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LONDON - Imperial Brands PLC (LON:IMB), a multinational tobacco company, has unveiled its 2030 strategy aimed at driving shareholder returns, building on the solid foundation of its current five-year plan. The strategy, detailed during a Capital Markets Day in London, focuses on continued investment in combustible products, expanding next-generation products (NGPs), and maintaining a disciplined capital allocation framework.
Chief Executive Stefan Bomhard expressed confidence in the company’s ability to unlock further value creation opportunities, emphasizing the importance of a deep understanding of consumers, agility, and a focus on significant growth levers. The strategy aims to maintain a strong presence in the company’s five priority combustible markets—the United States, Germany, the United Kingdom (TADAWUL:4280), Spain, and Australia—which account for approximately 70% of adjusted operating profit.
In addition to combustibles, Imperial Brands (OTC:IMBBY) plans to scale its NGP business by leveraging consumer insights, differentiated brands, and enhanced sales capabilities. The company expects this dual focus to contribute to sustainable growth and cash delivery.
The 2030 strategy also includes organizational enhancements such as differentiated consumer and brand capabilities, a high-performance culture, and a simplified, data-led organization. These strategic enablers are anticipated to generate annualized savings of around £320 million by the end of 2030, with the majority reinvested in growth initiatives. The associated one-time cash costs are estimated at approximately £600 million, with non-cash charges of around £140 million.
Imperial Brands projects low single-digit tobacco net revenue growth and double-digit NGP net revenue growth, with group adjusted operating profit expected to increase by 3-5% annually. Adjusted earnings per share (EPS) are forecasted to rise at a high single-digit rate, supported by a share buyback program. The company anticipates generating free cash flow of £2.2 billion to £3.0 billion annually.
The capital allocation framework remains unchanged, prioritizing organic growth investment, maintaining an investment-grade credit rating, a progressive dividend policy, and an ongoing share buyback program over the next five years.
For fiscal year 2025, Imperial Brands is on track to meet its full-year expectations, projecting low single-digit tobacco and NGP net revenue growth and mid-single-digit growth in group adjusted operating profit. The company also anticipates high-single-digit adjusted EPS growth for the year, offset partially by higher adjusted finance and tax costs.
The press release statement indicates that the company’s performance for the first half of the year is expected to grow at low single digits, with mid-single-digit EPS growth. The full-year guidance is underpinned by embedded tobacco pricing and further NGP growth, despite anticipated foreign exchange headwinds.
The details of Imperial Brands’ 2030 strategy and expectations for FY25 were presented at the Capital Markets Day event, with a live webcast and Q&A session available for analysts and investors. The company remains committed to delivering on its strategic objectives and providing attractive returns for shareholders.
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