Imperial Brands PLC · LSE:IMB

Imperial Brands — Imperial Tobacco Group — Investor Presentation (July 2009)

20 slides from Imperial Brands's investor presentation, Jul 1, 2009

  1. Slide 1: Americas – Morocco Factory Visit

    Americas Morocco Factory Visit 1 July 2009

  2. Slide 2: Jonathan Cox, General Manager USA

    Jonathan Cox General Manager USA

  3. Slide 3: Agenda

    Agenda ƒ USA overview ƒ FDA update ƒ Tobacco market ƒ Our performance ƒ Medium term market view ƒ Our business opportunities 3

  4. Slide 4: USA Overview

    USA Overview volume, share and profit - growth General: Politics: ƒ Population: 300m ƒ political alignment ƒ GDP: $14tn ƒ healthcare reform ƒ relatively wealthy ƒ war on terror ƒ 50 individual States ƒ economy WA ND ME MN MN VT OR NH SD WI NY MA ID MI CN WY PN IA NE NJ NV OH IL IN WV VI UT CO KY KA

  5. Slide 5: FDA Introduction and Context

    FDA Introduction and Context ƒ Food and Drug Administration (FDA) ƒ Shape the long term future of tobacco ƒ Long time coming ƒ Anthony Hemsley: VP Governmental Affairs 5

  6. Slide 6: FDA Bill – The Process

    FDA Bill – The Process The House of Representatives The Senate Waxman Bill Kennedy Bill Energy & Commerce Committee: HELP Committee: 39 votes for, 13 against 15 votes for, 8 against House floor of 435 Representatives: Senate Floor: 79-17 298 votes for, 112 against The Final Bill House approved the S

  7. Slide 7: FDA Bill – Post Enactment

    FDA Bill – Post Enactment Day 1 6 mths 12 mths 15 mths 24 mths 36 mths User fees Registration Marketing Premarket Pesticides Listing of entities restrictions notification compliance requirements and facilities filing (21 for harmful or months for potentially existing harmful products) constituents R

  8. Slide 8: FDA Bill – Our Position

    FDA Bill – Our Position ƒ Minimal overall impact ƒ Operational experience in darker markets ƒ Well balanced and positioned portfolio ƒ Compliance hurdle for small manufacturers ƒ We can guide regulatory development 8

  9. Slide 9: Market Dimensions: volumes

    Market Dimensions volumes Product Category Growth 450 438 2004 - 2008 450 404 400 170% 400 stick equivalent bn stick equivalent bn 350 160% 350 FCT 150% 300 300 140% Cigars 250 130% 250 Smokeless 200 120% 200 110% 150 150 100% Cigarettes 100 100 90% 50 80% 50 04 05 06 07 08 0 0 2004 2008 Note: Imper

  10. Slide 10: Market Dimensions: gross margin pool

    Market Dimensions gross margin pool $0bn $5bn $10bn $15bn $20bn Total Market Cigarettes Smokeless Cigars FCT 55% 20% 15% 90% 3% Note: Imperial estimates of US tobacco manufacturer values 10

  11. Slide 11: SCHIP: Consumer Prices

    SCHIP: Consumer Prices FET SETs MPI Apr 1st proposed 60 SETs MPI Mar $6.17 $5.62 Jan-Mar $0.90 Feb $0.10 50 $0.90 +41% +25% $ per carton 40 30 20 Trade Trade Trade Trade Margin Margin Margin Margin +19c +2c +$1.71 +56c 10 0 Start Mid End End End 2009 Feb Feb Mar 2009 Note: Imperial estimates combini

  12. Slide 12: SCHIP – Volume and Margins

    SCHIP – Volume and Margins Jan-Mar’08 vs Jan-Mar’09 Unit Net $ Volumes Margin Margin Gain Premium -10.0% +13% +1.7% High -10.8% +15% +2.6% Mid -12.9% +26% +9.7% Low -6.8% +45% +35.1% Note: Imperial estimates combining MSAi and internal data sets 12

  13. Slide 13: Market Dimensions: cigarette price tiers

    Market Dimensions cigarette price tiers Market Shares Pre & Post-SCHIP 60 50 48 50 Feb 2009 May 2009 40 30 21 18 19 18 20 8 10 6 7 5 0 Premium High Mid Low Bottom Approximate Net Margin $75 $55 $30 $13 $2 Range Range Range Range per‘000 $125 Range $70 $60 $50 $45 $25 $21 $5 $4 -$2 Note: Imperial est

  14. Slide 14: Our Cigarette Performance

    Our Cigarette Performance 10% YOY Volume 5% Growth Imperial +ve 0% YOY -ve Volume -5% -6.4% Decline Market -10% -10.4% -15% 2006 2007 2008 2009 Q1 Source: Maxwell Report 14

  15. Slide 15: Our Portfolio Performance

    Our Portfolio Performance 5.0 4.5 4.30 4.17 4.0 Price & Margin % market share 3.5 Sonoma 3.0 2.5 2.0 1.5 USA 1.0 Gold 0.5 0.0 Q108 Q109 Source: MSAi 15

  16. Slide 16: Our Performance: FCT, papers and tubes

    Our Performance FCT, papers and tubes Volumes Volumes YTD 2008* YTD 2009* FCT (tonnes) 212 500 +135% Papers/tubes (m) 1,993 2,317 +16% Note: *October to May 16

  17. Slide 17: Market Dimensions: fine cut tobacco

    Market Dimensions fine cut tobacco 50 Pre-SCHIP Post-SCHIP 50 45 45 RTM 40 40 retail price $ retail price $ 35 35 30 30 25 Tax & 25 RTM 20 Duty 20 15 RTM 15 Tax & 10 Tax & Duty Duty 10 5 5 Cost & Margin Cost & Margin Cost & Margin 0 0 200 1lb Non 200 1lb Non Cheap Expanded Cheap Expanded Expanded Ci

  18. Slide 18: Medium Term Market View

    Medium Term Market View* cigarettes Current Margin Current Future Margin Future % % Volume /’000 Margin Volume /’000 Margin Volume Margin FMC 334bn $47.30 $15.8bn 273bn $63.00 $17.2bn -18% 9% (MSA Paid) FMC 21bn $6.50 $137m 21bn $7.50 $158m - 15% (NPM) FMC 7bn $5.00 $35m 40bn $5.00 $200m 471% 471% (

  19. Slide 19: Our Business Opportunities

    Our Business Opportunities ƒ 80% profit pool in cigarettes - our share: 4% volume and 3% value - plenty to go for ƒ Investment in A&P and point of sale ƒ Core portfolio focus ƒ FCT: improve from a new base point - good share position, less competitive Note: Imperial estimates 19

  20. Slide 20: Americas – Morocco Factory Visit

    Americas Morocco Factory Visit 1 July 2009

Imperial Tobacco Group — Investor Presentation (July 2009) on 6ix