Imperial Brands Plc · LSE:IMB
Imperial Brands — Imperial Tobacco Group — Non-Deal Roadshow (May 2003)
30 slides from Imperial Brands's roadshow presentation, May 28, 2003
Slide 1: German Market Presentation – Analyst Trip
Imperial Tobacco Group PLC German Market Presentation Analyst Trip 28th May 2003
Slide 2: Welcome to Germany
Welcome to Germany Market dynamics and trends Our in market performance New market initiatives New structure advantages Proposed €1 tax increase Outlook – meeting the challenges Source for the presentation data: Imperial Market Research 2
Slide 3: Macro Economic Facts
Macro Economic Facts Country profile total population: 82.5m immigrant population: 7.3m number of households: 38.5m ave. size of household: 2.2 persons Economic indicators 2002 GDP: €1.984bn GDP per capita: €25,600 inflation rate: 1.4% total number of employees: 38.7m unemployment rate: 9.8% ave. ho
Slide 4: White Stick Market
White Stick Market Stable consumption - strong trend to value smoke (28% in 2003) 180 165.0 160.5 160.2 161.3 162.4 150 19.4 19.8 20.7 21.2 23.9 10.0 13.1 18.1 21.9 21.5 120 Bn Sticks 90 131.1 127.3 122.4 122.0 60 117.0 30 0 FY99 FY00 FY01 FY02 FY03E FMC: A-brands FMC: Private Label OTP 4
Slide 5: FMC: Taste Segment Shares
FMC: Taste Segment Shares Consistent consumer taste preferences 100 3.1 2.8 2.6 2.4 2.3 Average market Share - % 80 66.3 65.2 65.6 65.9 66.1 60 40 20 25.0 26.4 26.5 26.8 26.9 0 5.6 5.6 5.2 4.9 4.7 FY99 FY00 FY01 FY02 HY03 Ultra Light Light Full Favour Plain 5
Slide 6: FMC: Price Segments
FMC: Price Segments Private label growth rate slowed 100 Average market share - % 80 44.1 44.0 48.1 45.4 50.8 60 23.6 23.1 22.8 40 24.0 23.9 8.2 8.1 8.9 8.8 9.2 20 9.3 9.4 9.3 9.4 9.4 12.9 15.2 15.7 7.1 9.3 0 FY99 FY00 FY01 FY02 HY03 Private Label E Germany Mid High Premium 6
Slide 7: Market Specifics
Market Specifics Pricing vs communication restrictions Pricing fixed prices – no discounting banderol system Tobacco tax specific tax 6.17 € cent/stick (RYO: €21.40/kg) ad valorem 24.23% of RRP (RYO: 18.32% of RRP) min taxation €0.95/000 sticks (RYO: €35/kg) Communication TV and radio prohibited pri
Slide 8: FMC: Market Shares by Company
FMC: Market Shares by Company 100 16.4 18.7 22.4 24.7 25.6 Average market share - % 80 19.9 19.3 18.6 18.2 17.4 60 40.7 39.1 40 37.2 36.8 37.1 20 23.0 22.9 21.8 20.3 19.9 0 FY99 FY00 FY01 FY02 HY03 Imperial PMI BAT Others inc PL Note: These shares exclude brands distributed for third parties. 8
Slide 9: FMC: West Family
FMC: West Family market share 12 Stabilisation – now growth potential Average market share - % 8 4 10.6 11.0 10.5 9.7 9.6 0 FY99 FY00 FY01 FY02 HY03 Note : chart shows averages; March 03 spot was 9.8% 9
Slide 10: West FMC Off-Take
West FMC Off-Take focus delivering results 11.0 8 Average market share - % Average market share - % 10.5 7.5 10.0 7 Oct02- Jan03- Oct02- Jan03- Dec02 Apr03 Dec02 Apr03 Petrol Forecourt (example) Food Retail 10
Slide 11: West Special Editions
West Special Editions Objectives: attractive offer for smokers of other brands increase brand loyalty improve image dimensions Action: launch Summer Edition July 2003 11
Slide 12: West 10's Packs
West 10’s Packs Objectives: convenient pack for controlled and flexible consumption attractive offer for smokers due to new “pocket size” format Action: launch 16th June 2003 12
Slide 13: Davidoff Family
Davidoff Family market share Strongest growth-rate within main A-brands 1.2 1.1 Average market share - % 1.0 1 0.9 0.8 0.8 0.6 0.6 0.4 0.2 0 FY99 FY00 FY01 FY02 HY03 Note : chart shows averages; March 03 spot was 1.2% 13
Slide 14: Davidoff Ultra
Davidoff Ultra Objectives: establish Davidoff as pleasure brand in ultra segment expand brand family ahead of EU directive Actions: initial distribution Nov-Dec 02 sales cycle Jan–Feb 03 First results: total sales volume by April 17.5m 14
Slide 15: JPS Red Launch in East Germany
JPS Red Launch in East Germany encouraging sell-in East Germany Price Segments F6 10.4% 26.4% 23.2% 51.9% Pall Mall JPS 8.8% Red 12.0% Cabinet 8.0% 2.5% ≤ € 2.50 € 2.85 € 3.00 € 3.10 € 3.20 Note: price per pack of 19 sticks 15
Slide 16: OTP Market
OTP Market accelerating growth 25 23.9 20 21.2 20.7 19.4 19.8 Bn Sticks 15 10 +2% +5% +2% +13% 5 0 FY99 FY00 FY01 FY02 FY03E 16
Slide 17: OTP: Segment Shares
OTP: Segment Shares Price and innovation drive this segment 100 5.6 5.5 6.7 7.7 7.5 Average market share - % 16.2 14.9 12.2 16.6 80 26.7 60 36.3 37.0 39.0 38.5 31.8 40 20 42.0 36.1 41.3 41.2 37.3 0 FY99 FY00 FY01 FY02 HY03 RYO A-Brands RYO C-Brands + Private Label MYO Eco-Sticks 17
Slide 18: RYO/MYO A-brand market shares
RYO/MYO A-brand market shares Strengthened leadership – in a growing market 100 Average market share - % 80 55.6 55.5 58.0 53.6 58.6 60 40 17.6 19.7 17.3 17.1 17.7 20 24.7 27.2 24.9 28.8 23.7 0 FY99 FY00 FY01 FY02 HY03 Imperial BN/BAT Others inc C-brand & PL 18
Slide 19: Imperial's RYO/MYO Brands
Imperial’s RYO/MYO Brands market leading portfolio West no. 1 position still increasing share Drum no. 1 brand within classic RYO innovative edge through introduction of laminate pouch Van Nelle no. 2 brand within classic RYO most successful major A-brand of recent years 19
Slide 20: JPS MYO
JPS MYO value offering Objective: increase share within the growing value RYO segment Distribution: 20,000 outlets within 4 weeks Launch: 19 May 2003 20
Slide 21: MYO (Rolls & Singles) market share
MYO (Rolls & Singles) market share From segment leadership to segment dominance 100 17.6 Average market share - % 33.2 80 51.9 53.5 53.5 60 29.7 40 82.4 48.1 46.5 46.5 20 37.0 0 FY99 FY00 FY01 FY02 HY03 Imperial Rolls Imperial Singles Others 21
Slide 22: Total White Stick Market
Total White Stick Market West franchise gaining share 12 10.9 10.6 10.5 10.7 10.1 Average market share - % 9 6 3 0 FY99 FY00 FY01 FY02 HY03 22
Slide 23: West Success in OTP
West Success in OTP balance the value growth of the Family 27 25 NSV / 1000 Sticks in € 23 21 19 17 15 FY99 FY00 FY01 FY02 HY03 West FMC West OTP 23
Slide 24: Total White Stick branded market shares by company
Total White Stick branded market shares by company Imperial regaining market share 100 20.3 23.0 26.3 28.4 29.0 Average market share - % 80 20.1 19.3 18.7 18.2 17.6 60 40 36.3 34.1 32.8 32.3 32.1 20 23.3 23.6 22.2 21.1 21.3 0 FY99 FY00 FY01 FY02 HY03 Imperial PMI BAT Others 24
Slide 25: FMC – Route to Market 2002
FMC – Route to Market 2002 Huge outlet universe - food channel gaining shares Cigarettes 2% 59% 39% Tobacco Wholesale Food Wholesale/C&C Over the counter 45 % Vending Food Retail Tobacco Petrol Others machines Retailers Stations Total: 13,520 16,020 49,600 761,700 83,800 924.640 12% 21% 12% 22% 33%
Slide 26: RYO/MYO – Route to Market 2002
RYO/MYO – Route to Market 2002 No vending business – lower distribution levels RYO/MYO 8% 52% 40% Tobacco Wholesale Food Wholesale/C&C Over the counter 65 % Vending Food Retail Tobacco Petrol Others machines Retailers Stations 24% 24% 17% 0% 35 % CONSUMER 26
Slide 27: Old Structure
Old Structure Pre integration situation – business focus BTM REE ITA RYO/MYO FMC – A-brands RYO ECO-sticks ECO-sticks Tubes Cigarillos Paper & Tubes ONE FOCUSSED SALES ORGANISATION 27
Slide 28: New Structure Advantages
New Structure Advantages Competitive edge through intense sales activities One face to the customer Outlets visited more frequently Category leadership opportunities Higher outlet coverage for OTP Integrated key account management & telesales activities 28
Slide 29: Tobacco Tax Increase
Tobacco Tax Increase the opportunities Further tax increase €1 per pack from Jan 04 Increase in consumers’ search for value accelerate growth trend into OTP Imperial market leaders - well placed to benefit New price sector driver? Opportunities for manufacturers’ price increases 29
Slide 30: Imperial in Germany – outlook
Imperial in Germany outlook Well prepared to meet the challenges: multi-product portfolio innovation strength changing consumer preferences cost efficiency – drive profitability focused sales organisation 30
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