NGP portfolio heating up

Imperial Brands’ volume shipments of cigarettes and other tobacco products calculated as ‘stick equivalents’ (SE) during the 12 months to the end of September, at 255.5 billion, were down by 3.6 percent on those of the 12 months to the end of September 2017, 265.2 billion.

Within that overall volume, US-market volume was down by five percent to 22.1 billion.

In announcing its preliminary results for the year to the end of September, the company said that while its volume was down by 3.6 percent, it had outperformed industry volumes across its footprint.

It had achieved share growth in many of its priority markets, while its Growth Brand share had risen by 0.7 of a percentage point.

And it had enjoyed strong performances from ‘tobacco Specialist Brands: Backwoods, Kool, Rizla, Skruf and Premium Cigars’.

An improved price/mix had delivered tobacco net revenue growth of 0.9 percent.

Meanwhile, Imperial said it was delivering strong growth in next generation products focused on smoker conversion.

It was delivering a satisfying, safer experience with a trusted brand, blu, supported by leading-edge science

And it had a strong innovation pipeline focused on reduced risk products in the categories of vapor, heated tobacco and oral nicotine.

Pulze, the company’s first heated tobacco product, was planned to be launched in early 2019.

Tobacco and NGP (next generation products) net revenue was down by 0.3 percent, from £7,757 million to £7,730 million; tobacco and NGP adjusted operating profit was down by 1.1 percent, from £3,595 million to £3,557 million; distribution adjusted operating profit was increased by 17.3 percent from £181 million to £212 million; total adjusted operating profit was increased by 0.1 percent from £3,761 million to £3,766 million; and adjusted earnings per share were up by 1.9 percent from 267.0p to 272.2p.

‘FY18 was a successful year of delivery against our strategy and I’m pleased with the progress we are making in creating something better for the world’s smokers,’ said chief executive, Alison Cooper.

‘In NGP our main focus is on transitioning smokers to blu, a significantly less harmful alternative to cigarettes.

‘NGP also offers additive opportunities for our shareholders and the success of the international rollout of my blu has put us in a strong position to further invest and accelerate sales growth in FY19.

‘In tobacco we focus on providing smokers with an evolving portfolio of high-quality brands.

‘Following our additional brand investment in tobacco over the past two years, we have increased Growth Brand volume, share and revenue in our priority markets.

‘Our financial delivery was strong, with revenue and earnings growth, high cash generation and a further dividend increase of 10 percent.

‘Capital discipline remains central to all our activities, providing funds for investment and enhancing returns.

‘We have the strategy, assets and capabilities to realise the significant opportunities presented by a changing environment and to generate growing returns for our shareholders.’