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Pre-close trading update

  • Good progress in delivering on our strategic objectives
  • Growth in aggregate market share in top-five priority markets
  • First-half adjusted Group operating profit ahead of last year on constant currency basis
  • Full-year outlook in line with revised guidance issued on 15 March
  • NGP trials progressing well, further update on next steps to be given at the interim results
  • Cash conversion remains strong supporting year-on-year deleverage

Imperial Brands continues to perform in line with its five-year strategy launched in 2021. Focused investment in our top-five combustible markets, which account for around 70 per cent of adjusted operating profit, has driven an increase in aggregate market share for those markets. Gains in the US, UK and Australia more than offset declines in Germany and Spain. These share gains were achieved while maintaining strong pricing discipline, and overall tobacco volumes are in line with expectations.

Consumers have responded positively to the pilots of our Pulze heated tobacco system in Greece and the Czech Republic and an improved consumer marketing proposition for our blu vapour product in the US. We are making good progress against our strategic objective of building a sustainable, consumer-centric Next Generation Product (NGP) business and we will provide an update on our next steps at the interim results. First-half NGP revenues are expected to be slightly ahead of the prior period, driven by growth in Europe.

We are on track to deliver full-year results in line with our revised guidance issued on 15 March, with expected full-year net revenue growth of around 0-1 per cent on a constant currency basis and adjusted operating profit growth of around 1 per cent.

First-half Group net revenue is expected to be broadly flat on last year on a constant currency basis, in line with our expectations. This reflects a weaker tobacco performance in Europe, which offsets growth in other regions. Europe’s performance has been driven by the return to pre-COVID purchasing patterns as Northern Europeans resume international travel, as well as price phasing in some markets. However, price increases during the latter part of the first half will support a stronger revenue performance in the second half.

First-half Group adjusted operating profit is expected to grow by around 2 per cent on a constant currency basis, benefiting primarily from reduced losses in NGP. As expected, tobacco performance will be weighted to the second half. First-half tobacco operating profit will be broadly flat on last year on a constant currency basis, with increased investment behind our strategy offsetting the benefit of reduced US litigation costs compared to last year.

At current exchange rates, translation foreign exchange is expected to be a c. 2 per cent headwind on first-half earnings per share and a 1 per cent headwind on full year earnings per share.

Our adjusted operating cash conversion remains strong on a 12-month basis and we are on track to deliver in line with expectations at the half and full year. Our first-half leverage (adjusted net debt to EBITDA) will improve year on year, with 12-month leverage expected to be c. 2.4 times at the half year (HY21: 2.6x), reflecting the usual seasonal variations in cash flow. We expect to deliver a further year-on-year improvement in leverage at the full year.

We continue negotiations with a local third party about an orderly transfer of our Russian assets and operations as a going concern. Meanwhile, we also continue to support our Ukrainian colleagues and their families, including with transport and accommodation to enable them to escape the areas most severely hit by conflict, as well as resettlement assistance for those who have left Ukraine.

The interim results for the six months ended 31 March 2022 will be announced on 17 May 2022.



The Group uses 'adjusted' (non-GAAP) measures as we believe they provide a better comparison between reporting periods. The definition of our adjusted measures is unchanged from our full-year results. We also use the term 'constant currency', which removes the effect of exchange rate movements on the translation of the results of our overseas operations. 

Investor Contacts   Media Contact  
Peter Durman +44 (0)7970 328 903 Jonathan Oliver +44 (0)7740 096 018
James King +44 (0)7581 052 880    
Jennifer Ramsey +44 (0)7974 615 739    

Cautionary Statement

Certain statements in this announcement constitute or may constitute forward-looking statements. Any statement in this announcement that is not a statement of historical fact including, without limitation, those regarding the Company’s future expectations, operations, financial performance, financial condition and business is or may be a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied in any forward-looking statement. These risks and uncertainties include, among other factors, changing economic, financial, business or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this announcement. As a result, you are cautioned not to place any reliance on such forward-looking statements. The forward-looking statements reflect knowledge and information available at the date of this announcement and the Company undertakes no obligation to update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this announcement should be construed as a profit forecast or profit estimate and no statement in this announcement should be interpreted to mean that the future earnings per share of the Company for current or future financial years will necessarily match or exceed the historical or published earnings per share of the Company. This announcement has been prepared for, and only for the members of the Company, as a body, and no other persons. The Company, its Directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this announcement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.