Imperial Brands Plc · LSE:IMB

Imperial Brands — Imperial Tobacco Group — Merger or Acquisition (June 2015)

16 slides from Imperial Brands's merger presentation, Jun 15, 2015

  1. Slide 1: US Assets Acquired

    US Assets Acquired 15 June 2015

  2. Slide 2: Disclaimer

    Disclaimer Certain statements in this presentation constitute or may constitute forward-looking statements. Any statement in this presentation that is not a statement of historical fact including, without limitation, those regarding the Company’s future expectations, operations, financial performanc

  3. Slide 3: Our Priorities for 2015

    Our Priorities for 2015 Target of at least 10% increase in dividend Strengthen Develop Cost Capital Portfolio Footprint Optimisation Discipline  Enhance brand equity  Building momentum  Deliver further savings  Embedding cash to build sustainability across Growth as part of £300m pa conversion d

  4. Slide 4: Transforms US business

    Transforms US business Strengthen  Enhanced brand portfolio, capabilities, scale and influence Portfolio  Greater market share in a large profitable market Develop  Stable regulatory environment and relative affordability Footprint support long term growth  Diversifying Group Revenues and profit

  5. Slide 5: Relative Affordability

    Minutes of labour at average rates to purchase 20 cigarettes 10 30 50 70 90 -10 110 130 150 170 190 India Morocco Bulgaria South Africa Romania Indonesia Morocco 157 mins Hungary Philippines 82 mins Indonesia Thailand Egypt Ukraine Vietnam Ireland Ireland 67 mins Poland United Kingdom Turkey UK Port

  6. Slide 6: Execution strategy on track

    Execution strategy on track  Acquisition of assets completed following approval from FTC and DOJ  No change to deal structure  Consideration of $7.1bn settled; evaluating re-financing plans  ITG Brands now operational; execution of integration plan underway  Commercial and operational strategie

  7. Slide 7: Brand Performance

    Brand Performance 9.5% 10% 8% 6% 6.8% Newly Acquired 4% Commonwealth 2% 2.7% 0%  Acquired cigarette brand share 6.8%*  Day one market share of ITG Brands 9.5% of cigarette market  Not expecting to receive Doral 7 * Based upon quarterly MSAi data for 13 weeks to week ending 9 June 2015

  8. Slide 8: Brand Strategy

    Brand Strategy  Sales team in place; brand training complete  New account coverage plan in place  Brand investment plans finalised with significant investment behind portfolio; A&P, price, trade.  Primary national focus on Winston plus state specific focus on Kool, Maverick and USA Gold  First

  9. Slide 9: Blu & e-Vapour

    Blu & e-Vapour  blu to be included in enlarged Fontem business  UK distribution of blu already underway  Strengthens existing platform for development  Combining blu leading offer and innovation with IP and technical expertise in Fontem 9

  10. Slide 10: Integration Underway

    Integration Underway  Leadership team in place, organisational structure defined  Close cultural alignment between Lorillard and Commonwealth teams Manufacturing  All critical functions in place for Day 1  Over 1,000 integration processes completed Supply Chain  Back office systems and processe

  11. Slide 11: Financials

    Financials  Consideration of $7.1bn (£4.6bn at current FX) drawn against US dollar denominated bank facilities  Evaluating near term opportunity to re-finance; market rates currently around 4%  Ratings agencies fully updated  Significantly earnings enhancing in first full year  All cost related

  12. Slide 12: Stronger Winning Business

    Stronger Winning Business National tobacco brands Increased consumer appeal A leading e-cigarette brand Enhanced capabilities More presence and relevance at retail Key account coverage Combined integration planning Stronger winning business Winning culture 12

  13. Slide 13: US Assets Acquired

    US Assets Acquired 15 June 2015

  14. Slide 14: Appendix

    Imperial Tobacco Appendix

  15. Slide 15: Historical Financials

    Historical Financials US now disclosed as a separate market HY 2014 FY 2014 HY 2015 Growth Growth Growth Growth Growth Growth Markets as US Markets Markets as US Markets Markets as US Markets Reported Market Restated Reported Market Restated Reported Market Restated Volume (bn SE) 49.4 3.7 45.7 106.

  16. Slide 16: Historical Financials

    Historical Financials US market FY 2013 ‘Americas’ US as Reported Market Volume (bn SE) 9.0 8.7 Tobacco net revenue (£m) 653 512 Adjusted operating profit (£m) 219 206  FY2013 published ‘Americas’ segment net revenue and adjusted operating profit included other Americas (i.e. non-USA) markets and a

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