Imperial Brands Plc · LSE:IMB
Imperial Brands — H1 2025 Earnings Presentation
54 slides from Imperial Brands's earnings presentation, May 14, 2025
Slide 1: Imperial Brands Half Year Results
Draft 24 v8 April – 102025 March 2025 – Draft 2 New photo Imperial Brands Half Year Results 14 May 2025
Slide 2: Introduction from Chair
Introduction from Chair Thérèse Esperdy Chair Capital Markets Day | 26 March 2025 2
Slide 3: Imperial Brands Half Year Results
Draft 24 v8 April – 102025 March 2025 – Draft 2 New photo Imperial Brands Half Year Results 14 May 2025
Slide 4: Cautionary Statement
Cautionary Statement Certain statements in this announcement other market conditions. These and other mean that the future earnings per share of constitute or may constitute forward-looking factors could adversely affect the outcome the Company for current or future financial statements. Any stateme
Slide 5: Agenda
Agenda Results Overview Stefan Bomhard Financial Review and Outlook Lukas Paravicini Strategic and Operational Update Stefan Bomhard Stefan Bomhard Q&A Lukas Paravicini Half Year Results | 14 May 2025 5
Slide 6: Half Year Delivery in Line with Guidance
Half Year Delivery in Line with Guidance OPERATIONAL AND FINANCIAL PERFORMANCE DRIVING SHAREHOLDER RETURNS OPERATIONAL FINANCIAL SHAREHOLDER DELIVERY DELIVERY RETURNS TOP FIVE AGGREGATE SHARE TOBACCO & NGP NET REVENUE* DIVIDEND PER SHARE +6 bps +3.2% +78.5% Reflecting equalisation of quarterly divid
Slide 7: Performing Within a Challenging Environment
Performing Within a Challenging Environment WE ARE WELL PLACED TO CONTINUE DELIVERING DESPITE MACRO VOLATILITY • Supply chain has limited exposure to tariffs Global tariffs • High margins • Pricing power • Sector is relatively defensive Uncertain economic • Imperial portfolio well-positioned across
Slide 8: Financial Review and Outlook
Financial Review and Outlook Lukas Paravicini Chief Financial Officer Half Year Results | 14 May 2025 8
Slide 9: Continued Strong Financial Delivery
Continued Strong Financial Delivery REVENUE AND PROFIT GROWTH IN LINE WITH FIVE-YEAR PLAN TOBACCO & NGP NET REVENUE GROUP AOP 12-MONTH FREE CASHFLOW +3.2% +1.8% £2.4bn NGP NET REVENUE ADJUSTED EPS ADJUSTED NET DEBT TO EBITDA +15.4% +6.0% 2.4x Constant currency Half Year Results | 14 May 2025 99
Slide 10: Strong Tobacco Price Mix Across the Group
Strong Tobacco Price Mix Across the Group GROWING TOBACCO NET REVENUE ACROSS ALL REGIONS Net Revenue % +1.1% +4.9% +2.5% +2.7% • Group volume declines normalising 10.1% 6.3% 5.9% 3.3% • Strong price/mix more than offsetting volume -2.2% -3.2% -5.2% -3.8% headwinds Europe Americas AAACE Group • Impro
Slide 11: Growing Adjusted Operating Profit
Growing Adjusted Operating Profit PROFIT DELIVERY DRIVEN BY COMBUSTIBLES AND NGP +1.8% +2.0% £1,699m £1,669m +£23m +£7m £0m HY24 AOP Tobacco performance Reduced NGP losses Logista* HY25 constant currency AOP * Including eliminations Half Year Results | 14 May 2025 11
Slide 12: Delivering Continued EPS Growth
Delivering Continued EPS Growth DRIVEN BY OPERATING PROFIT GROWTH AND SHARE COUNT REDUCTION +6.0% (2.9)% +3.1% 127.4p 123.9p 120.2p +3.4p (0.1)p (1.1)p (1.7)p +6.7p (3.5)p HY24 Adjusted Interest Minorities Tax Number of HY25 Translation HY25 adjusted operating & JV shares constant currency FX adjust
Slide 13: On Track with FY25 Capital Allocation
On Track with FY25 Capital Allocation STRONG FREE CASH FLOW SUPPORTING SHAREHOLDER RETURNS CASH FLOW OUR CAPITAL ALLOCATION PRIORITIES CONTINUED HIGH 12-MONTH FREE OPERATING CASH CONVERSION CASH FLOW 1 Investing in the strategy to drive sustainable growth 99% £2.4bn 13 | 12-month cash conversion £0.
Slide 14: Full Year Guidance Unchanged
Full Year Guidance Unchanged GENERATING RETURNS WITHIN A VOLATILE MARKET ENVIRONMENT KEY DRIVERS OF H2 PEFORMANCE FY25 OUTLOOK* - GUIDANCE UNCHANGED • Pricing embedded within H1 Revenue • Low-single-digit net revenue growth; double-digit NGP net revenue growth • Operational gearing • Adjusted operat
Slide 15: Strategic and Operational Update
Strategic and Operational Update Stefan Bomhard Chief Executive Officer Half Year Results | 14 May 2025 15
Slide 16: Preparing for the Next Phase of the Strategy
Preparing for the Next Phase of the Strategy WHILE ALSO DELIVERING THE FINAL YEAR OF THE CURRENT PLAN 2030 STRATEGY • Clear opportunities to build on strong foundations • Building stakeholder engagement for next phase Driving sustainable Building scale • Refining our detailed investment plans value
Slide 17: Gaining Share in our Priority Markets
Gaining Share in our Priority Markets ACHIEVING STRATEGIC OBJECTIVE OF MAINTAINING MARKET SHARE AGGREGATE WEIGHTED PRIORITY PRIORITY MARKET SHARES MARKET SHARE PERFORMANCE (12-MONTH SHARE Δ) +35 bps +10 bps +10 bps +6 bps +65 bps +5 bps -2 bps -70 bps Strategy has delivered +54 bps of cumulative -29
Slide 18: US: Delivering Revenue and Profit Growth
US: Delivering Revenue and Profit Growth ROBUST PERFORMANCE ACROSS THE PORTFOLIO KEY METRICS CIGARETTES – DELIVERING SHARE GAINS • Strong cigarette pricing, offsetting industry Cigarette market volume declines (-8.3%) share growth +10 bps • Growing share in an attractive and competitive market; bala
Slide 19: Priority Markets: Managing Share and Value
Priority Markets: Managing Share and Value STRONG PRICING AND MANAGING SHARE OBJECTIVE +65 bps -70 bps -90 bps +5 bps • Strong share growth • Market size affected by • Attractive market size • High excise and illicit excise and illicit dynamics driving volume declines • Investing behind salesforce,
Slide 20: Vapour: Building a Trusted Brand With blu
Vapour: Building a Trusted Brand With blu POSITIVE CONSUMER FEEDBACK FOLLOWING THE LAUNCH OF BLU BAR/BLU BOX • Investment focused in Europe HY25 MARKET SHARE • Growing share across footprint, driven Vapour market share by UK +130 bps • New product launches (e.g. blu box kit) Data to Feb’25 • Authent
Slide 21: Modern Oral: Brands Meeting Distinctive Needs
Modern Oral: Brands Meeting Distinctive Needs BUILDING SCALE IN THE US AND EUROPE HY25 MARKET SHARE ZONE US Oral nicotine market share • Launched February 2024 • Distribution: 72,000 stores +180 bps Data to Mar ‘25 • 2.6% national share; 5.1% in Imperial footprint SKRUF • Differentiated product reso
Slide 22: Heated Tobacco: Consumer-led Innovation
Heated Tobacco: Consumer-led Innovation SIMPLICITY AND AUTHENTICITY, TARGETING THE “TRUST SEEKER” • Continued share growth in footprint HY25 MARKET SHARE • Launching Pulze 3.0 in H2 25 Heated tobacco market share • Smallest 25+ session all-in-one device +90 bps Data to Feb’25 • Simple and intuitive
Slide 23: Delivering the Final Year of the Current Plan
Delivering the Final Year of the Current Plan ON TRACK WITH OUR FY25 PRIORITIES Maintaining aggregate market share growth across priority markets Delivering NGP revenue growth with improving gross margins Leveraging new ways of working and further self-help opportunities Strong cash generation to un
Slide 24: Foundations in Place for the Next Five-Year Plan
Foundations in Place for the Next Five-Year Plan A CLEAR STRATEGY FOR VALUE CREATION Get even closer to our consumers and build differentiated brands Invest in our people, technology and data to drive growth and efficiency Generate sustainable value from combustibles Build scale in next generation p
Slide 25: Reinforcing an Attractive Investment Case
Reinforcing an Attractive Investment Case GLOBAL CONSUMER GOODS BUSINESS WITH ATTRACTIVE VALUATION OPERATIONAL DELIVERY FINANCIAL DELIVERY SHAREHOLDER RETURNS Sustainable growth in Supporting our medium- Progressive dividend tobacco term guidance • Growing annually reflecting • Low-single-digit toba
Slide 26: Q&A
Q&A Half Year Results | 14 May 2025 26
Slide 27: Appendices
Draft 24 v8 April – 102025 March 2025 – Draft 2 New photo Appendices
Slide 28: Our FY26-FY30 Operational and Financial Ambitions
Our FY26-FY30 Operational and Financial Ambitions Sustained value Building a meaningful Leveraging our Significant delivery from our business in NGP with consumer capabilities shareholder returns combustible business scale as an efficient, data-led through dividends organisation and buybacks Low sin
Slide 29: Cigarette Affordability Remains High
Cigarette Affordability Remains High SUPPORTING CONTINUED STRONG PRICING IN IMPERIAL MARKETS AFFORDABILITY OF TOBACCO Imperial top 5 markets (# Packs earned per hour of work at average salary) Imperial significant presence 4.4 4.3 3.9 3.7 3.6 3.6 2.6 2.1 1.9 1.8 1.4 1.4 1.1 0.7 0.7 0.7 0.6 0.6 0.5 G
Slide 30: NGP Preferences Vary by Market
NGP Preferences Vary by Market CONSUMER NGP CHOICES VARY BETWEEN MARKETS CATEGORY RETAIL SALES VALUE PENETRATION RATE (2024) 1% 3% 5% 2% 1% 3% 1% 2% 7% 6% 5% 15% 17% 17% 14% 20% 8% 22% 27% 3% 3% 6% 41% 1% 2% 1% 27% 30% 1% 99% 96% 93% 93% 81% 83% 80% 80% 74% 72% 58% 52% 49% Australia Spain Germany US
Slide 31: NGP: Attractive Margins in Markets with Scale
NGP: Attractive Margins in Markets with Scale BUILDING SCALE IS DRIVING NGP MARGIN ACCRETION INDUSTRY GROSS MARGINS IMB MARKETS WITH SCALE FY24 IMB GROSS MARGINS VAPOUR 45% - 55% FY24 VAPOUR GROSS MARGINS* c.55% c.40% HEATED TOBACCO HEATED 60% - 70% GROSS MARGINS* Currently building scale to enhance
Slide 32: Investing To Drive Sustainable Growth & Savings
Investing To Drive Sustainable Growth & Savings UNLOCKS GROWTH OPPORTUNITIES AND EFFICIENCIES Investing in Sustainable Growth and Efficiency Initiatives An Agile Data-Led Enterprise Manufacturing Excellence • Leveraging our scale through global business • Adopting a standardised operating model base
Slide 33: Unlocking Value for 2030 Strategy and Beyond
Unlocking Value for 2030 Strategy and Beyond DELIVERING SAVINGS TO UNDERPIN SUSTAINABLE PROFIT AND CASH GROWTH Investment Focus Annualised savings Underpin c. £320m by end 2030 Operational levers in long-term to underpin combustibles sustainability of investment initiatives Growth initiatives in NGP
Slide 34: A Clear Five-Year Strategy For Value Creation
A Clear Five-Year Strategy For Value Creation MEDIUM-TERM CAGR GUIDANCE - FY26 TO FY30 Tobacco & NGP Low-single digit tobacco net revenue growth net revenue* Double-digit NGP net revenue growth Group adjusted 3-5% constant currency growth operating profit Adjusted EPS At least high-single digit cons
Slide 35: Appendices Group Financials
Draft 24 v8 April – 102025 March 2025 – Draft 2 New photo Appendices Group Financials
Slide 36: Net Revenue
Net Revenue +3.2% (2.5)% +0.7% £3,754m £3,664m £3,637m £(112)m £207m £22m £(90)m HY24 tobacco Tobacco Tobacco NGP net HY25 constant Translation FX HY25 tobacco & NGP net volume price mix revenue currency net & NGP net revenue revenue revenue Half Year Results | 14 May 2025 36
Slide 37: Adjusted Operating Profit Growth
Adjusted Operating Profit Growth +1.8% (2.8)% (1.0)% +2.0% £1,699m £1,669m £1,652m £23m £7m £0m £(47)m HY24 adjusted Tobacco Reduced Logista* HY25 Translation HY25 adjusted operating profit performance NGP losses constant currency FX operating profit adjusted operating profit * Including elimination
Slide 38: Group Adjusted Results
Group Adjusted Results Constant Foreign Constant HY24 Currency HY25 Actual ∆ Exchange Currency ∆ Growth Tobacco net revenue £m 3,494 (85) 95 3,504 0.3% 2.7% NGP net revenue £m 143 (5) 22 160 11.9% 15.4% Tobacco & NGP adj. operating profit £m 1,498 (42) 30 1,486 (0.8)% 2.0% Tobacco & NGP adj. profit
Slide 39: Group Adjusted Results
Group Adjusted Results HY25 HY24 Group adjusted operating profit £m 1,652 1,669 Adjusted net finance costs £m (199) (204) Share of profit of JVs £m 4 4 Adjusted profit before tax £m 1,457 1,469 Adjusted effective tax rate % 23.5% 23.0% Adjusted EPS pence 123.9 120.2 Dividend per share pence 80.2 44.
Slide 40: Reconciliation: Reported to Adjusted
Reconciliation: Reported to Adjusted Structural Net fair value Adjustments Amortisation changes to and exchange Post-employment Recognition of above £m and impairment Restructuring Tax settlement Reported HY25 defined benefit movements on benefits net deferred tax attributable to Adjusted HY25 (unle
Slide 41: Income Statement
Income Statement £m (unless otherwise stated) HY25 HY24 Revenue 14,604 15,064 Adjusted operating profit 1,652 1,669 Amortisation and impairment of acquired intangibles (183) (175) Restructuring costs (6) - Structural changes to defined benefit pension schemes (7) - Share of profit of investments acc
Slide 42: Balance Sheet
Balance Sheet HY25 HY24 £m Non-current assets: tangible 3,713 3,588 intangible 16,050 16,499 Current assets: inventories 4,529 4,740 other 3,564 3,719 Current liabilities (11,908) (13,261) Non-current liabilities (10,418) (10,199) Net assets 5,530 5,086 Half Year Results | 14 May 2025 42
Slide 43: Cash flow
Cash flow £m HY25 HY24 Group adjusted operating profit 1,652 1,669 Depreciation, amortisation and impairments 146 143 EBITDA 1,798 1,812 Other non-cash movements (14) (16) Operating cash flows before movement in working capital 1,784 1,796 Working capital (1,425) (1,406) Tax cash flow (372) (425) Ca
Slide 44: 12-month Cash Conversion
12-month Cash Conversion HY25 HY24 £m (unless otherwise stated) Net cash flow from operating activities 3,334 3,074 Tax 835 840 Net capex (351) (249) Restructuring cash spend 38 61 Cash flow post capex pre interest and tax 3,856 3,726 Adjusted operating profit 3,894 3,840 Cash conversion (%) 99% 97%
Slide 45: Net Finance Costs
Net Finance Costs £m HY25 HY24 Net finance costs (162) (354) Adjusted for: - interest income on net defined benefit assets (9) (11) - interest cost on net defined benefit liabilities 14 16 - net fair value & exchange (gains)/losses on financial instruments (33) 135 - tax settlement interest (income)
Slide 46: Net Debt Reconciliation
Net Debt Reconciliation Fair value of Accrued Adjusted £m Reported HY25 Lease liabilities interest rate interest HY25 derivatives Opening net debt (8,340) 95 386 119 (7,740) Free cash flow (517) - - (517) Finance lease interest cash flow 7 - (55) - (48) Acquisitions/disposals (78) - - - (78) Contrib
Slide 47: Foreign Exchange
Foreign Exchange Average Closing HY24 HY25 ∆ HY24 HY25 ∆ USD $ 1.255 1.271 1.27% 1.263 1.293 2.38% EURO € 1.161 1.199 3.27% 1.170 1.197 2.31% AUD $ 1.917 1.987 3.65% 1.938 2.076 7.12% Half Year Results | 14 May 2025 47
Slide 48: FY25 Guidance
FY25 Guidance OTHER FINANCIAL ITEMS Financing & Cost of Debt Finance charge for FY25 expected to be c. £420m 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 Foreign Exch
Slide 49: 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. £10m impact on net revenue. Norwegian Krone, Europe 15% 75% 0% 0% 10% Swedish Krona Amer
Slide 50: Appendices Financing
Draft 24 v8 April – 102025 March 2025 – Draft 2 New photo Appendices Financing
Slide 51: Committed Financing Outstanding (£m)
Financial Profile 31 MARCH 2025 Interest Split* Currency Split (structural)** Committed Funding Split 10% 5% 2% Fixed Bonds Issues EUR Floating 22% Bank (Syndicated) Bank (Bilaterals) ECP 90% 70% 100% 14,000 Committed Financing Outstanding (£m) 12,000 Bond Issues Bank (Syndicated) 10,000 ECP Bank (B
Slide 52: Committed Bank Facilities
Committed Bank Facilities 31 MARCH 2025 Description Maturity date Amount (EUR m) £m equiv. Committed 3-year Revolving Credit Facility 30 September 2025 184 154 Committed 3-year Revolving Credit Facility 30 March 2028 3,309 2,766 Total 2,919 Description Maturity date Amount (GBP m) £m equiv. Bilatera
Slide 53: Bond Issues
Bond Issues 31 MARCH 2025 Currency of Amount issue (ccy m) Issuer Coupon Issue Date Maturity Date £m equiv. USD 950 Imperial Brands Finance PLC 4.250% Jul-15 Jul-25 742 EUR 650 Imperial Brands Finance PLC 3.375% Feb-14 Feb-26 543 USD 750 Imperial Brands Finance PLC 3.500% Jul-19 Jul-26 563 GBP 500 I
Slide 54: Glossary
Glossary Stick Equivalent (SE) volumes reflect our combined cigarette, fine cut tobacco, cigar and SE snus volumes. Change at constant currency removes the effect of exchange rate movements on the Constant Currency translation of the results of our overseas operations. Total Tobacco includes cigaret