Imperial Brands is on track to deliver full-year results in line with the guidance it gave in November, with low-to-mid single-digit organic adjusted operating profit growth at constant currency, the company announced in a trading update.
First half group net revenue is expected to grow by at least 1 percent on an organic constant currency basis, driven by continued strong pricing in tobacco as well as some benefit from growth in next-generation product (NGP) revenues against a weak comparator period.
“In tobacco, we have begun to achieve aggregate market share growth in our five priority markets with gains in [the] U.S., U.K. and Spain more than offsetting declines in Germany and Australia,” the company wrote in a statement. “We are investing behind the operational levers outlined at our January 2021 Capital Markets Day in each of these priority markets to drive performance improvements over time. Overall tobacco volumes are in line with expectations, although Covid-19 continues to affect consumer buying patterns across different channels and markets.
“In NGP, our clear focus is to improve performance, returns and capabilities. Our preparations for market trials in vapor and heated-tobacco later this year are on track.”
Imperial Brands expects first half group adjusted organic operating profit growth to be at least mid-single digit at constant currency, benefiting primarily from significantly reduced losses in NGP and increased logistics profit. Tobacco operating profit has been impacted by a lower duty windfall in Australia and the impact of U.S. trade inventories following the higher wholesaler purchases in March 2020 to meet Covid-19 pantry loading demand.
“Full-year adjusted group operating profit will reflect increased investment consistent with our strategic plans and is expected to be in line with our guidance for low-mid single digit organic growth at constant currency,” the company wrote.
The interim results for the six months ended March 31, 2021, will be announced on May 18, 2021.