Tag: Imperial Brands

Imperial to Cut CEO Compensation

Stefan Bomhard (Photo: Imperial Brands)
Imperial Brands is cutting CEO Stefan Bomhard’s performance-linked pay in response to shareholders’ concerns over his remuneration package, reports Reuters.
Bomhard and the remuneration committee have agreed that the value of his 2021 long-term incentive plan award will be cut to 315 percent from 350 percent of his salary.
Around 40 percent of shareholders voted against the directors’ remuneration proposal during Imperial Brand’s annual general meeting earlier this month.
The shareholder revolt over Bomhard’s salary came as it was “significantly larger” than his long-running female predecessor, reported The Times.
When Imperial Brands announced Bomhard’s appointment in February last year, it said he would receive an annual salary of about £1.3 million ($1.82 million) and a pension allowance equivalent to a maximum of 14 percent of salary and other usual benefits.
Since joining, the former Inchcape executive has promised to boost the company’s performance by bringing in new talent, changing incentive structures and sharpening focus on top markets.
In 2017, Imperial Brands shareholders balked a proposal to increase the salary of then-CEO Alison Cooper to almost £8.5 million annually from £5.5 million.
February 22, 2021
Imperial Appoints Chief Financial Officer

Photo: Jakub Jirsák | Dreamstime.com
Imperial Brands has appointed Lukas Paravicini as chief financial officer effective Aug. 5, 2021, or at an earlier date to be announced. Paravicini is currently chief financial officer of agricultural commodities and brokerage group ED&F Man Holdings. He will succeed Oliver Tant, who announced his retirement last year.
Paravicini will step down from the board upon Paravicini’s appointment and leave the business following an orderly handover.
“I am delighted to welcome Lukas to the business,” said Imperial Brands CEO Stefan Bomhard in a statement. “He is a disciplined, results-oriented leader with a proven track record in international consumer goods companies. As well as his impeccable finance credentials, Lukas has considerable operational experience as well as expertise in driving transformational change including in global shared services in large international organizations. These qualities will be invaluable to Imperial as we implement our new strategy. I would like to thank Oliver for his support since I joined Imperial and for his contribution to the business during his seven-year tenure.”
“I am delighted to be joining Imperial at such an exciting time,” said Paravicini. “I look forward to supporting the new strategic direction and working with the board and my new colleagues to strengthen performance and enhance shareholder value.”
Before joining ED&F Man Holdings, Paravicini held senior positions at Fonterra, a New Zealand and Australia listed cooperative and the world’s largest dairy exporter with sales in 130 countries. He was chief financial officer from 2013 to 2017 and chief operating officer of global consumer and foodservice business from 2017 to 2018. Prior to that, he spent 22 years with Nestle in various senior finance and general management roles, working in South America and latterly in Switzerland for Nestle Professional, the food service arm of Nestle, first as chief financial officer and then as vice president and general manager of Europe.
February 17, 2021
Imperial Praised for Engagement on Climate

Photo: Gerd Altmann from Pixabay
Imperial Brands has been recognized as a global leader for engaging with its suppliers on reducing carbon emissions and tackling climate change.
The business is among a group of fewer than 400 companies to be included on the 2020 Supplier Engagement Leaderboard compiled by environmental nonprofit organization CDP. This is the second successive year that Imperial has been included.
In December, Imperial maintained its position on the CDP’s Climate A List for its actions to cut emissions and mitigate climate risks. Imperial also achieved a score of A- from CDP for minimizing water use.
All companies responding to the annual CDP climate change questionnaire receive a Supplier Engagement Rating (SER) in addition to their climate change score. The SER measures how effectively companies engage their suppliers on climate change through an assessment of governance, targets, scope 3 emissions and value chain engagement.
Stefan Bomhard
“We are pleased to once again be recognized by CDP for our focus on climate and energy, this time for the work we are doing with our suppliers to help minimize their carbon footprint,” said Stefan Bomhard, CEO of Imperial, in a statement. “This reflects further great efforts from employees across the business and their commitment to deliver our ESG agenda.”
“Meaningful corporate climate action means engaging with suppliers to reduce emissions across the value chain,” said Sonya Bhonsle, global head of value chains at CDP. “Despite the challenges from Covid-19, in 2020, nearly 400 companies achieved a place on CDP’s Supplier Engagement Leaderboard. Congratulations to these companies—as Supplier Engagement Leaders, they are driving the transition toward the net-zero sustainable economy.”
February 9, 2021
Imperial Brands Announces New Strategy

Photo: Casimirokt – Dreamstime.com
Imperial Brands has announced a new strategy to create long-term value. The company says it will focus on priority combustible markets, drive value from its broader market portfolio and build a targeted next-generation products (NGP) business.
Imperial Brands will focus its investment and resources around the U.S., Germany, the U.K., Australia and Spain, which represent 72 percent of its combustible operating profit.
At the same time, the company will selectively build markets where it has attractive leadership positions, such as Africa and other European markets, while selectively exiting a small number of markets where it has a relatively weaker presence.
Furthermore, Imperial Brands will focus its investment behind heated tobacco opportunities in Europe and in selective market opportunities in vapor, particularly in the U.S. Imperial’s oral nicotine business will remain focused on its existing markets within Europe. The aim is to develop a sustainable NGP business that supports Imperial’s ESG agenda by making a meaningful contribution to harm reduction.
Stefan Bomhard
“We have undertaken a comprehensive strategic review, examining all opportunities for unlocking value,” said Stefan Bomhard, CEO of Imperial Brands, in a statement. “This process has reinforced my view that the group has solid foundations on which we can build a better and stronger business. Our new detailed five-year plan sets out clear strategic priorities, which will drive targeted investment behind those markets and brands with the greatest opportunities for value creation. We have put the consumer at the center of everything we do and are beginning to reshape our culture to support the new strategy. This will improve our ways of working and create an agile, collaborative and performance-based business that will deliver a stronger, more consistent performance.”
To support the delivery of its strategic priorities, Imperial is changing how it operates to embrace new ways of working and to enhance its culture. Three critical enablers to drive these changes have been identified: consumer at the center of the business; performance-based culture and capabilities; and simplified and efficient operations.
As a result of these changes, Imperial will increase its investment in core capabilities, such as sales and marketing, by £50 million ($68,28 million) to £60 million per year. This additional investment will be funded by efficiency savings as the company reorganizes and simplifies the business, generating annualized savings of £100 million to £150 million by the end of fiscal year 2023. The anticipated cash costs of the initiatives are £245 million to £275 million, with the majority of the spend occurring in fiscal year 2022. In addition, the company expects to incur associated non-cash restructuring charges, currently expected to be around £150 million. Any additional restructuring charges beyond fiscal year 22 will not be treated as an adjusting item.
Imperial’s outlook for fiscal year 21 remains in line with the statement provided at the preliminary results on Nov. 17, 2020.
The new plan is expected to deliver a gradually improving trajectory in net revenue over the five years with a compound annual growth rate of 1 percent to 2 percent for fiscal year 2020 to fiscal year 2025.
January 28, 2021
Tobacco Firms Named Top Employers

Image: Top Employer Institute
British American Tobacco (BAT), Japan Tobacco International (JTI) and Imperial Brands have been recognized by the Top Employers Institute.
BAT and JTI were certified as two of only 16 “Global Top Employers.” Imperial Brands was named a “Top Employer Europe” for a fourth consecutive year in 2021.
“Receiving Global Top Employer certification for the fourth-year running is a fantastic achievement as it acknowledges our commitment to creating an inclusive and innovative working environment that our employees enjoy being a part of,” said Hae In Kim, director, talent, culture and inclusion at BAT, in a press note.
“Our employees are our most important asset, and we are particularly proud of the resilience and determination they have displayed during the pandemic. Without doubt, they are a key driver in our continued strong performance as we transform our business and build A Better Tomorrow for all our stakeholders.”
“The Top Employer certification is not an end-in-itself,” said Steve Dyer, JTI’s vice president, global talent management, in a statement. “For us, it is confirmation that we have always been on the right track by making our workplace a safe and flexible environment for all our employees, whether they are farmers, scientists, office or factory workers.
“This seventh consecutive certification also sends a strong message to our future employees: we constantly give our people the opportunity to develop their career under the best conditions in order to perform to their highest abilities while being themselves.”
“I am delighted that Imperial has been recognised for another year with the Top Employer certification,” said Alison Clarke, chief people and culture officer at Imperial Brands, in a statement.
“Our HR Practices have been surveyed against an international benchmark with a thorough methodology. This accreditation is a symbol of the high standards that we aspire to deliver every day for our people.”
“Despite the challenging year we have experienced, which has certainly made an impact on organisations around the globe, our regional top employers have continued to demonstrate the power of putting their people first in the workplace,” said David Plink, CEO of the Top Employers Institute.
Top Employers Institute is the global authority on recognizing excellence in the conditions that businesses create for their people.
Companies participating in its prestigious certification program have the potential to gain top employer status following a comprehensive analysis of people development practices.
The institute’s analysis covers 600 practices across a number of areas including: talent strategy, workforce planning, on-boarding, learning and development, performance management, leadership development, career and succession management, compensation and benefits and culture.
January 25, 2021
Claim: Tobacco Profiting from Child Labor

Tobacco companies say they go to great lengths to keep their supply chains free of child labor.
(Photo: Timothy Donahue)
British American Tobacco (BAT) and Imperial Brands profited from child labor on tobacco farms in Malawi, according to a legal claim initiated after an investigation by The Guardian.
The claim alleges “widespread use of unlawful child labor, unlawful forced labor and the systematic exposure of vulnerable and impoverished adults and children to extremely hazardous working conditions with minimal protection against industrial accidents, injuries and diseases.”
The Guardian’s 2018 investigation reported that tobacco farmers were exposed to nicotine poisoning, toxic pesticides and harsh weather conditions during labor-intensive shifts in areas where up to 63 percent of children were engaged in child labor.
Due to that investigation, several countries, including the U.S., suspended leaf imports from Malawi over the child labor allegations. U.S. Customs and Border Protection later cleared imports from Malawi by Limbe Leaf Tobacco Co. and Alliance One International after investigations determined that the tobacco imported by those companies was not harvested and produced with child labor.
(Tobacco Reporter recently featured Alliance One’s actions to keep its supply chain free of child labor and forced labor in a feature article, titled, “Up to the Task.”)
BAT and Imperial Brand declined to comment on the specifics of the case.
“BAT takes human rights very seriously and expects all employees and suppliers to respect and uphold them. It would not be appropriate for us to comment on the specifics of this situation, given the possibility of future litigation,” a BAT spokesperson said. “We take the issue of child labor extremely seriously and strongly agree that children must never be exploited, exposed to danger or denied an education.”
“We take the issue of child and forced labor very seriously and do not condone exploitative practices in our supply chains, as made clear in our code of conduct, which is published on our corporate website,” an Imperial Brands spokesperson said.
“We actively seek to prevent exploitation through multi-stakeholder initiatives, including an industry-wide sustainable tobacco program, which is aligned to the U.N. guiding principles. We will defend any claim vigorously, and it would be inappropriate to comment further.”
Leigh Day, the law firm that filed the legal claim, said that more details of the claim will be filed in January 2021 with the monetary value to be set later.
December 18, 2020
Brexit Claims First Cigarette Brands

Illustration Skypixel – Dreamstime.com
Imperial Brands will reduce its range of products in Northern Ireland as a result of Brexit, reports The Grocer.
Northern Ireland will remain under EU legislation, making it subject to the EU rules requiring pictorial health warnings on tobacco packaging. Tobacco manufacturers would have to produce separate products for Northern Ireland and Great Britain to comply with these laws.
“Due to the smaller volumes, it is likely that there will be a significant reduction to the product range for NI [Northern Ireland] accounts, final range still to be confirmed,” Imperial said in a letter to wholesalers.
“We continue to plan and prepare for different Brexit scenarios, which includes a range of different regulatory requirements across the U.K.,” said an Imperial spokesperson. “We continue to work closely with our customers on the potential changes and would encourage them to speak to their account manager if they have any questions.”
Brexit is likely to impact the nicotine business in several ways. Earlier this month, researchers at the University of Bath argued that withdrawing from the EU offered Britain new opportunities to strengthen tobacco control.
Meanwhile, vapor advocates are hoping that breaking with EU rules will allow the U.K. to continue and even strengthen its comparatively permissive policies on e-cigarettes.
Earlier this year, Tobacco Reporter contributor Clive Bates examined the impact of Brexit on the tobacco and vapor businesses in-depth.
December 17, 2020
Tobacco Firms Lauded for Sustainability

Photo: Gerd Altmann from Pixabay
CDP, a global environmental nonprofit, has recognized Japan Tobacco and Imperial Brands for their leadership in corporate sustainability.
JT achieved a place on CDP’s prestigious A List for tackling climate change as well as acting to protect water security for the second consecutive year. In addition, in December 2020, the company endorsed the recommendations of the Task Force on Climate-related Financial Disclosures.
“We are delighted to be included in the CDP’s Climate A List and Water A List for the second consecutive year. This clearly reflects our continued efforts to reduce our environmental footprint and our transparency in disclosing information,” said Kazuhito Yamashita, member of the board and senior vice president, chief sustainability officer, compliance and general affairs in a press note.
Imperial Brands too secured a place on CDP’s prestigious “A List” for tackling climate change for the second successive year.
The business has been recognized for its actions to cut emissions, mitigate climate risks and transition to a lower-carbon economy, based on the data reported through CDP’s 2020 climate change questionnaire.
Stefan Bomhard
“To retain our A rating is a tremendous achievement that highlights our commitment to reducing our carbon footprint,” said Imperial Brands Chief Executive Stefan Bomhard in a statement. “The data we provided for review by CDP was extensive and I’d like to thank everyone who was involved in pulling together such an impressive submission.”
CDP’s annual environmental disclosure and scoring process is widely acknowledged as the gold standard of corporate environmental transparency. Japan Tobacco and Imperial Brands are among a small number of A List companies out of more than 5,800 that were scored.
A detailed and independent methodology is used by CDP to assess companies based on the comprehensiveness of disclosure, awareness and management of environmental risks and demonstration of best practices associated with environmental leadership, such as setting ambitious and meaningful targets.
“We extend our congratulations to all the companies on this year’s A List,” said Paul Simpson, CEO of CDP. “Taking the lead on environmental transparency and action is one of the most important steps businesses can make, and is even more impressive in this challenging year marked by Covid-19.”
December 8, 2020
Johnson Nonexecutive Director at Imperial

Photo: Jakub Jirsák | Dreamstime
Imperial Brands has appointed Alan Johnson to the board as a nonexecutive director with effect from Jan. 1, 2021.
Johnson has a financial background in consumer goods and retail, having held a number of senior finance positions at Unilever during a 30-year career, including chief audit executive and chief financial officer of the Global Foods Division.
He was previously chief financial officer and then a nonexecutive director at food retailer Jeronimo Martins until April 2016. Johnson is currently president and chair of the board of the International Federation of Accountants and a member of the board and chair of the audit committee of the International Valuation Standards Council.
Johnson will also join Imperial Brands’ Succession and Nominations Committee and Audit Committee with effect from Jan. 1, 2021.
December 2, 2020
Imperial Reflects on ‘Difficult’ Year

Photo: William Iven from Pixabay
Imperial Brands reported revenue of £35.56 billion ($47.16 billion) in its fiscal year 2020, up from £31.59 billion in 2019. Its operating profit was £2.73 billion, compared with £2.2 billion the previous year. On an adjusted basis, the company’s revenue was £7.99 billion in 2020, down 0.1 percent from 2019. Adjusted operating profit was £3.53 billion, against £3.74 billion the previous year.
While benefiting from strong tobacco volumes, Imperial Brands said it suffered from a sub-optimal product and market mix in 2020. However, a more disciplined approach in next-generation products reduced second-half losses after a disappointing first six months, the company added.
“Although this has been a difficult year, the resilience of our tobacco business and the measures we have taken to improve our NGP [next-generation product] operations reinforce my confidence in the future potential of the business,” said Imperial Brands CEO Stefan Bomhard in a statement. “With a more disciplined focus and better execution we can realize significant value for our stakeholders over time.
“My first months have been focused on engaging with employees, consumers and customers and leading the strategic review of the business,” added Bomhard, who joined the company earlier this year. What I have seen to date confirms my view of the group’s solid foundations. I believe there is scope to enhance returns from our tobacco business and opportunities to strengthen our NGP delivery over time. I firmly believe we can make a meaningful contribution to harm reduction within a more disciplined, returns focused framework and we have already taken steps to stem the NGP losses.”
Imperial Brands completed the sale of its premium cigars business on Oct. 29. It will use the proceeds to reduce debt. In recent months, the company has strengthened its executive team with external leadership appointments providing fresh skills and perspectives. A comprehensive strategic review is underway with a capital markets update scheduled for Jan. 27, 2021.
November 17, 2020