Consumer healthcare group Haleon's Chief Executive Brian McNamara said on Thursday he does not expect to announce any acquisitions or divestments imminently, amid analyst concerns its 2023 cost forecasts could hit consensus profit estimates.
McNamara told Reuters that both types of transactions were on the cards, but added "there's certainly nothing imminent that is out there that I would talk about today".
Haleon, carved out of British drugmaker GSK in July in the biggest listing in Europe for more than a decade, is the world's biggest standalone consumer health business selling non-prescription drugs, vitamins and oral care products.
There is widespread talk of consolidation in the highly fragmented sector, with big pharma majors offloading their consumer health businesses to focus on their high-risk, high-reward field of prescription medicines.
"The consumer healthcare sector is evolving rapidly, and Haleon needs to be an acquiror rather than a target," Lucy Coutts, investment director at wealth management firm JM Finn, which holds Haleon shares, told Reuters.
With very significant cost savings associated with M&A, given the top five companies hold 16% of the global consumer health business, consolidation seems highly likely longer term, Barclays analyst Iain Simpson told Reuters this week.
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Haleon has navigated a highly volatile macro-economic environment in 2022 - with double digit inflation on things like input costs, McNamara said, adding that he expects inflation to continue to rise more in the mid-single digit range this year.
Rivals with consumer health operations, such as Bayer and Reckitt, have charged higher prices to partly offset broader falls in sales volumes.
McNamara said Haleon expects its 4% to 6% growth in 2023 will be fuelled by price increases more than higher volumes.
Players in the consumer health field, like other sectors, have been contending with sharp cost increases across the business, including raw materials, transport and energy linked to the war in Ukraine and lingering COVID-19 disruptions.
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