A Challenger Mindset

Annual Report and Accounts 2022

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Our Purpose

Forging a path to a healthier future for moments of relaxation and pleasure.

Our vision

To build a strong challenger business powered by responsibility, focus and choice.

Leadership statements

Stefan Bomhard


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Stefan Bomhard


We are now two years into our strategy and I am pleased with our progress so far. The foundations have been built and we are moving to the next phase of the plan: improved, more consistent performance and enhanced returns for investors.

Thérèse Esperdy


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Thérèse Esperdy


This has been a year of significant progress for Imperial against a backdrop of unexpected and challenging conditions. The team remained focused on the methodical roll-out of our strategy and we are emerging as a strong challenger business – our natural role as the smallest of the four global tobacco companies.

Delivering on our strategy



The five-year strategy we launched in January 2021 was the roadmap for our transformation. Since then we have been building the foundations for future success – and we are now on track to move to the next phase of delivery.

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Our financial performance

£7.8bn [+1.5%*] Tobacco & NGP net revenue
265.2p [+4.9%]* Adjusted EPS
165.9p [-44.7%] Reported EPS
141.17p [+1.5%*] Dividend per share

* Movement on a constant currency basis.

Transformation In action

Our choices are guided by our strategy, purpose, and vision as well as our refreshed approach to environmental, social and governance priorities. The three strategic pillars of our strategy – focusing on our priority combustible markets, driving value from our broader market portfolio, and building a targeted NGP business – are supported by three critical enablers.

Click on the sections of the strategy wheel below to read more.

ESG Review

An important element of the foundation-building phase of our business strategy has been a refresh of our approach to environmental, social and governance (ESG) responsibilities.


Our commitment to ESG issues is enshrined in our Company purpose and vision. Our purpose expresses our ambition to build a "healthier future" and this applies not only to our consumers but also to our communities and planet. Our vision states that our pursuit of commercial success will be "powered by responsibility".

Five core behaviours, which were co-created with our employees, articulate what success looks like in our new culture, and these too are linked directly to our ESG commitments.

Healthier Futures
  • Consumer health
  • Climate change
  • Packaging & waste
Positive contribution to society
  • Farmer livelihoods & welfare
  • Sustainable & responsible sourcing
Safe & inclusive workplace
  • Employee health, safety & wellbeing
  • Diversity, equity & inclusion
  • Human rights

Why invest in imperial?

We have enhanced our investor proposition by building a stronger and more consumer-focused business as well as through our clear capital allocation framework, which supports investment in our new strategy, maintains a strong and efficient balance sheet and delivers enhanced shareholder returns.

Our investment case rests on five pillars.




The tobacco value creation model remains resilient, with affordability and strong brand loyalty supporting sustainable pricing. By focusing on our top five combustible markets that generate c.70% of operating profit contribution, and with selective investment in brand equity and our sales force, we are starting to stem market share losses. This, together with strong performance from our broader portfolio and the exit from select markets, underpins the generation of improving cash returns from our combustible business.



Next generation products have growth potential as they are still a relatively nascent category in the majority of markets. We seek to build a sustainable NGP business through a relentless consumer focus, focusing on offering consumers a choice where they have already expressed an NGP preference and where we can leverage our existing customer relationships.



Continued investment and operational improvements will enhance financial performance as we focus on making our enabling functions more efficient. We are placing the consumer at the centre of our business and our decision-making. We are adopting a challenger mindset and embedding behaviours to support a performance-based culture.



The business remains highly cash-generative with low capital intensity, a working capital focus and disciplined capital expenditure producing adjusted operating cash conversion of typically 90% to 100%. With the foundations for growth in place, expectations are to deliver a three-year mid-single-digit compound annual growth rate in adjusted operating profit.



We have clear capital allocation priorities: (1) targeted investment to support our strategy, (2) a strong and efficient balance sheet with an investment grade credit rating, (3) a progressive dividend policy reflecting underlying performance, and (4) to return surplus capital to investors via a share buyback.

We are designing global processes and digital strategies.

Simplified and efficient operations

Imperial emerged as the world’s number four tobacco business through bold acquisitions over the past two decades. These transactions have given the Company significant positions in some of the world’s most attractive markets and a stable of strong brands. Our new strategy identified a need to go further in integrating this portfolio of businesses to create simpler, more efficient operations, enabling us to better capture future opportunities.

Two years on, our transformation is well underway with significant structural changes, the introduction of new capabilities, and investment in digital.

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We’ve identified a clear role for each of our diverse markets.

Driving value from our broader market portfolio

While our main combustible focus is on our five priority markets, we have a clear view on how we can drive value from the breadth of our full market portfolio. Our smaller markets typically have attractive margins and are potential platforms for future growth. And they are markets which are used to operating successfully with more limited resources and leveraging our global capabilities in manufacturing, distribution and brand building.

Our strategy launched in January 2021 proposed a more rigorous approach to getting the most from this diverse set of markets.

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Through a consumer-focused approach we aim to make a meaningful contribution to harm reduction.

Building a targeted ngp business

As part of our strategy launched in January 2021 we overhauled our approach to NGP. The plan we are now rolling out plays to our strengths; it recognises our position as the smallest of the four global tobacco players, and is based on three clear principles:

  • Consumer led: We start by understanding consumers and their needs. This informs our choice of markets, choice of NGP category for each market, and how we differentiate our propositions
  • Focused: Our role is not to provide a full offering in all markets. Instead we prioritise markets where there is an established category presence and where we have an existing route to market through our tobacco business.
  • Collaborative: Our in-house team works in close partnership with third-party innovation houses to harness their expertise and combine this with our knowledge and our insights from adult consumers.
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We’re investing to support a rigorous approach to consumer insight.

Putting the consumer at the centre of the business

Placing the consumer at the centre of the business means investing in capabilities, data and insights to ensure the voice of the consumer shapes and influences our decision making and becomes part of the fabric of our culture. Chief Consumer Officer Andy Dasgupta was appointed in April 2021 to bring the voice of the consumer consistently to the Executive Leadership Team and to the broader business.

Andy and the connected multidisciplinary team he has built have focused on four priorities in the past year:

  • To embed consumer centricity into the organisation;
  • To rebuild consumer-preferred brands to stem the share losses across the priority combustible markets;
  • To undertake market trials to validate our approach to NGP;
  • To build our innovation capabilities by leveraging third-party partnerships.
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We’re growing market share across our top five markets.

Focusing on priority combustible markets

Five markets – the US, Germany, UK, Spain and Australia – make up around 70% of our operating profit. In each of these markets, Imperial enjoys a top-three market share position, with established brands and strong customer relationships. At the heart of our new strategy was a recognition that for Imperial to become a business capable of sustainable growth, long-term share declines in these markets needed to be reversed.

Our strategy defined six operational levers to improve combustible performance and, two years on, we have made significant progress on each front.

Our success in these six areas has led to growth in aggregate market share for these five priority markets of 35bps over the past year – while at the same time we have maintained strong pricing discipline.

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We’re embedding a performance-based culture across the business.

Transforming our culture

Our new strategy launched in January 2021 identified the development of a performance-based culture and capabilities as a key enabler to successfully delivering our strategy. This reflects the importance of harnessing the skills, the performance, and the potential of every colleague in pursuit of our strategic goals.

In October 2021, following extensive consultation with colleagues across all markets and functions, we launched ‘Connections’, our new purpose, vision and behaviours, to all 26,000 of our employees through our first global conference.

Our five behaviours are:

  • Start with the Consumer;
  • Collaborate with Purpose;
  • Take Accountability with Confidence;
  • Be Authentic and Inclusive to all; and
  • Build our Future.
We are now rolling out a highly structured, multi-year programme, where all of our colleagues are expected to invest considerable time immersed in thinking about our behaviours and improving their broader capabilities. Download now

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