Imperial Brands plc has unveiled its mission to bolster investments in its five key markets – the United States, Germany, the United Kingdom, Spain, and Australia – as part of its 2030 strategy. The plan not only emphasizes expanding its traditional combustible tobacco business but also focuses on growing its next-generation products (NGP) segment, while remaining committed to creating “long-term value.”
During its Capital Markets Day, CEO Stefan Bomhard explained the new strategy by saying that the company intends to build “on the firm foundations of our current plan, which has created a better business delivering a stronger, more consistent operational and financial performance, and excellent returns for shareholders.”
These five core markets, he noted, contribute approximately 70% of the company’s adjusted operating profit. Bomhard added, “By applying a performance-driven, consumer-led approach to our wider portfolio of tobacco markets, we expect them to make a greater contribution to our overall performance over the next five years.”
In addition to reinforcing its presence in combustible markets, Imperial is setting its sights on its fast-growing NGP portfolio, which includes both vaping and oral nicotine products. The company aims for double-digit revenue growth in this segment by capitalizing on evolving consumer preferences and expanding its market presence.
“We have built a solid foundation based on credible brands and differentiated products that resonate with consumers,” said Bomhard. “Our goal is to sharpen our consumer insights and sales capabilities to further drive growth in NGP.”
Imperial Brands has pinpointed three key strategic factors it states will support its growth agenda:
- Differentiated Consumer & Brand Capabilities: The establishment of a Global Consumer Organization is intended to enhance brand positioning and innovation, enabling a deeper understanding of consumer preferences.
- High-Performance Culture: The company is focused on “enhancing leadership skills and fostering collaboration” across regions to boost efficiency and accountability within its workforce.
- Simplified, Efficient, and Data-Led Organization: Significant investments in a new global enterprise resource planning system and global business services are expected to drive efficiencies, with anticipated annualized savings of around £320 million by 2030.
As part of its commitment to returning value to shareholders, Imperial also announced an annual “evergreen” share buyback over the next five years, alongside a progressive dividend policy.
“We are maintaining our rigorous capital allocation framework, which has both supported investment in growth and delivered substantial, growing capital returns for shareholders,” said Bomhard. “We believe this combination of sustainable growth and capital returns reinforces a compelling investment case for shareholders.”
Financially, the company remains on target to meet its fiscal year 2025 goals. It projects low single-digit growth in tobacco revenue alongside robust double-digit growth in NGP revenue. Group adjusted operating profit is expected to rise at an annual rate of 3-5%, with adjusted earnings per share (EPS) increasing in the high single digits, bolstered by ongoing share buybacks.
For the upcoming year, Imperial anticipates that its financial performance will be stronger in the second half, driven by adjustments in combustible pricing and further NGP expansion. The company forecasts annual free cash flow generation between £2.2 billion and £3.0 billion.
