Imperial Brands PLC · LSE:IMB
Imperial Brands — Imperial Tobacco — Investor Day (February 2013)
31 slides from Imperial Brands's investor day presentation, February 2013
Slide 1: Imperial Tobacco Investor Day February 2013
Imperial Tobacco Investor Day February 2013
Slide 2: Agenda
Agenda 09:00 Alison Cooper & Bob Dyrbus - Sustainable Growth; Growing Cash Returns 10:00 Coffee 10:30 Arthur van Benthem - Driving Quality Sales Growth 12:00 Lunch 13:00 Break out sessions (coffee 14:20-14:30) Titus Wouda Kuipers – JPS: Driving Growth Through Total Tobacco Fernando Dominguez – The P
Slide 3: Disclaimer
Disclaimer Certain statements in this presentation 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 performance, financial condi
Slide 4: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns Alison Cooper Chief Executive
Slide 5: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns Strategic choices delivering quality sales growth Cost optimisation reinforces earnings model; £300m pa by FY18 Sustainable 10%+ pa dividend growth for the medium term 5
Slide 6: Our Strategy
Our Strategy Delivering Sustainable Shareholder Returns Cost Cost Sales Sales Cash Cash Growth Optimisation Optimisation Growth Utilisation Utilisation Our Key Assets Market Total Brand People Footprint Tobacco Equity Sales Growth Drivers Portfolio Pricing Customer Engagement Innovation Management K
Slide 7: The Earnings Model; Consistent Delivery
The Earnings Model; Consistent Delivery Earnings Growth Currency neutral basis 7
Slide 8: Delivering Against the Model
Delivering Against the Model 4.1% 12.3% 2.8% 2.7% 7.8% 1.4% 2.0% 5.4% 2010 2011 2012 2010 2011 2012 Tobacco Net Revenue EPS Impact of Spanish revenue and profit decline All data on a constant currency basis and excludes revenue from peripheral and non-tobacco related products as disclosed in our HY1
Slide 9: A Significant Transition
A Significant Transition From To M&A growth Sustainable sales growth Brand proliferation Maximise brand equity Cost cutting Resource allocation Manufacturing led Consumer led Local autonomy Central direction; co-created Short term delivery Sustainable delivery 9
Slide 10: The Strategic Journey
The Strategic Journey | is
Slide 11: A Differentiated Consumer Understanding
A Differentiated Consumer Understanding 11
Slide 12: Driving Quality Sustainable Growth
Driving Quality Sustainable Growth Key Strategic Brands +4% +9% Fine cut tobacco Snus +37% +6% +28% +10% Premium Cigars Rolling paper +3% +4% +5% +3% All percentages are 3 year CAGR to FY12; Top percentage is volume, bottom is revenue 12
Slide 13: Unlocking Further Sustainable Growth
Unlocking Further Sustainable Growth Other FMC -6% 0% All percentages are 3 year CAGR to FY12; Top percentage is volume, bottom is revenue 13
Slide 14: Clear Portfolio Priorities
Clear Portfolio Priorities Key Strategic Brands Focus Brands Portfolio Brands This space appears blank because we have removed the images that appear in the presentation. This is because we currently do not feature tobacco product brand imagery on our website. International equity Equity in key mark
Slide 15: Clear Footprint Priorities
Clear Footprint Priorities Drive Profit Drive Share Drive Scale Footprint strength driving Balanced growth agenda Scale existing presence sales and high returns for medium term returns for long term growth 15
Slide 16: Strategic Focus Enables Cost Optimisation
Strategic Focus Enables Cost Optimisation Focused Investments Portfolio and Optimisation Product Cost Footprint Overheads Savings of £300m pa by September 2018 16
Slide 17: Strategic Focus Enables Cost Optimisation
Strategic Focus Enables Cost Optimisation Investments Resource allocation Fewer Bigger Better initiatives Product Cost Complexity reduction Operational excellence Overheads Operating model Procurement 17
Slide 18: The Strategic Journey
The Strategic Journey | is
Slide 19: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns Cost Sales Cash Optimisation 1-2% Growth 2-4% Utilisation 1-2% Focused Portfolio and Footprint Tax Optimisation Sales Investments Interest Product Cost Overheads Sustainable 10%+ pa dividend growth for the medium term 19
Slide 20: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns Strategic choices delivering quality sales growth Cost optimisation reinforces earnings model; £300m pa by FY18 Sustainable 10%+ pa dividend growth for the medium term 20
Slide 21: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns Bob Dyrbus Finance Director
Slide 22: HY13: Performance Drivers
HY13: Performance Drivers EU and Russia Investment: continued uplift USA: still in turnaround Adjusted Operating Profit 22
Slide 23: H213: Levers to Deliver
H213: Levers to Deliver Market conditions persist Reduced investment uplift; embedded in H2 FY12 Business delivery Pricing: greater benefit in H2 Adjusted Operating Early cost optimisation benefits Profit 23
Slide 24: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns High Margin Profits Strong Maximising Sales Cash Shareholder Flow Returns Reinvest Maximising Shareholder Returns 24
Slide 25: Growing Cash Returns: RoIC
Growing Cash Returns: RoIC 15.4% 15.4% 15.0% 2010 2011 2012 RoIC is Adjusted Net Operating Profit After Tax (Adjusted NOPAT)/Invested Capital, where Adjusted NOPAT is Adjusted Operating Profit as disclosed in the Group Financial 25 Statements multiplied by (1 – Adjusted Tax Rate) and Invested Capita
Slide 26: Growing Cash Returns: Cash Conversion
Growing Cash Returns: Cash Conversion 4 71%* 97% 88% 3 £ Billion 2 1 0 2010 2011 2012 £500m working capital outflow Adjusted operating profit Cashflow after capex and before interest and tax * Excluding impact of working capital outflow: 87% 26
Slide 27: Growing Cash Returns: Increasing Pay-out
Growing Cash Returns: Increasing Pay-out 55 11% 13% 50 15% % 16% 45 40 2009 2010 2011 2012 Payout ratio (LHS) DPS growth 27
Slide 28: Growing Cash Returns
Growing Cash Returns £1,511m High +41% Margin Profits £1,074m +39% £773m +21% Strong Sales Cash Flow Reinvest Maximising 2010 2011 2012 Shareholder Share buy-back in year Returns Dividends paid in year 28
Slide 29: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns Delivering Sustainable Shareholder Returns Sales Cost Cash Growth Optimisation Utilisation c.£2bn Free Cash Flow And Growing 10%+ Dividend Growth Deleverage Buybacks 29
Slide 30: Sustainable Growth; Growing Cash Returns
Sustainable Growth; Growing Cash Returns Strategic choices delivering quality sales growth Cost optimisation reinforces earnings model; £300m pa by FY18 Sustainable 10%+ pa dividend growth for the medium term 30
Slide 31: Imperial Tobacco Investor Day February 2013
Imperial Tobacco Investor Day February 2013 31