Imperial: Trading Update

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(October 5, 2023) Imperial Brands confirms that it is on track to deliver FY23 guidance1 and announces further £1.1Bn share buyback (~8% of share capital). Imperial repurchased 52.1Mn shares (~5.5% of share capital, £1.0Bn in total) in FY23.

Key highlights from the announcement:

– Single-digit tobacco segment revenue growth and low/mid-single digit adj. operating growth (- in line with the expectations. Recall: our “Imperial: Trading Update – Preview” write-up)

– Strong tobacco pricing driving net revenue and adj. operating profit growth

– Further modest gain in aggregate SoM in top-five priority markets (3rd consecutive year of
improved SoM performance following several years of decline): SoM growth in the US, Spain
and Australia, more than offsetting SoM declines in Germany and the UK

– Net revenue decline in the US: net revenue growth in the cigarette category (achieved through focus on the “discount” segment) failed to compensate for the decline in mass market cigar revenue

– Next Generation Products (NGP) revenue momentum across all categories (driven by the growth in Europe)

– ~2% FX tailwind on the FY23 revenue and adj. operating profit

– Expects operating profit growth to accelerate to mid-single digit in FY24/FY25

– Expects net debt/EBITDA at ~2.0 (as of FY23 year-end)

– Total FY24 capital returns (dividends & buybacks) expected to exceed £2.4Bn (~17% of current market cap)

Imperial Brands will announce the FY23 results on November 14, 2023.
References:

  1. https://www.imperialbrandsplc.com/creating-shareholder-value/results-reports-and-presentations ↩︎

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