Imperial Tobacco Gp IMT Interim Management Statement

  Imperial Tobacco Gp (IMT) - Interim Management Statement

RNS Number : 3310I
Imperial Tobacco Group PLC
24 July 2012
 



                          IMPERIAL TOBACCO GROUP PLC

       Interim Management Statement for the 9 months ended 30 June 2012

 

Imperial Tobacco Group PLC confirms that the overall financial position and
operational performance of the Group for the financial year to 30 September
2012 is in line with the Board's expectations.

 

The following relates to the nine months to 30 June 2012 unless otherwise
stated. Tobacco net revenues exclude the impact of foreign exchange.

 

 

Portfolio Gains Driving Positive Sales Momentum

 

·     Tobacco net revenue up 3 per cent reflecting ongoing strong price/mix;
stick equivalent volumes declined 3 per cent

·     Strong key strategic brand growth continues with net revenues up 13 per
cent and combined stick equivalent volumes up 6 per cent

·     Excellent emerging market growth in Cuban cigars and significant snus
gains

 

Summarising today's announcement Alison Cooper, Chief Executive, said:

 

"This good performance builds on the positive sales momentum we're generating
across our total tobacco portfolio in both EU and Non-EU markets.

 

"I'm particularly pleased with the quality of the volume and revenue growth
we're achieving with our key strategic brands Davidoff, Gauloises Blondes,
West and JPS which now account for almost a third of our total stick
equivalent volumes.

 

"Consistently applying our sales growth drivers to enhance sales across our
regions is our priority for the remainder of the year. Challenging conditions
persist in some markets but we have a strong record of delivering growth in
this environment and remain in a good position to continue maximising value
for shareholders."

 

 

Overview

 

We increased tobacco net revenue by three per cent, reflecting the growing
contribution from our key strategic brands and our innovation initiatives.

 

Our total tobacco portfolio is performing well with ongoing price/mix
improvements within each of our regions.

 

We invest the cash we generate in capital investments supporting our sales
growth agenda, buying back shares (£122m since May 2012) and increasing
dividends, which we intend to grow ahead of the growth in adjusted earnings
per share.

 

We continue to vigorously challenge extreme regulatory proposals such as plain
packaging which are not based on credible evidence and will only serve to fuel
the illegal trade in tobacco. We will be making a detailed submission to the
UK plain packaging consultation and expect the outcome of the court hearing in
Australia to be announced later in the year.

 

 

 

Sales Growth Drivers

 

We remain focused on delivering sales excellence through our four sales growth
drivers: portfolio management; innovation; pricing and customer engagement.

 

Through portfolio management we're realising the significant growth potential
of our brands and products to maximise our share of consumers and consumption.

 

We made further strong gains with our key strategic brands Davidoff, Gauloises
Blondes, West and JPS, with net revenues up 13 per cent and combined stick
equivalent volumes up six per cent.

 

In May we launched Davidoff iD, a new king size range in standard and GlideTec
packs. Davidoff iD is a key initiative to fuel growth by making Davidoff
accessible to a much wider range of consumers and is currently being rolled
out across our regions.

 

We continue to build on our position as world leader in fine cut tobacco.
Volumes increased two per cent excluding the impact of Poland, where market
volumes declined 37 per cent due to an increase in non-duty paid volumes.

 

We've also continued to build on our strong growth record in cigars and snus.
We increased volumes of luxury Cuban cigars by one per cent in total and by 10
per cent in emerging markets, and grew snus volumes by 39 per cent.

 

Through our focus on innovation we're building a pipeline of scalable
innovative brands and products based on consumer insights. The international
roll-out of GlideTec cigarette packs continues and we are launching crushball
products in several markets across the world.

 

With pricing we focus on enhancing revenue growth by identifying opportunities
by brand, pack size and sales channel. In the third quarter we've announced or
implemented price increases in a number of markets and have now embedded over
90 per cent of our assumed pricing for the year. Through customer engagement
we continue to leverage our strong retailer partnerships to maximise the
availability and advocacy of our portfolio at the point of sale.

 

 

Market Performance

 

Applying all four growth drivers across our regions continues to generate
sales momentum in EU and Non-EU markets.

 

In the EU we've consolidated the market share gains we made in Q2 with stable
or increasing cigarette and fine cut tobacco shares in a number of markets.

 

In Spain we continue to build on our leading positions in cigarette and fine
cut tobacco; our domestic blonde cigarette share continues to benefit from the
growth of Fortuna and Nobel and we increased our fine cut tobacco volumes by
19 per cent, although the environment remains challenging with market stick
equivalent volumes declining 11 per cent.

 

Outside the EU we achieved excellent performances from our key strategic
brands in numerous emerging markets in Asia-Pacific, Africa and the Middle
East and Eastern Europe. Across these regions we consolidated or improved our
cigarette market shares in several markets when compared to the half year
including Ukraine, which continues to be impacted by illicit trade with market
volumes down 11 per cent.

 

The USA remains very competitive and our new senior management team continues
to refine our strategy to improve our performance, with a focus on building
sales across our portfolio in key states.

 

 

Logistics

 

Our logistics business is performing well in a challenging operating
environment and we continue to focus on cost management, business integration
and development of new services to maximise profitability.

 

 

Enquiries

 

Gerry Gallagher (Director of Investor Communications)

Telephone: +44 (0) 117 933 7014

 

John Nelson-Smith (Investor Relations Manager)
Telephone: +44 (0) 117 933 7032

 

Grant Edmunds (Investor Relations Manager)

Telephone: +44 (0) 117 933 7117

 

Alex Parsons (Director of Corporate Communications)
Telephone: +44 (0) 117 933 7241

 

Simon Evans (Group Press Officer)
Telephone: +44 (0) 117 933 7375

 

 

Copies of our announcements are available on our website: 
www.imperial-tobacco.com.

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
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IMSZMGZNKDZGZZG -0- Jul/24/2012 06:00 GMT