Expectations – Ahead of the release:
Sell-side expects +2.7% tobacco & NGP revenue and +4.3% adjusted profit growth. Imperial’s latest FY24 guidance is low single-digit (1%-3%) tobacco & NGP net revenue growth and close to the middle of the mid-single digit (5%) operating profit growth as the tobacco pricing and lower NGP losses drive a stronger financial delivery in H2 2024.
FY24 pre-close trading update:
Imperial Brands confirms that is is on track to meet FY24 guidance1:
– Acceleration in tobacco and NGP net revenue growth vs. FY23 and adjusted operating profit growth close to the middle of mid-single digit range
– Strong combustible pricing and stable aggregate share in the top-five combustible markets (i.e. share gains in the US, Spain and Australia, broadly offsetting declines in Germany and the UK) as the industry volume pressures ease across the majority of Imperial’s wider market footprint
– Strong growth in NGP net revenues (in the range of 20-30% at constant currency) with a further reduction in operating losses
– NGP growth across all three regions driven by launch of new formats under the blu brand, new iSenzia non-tobacco heat sticks and new flavours in the modern oral segment as wells the entry in the US oral nicotine category with the launch of the Zone pouches
– Group adjusted operating profit growth in line with guidance, driven by strong results across all three regions (including the AAACE region where shipment timings in the Middle East affected H1 results) and at Logista, the Spanish-based distribution business in which Imperial has a 50.01% stake
– Adjusted EPS accelerating, driven by constant currency adjusted operating profit growth and share count reduction from the ongoing buyback
– FY24 net debt to EBITDA to remain at the lower end of 2.0-2.5x range
– FY24 annual dividend: increased by +4.5% to 153.43 pence per share. For further details: Tobacco Companies: Dividend Changes
– FY25 capital returns to shareholders: c. £2.8 billion (vs £2.4 billion commitment in FY24), comprising of share buyback of £1.25 billion (+13.6% increase, for further details: Share Buybacks: Imperial Brands) and cash dividends of c. £1.5 billion payable in FY25 as part of a move to four equal quarterly dividend payments in the future
– Translation FX is expected to be a ~2.5-3.0% headwind on FY24 tobacco and NGP net revenue and a ~4.0% headwind on FY24 adjusted operating profit and EPS, at current exchange rates (i.e. 0.5-1% higher than the previous guidance)
– The average number of shares for the year is 869 million.
The FY24 results (for the fiscal year ended September 30, 2024) will be announced on November 19, 2024.
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