Imperial Brands Plc · LSE:IMB
Imperial Brands — FY2024 Earnings Presentation
47 slides from Imperial Brands's earnings presentation, Nov 19, 2024
Slide 1: Full Year Results 19 November 2024
i Me IMPERIAL Alf BRANDS 19 NOVEMBER 2024
Slide 2: Disclaimer
Disclaimer Certain statements in this announcement business or other market conditions. announcement should be interpreted to constitute or may constitute forward- These and other factors could adversely mean that the future earnings per share of looking statements. Any statement in this affect the
Slide 3: Agenda
Agenda RESULTS OVERVIEW Stefan Bomhard FINANCIAL REVIEW AND OUTLOOK Lukas Paravicini STRATEGIC AND OPERATIONAL UPDATE Stefan Bomhard Stefan Bomhard Q&A Lukas Paravicini 3 | Full Year Results | 19 November 2024
Slide 4: Delivering the Acceleration Phase of Our Plan
Delivering the Acceleration Phase of Our Plan FULL YEAR RESULTS IN LINE WITH EXPECTATIONS PRIORITY MARKET SHARE STRONG TOBACCO PRICING Delivering aggregate market Driving strong net revenue share gains in five priority growth through tobacco pricing markets DRIVING NGP GROWTH BUSINESS TRANSFORMATION
Slide 5: 2024 – Successful Year of Delivery
2024 – Successful Year of Delivery STRONG PERFORMANCE SUPPORTING INCREASED CAPITAL RETURNS OPERATIONAL FINANCIAL SHAREHOLDER DELIVERY DELIVERY RETURNS PRIORITY MARKET SHARE TOBACCO & NGP NET REVENUE FY24 DIVIDEND PER SHARE +5bps +4.6% +4.5% NGP NET REVENUE ADJUSTED EPS FY25 BUYBACK COMMITMENT +26.4%
Slide 6: Lukas Paravicini, CFO
Lukas Paravicini CFO 6 | Full Year Results | 19 November 2024
Slide 7: Continued Financial Delivery
Continued Financial Delivery IMPROVING ADJUSTED OPERATING PROFIT AND EPS GROWTH TOBACCO & NGP NET REVENUE GROUP AOP ADJUSTED NET DEBT TO EBITDA +4.6% +4.6% 1.8x NGP NET REVENUE ADJUSTED EPS FREE CASH FLOW +26.4% +10.9% £2.4bn 7 | Full Year Results | 19 November 2024 Constant currency basis
Slide 8: Strong Tobacco Price Mix Across Footprint
Strong Tobacco Price Mix Across Footprint BRAND AND SALES INVESTMENT SUPPORTING STRONG PRICING VOLUME AND PRICE MIX Net Revenue % +4.5% +4.0% +2.5% +3.8% • Volume declines have normalised: (4.0)% 11.7% 8.2% 7.8% 6.0% • Strong pricing offsetting volume, while gaining share -3.7% -3.5% -4.0% -7.7% • U
Slide 9: Strong Adjusted Operating Profit Growth
Strong Adjusted Operating Profit Growth GROWTH THROUGH COMBUSTIBLE PERFORMANCE, NGP AND LOGISTA +4.6% £4,065m £3,887m +£94m +£58m +£26m FY23 AOP Tobacco performance Reduced NGP losses Logista* FY24 AOP constant currency 9 | Full Year Results | 19 November 2024 * Including eliminations
Slide 10: Accelerating Adjusted EPS Growth
Accelerating Adjusted EPS Growth OPERATING PROFIT AND SHARE BUYBACK OFFSET BY TAX AND INTEREST +10.9% (4.4)% +6.5% 309.2p 297.0p 278.8p +19.3p (0.8)p (0.5)p (5.5)p +17.9p (12.2)p FY23 Adjusted Interest Minorities Tax Number of FY24 Translation FY24 adjusted operating & JV shares adjusted constant FX
Slide 11: Delivering Our Capital Allocation Priorities
Delivering Our Capital Allocation Priorities CASH GENERATION UNDERPINS OUR CAPITAL RETURNS RESILIENT CASH DELIVERY DISCIPLINED CAPITAL ALLOCATION CONTINUED HIGH FREE CASH FLOW Continuing to invest in the business; CASH CONVERSION 1 organic initiatives and M&A in NGP 100% 12-month £2.4bn High free ca
Slide 12: FY25 Outlook
FY25 Outlook DELIVERING GROWTH AND DRIVING RETURNS Outlook for FY25* Revenue • Low-single-digit net revenue growth; double-digit NGP revenue growth • Adjusted operating profit (AOP) growth close to middle of mid-single-digit range Profit • Profit drivers: operational gearing, improving NGP margins,
Slide 13: Stefan Bomhard, CEO
Stefan Bomhard CEO 13 | Full Year Results | 19 November 2024
Slide 14: Our Purpose, Vision and Strategy
Our Purpose, Vision and Strategy CREATING A COMMON HIGH-PERFORMANCE CULTURE FOR IMPERIAL BRANDS OUR PURPOSE “Forging a path to a healthier future for moments of relaxation and pleasure” OUR VISION “To build a strong challenger business powered by responsibility, focus and choice” 14 | Full Year Resu
Slide 15: Transforming Imperial Brands
Transforming Imperial Brands LEVERAGING THE CRITICAL ENABLERS TO DRIVE PERFORMANCE CONSUMER AT THE CENTRE PERFORMANCE-BASED SIMPLIFIED AND EFFICIENT OF THE BUSINESS CULTURE OPERATIONS Global Engagement Score 220,000 consumer 1 ppt above global benchmark UK pilot market roll-out delivered Global on t
Slide 16: Good Progress Against Our ESG Priority Areas
Good Progress Against Our ESG Priority Areas FORGING A PATH TO A HEALTHIER FUTURE Enabled Reduced our Reduced We Recognised Reduced Workforce Factory self- Consumer direct absolute waste supported by Lost Time Disclosure assessment Choice emissions in operations more than CDP for a Accidents by Init
Slide 17: Delivering Share Gains in Priority Markets
Delivering Share Gains in Priority Markets ACHIEVING OUR OBJECTIVE OF MAINTAINING MARKET SHARE AGGREGATE WEIGHTED PRIORITY PRIORITY MARKET SHARES MARKET SHARE PERFORMANCE (12 month share Δ) +15 bps Objective to stabilise share performance +35 bps +2 bps +5 bps +10 bps -2 bps +5 bps -16 bps Average F
Slide 18: Americas: Delivering Further Cigarette Share Gains
Americas: Delivering Further Cigarette Share Gains STRONG PERFORMANCE IN FMC AND MMC FMC: SHARE GAINS AND PRICING MMC: STRONGER PERFORMANCE • Strong pricing outpacing volume declines • Category remains attractive with opportunities for long-term growth • Balanced portfolio across focus price segment
Slide 19: Priority Markets: Managing Share and Value
Priority Markets: Managing Share and Value STRONG PRICING, REVENUE AND PROFIT GROWTH • Strong market size +2 bps • Delivering market share +5 bps gains • Investing in strategic initiatives • Positive pricing environment • Improved salesforce capability • Investments in innovation • Increased distrib
Slide 20: Broader Market Portfolio: Driving Value
Broader Market Portfolio: Driving Value STRATEGIC INITIATIVES ARE DELIVERING A STRONGER PERFORMANCE AFRICA CENTRAL & EASTERN EUROPE NR: +5% NR: +6% • Strong volumes and price/ mix in sub- • Pricing offsetting volume declines Saharan Africa • Growth from broader market portfolio • Continued focus on
Slide 21: Delivering NGP Net Revenue Growth
Delivering NGP Net Revenue Growth GROWING ACROSS ALL REGIONS AND ALL CATEGORIES NGP NET REVENUE GROWTH FY24: NGP as a % of NR BY MARKET Constant currency growth Europe FY24 8% Europe FY20 3% -4% 11% 26% 26% Greece 43% Italy 36% Portugal 34% Estonia 31% Austria 27% Norway 27% Finland 21% 329 Sweden 2
Slide 22: Vapour: Product Innovation Driving Growth
Vapour: Product Innovation Driving Growth BUILDING SCALE WITH GROWING NET REVENUE AND IMPROVING MARGINS VAPOUR KEY METRICS • Building scale in # OF MARKETS existing markets >20 +2 in FY24 • Launch of 1,000 puff blu bar, blu box and blu SHARE GROWTH bar kit +210 bps • Product and flavour innovation N
Slide 23: Heated Tobacco: Consolidating Market Launches
Heated Tobacco: Consolidating Market Launches DIFFERENTIATED OFFERING PROVIDING CONSUMER CHOICE HEATED TOBACCO KEY METRICS • Building scale in # OF MARKETS existing markets 8 +1 in FY24 • Focus on understanding the SHARE GROWTH consumer +110 bps • Introduction of iSenzia, flavoured non-tobacco NET R
Slide 24: Modern Oral: Building Scale in Footprint
Modern Oral: Building Scale in Footprint INNOVATION AND PRODUCT LAUNCHES DELIVERING GROWTH MODERN ORAL KEY METRICS • Product innovation in # OF MARKETS Europe 8 SHARE GROWTH • Flavour launches to provide consumer +40 bps choice NET REVENUE GROWTH • Zone successfully launched in the US +61% 24 | Full
Slide 25: Modern Oral: Zone Launched in the US
Modern Oral: Zone Launched in the US ENCOURAGING EARLY PROGRESS WITH ZONE ROLL-OUT US MODERN ORAL ZONE US ROLL-OUT • Zone launched in ZONE DISTRIBUTION February 2024 42k stores • Present in 12 US metropolitan areas USA NATIONAL SHARE • Strong share trajectory 1.6% • Encouraging 4.3% share in Imperia
Slide 26: Priorities for FY25
Priorities for FY25 STRENGTHENING OUR CULTURE, PERFORMANCE AND RESILIENCE Delivering aggregate market share growth across priority markets Driving NGP revenue growth with improving gross margins Leveraging new ways of working and further self-help opportunities Strong cash generation to underpin cap
Slide 27: FY25 Priorities Underpin Investment Case
FY25 Priorities Underpin Investment Case GLOBAL CONSUMER GOODS BUSINESS WITH ATTRACTIVE VALUATION OPERATIONAL FINANCIAL SHAREHOLDER DELIVERY DELIVERY RETURNS REVITALISED TOBACCO SUPPORTING OUR PROGRESSIVE DIVIDEND BUSINESS MEDIUM-TERM GUIDANCE • Dividend growth +4.5% • Dividend yield 8.0% • Low-sing
Slide 28: Capital Markets Day 26 March 2025, London
Capital Markets Day 26 March 2025, London 28 | Full Year Results | 19 November 2024
Slide 29: 29 | Full Year Results | 19 November 2024
29 | Full Year Results | 19 November 2024
Slide 30: Net Revenue Growth
Net Revenue Growth +4.6% (2.8)% +1.8% £8,378m £8,157m £8,012m £(311)m £607m £70m £(221)m FY23 Tobacco Tobacco Tobacco NGP net FY24 constant Translation FX FY24 & NGP net volume price/mix revenue currency tobacco Tobacco & revenue & NGP net NGP net revenue revenue Full Year Results | 19 November 2024
Slide 31: Adjusted Operating Profit Growth
Adjusted Operating Profit Growth +4.6% -4.0% +0.6% £4,065m £3,911m £3,887m £94m £58m £26m £(154)m FY23 AOP Tobacco NGP Logista* FY24 constant Translation FY24 AOP performance losses/ currency AOP FX investment * Including eliminations 31 | Full Year Results | 19 November 2024
Slide 32: Group Adjusted Results
Group Adjusted Results Constant Foreign Constant FY23 Currency FY24 Actual ∆ Exchange Currency ∆ Growth Tobacco net revenue £m 7,747 (215) 296 7,828 1.0% 3.8% NGP net revenue £m 265 (6) 70 329 24.2% 26.4% Tobacco & NGP adj. operating profit £m 3,583 (148) 152 3,587 0.1% 4.2% Tobacco & NGP adj. profi
Slide 33: Group Adjusted Results
Group Adjusted Results FY24 FY23 Group adjusted operating profit £m 3,911 3,887 Adjusted net finance costs £m (402) (410) Share of profit of JVs £m 9 7 Adjusted profit before tax £m 3,518 3,484 Adjusted effective tax rate % 22.7% 22.4% Adjusted EPS pence 297.0 278.8 Dividend per share pence 153.4 14
Slide 34: Reconciliation: Reported to Adjusted
Reconciliation: Reported to Adjusted Net fair Amortisation Structural Adjustments Charges value and Post- Effect of and changes to Tax Recognition Provision for Uncertain above £m Reported related to exchange employment discounting Prior year Adjusted impairment of defined benefit settlement of defe
Slide 35: Income Statement
Income Statement £m (unless otherwise stated) FY24 FY23 Revenue 32,411 32,475 Adjusted operating profit 3,911 3,887 Russia, Ukraine and associated markets - (4) Amortisation and impairment of acquired intangibles (353) (347) Fair value adjustment and impairment of other financial assets - (36) Loss
Slide 36: Balance Sheet
Balance Sheet £m FY24 FY23 Non-current assets: tangible 3,692 3,952 intangible 15,938 16,944 Current assets: inventories 4,080 4,522 other 4,116 4,073 Current liabilities (11,462) (11,899) Non-current liabilities (10,335) (10,950) Net assets 6,029 6,642 Full Year Results | 19 November 2024
Slide 37: Net Finance Costs
Net Finance Costs £m FY24 FY23 Net finance costs (534) (298) Adjusted for: - interest income on net defined benefit assets (22) (43) - interest cost on net defined benefit liabilities 33 30 - fair value & exchange losses / (gains) on financial instruments 110 (149) - tax interest cost 10 50 - effect
Slide 38: Cash flow
Cash flow £m FY24 FY23 Group operating profit 3,554 3,402 Depreciation, amortisation and impairments 647 632 EBITDA 4,201 4,034 Other non-cash movements (106) 32 Operating cash flows before movement in working capital 4,095 4,066 Working capital 100 (347) Tax cash flow (888) (590) Cash flows from op
Slide 39: Net Debt Reconciliation
Net Debt Reconciliation Fair value of Accrued £m Reported FY24 Lease liabilities interest rate Adjusted FY24 interest derivatives Opening net debt (8,438) 125 349 (62) (8,026) Free cash flow 2,434 - (93) - 2,341 Finance lease interest cash flow 14 - (14) - - Acquisitions (91) - - - (91) Dividends pa
Slide 40: Foreign Exchange
Foreign Exchange Average Closing FY23 FY24 ∆ FY23 FY24 ∆ USD $ 1.226 1.268 3.40% 1.221 1.338 9.58% EURO € 1.149 1.169 1.80% 1.155 1.199 3.81% AUD $ 1.843 1.923 4.36% 1.887 1.931 2.34% Full Year Results | 19 November 2024
Slide 41: Foreign Currency
Foreign Currency DIVISIONAL CURRENCY EXPOSURE Approximate weight of EUR / • €0.01 (1 cent) movement in the € currency in EUR Other Total Net Revenue GBP £ Linked USD $ AUD $ Currencies Other includes Euro has c. £23m impact on net revenue. Europe 15% 75% 0% 0% 10% Norwegian Krone Americas 0% 0% 100%
Slide 42: FY25 Guidance
FY25 Guidance OTHER FINANCIAL ITEMS Financing & Cost of Debt • Finance charge for FY25 expected to be c. £430m at current rates; all-in cost of debt of c. 4.4% for FY25 Tax Rate • Expected to be c. 23% - 24% Capex • Expect gross capex to be c. £300m-350m Cash Conversion • Expect 90% to 100% range Fo
Slide 43: 43 | Full Year Results | 19 November 2024
43 | Full Year Results | 19 November 2024
Slide 44: Financial Profile September 2024
Financial Profile 30 September 2024 Interest Split* Currency Split (structural)** Committed Funding Split 3% 6% Fixed EUR Bonds Issues Floating 23% Bank (Syndicated) Bank (Bilaterals) 97% 100% 71% 14,000 Committed Financing Outstanding (£m) 12,000 Bond Issues 10,000 Bank (Syndicated) Bank (Bilateral
Slide 45: Committed Bank Facilities
Committed Bank Facilities 30 September 2024 Amount Description Maturity date £m equiv. (EUR m) Committed 3-year Revolving Credit Facility 30 September 2025 184 153 Committed 3-year Revolving Credit Facility 30 March 2026 184 153 Committed 3-year Revolving Credit Facility 30 March 2027 3,125 2,607 To
Slide 46: Bond Issues
Bond Issues 30 September 2024 Currency of Amount Issuer Coupon Issue Date Maturity Date £m equiv. issue (ccy m) EUR 500 Imperial Brands Finance PLC 1.375% Jan-17 Jan-25 417 USD 950 Imperial Brands Finance PLC 4.250% Jul-15 Jul-25 741 EUR 650 Imperial Brands Finance PLC 3.375% Feb-14 Feb-26 542 USD 7
Slide 47: Glossary
Glossary Stick Equivalent (SE) volumes reflect our combined cigarette, fine cut tobacco, cigar and SE snus volumes. Adjusted operating profit (AOP) is calculated as operating profit amended for a number of AOP adjustments, which can be found in the annual report and accounts Change at constant curre