of year		611			406

21

Full year results announcement Twelve months ended 31 December 2022

Appendix

The unaudited financial information shown in this preliminary results announcement was approved by the Board on 01 March 2023. The financial information set out in the preliminary results announcement does not constitute the Group’s statutory accounts for the financial years ended 31 December 2022 or 31 December 2021. The financial information for the year ended 31 December 2021 is derived from the prospectus which was published on 1 June 2022. The auditors reported on the 2021 accounts is included within the prospectus; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006. The audit of the Group’s statutory accounts for the year ended 31 December 2022 is not yet complete. These 2022 statutory accounts will be finalised on the basis of the financial information presented by the Board in this preliminary results announcement. As the 2022 statutory accounts are the first set of consolidated financial statements of the Group, no filings have been delivered to the UK Registrar of Companies. The 2022 statutory accounts will be delivered to the UK Registrar of Companies in due course.

Cautionary note regarding forward-looking statements

This document contains certain statements that are, or may be deemed to be, “forward-looking statements“ (including for purposes of the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements give Haleon’s current expectations and projections about future events, including strategic initiatives and future financial condition and performance, and so Haleon’s actual results may differ materially from what is expressed or implied by such forward-looking statements. Forward-looking statements sometimes use words such as “expects“, “anticipates“, “believes“, “targets“, “plans” “intends“, “aims”, “projects“, “indicates”, “may”, “might”, “will”, “should“, “potential”, “could” and words of similar meaning (or the negative thereof). All statements, other than statements of historical facts, included in this presentation are forward-looking statements. Such forward-looking statements include, but are not limited to, statements relating to future actions, prospective products or product approvals, delivery on strategic initiatives (including but not limited to acquisitions and dispositions, realisations of efficiencies and responsible business goals), future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, dividend payments and financial results.

Any forward-looking statements made by or on behalf of Haleon speak only as of the date they are made and are based upon the knowledge and information available to Haleon on the date of this document. These forward-looking statements and views may be based on a number of assumptions and, by their nature, involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future and/or are beyond Haleon’s control or precise estimate. Such risks, uncertainties and other factors that could cause Haleon’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, but are not limited to, those discussed under “Risk Factors” on pages 17 to 45 of Haleon’s prospectus and under “Risk Factors” in Haleon’s Registration Statement on Form 20-F. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements.

Subject to our obligations under English and U.S. law in relation to disclosure and ongoing information (including under the Market Abuse Regulations, the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Conduct Authority (“FCA”)), we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should, however, consult any additional disclosures that Haleon may make in any documents which it publishes and/or files with the SEC and take note of these disclosures, wherever you are located.

22

Full year results announcement Twelve months ended 31 December 2022

No statement in this document is or is intended to be a profit forecast or profit estimate.

Use of non-IFRS measures (unaudited)

We use certain alternative performance measures to make financial, operating, and planning decisions and to evaluate and report performance. We believe these measures provide useful information to investors and as such, where clearly identified, we have included certain alternative performance measures in this document to allow investors to better analyse our business performance and allow greater comparability. To do so, we have excluded items affecting the comparability of period-over-period financial performance. 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.

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 in results 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, the Group restates current year comparatives translating the income statements of consolidated entities from their non-Sterling functional currencies to Pounds Sterling using prior year exchange rates. The currencies which most influence the constant currency results of the Group and their exchange rates are shown in the table below.

	2022		2021
Average rates:
US$/£		1.24		1.38
Euro/£		1.17		1.16
CNY/£		8.31		8.86
Swiss Franc/£		1.18		1.25

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 Selling, General and Administration (SG&A), Adjusted Research and Development (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 Admission costs, and Disposals and other, in each case net of the impact of taxes (where applicable) (collectively, the Adjusting Items, which are described in 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 comparable.

23

Full year results announcement Twelve months ended 31 December 2022

Adjusting items

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

Net amortisation and impairment of intangible assets

Net impairment of intangibles, impairment of goodwill and amortisation of acquired intangible assets, excluding computer software. These adjustments are made to reflect the performance of the business excluding the effect of acquisitions.

Restructuring costs

From time to time, the Group may undertake business restructuring programmes that are structural in nature and significant in scale. The cost associated with such programmes includes severance and other personnel costs, professional fees, impairments of assets, and other related items.

Transaction-related costs

Transaction-related accounting or other adjustments related to acquisitions including deal costs and other pre-acquisition costs, when there is certainty that an acquisition will complete. It also includes the costs of registering and issuing debt and equity securities and the effect of inventory revaluations on acquisitions.

Separation and Admission costs

Costs incurred in relation to and in connection with Separation, UK Admission registration of the Company’s Ordinary Shares represented by the Company’s American Depositary Shares (ADSs) under the Exchange Act and listing of ADSs on the NYSE (the US Listing). These costs are not directly attributable to the sale of the Group’s products and specifically relate to the foregoing activities, affecting comparability of the Group’s financial results in historical and future reporting periods.

Disposals and others

Includes gains and losses on disposals of assets, businesses and tax indemnities related to business combinations, legal settlements and judgements, the impact of changes in tax rates and tax laws on deferred tax assets and liabilities, retained or uninsured losses related to acts of terrorism, significant product recalls, natural disasters and other items. These gains and losses are not directly attributable to the sale of the Group’s products and vary from period to period, which affects comparability of the Group’s financial results. From period to period, the Group will also need to apply judgement if items of unique nature arise that are not specifically listed above.

24

Full year results announcement Twelve months ended 31 December 2022

The following tables set out a reconciliation between IFRS and Adjusted Results for the years ended 31 December 2022 and 31 December 2021:

2022 £m	IFRS Results			Net amortisation and impairment  of intangible assets1			Restructuring costs2			Transaction -related costs3			Separation and Admission costs4			Disposals and others5		Adjusted Results
Revenue		10,858			—			—			—			—			—		10,858
Gross profit		6,577			172			19			—			4			—		6,772
Gross profit margin %		60.6	%																62.4	%
Operating profit		1,825			172			41			8			411			15		2,472
Operating profit margin %		16.8	%																22.8	%
Net finance costs		(207	)		—			—			—			—			—		(207	)
Profit before tax		1,618			172			41			8			411			15		2,265
Income tax		(499	)		(37	)		(7	)		(2	)		(55	)		94		(506	)
Effective tax rate %		31	%																22	%
Profit after tax for the year		1,119			135			34			6			356			109		1,759

The following table shows the adjusting items to reconcile cost of sales to adjusted cost of sales.

2022 £m	IFRS Results			Net amortisation and impairment  of intangible assets1		Restructuring costs2		Transaction -related costs3		Separation and Admission costs4		Disposals and others5		Adjusted Results
Cost of sales		(4,281	)		172		19		—		4		—		(4,086	)
Cost of sales		(4,281	)		172		19		—		4		—		(4,086	)

The following table shows the adjusting items to reconcile operating expenses to adjusted operating expenses among the relevant components thereof.

2022 £m	IFRS Results			Net amortisation and impairment  of intangible assets1		Restructuring costs2			Transaction -related costs3		Separation and Admission costs4		Disposals and others5			Adjusted Results
Selling, general and administration		(4,483	)		—		25			8		407		44			(3,999	)
Research and development		(300	)		—		(3	)		—		—		—			(303	)
Other operating income/(expense)		31			—		—			—		—		(29	)		2
Operating expenses		(4,752	)		—		22			8		407		15			(4,300	)

The following table shows the adjusting items to reconcile diluted earnings per share to adjusted diluted earnings per share.

2022	IFRS Results		Net amortisation and impairment  of intangible assets1		Restructuring costs2		Transaction -related costs3		Separation and Admission costs4		Disposals and others5		Adjusted Results
Profit attributable to shareholders (£m)		1,060		135		34		6		356		109		1,700
Weighted average number of shares (millions)		9,239												9,239
Diluted earnings per share (pence)		11.5		1.4		0.4		0.1		3.8		1.2		18.4

1. Net amortisation and impairment of intangible assets: includes impairment of intangible assets of £129m and amortisation of intangible assets excluding computer software of £43m.

2. Restructuring costs: includes amounts related to business transformation activities.

3. Transaction-related costs: includes amounts related to the acquisition of a manufacturing site.

4. Separation and Admission costs: includes amounts incurred in relation to and in connection with the separation and listing of the Group as a standalone business.

5. Disposals and others: includes net gains on disposals of assets and business changes totalling £20m, offset by other items including a provision with respect to PPI litigation. The tax effect includes a £102m tax charge related to the revaluation of US deferred tax liabilities due to the increase in the blended rate of US state taxes expected to apply as a result of the demerger.

25

Full year results announcement Twelve months ended 31 December 2022

2021 £m	IFRS Results			Net amortisation and impairment  of intangible assets1		Restructuring costs2			Transaction -related costs		Separation and Admission costs3			Disposals and others4			Adjusted Results
Revenue		9,545			—		—			—		—			—			9,545
Gross profit		5,950			8		44			—		—			—			6,002
Gross profit margin %		62.3	%															62.9	%
Operating profit		1,638			16		195			—		278			45			2,172
Operating profit margin %		17.2	%															22.8	%
Net finance costs		(2	)		—		—			—		—			—			(2	)
Profit before tax		1,636			16		195			—		278			45			2,170
Income tax		(197	)		8		(36	)		—		(47	)		(197	)		(469	)
Effective tax rate %		12	%															22	%
Profit after tax for the year		1,439			24		159			—		231			(152	)		1,701

The following table shows the adjusting items to reconcile cost of sales to adjusted cost of sales.

2021 £m	IFRS Results			Net amortisation and impairment  of intangible assets1		Restructuring costs2		Transaction -related costs		Separation and Admission costs3		Disposals and others4		Adjusted Results
Cost of sales		(3,595	)		8		44		—		—		—		(3,543	)
Cost of sales		(3,595	)		8		44		—		—		—		(3,543	)

The following table shows the adjusting items to reconcile operating expenses to adjusted operating expenses among the relevant components thereof.

2021 £m	IFRS Results			Net amortisation and impairment  of intangible assets1		Restructuring costs2		Transaction -related costs		Separation and Admission costs3		Disposals and others4			Adjusted Results
Selling, general and administration		(4,086	)		—		150		—		278		76			(3,582	)
Research and development		(257	)		8		1		—		—		—			(248	)
Other operating income/(expense)		31			—		—		—		—		(31	)		—
Operating expenses		(4,312	)		8		151		—		278		45			(3,830	)

The following table shows the adjusting items to reconcile diluted earnings per share to adjusted diluted earnings per share.

2021	IFRS Results		Net amortisation and impairment  of intangible assets1		Restructuring costs2		Transaction -related costs		Separation and Admission costs3		Disposals and others4			Adjusted Results
Profit attributable to shareholders (£m)		1,390		24		159		—		231		(152	)		1,652
Weighted average number of shares (millions)		9,235													9,235
Diluted earnings per share (pence)		15.1		0.2		1.7		—		2.5		(1.6	)		17.9

1. Net amortisation and impairment of intangible assets: includes impairment of intangible assets of £12m, reversal of impairment of £36m and amortisation of intangible assets excluding computer software of £40m.

2. Restructuring costs: includes amounts related to business transformation activities.

3. Separation and Admission costs: includes amounts incurred in relation to and in connection with the separation and listing of the Group as a standalone business.

4. Disposals and others: includes net gains on disposals of assets and businesses totalling £31m, offset by tax indemnities related to business combinations and other expense items totalling £76m. Income tax includes a £164m tax credit related to an uplift of the tax basis of certain intra-group brand transfers.

26

Full year results announcement Twelve months ended 31 December 2022

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 but 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 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, with 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 of the comparative period 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.

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.

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

• 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.

• Volume/Mix: Defined as the variation in revenue attributable to changes in volumes and composition of products in the period.

27

Full year results announcement Twelve months ended 31 December 2022

The following tables reconcile reported revenue growth for the years ended 31 December 2022 and 31 December 2021 to organic revenue growth for the same period by geographical segment and by product category.

	Geographical Segments
2022 vs 2021 (%)	North America			EMEA and LatAm			APAC			Total
Revenue Growth		16.8			10.1			15.4			13.8
Organic Adjustments of which:		0.3			0.9			(1.0	)		0.2
Effect of Acquisitions		—			—			(1.1	)		(0.3	)
Effect of Disposals		0.1			0.4			—			0.2
Effect of MSAs		0.2			0.5			0.1			0.3
Effect of Exchange Rates		(11.2	)		(0.1	)		(3.8	)		(5.0	)
Organic Revenue Growth		5.9			10.9			10.6			9.0
Price		2.9			6.4			2.6			4.3
Volume/Mix		3.0			4.5			8.0			4.7
	Geographical Segments
2021 vs 2020 (%)	North America			EMEA and LatAm			APAC			Total
Revenue Growth		(6.7	)		(4.5	)		4.3			(3.5	)
Organic Adjustments of which:		2.4			3.4			2.0			2.7
Effect of Acquisitions		—			—			—			—
Effect of Disposals		2.5			3.1			2.2			2.7
Effect of MSAs		(0.1	)		0.3			(0.2	)		—
Effect of Exchange Rates		5.6			4.6			2.8			4.6
Organic Revenue Growth		1.3			3.5			9.1			3.8
Price											2.2
Volume/Mix											1.6

	Product Categories
2022 vs 2021 (%)	Oral Health			VMS			Pain Relief			Respiratory Health			Digestive Health and Other			Total
Revenue Growth		8.6			11.6			14.0			39.5			7.4			13.8
Organic Adjustments of which:		(0.3	)		(0.2	)		(0.4	)		—			2.2			0.2
Effect of Acquisitions		(0.3	)		(0.3	)		(0.5	)		—			—			(0.3	)
Effect of Disposals		—			0.1			0.1			—			0.8			0.2
Effect of MSAs		—			—			—			—			1.4			0.3
Effect of Exchange Rates		(2.7	)		(6.4	)		(4.7	)		(6.9	)		(6.7	)		(5.0	)
Organic Revenue Growth		5.6			5.0			8.9			32.6			2.9			9.0
	Product Categories
2021 vs 2020 (%)	Oral Health			VMS			Pain Relief			Respiratory Health			Digestive Health and Other			Total
Revenue Growth		(0.8	)		0.5			2.1			(12.8	)		(9.8	)		(3.5	)
Organic Adjustments of which:		—			0.3			0.3			6.4			7.6			2.7
Effect of Acquisitions		—			—			—			—			—			—
Effect of Disposals		—			0.3			0.3			6.4			7.5			2.7
Effect of MSAs		—			—			—			—			0.1			—
Effect of Exchange Rates		5.2			3.4			4.1			4.6			5.3			4.6
Organic Revenue Growth		4.4			4.2			6.5			(1.8	)		3.1			3.8

Adjusted EBITDA

Adjusted EBITDA is calculated as Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) after adding back items impacting the comparability of period over period financial performance. Adjusted EBITDA does not reflect cash expenditures, or future requirements for capital expenditures or contractual commitments. Further, adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs, and although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised are likely to be replaced in the future and adjusted EBITDA does not reflect cash requirements for such replacements.

28

Full year results announcement Twelve months ended 31 December 2022

The reconciliation between profit after tax for the year and Adjusted EBITDA for the years ended 31 December 2022 and 31 December 2021 is provided below:

£m	2022			2021
Profit After Tax		1,119			1,439
Add Back: Income tax		499			197
Less: Finance Income		(51	)		(17	)
Add Back: Finance Expense		258			19
Operating Profit		1,825			1,638
Net amortisation and impairment of intangible assets		172			16
Restructuring costs		41			195
Transaction-related costs		8			—
Separation and Admission costs		411			278
Disposals and others		15			45
Adjusted Operating Profit		2,472			2,172
Add Back: Depreciation of property, plant and equipment		142			139
Add Back: Depreciation of rights of use assets		38			35
Add Back: Amortisation of computer software		64			54
Add Back: Impairment of property, plant and equipment, rights of use assets and computer software net of impairment reversals		14			13
Adjusted EBITDA		2,730			2,413

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 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).

The reconciliation of net cash inflow from operating activities to free cash flow for the years ended 31 December 2022 and 31 December 2021 is provided below:

£m	2022			2021
Net cash inflow from operating activities		2,063			1,356
Less: Net capital expenditure		(292	)		(149	)
Less: Distributions to non-controlling interests		(48	)		(35	)
Less: Interest paid		(163	)		(15	)
Add: Interest received		19			16
Free cash flow		1,579			1,173

1. Refer to Net capital expenditure for calculation.

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 management 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.

29

Full year results announcement Twelve months ended 31 December 2022

The reconciliation of free cash flow conversion for the years ended 31 December 2022 and 31 December 2021 is provided below.

	2022			2021
Free cash flow (£m)		1,579			1,173
Reported profit after tax (£m)		1,119			1,439
Free cash flow conversion (%)		141	%		82	%

Net capital expenditure

Net capital expenditure includes purchases net of sales of property, plant and equipment and other intangible assets. Net capital expenditure is used by management to measure capital invested in the operating activities of the Group’s business. The reconciliation of net capital expenditure for the years ended 31 December 2022 and 31 December 2021 is provided below:

£m	2022			2021
Purchase of property, plant and equipment		(304	)		(228	)
Proceeds from sale of property, plant and equipment		—			12
Purchase of intangible assets		(24	)		(70	)
Proceeds from sale of intangible assets		36			137
Net capital expenditure		(292	)		(149	)

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 management to more clearly identify the level of cash generated from operations that remains available for distribution after servicing the Group’s debt. In addition, the ratio of net debt to adjusted EBITDA is used by investors, analysts and credit rating agencies to analyse our operating performance in the context of targeted financial leverage.

The reconciliation of net debt to the different balance sheet items as at 31 December 2022 and 31 December 2021 is provided below.

£m	2022			2021
Short-term borrowings		(437	)		(79	)
Long-term borrowings		(10,003	)		(87	)
Derivative financial liabilities		(206	)		(19	)
Cash and cash equivalents		684			414
Derivative financial assets		94			17
Net Debt1		(9,868	)		246

1. The sum of the Group’s cash and cash equivalents and derivative financial assets exceeded the sum of its short-term borrowings, long-term borrowings and derivative financial liabilities as at the year ended 31 December 2021 (a net cash position).

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