Haleon Pakistan limited (formerly known as GlaxoSmithKline) was incorporated in Pakistan as a public limited company in 2015. The principal activity of the company is the manufacturing, marketing and sales of consumer healthcare and over the counter health products. The company is a subsidiary of “Haleon Netherlands B.V.’ while Haleon plc is the ultimate parent company. Historical Performance (2019-24) HALEON’s sales rose steadily from 2019–2024, but profitability was volatile—margins dipped in 2020, collapsed in 2022, then rebounded strongly to a peak in 2024. In 2019, HALEON’s net sales grew 9.69 percent year-on-year to Rs 16,316.65 million, led by broad-based segment growth except respiratory health and toll manufacturing. Two price hikes helped lift gross margin to 30.56 percent despite currency depreciation. Higher advertising pushed up distribution costs, while lower legal expenses kept administrative costs in check. Operating profit rose 12 percent, and net profit increased 17 percent to Rs 1,257.52 million (EPS Rs 10.74). In 2020, net sales jumped 21.63 percent to Rs 19,846.11 million on strong local demand, though exports weakened due to COVID-19 disruptions. Sharp rupee depreciation drove a 28.13 percent rise in cost of sales, compressing gross margin to 26.85 percent. Operating profit edged down, but a sharp fall in finance cost supported net profit, which remained largely flat at Rs 1,262.01 million (EPS Rs 10.78). In 2021, sales increased 21.75 percent to Rs 24,163.15 million, supported by growth across all segments. Supply disruptions and inflation raised costs, but cost controls and a stable rupee lifted gross margin to 27.67 percent. Other income surged, driving a 69.37 percent rise in operating profit. Net profit climbed to Rs 2,134.33 million (EPS Rs 18.23), despite higher exchange-related finance costs. In 2022, net sales rose 13.84 percent to Rs 27,507.21 million, aided by strong segment demand and new product launches. However, soaring paracetamol prices and rupee depreciation pushed cost of sales up 30 percent, dragging gross margin down to 17.40 percent. Exchange losses sharply increased finance costs, and net profit fell 84.75 percent to Rs 325.41 million (EPS Rs 2.78). In 2023, sales grew 14.91 percent to Rs 31,609.78 million, led by strong over the counter and FMCG growth, particularly in oral care and pain management. Gross margin recovered to 20.40 percent as pricing and mix improved. Higher expenses were partly offset by stronger other income, resulting in net profit of Rs 995.59 million (EPS Rs 8.51). In 2024, net sales expanded 17.70 percent to Rs 37,205.89 million, driven mainly by local demand and pricing flexibility following deregulation of non-essential medicines. Lower inflation, high localization, and efficiency gains reduced cost of sales, lifting gross margin to 34.45 percent. With sharply lower finance costs, net profit surged to Rs 4,578.25 million (EPS Rs 39.11), marking the strongest performance of the period. HALEON in 9MCY25 Haleon Pakistan delivered a robust performance in 9MCY25, underpinned by healthy revenue growth, sharp margin expansion, and solid earnings momentum. Net sales increased 17 percent year-on-year to Rs 32.2 billion, driven by a balanced mix of 10 percent price increases and 7 percent volume growth. The volume pickup is notable, as it signals resilient consumer demand despite successive price adjustments. Profitability improved meaningfully during the period. Gross profit rose 35 percent year-on-year, lifting gross margins to 38.4 percent from 33.3 percent last year. This expansion reflects a favorable pricing environment, easing API costs, and Haleon’s highly localized manufacturing footprint, with nearly the entire portfolio produced domestically. Lower input pressure—particularly in key molecules such as paracetamol—allowed the company to translate topline growth into strong operating leverage. Operating profit grew 45 percent year-on-year to Rs 7.65 billion, with operating margins expanding sharply. Selling and distribution expenses increased due to higher advertising and promotion spend, consistent with Haleon’s brand-led strategy. However, these costs were comfortably absorbed by the improvement in gross margins, while administrative expenses remained relatively contained, highlighting operating discipline at higher sales volumes. Net profit reached Rs 4.59 billion, up 43 percent year-on-year, translating into earnings per share of Rs 39.18 compared to Rs 27.36 in the same period last year. Lower exchange-related losses and reduced finance costs supported the bottom line, even as other income declined due to softer returns on cash and investments. Overall, earnings growth remained firmly driven by core operations rather than one-off items. Operationally, growth was broad-based across Haleon’s portfolio. The FMCG segment posted a strong 32 percent year-on-year increase, while the OTC business grew 18 percent. Pain management, oral care, and wellness products remained the key growth engines. Panadol, CAC-1000, and Sensodyne continued to dominate the revenue mix, together contributing around 80 percent of total sales and maintaining leadership positions in their respective categories. This concentration underscores both the strength of Haleon’s brands and the pricing power embedded in its core franchises. New product launches added further momentum. Centrum, Panadol Ultra, and new oral care variants received a positive market response during the period. Oral care, in particular, continued to outpace overall company growth, reinforcing management’s strategic focus on expanding this segment. The pipeline remains active, with Panadol Migraine and Panadol Menstrual expected to be introduced, further broadening the pain management portfolio. From a manufacturing and supply chain perspective, Haleon continued to benefit from high localization and improving cost efficiency. Preparations for the Jamshoro plant expansion progressed during the period. Once commissioned, the expansion is expected to materially reduce reliance on outsourced Panadol manufacturing and enhance in-house capacity for both solids and vitamins, strengthening operational control and cost competitiveness. Outlook Looking ahead, Haleon appears well positioned to sustain earnings momentum. Management aims to maintain the volumetric growth achieved in 9MCY25, supported by continued brand investment, selective price actions, and new product launches. Margin sustainability should remain favorable in the near term, provided API prices stay benign, and currency volatility remains manageable. The planned capacity expansion at Jamshoro is a key medium-term catalyst, expected to improve margins and supply reliability once operational. Export growth offers additional upside, though this remains a longer-dated opportunity given regulatory lead time. Key risks include delays in revising low-price thresholds for essential medicines and potential cost pressures from currency or input price shocks. Overall, Haleon enters the next phase with strengthened profitability, a dominant brand portfolio, and improving operational leverage.