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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Imperial Brands PLC    IMB   GB0004544929


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Imperial Brands : sets five-year focus on top five cigarette markets

01/27/2021 | 09:08am EDT
FILE PHOTO: An illustration picture shows discarded Gauloises cigarette butts in an ashtray in a coffee house in Vienna

Jan 27 (Reuters) - Imperial Brands on Wednesday laid out a five-year plan, led by its new chief executive, to focus on the company's top five cigarette markets, to fine-tune next-generation products to consumer preferences and to bolster its sales force.

The announcement is the culmination of a six-month review by Stefan Bomhard, who joined as CEO in July.

Since joining, the former Inchcape executive has promised to boost the British company's performance by bringing in new talent, changing incentive structures and sharpening the focus on top markets.

On Wednesday, the maker of Kool and Winston cigarettes said it would concentrate investment on Australia, Germany, Spain, the United Kingdom and the United States, which generate about 72% of group profits. It will also exit some smaller markets, where it sees no future growth, but did not provide details.

Imperial also said it was resetting its next-generation products (NGP) strategy - considered the next frontier for tobacco - redirecting resources to develop heated tobacco products in Europe and e-cigarettes in the United States.

Bomhard said the emphasis would be on heated tobacco products, such as its Pulze device, as those were gaining traction in Europe, had higher customer retention rates and generated higher margins than e-cigarettes.

Imperial has lowered its aspirations for next generation products, mainly e-cigarettes, after missing several sales targets over the last five years. The company wrote down the value of that business by 124 million pounds ($170.02 million)last year after sales fell 27% in 2020.

"The new strategy will have a renewed emphasis on a more focused group of priority tobacco markets and a more disciplined execution in NGP," Bomhard said at a virtual capital markets event.

Any future growth plans would be informed by extensive testing, local consumer preferences and market data, he said.

Bomhard has blamed underperformance in NGP on rolling out too many products too quickly without sufficient insights into consumers.

"We expect the new plan will deliver a gradually improving trajectory in net revenue over the five years with a compound annual growth rate of 1-2% from FY2020-2025," the company said.

Shares of the FTSE-listed company, however, fell as much as 5.3%, after it did not announce a widely-expected buyback plan.

Imperial said taking on extra debt for buybacks would have put its credit rating at risk. It would buy back shares only after cutting its debt to the lower end of a net debt to EBITDA ratio of 2-to-2.5 times.

The company said it will raise its dividend annually, though from a lower base after it cut it for the first time in 2020. ($1 = 0.7293 pounds) (Reporting by Siddharth Cavale and Tanishaa Nadkar in Bengaluru Editing by Maju Samuel, Keith Weir and Barbara Lewis)

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
IMPERIAL BRANDS PLC 0.10% 1555.5 Delayed Quote.1.20%
INCHCAPE PLC 0.26% 785.5 Delayed Quote.21.76%
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Sales 2021 8 728 M 12 029 M 12 029 M
Net income 2021 1 578 M 2 174 M 2 174 M
Net Debt 2021 9 546 M 13 156 M 13 156 M
P/E ratio 2021 8,60x
Yield 2021 9,03%
Capitalization 14 585 M 20 121 M 20 102 M
EV / Sales 2021 2,76x
EV / Sales 2022 2,67x
Nbr of Employees 32 500
Free-Float 92,3%
Duration : Period :
Imperial Brands PLC Technical Analysis Chart | MarketScreener
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Technical analysis trends IMPERIAL BRANDS PLC
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 20
Average target price 1 913,26 GBX
Last Close Price 1 554,00 GBX
Spread / Highest target 93,1%
Spread / Average Target 23,1%
Spread / Lowest Target -26,4%
EPS Revisions
Managers and Directors
Stefan Bomhard Chief Executive Officer & Director
Oliver Reginald Tant Chief Financial Officer & Executive Director
Therese Marie Esperdy Non-Executive Chairman
Steven P. Stanbrook Independent Non-Executive Director
Simon Langelier Independent Non-Executive Director
Sector and Competitors