Imperial Brands announced today (May 14) that CEO Stefan Bomhard will retire after five years in the job. He will continue to serve on the company’s board until December 31 and be available until May 2026 to support the transition. Chief financial officer Lukas Paravicini will be promoted to CEO October 1.
“While Bomhard’s retirement is disappointing, this doesn’t imply any change to the plans laid out at the company’s recent investor event,” Panmure Liberum analyst Rae Maile wrote. “The transition will be seamless given Paravicini’s skills.”
Paravicini, CFO since May 2021, has been instrumental in driving consistent growth over the past four years and leads the long-term program to transform the company’s tech and data capabilities, the company said. Chief strategy and development officer, Murray McGowan, will replace Paravicini as CFO.
With the news, Imperial’s shares dropped more than 7% as investors reacted to the unexpected loss of a leader credited with turning the company around. The company recently reported a 1.8% rise in first-half adjusted operating profit and reaffirmed its annual forecast after reporting market share growth in its five priority markets.
“Prior to Bomhard’s arrival, Imperial had lost market share in its core tobacco business and failed to gain any real traction with new products like vapes, resulting in years of missed sales targets and a 2020 write-down,” Shashwat Awasthi and Emma Rumney wrote for Reuters. “Bomhard restored that market share, sales growth, and healthy investor returns by retreating to focus on traditional tobacco in Imperial’s key markets.
“He also fine-tuned the company’s strategy on smoking alternatives – a portfolio which delivered double-digit growth in the first half of this year.”
Paravicini told investors on an analysts’ call he was committed to Imperial’s five-year strategy set out in March and a capital allocation framework based around healthy returns for shareholders. Under that strategy, Paravicini is tasked with stepping up growth in smoking alternatives, where Imperial lags competitors, and compounding progress on tobacco in difficult markets like Germany, where Imperial has struggled to regain lost share amid stiff competition.
Bomhard said he did not plan to take any other executive role and was retiring, and that his departure was “a very personal decision” related to freeing up personal time for himself and his family after 11 years leading large UK companies. He was previously CEO of car distributor and held senior roles at Unilever and Bacardi.