2021 PERFORMANCE AT A GLANCE

 

* Organic basis

HOW WE MEASURE OUR PERFORMANCE

These key performance indicators are used to assess the progress we are making in delivering our strategy. We revised the KPIs this year to align with our new strategy and our remuneration incentives.

AGGREGATE PRIORITY MARKET SHARE VS PRIOR YEAR (%)

 

Performance
Our strategic focus and rigorous performance management has begun to arrest the aggregate weighted market volume share performances in our priority markets, following several years of decline. Gains in the USA, UK and Spain were offset by declines in Australia and Germany.

Definition
Aggregate weighted market volume share,based on our five priority markets (USA, Germany, UK, Spain and Australia). Market volume share is calculated based on a 12-month moving annual total (MAT) volume share position from September to August. The market volume size used in the weighting calculation is based on a constant prior year end actual market size.

TOBACCO & NGP NET REVENUE (£BN)

 

Performance
Tobacco NGP net revenue declined 4.7 per cent at actual exchange rates. Excluding the Premium Cigar Division, Tobacco & NGP net revenue declined 1.9 per cent at actual exchange rates but grew 1.4 per cent on a constant currency basis. Tobacco net revenue increased by 1.5 per cent excluding the Premium Cigar Division disposal and NGP revenue was down by 3.9 per cent both at constant currency.

Definition
Tobacco & NGP net revenue comprises tobacco and NGP revenue less duty and similar items, excluding peripheral products.

£7.7bn excluding Premium Cigar Division disposal.

ADJUSTED EARNINGS PER SHARE (PENCE)

 

Performance
Adjusted earnings per share was up 2.8 per cent on an organic constant currency basis, excluding a currency headwind of 3.1 per cent. Reported earnings per share was up 89.5 per cent. This is explained in the Financial Review.

Definition
Adjusted earnings per share represents adjusted profit after tax attributable to the equity holders of the Company divided by the weighted average number of shares in issue during the period, excluding shares held to satisfy employee share plans and shares purchased by the Company and held as treasury shares.

* 247.2p excluding Premium Cigar Division disposal.
** 2019 EPS restated to exclude other income.

TOBACCO & NGP ADJUSTED OPERATING MARGIN (%)

 

Performance
Margins improved primarily due to lower NGP write-downs and losses.

Definition
Tobacco & NGP operating margin is adjusted operating profit divided by tobacco & NGP net revenue expressed as a percentage.

* 42.1% excluding Premium Cigar Division disposal.

DIVIDEND PER SHARE (PENCE)

 

Performance
The dividend grew 1.0 per cent reflecting our progressive dividend policy. This follows the Board’s decision in May 2020 to rebase the dividend by one-third to accelerate debt repayment.

Definition
Dividend per share represents the total annual dividends, being the sum of the paid interim dividend and the proposed final dividend for the financial year.

RETURN ON INVESTED CAPITAL (%)

 

Performance
Return on invested capital improved in the year driven by a reduction in invested capital as a result of the disposal of the Premium Cigar Division.

Definition
Return on invested capital measures the effectiveness of capital allocation and is calculated by dividing adjusted operating profit after tax by the annual average of: intangible assets, property, plant and equipment, net assets held for sale, inventories, trade and other receivables and trade payables and other current liabilities. The annual average is defined as the average of the opening and closing balance sheet values.

NET DEBT TO EBITDA (MULTIPLE)

 

Performance
The ratio trajectory continues to improve, supported by strong cash flows and the use of divestment proceeds from the sale of the Premium Cigar Division to pay down debt.

Definition
Adjusted closing net debt divided by adjusted EBITDA. Adjusted closing net debt is measured at balance sheet foreign exchange rates. Adjusted EBITDA is calculated as adjusted operating profit plus amortisation, depreciation and impairments.

CASH CONVERSION RATE (%)

 

Performance
2021 cash conversion of 83 per cent reflected unwind of prior year Logista working capital.

Definition
Cash conversion is calculated as cash flow from operations pre-restructuring and before interest and tax payments less net capital expenditure relating to property, plant and equipment, software and intellectual property rights as a percentage of adjusted operating profit.

TOTAL SHAREHOLDER RETURN

 

Performance
Total shareholder returns rebounded in the year, growing 25 per cent, as news of the new strategy stabilised share price performance and the dividend cut in 2019 was annualised.

Definition
Total shareholder return is the total investment gain to shareholders resulting from the movement in the share price and assuming dividends are immediately reinvested in shares.

Non-financial KPIs

ENERGY CONSUMPTION (GWH)1,2

 

Performance
We have seen a 17 per cent decrease in energy consumption from our 2017 baseline year. Our target is to reduce energy consumption by 25 per cent by 2030. Our 2021 relative energy consumption is 95,740 kWh/£million.

Definition
We measure relative indicators against “£million” tobacco and NGP net revenue. Energy consumption covers the energy used in our offices, manufacturing sites and by our sales fleet vehicles. The energy we use originates from a variety of sources including fossil fuels and renewable source.

ABSOLUTE CO2 EQUIVALENT EMISSIONS (TONNES)1,2

 

Performance
We have seen a 14 per cent decrease in total Scope 1 and 2 emissions from our 2017 baseline year. Our target is to reduce CO2e emissions by 25 per cent by 2030. We have also set a Scope 3 target to minimise our carbon impact beyond our direct operations.

Definition
We report on greenhouse gas emissions resulting from the operations that fall within our consolidated financial statements, using the operational control reporting approach. We report on the seven main greenhouse gases and report in terms of tonnes of CO2 equivalent (CO2e).

WASTE (TONNES)1,2

 

Performance
We have seen a 15 per cent decrease in waste from our 2017 baseline year. However, we have seen a 4 per cent increase in waste compared to last year which is due to an improvement in the accuracy of measurements. One of our sites in Central America has a new waste management provider who weighs the waste on site which provides more accurate data. We seek to minimise the waste and waste to landfill associated with our production processes through a combined approach of reduce, reuse and recycle.

Definition
This includes waste from manufacturing sites and main offices, excluding Logista and Sales and Marketing entities. It does not include any material which is re-used.

LOST TIME ACCIDENT FREQUENCY RATE (PER 200,000 HOURS)1,3

 

Performance
Our continued focus on health, safety and risk management has resulted in a 16 per cent decline in our lost time accident rate compared to last year.

Definition
A lost time accident is an ”on-the-job” accident that results in an employee being unable to return to work for a minimum of one full day.

1. 2020 and 2021 data has been independently assured by EY. Our Reporting Criteria Document contains detail on definition and scope of all non-financial KPIs. See www.imperialbrandsplc.com/sustainability for more information.

2. Our 2021 environmental data follows the reporting period Q4 financial year 2020 to Q3 financial year 2021. This is to allow for data collection, validation and external assurance. Our reporting scope and definitions are detailed in the Reporting Criteria Document published on our website.

3. Our health and safety data is for the full 2021 financial year. Our reporting scope and definitions are detailed in the Reporting Criteria Document published on our website.