Tag: Imperial

  • Imperial On Track to Meet Full-Year Guidance

    Imperial On Track to Meet Full-Year Guidance

    Image: Tobacco Reporter archive

    Imperial Brands is on track to deliver full-year results in line with expectations and the company’s guidance of low-single-digit constant currency net revenue growth. Over the next three years, the company continues to expect operating profit growth to accelerate to a mid-single-digit CAGR at constant currency.

    The company has seen a robust tobacco pricing and stable aggregate market share across its top 5 combustible markets against a strong comparator.

    Product launches across vapor, heated tobacco and modern oral have driven next-generation product net revenue growth.

    First-half group adjusted operating profit is expected to be at a similar level to last year on a constant currency basis. Tobacco and next-generation product (NGP) adjusted operating profit has been impacted by the planned increase in NGP investment, the impact of the company’s exit from Russia and the continued unwind of Covid-19. Growth in distribution adjusted operating profit has helped to mitigate these headwinds.

    Imperial is on track to meet full-year expectations and its guidance of growing revenue and operating profit. The company completed £523 million ($654.82 million) of the fiscal year 2023 £1 billion share buyback as part of an ongoing program of capital returns.

    The interim results for the six months ended March 31, 2023, will be announced on May 16, 2023.

  • Despite EU weakness, German smokers stay strong

    Alison Cooper, CEO of Imperial Tobacco, said cigarette and tobacco sales in Germany were “excellent,” despite the EU’s economic weakness, which hit the British multinational’s half-year profits.

    “We are growing cigarette share, we are growing fine-cut share, and not just at the value end of the market. We have seen growth at the top-end in brands such as Davidoff and Gauloises,” Cooper told CNBC.

    “We have seen excellent performance in that market,” she added.

    However, Imperial Tobacco, the world’s fourth-largest cigarette company, said volumes were hit by difficult trading conditions in the broader EU, from where it makes two-thirds of its earnings.

    Revenue in the six months leading to March 31 stood at £13.4 billion ($20.8 billion), down 4.2 percent on the previous year’s £14.0 billion. Operating profit was down 9.7 percent at £1.2 billion.

    “The performance reflects the weak consumer environment across Europe, challenging competitive situation in the U.S. and the need to step up investment behind its key brands,” said Damian McNeela and Graham Jones, analysts at Panmure Gordon, in a research note released after the earnings announcement.

    Cooper said revenues from key strategic brands, fine-cut tobaccos and snus (similar to American dipping tobacco) had increased, with improved volumes, and the company achieved revenue growth in the UK and Germany, plus Africa and a number of other emerging markets.

    “Excise-driven market dynamics in Russia, and our transition to a new pricing strategy in the U.S. slowed our revenue and profit momentum in non-EU territories, masking the good growth we’re generating in Asia-Pacific and Africa and the Middle East,” Cooper said in a press release issued after the results.

    Despite the weak economic environment, Cooper said consumers are not reducing their tobacco consumption.

    She added that the EU market would remain tough for at least another 12-to-18 months.

  • Imperial latest to hop aboard e-cig train

    Imperial Tobacco, the world’s fourth-largest cigarette group by market share, said it had set up a venture to develop e-cigarettes, as it battles an increasingly tough consumer environment in Europe.

    The company said Fontem Ventures would look into areas such as e-vapor cigarettes, according to a story published by Reuters.

    “We’re looking at opportunities and we’re actively developing in that area at the moment,” CEO Alison Cooper said on Tuesday, adding that the company would be “open-minded” to making acquisitions.

    E-cigarettes –battery-powered metal tubes that turn nicotine-laced liquid into vapor– are gaining popularity among smokers trying to quit. Rival British American Tobacco set up Nicoventures, in 2011 to develop such products.

    Imperial has been combating falling smoker numbers in developed countries and rising black market trade in countries such as Spain and France by raising prices, cutting costs and focusing on emerging markets, including Turkey and Saudi Arabia.

    The company said full-year earnings per share growth would be at the lower end of its 4–8 percent target range due to such challenges. Analysts had been expecting Imperial to post a 5.6 percent rise, Reuters data showed.