Imperial Brands PLC · LSE:IMB

Imperial Brands — Imperial Tobacco Group — Dresdner Kleinwort Consumer Staples Conference 2008

27 slides from Imperial Brands's conference presentation, Apr 4, 2008

  1. Slide 1: Dresdner Kleinwort Consumer Staples Conference

    Dresdner Kleinwort Consumer Staples Conference Frankfurt 4 April 2008

  2. Slide 2: Titus Wouda Kuipers, General Manager Germany/Austria

    Titus Wouda Kuipers General Manager Germany/Austria 2

  3. Slide 3: Agenda

    Agenda ƒ Macro-economic facts ƒ Market dynamics ƒ In-market performance ƒ Brand performance 3

  4. Slide 4: Macro-Economic Facts

    Macro-Economic Facts Country profile ƒ total population: 82.3m ƒ immigrant population: 6.7m ƒ number of households: 39.2m ƒ ave. size of household: 2.1 persons Economic indicators 2007 ƒ GDP: €2.424bn ƒ GDP per capita: €29,453 ƒ inflation rate: 2.6% ƒ total number of employees: 39.7m ƒ unemployment

  5. Slide 5: Market Dynamics

    Market Dynamics 5

  6. Slide 6: Market Dynamics: Volume Development

    Market Dynamics volume development Sales in sticks (bn) 180 162 160 150 24 144 135 140 127 31 22 120 43 43 20 36 100 OTP 16 12 11 80 FMC PL 60 116 99 FMC 40 85 80 80 Branded 20 0 FY03 FY04 FY05 FY06 FY07 Note: Imperial estimates 6

  7. Slide 7: Market Dynamics: Price Segments

    Market Dynamics price segments Mar04 Oct06 Jan08 100% Price Price Price €/17s €/17s €/17s 90% 80% 3.04- 3.80- 3.80- 70% 3.22 4.00 4.00 62 73 72 69 60% 50% 40% 6 3.70 30% 6 3.60 9 2.95 7 19 3.60 20% 6 12 3.50 2 2.86 10% 16 15 2.59 13 3.10 13 3.25 0% FY04 FY05 FY06 FY07 Private Label 4th Price Sector

  8. Slide 8: Market Dynamics: Other Tobacco Products

    Market Dynamics other tobacco products Sales in stick equivalents (bn) 50 45 43 43 3 3 40 36 35 31 5 30 2 22 20 24 9 25 2 10 20 5 2 15 10 22 18 18 18 18 5 0 FY03 FY04 FY05 FY06 FY07 Traditional fine-cut New MYO Singles XL Ecos Note: Imperial estimates 8

  9. Slide 9: Market Dynamics: Singles Transition

    Market Dynamics Singles transition Duty Paid Duty Paid OTP Cigarette 55% 20% Low Price Make Your Own Branded Traditional Single Tobacco Private Label Roll Your Own Non-Duty Traditional Paid Eco Cigarillos Cigarette 25% Note: Imperial estimates and definitions 9

  10. Slide 10: Market Dynamics: Cigarette Tax

    Market Dynamics cigarette tax Based on mppc* in €/17 sticks 5.00 74.7% 74.2% 74.2% 75.4% 77.1% 75.8% 72.7% 69.0% 69.8% €4.00 €4.00 4.00 €3.80 €3.58 €3.22 1.03 0.97 0.91 3.00 €2.86 0.91 €2.68 0.83 €2.52 €2.52 0.73 0.74 0.78 0.76 2.00 1.00 1.73 1.76 1.95 2.14 2.39 2.67 2.89 2.97 3.03 0.00 Dec 00 Nov 0

  11. Slide 11: Manufacturer Price Increases since October 2006

    Market Dynamics MPIs since October 2006 ƒ October 2007: Big boxes (24 sticks) +10c ƒ December 2007: 100mm cigarettes +20c ƒ January 2008 - 4th price sector: RP +10c; BB +20c; VP +8c - East-Germany: RP +10c; BB +16c; VP +16c Note: RP = Retail Pack; BB = Big Box; VP = Vending Pack 11

  12. Slide 12: Market Dynamics: Cross-Border Flows

    Market Dynamics cross-border flows % Non-duty paid cigarettes as a 40 percentage of cigarette consumption 35 East-GER 30 25 National 20 15 West-GER 10 Oct-Dec Jan-Mar Apr- Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep07 Oct-Dec 05 06 Jun06 06 06 07 07 07 Note: Imperial estimates 12

  13. Slide 13: Market Dynamics: Smoking Restrictions

    Market Dynamics smoking restrictions ƒ Smoking ban in public buildings and transport ƒ Horeca: - mix of regulations across country - restrictions in 14 out of 16 States - permitted smoking in separate rooms, except Bavaria - two remaining States from 1 July 2008 13

  14. Slide 14: Advertising Restrictions

    Market Dynamics advertising restrictions ƒ Liberal market compared to rest of EU ƒ Bill boards, cinema & PoS ads allowed ƒ Print & internet ad ban since Jan 2007 - except trade press ƒ TV and radio ad ban since 1974 14

  15. Slide 15: Market Dynamics: Vending Packs

    Market Dynamics vending packs (VP) Sales in sticks (bn) VP share of total FMC sales 30 23% 23% 23% 25% 25 20% 16% 20 15% 15 27 23 10% 10 21 15 5% 5 0 0% FY 04 FY 05 FY 06 FY 07 VP Sales VP share of total FMC Note: Imperial estimates 15

  16. Slide 16: Market Dynamics: Route to Market

    Market Dynamics route to market Industry FMC Products Tobacco Wholesale Food Wholesale/C&C Over the counter 49 % Tobacco Petrol Vending Others* Food Retail Retailers Stations machines 13 % 26 % 10 % 16 % 35 % FY07 (12 %) (23 %) (10 %) (23 %) (32 %) FY06 CONSUMER Note: Imperial estimates; *kiosks, ca

  17. Slide 17: In-Market Performance

    In-Market Performance 17

  18. Slide 18: Cigarette Share Development

    In-Market Performance cigarette share development 100 4.6 4.8 4.7 5.5 16.8 15.9 13.4 12.5 80 average market share % 37.1 36.3 60 37.1 36.5 40 17.1 17.9 18.6 17.0 6.3 6.2 5.8 20 5.8 18.7 19.4 20.7 21.3 0 FY04 FY05 FY06 FY07 IT GER Altadis BAT PM Private Label Others Note: Imperial estimates; 12 month

  19. Slide 19: OTP Share Development

    In-Market Performance OTP share development 100 16.8 17.0 16.6 20.1 80 average market share % 28.9 28.4 26.6 23.2 60 5.4 7.5 13.7 15.3 40 20.8 20.8 19.8 20.2 0.8 0.7 0.6 0.7 20 27.3 25.6 22.7 20.5 0 FY04 FY05 FY06 FY07 IT GER Altadis BAT PM Private Label Others Note: Imperial estimates; 12 months mo

  20. Slide 20: Brand Performance

    Brand Performance 20

  21. Slide 21: Brand Performance: Portfolio

    Brand Performance portfolio Multi-product portfolio 21

  22. Slide 22: Cigarette Brand Families Shares

    Brand Performance cigarette brand families 12 month moving average shares % 10 8 West 7.2% 6.4% JPS 6 Gauloises Blondes 5.5% 4 trad. brands 2 PST R1 Cabinet Davidoff 0 Mar 05 Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Note: Imperial estimates (excluding third party distrib

  23. Slide 23: OTP Brand Families Shares

    Brand Performance OTP brand families 12 month moving average shares - based on total OTP vol. in sticks % 16 14 12 10 8 JPS 7.7% 6 West 4 3.7% Drum 2 Van Nelle Route 66 1.8% 0 Mar 05 Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Note: Imperial estimates (excluding third party

  24. Slide 24: Brand Performance: JPS

    Brand Performance JPS ƒ Strong brand relaunched in March 2004 ƒ Value price of €3.60 per pack ƒ Fastest growing cigarette brand in Germany ƒ Cigarette, make your own, roll your own and eco-cigarillo products ƒ Red, Blue, Black & Silver variants 24

  25. Slide 25: Brand Performance: Route

    Brand Performance Route 66 ƒ Strong international brand image and design ƒ Launched 2006; new campaign April 2008 ƒ Value price of €3.60 per pack ƒ Cigarette, make your own and eco-cigarillo products ƒ Original and Blue variants 25

  26. Slide 26: Summary Outlook

    Summary outlook ƒ Well prepared to meet the challenges: - multi-product portfolio - innovation strengths - changing consumer preferences - cost efficiencies driving profitability - focused sales organisation 26

  27. Slide 27: Dresdner Kleinwort Consumer Staples Conference

    Dresdner Kleinwort Consumer Staples Conference Frankfurt 4 April 2008

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