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Imperial Brands PLC (IMB)

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Tuesday 30 March, 2021

Imperial Brands PLC

Trading Statement

RNS Number : 9298T
Imperial Brands PLC
30 March 2021



Legal Entity Identifier (LEI) No. 549300DFVPOB67JL3A42


30 March 2021


Pre-close trading update


· Good start to the year with trading in line with our expectations

· Aggregate market share growth in top five priority markets

· Increased investment in priority markets in line with the new strategy

· Growth in Group operating profit driven by reduced NGP losses and higher Logistics profit

· Full year constant currency guidance remains unchanged


Our business is performing well and we remain on track to deliver our full year results in line with the guidance we gave at our annual results in November last year with low-mid single digit organic adjusted operating profit growth at constant currency.


First half Group net revenue is expected to grow by at least 1 per cent on an organic, constant currency basis, driven by continued strong pricing in tobacco, as well as some benefit from growth in NGP revenues against a weak comparator period.


In tobacco, we have begun to achieve aggregate market share growth in our five priority markets with gains in US, UK and Spain more than offsetting declines in Germany and Australia. We are investing behind the operational levers outlined at our January 2021 Capital Markets Day in each of these priority markets to drive performance improvements over time. Overall tobacco volumes are in line with expectations although COVID-19 continues to affect consumer buying patterns across different channels and markets.


In NGP, our clear focus is to improve performance, returns and capabilities. Our preparations for market trials in vapour and heated tobacco later this year are on track.


First half Group adjusted organic operating profit growth is expected to be least mid-single digit at constant currency, benefiting primarily from significantly reduced losses in NGP and increased Logistics profit. Tobacco operating profit has been impacted by a lower duty windfall in Australia as previously guided and as we lap the impact of US trade inventories following the higher wholesaler purchases in March 2020 to meet COVID-19 pantry loading demand.  Full year adjusted Group operating profit will reflect increased investment consistent with our strategic plans and is expected to be in line with our guidance for low-mid single digit organic growth at constant currency .


At current exchange rates, translation foreign exchange is expected to be broadly neutral on first half earnings per share and be a c. 2 per cent headwind to full year earnings per share. As previously announced, the adjusted tax rate is expected to increase this year to around 23 per cent.


Our 12-month rolling cash conversion remains strong.  In line with previous guidance, the temporary Logista cash benefits in FY20 are expected to unwind resulting in full year adjusted operating cash conversion in the range of 75-80 per cent.


The interim results for the six months ended 31 March 2021 will be announced on 18 May 2021.







To aid comparison of performance between periods, the Group uses the term 'organic' to exclude the impact of the Premium Cigar divestment, which completed on 29 October 2020. The organic performance comparison 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 H1 2020 results:



Premium Cigars

HY20 organic

Volume (bn SE)




Tobacco net revenue (£m)




Adjusted operating profit (£m)




Share of JV profits (£m)




Adjusted profit before tax (£m)




Adjusted earnings (£m)




Adjusted EPS (p)








Investor Contacts

Media Contacts

Peter Durman

+44 (0)7970 328 903

Alex Parsons

+44 (0)7967 467 241

James King

+44 (0)7581 052 880

Simon Evans

+44 (0)7967 467 684



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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