STRATEGY

Our current strategy focuses on driving performance in three key areas: Tobacco, Next Generation Products (NGP) and Cost and Cash.

In tobacco we maximise opportunities for our Asset Brands and priority markets. Through our NGP portfolio we are providing adult smokers with a range of potentially less harmful alternatives to cigarettes.

The approach we take to managing cost and cash provides funds to invest in the business and return to shareholders. Our sustainability strategy frames the way we manage our environmental, social and governance issues. 

CEO Stefan Bomhard is currently leading a strategic review of the business, with an update to follow in a Capital Markets event on 27 January 2021.

BUSINESS MODEL

We create value through two distinct business growth models, our Market Repeatable Model for tobacco and our Brand Adoption Model for NGP. Consistently applying these models to the right markets and the right brands is key for delivering quality growth. Our high operating margins drive the strong cash flows that are a hallmark of our business and although investment in NGP may initially dilute these margins we expect to see profitability improve over time. We use the cash we generate to reinvest to support growth, pay down debt or return to shareholders through dividends.

4Bs FOR NEXT GENERATION PRODUCTS

1. BELIEVE

'Believe’ is the first element of our 4Bs brand adoption model.

This is about triggering connections and raising awareness of our NGP brands amongst adult smokers through a variety of methods, including responsible marketing.

The aim is to encourage smokers to recognise that blu and our other NGP brands are potentially less harmful than cigarettes.

2. BUY

Smokers who believe are inspired to buy.

We take an omnichannel approach, with sales across traditional retail outlets, specialist vape stores and online.

Online sales are age verified and we insist that our retail outlet and vape store partners only ever sell to adults.

 

3. BUY AGAIN

‘Buy again’ is about generating repeat purchase. 

A smoker who has had a positive initial experience with one of our NGP brands will have the confidence to buy again.

It is the start of building brand loyalty and relies on a frictionless omnichannel experience, ensuring our products are always available when and where smokers want to buy them.

4. BELONG

We want smokers to stay with our NGP offerings and not revert to smoking, so we welcome, for example, blu users to belong to a thriving community (blu.com).

It is here that we deepen our connection with consumers and increase the level of interaction.

This includes offering exclusive access to products and promotions and the chance to participate in our bluNation loyalty programme.

MARKET REPEATABLE MODEL FOR TOBACCO

SIMPLE MARKET FOCUSED PORTFOLIO

Our Market Repeatable Model starts with a simple market focused portfolio that is built around an optimal number of brands and stock keeping units that are aligned with consumer needs. Our strongest offerings are our Asset Brands and we focus on driving their performance to generate quality market share growth.