IMPERIAL TOBACCO GROUP PLC
Interim Management Statement following the 3 months ended 31 December 2012
Ahead of the Annual General Meeting to be held later today Imperial Tobacco Group PLC issues this update on trading following the three months to 31 December 2012. All comments relate to this period unless otherwise stated. Tobacco net revenue is reported in constant currency terms.
Quality Growth through Total Tobacco
Tobacco net revenue up over 2 per cent, with price mix improvement of 3.5 per cent
Stick equivalent volumes down 1 per cent
Q1 growth across total tobacco portfolio:
+12 per cent net revenue and +10 per cent volume growth in key strategic brands
+9 per cent net revenue and +9 per cent volume growth in fine cut tobacco
+40 per cent net revenue and +33 per cent volume growth in snus
Stable net revenue and +3 per cent volume growth in premium cigar
Half Year and Full Year Outlook
The macro environment continues to be challenging; towards the end of the first quarter and into January, market trends have worsened in a number of key markets including in the EU and Russia. In the EU we estimate that the legal stick equivalent market size is currently down around 5 per cent with the legal cigarette market size down around 7 per cent.
We are confident in our strategic focus and are continuing to increase investment behind our key total tobacco assets and geographies. Given our ongoing investment and the European market pressures we expect first half adjusted operating profit to be down year on year. Our full year results remain in line with our expectations, reflecting the benefits from an acceleration of a cost optimisation programme designed to fund our continued investments and offset the current European market pressures; we expect that around 55 per cent of adjusted operating profits will be delivered in the second half.
Alison Cooper, Chief Executive, said:
"Our strategic focus continues to deliver further quality growth across our total tobacco portfolio, including excellent results from our key strategic brands Davidoff, Gauloises Blondes, West and JPS and in fine cut tobacco.
"The growth momentum in key markets in Africa and the Middle East and Asia-Pacific is being offset by the current adverse market dynamics in Europe, with increasing levels of illicit trade. This reinforces the importance of our two focus areas for 2013: further investing behind our key total tobacco assets and geographies; and accelerating our cost optimisation programme, providing funds for investment and mitigation for the full year given the current European environment.
"Challenging environments also present opportunities; our focus on the consumer, our total tobacco portfolio and new consumer experiences are key to realising those opportunities and continuing to drive sustainable quality growth."
