Imperial Brands PLC Trading Statement (1756O)
06 Oktober 2021 - 8:00AM
UK Regulatory
TIDMIMB
RNS Number : 1756O
Imperial Brands PLC
06 October 2021
IMPERIAL BRANDS PLC
Legal Entity Identifier (LEI) No. 549300DFVPOB67JL3A42
6 October 2021
Pre-close trading update
-- Delivering in line with guidance and on track to meet full year expectations
-- Focus on top five priority markets beginning to arrest long-term share declines
-- Market trials underway with heated tobacco in Czech Republic and Greece, and blu in the US
-- Significant new hires to strengthen capabilities across the Group
-- Continued strong cash generation supporting our planned investment behind the new strategy
Chief Executive Stefan Bomhard commented "We have made good
progress in implementing our strategy through a sharper management
focus, greater investment behind our priority combustible tobacco
markets and new market trials in heated tobacco and vapour. We are
building a high-performance culture with the introduction of new
more consumer-focused ways of working, and have made a significant
number of new hires to enhance our capabilities in key areas. I am
pleased to report the business continues to perform well and we
remain on track to deliver our full-year results in line with
expectations."
Group net revenue is expected to grow by around 1 per cent on an
organic, constant currency basis, driven by continued strong
pricing in tobacco.
In our combustibles business, greater focus on our five priority
markets is beginning to stabilise the long-term aggregate market
share performances in these markets with share expected to be
slightly lower by around 2-3 basis points, compared with a 17 basis
point decline in the prior year. We are stepping up our investment
behind our strategic initiatives in each of these priority markets
to drive performance improvements. Overall tobacco volumes are in
line with expectations and total Group cigarette market share is
expected to grow by c. 20 basis points. The net effect of the
COVID-19 travel restrictions and changes in consumer buying
patterns has been a small mix benefit, although this is beginning
to reduce as restrictions are lifted and is likely to unwind
further in FY22.
In Next Generation Products (NGP), we are committed through our
new strategy to make a meaningful contribution to harm reduction,
led by consumer needs. As anticipated, second-half NGP revenue is
expected to be at a similar level to the first half, reflecting the
impact of market exits as we focus on the categories and markets
with the best potential for sustainable growth. We have taken steps
this year to strengthen our capabilities and performance to create
a solid foundation for future growth. In line with our strategy, we
have launched market trials for our heated tobacco proposition in
the Czech Republic and Greece, as well as a trial of an improved
consumer marketing proposition for our vapour product, blu, in
Charlotte, North Carolina. We will be monitoring the consumer
response to these trials over the coming months and will update on
progress during 2022.
Group adjusted organic operating profit growth is expected to be
in line with our guidance of low to mid-single digit constant
currency growth, reflecting significantly reduced losses in NGP and
increased Distribution profit. The tobacco business has performed
well although adjusted operating profit will be slightly lower than
last year, as previously guided, as a result of the planned
increased investment to support our strategic plan as well as lower
stock revenue/profit in Australia (c. GBP90m) and US state
litigation settlement costs (c. GBP50m).
At current exchange rates, translation foreign exchange is
expected to be c. 3 per cent headwind to full year earnings per
share. As previously announced, the adjusted effective tax rate is
expected to increase this year from 21 per cent to around 23 per
cent.
Full-year adjusted operating cash conversion is expected to be
in line with expectations with the unwind of the temporary Logista
cash benefits in FY20 resulting in a working capital outflow. We
remain focused on strengthening the balance sheet and continue to
make progress towards achieving our target leverage of the lower
end of our 2-2.5 times net debt to EBITDA range on a sustainable
basis.
The annual results for the 12 months ended 30 September 2021
will be announced on 16 November 2021.
ENDS
Notes:
The Group uses 'adjusted' (non-GAAP) measures as we believe they
provide a better comparison between reporting periods. The
definition of our adjusted measures is unchanged from our half-year
results. We also use the term 'constant currency', which removes
the effect of exchange rate movements on the translation of the
results of our overseas operations. The term 'organic' excludes the
impact of the Premium Cigar divestment, which completed on 29
October 2020. This excludes the contribution of the Premium Cigar
business from both FY20 and FY21 results. The table below sets out
the contribution of the Premium Cigar business to FY20 results:
FY20 Premium FY20 organic
Cigars
Volume (bn SE) 239.1 (0.3) 238.8
Tobacco net revenue (GBPm) 7,784 (247) 7,537
Adjusted operating profit
(GBPm) 3,527 (31) 3,496
Share of JV profits (GBPm) 45 (44) 1
Adjusted profit before
tax (GBPm) 3,143 (75) 3,068
Adjusted earnings (GBPm) 2,403 (68) 2,335
Adjusted EPS (p) 254.4 (7.2) 247.2
Investor Contacts Media Contacts
+44 (0)7970 328 +44 ( 0)7740 096
Peter Durman 903 Jonathan Oliver 018
+44 (0)7581 052 +44 (0)7967 467
James King 880 Simon Evans 684
+44 (0)7974 615
Jennifer Ramsey 739
Cautionary Statement
Certain statements in this announcement constitute or may
constitute forward-looking statements. Any statement in this
announcement that is not a statement of historical fact including,
without limitation, those regarding the Company's future
expectations, operations, financial performance, financial
condition and business is or may be a forward-looking statement.
Such forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from those projected or implied in any forward-looking statement.
These risks and uncertainties include, among other factors,
changing economic, financial, business or other market conditions.
These and other factors could adversely affect the outcome and
financial effects of the plans and events described in this
announcement. As a result, you are cautioned not to place any
reliance on such forward-looking statements. The forward-looking
statements reflect knowledge and information available at the date
of this announcement and the Company undertakes no obligation to
update its view of such risks and uncertainties or to update the
forward-looking statements contained herein. Nothing in this
announcement should be construed as a profit forecast or profit
estimate and no statement in this announcement should be
interpreted to mean that the future earnings per share of the
Company for current or future financial years will necessarily
match or exceed the historical or published earnings per share of
the Company. This announcement has been prepared for, and only for
the members of the Company, as a body, and no other persons. The
Company, its Directors, employees, agents or advisers do not accept
or assume responsibility to any other person to whom this
announcement is shown or into whose hands it may come and any such
responsibility or liability is expressly disclaimed.
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END
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