Imperial Brands PLC AGM Statement (0240C)
05 Febbraio 2020 - 8:00AM
UK Regulatory
TIDMIMB
RNS Number : 0240C
Imperial Brands PLC
05 February 2020
IMPERIAL BRANDS PLC
5 February 2020
AGM Update
Imperial Brands PLC today issues the following AGM trading
update:
Tobacco trading remains in line with expectations, with a
weighting to the second half as previously guided. However,
following the US FDA's ban on certain flavours of cartridge-based
vapour devices and weaker than expected consumer demand for vapour,
we now expect constant currency full year Group net revenue to be
at a similar level to last year and adjusted earnings per share to
be slightly lower than last year.
First half adjusted earnings per share is expected to be down c.
10% at constant currency, due to the phasing of inventory
write-downs, primarily relating to the US flavour ban.
Next Generation Products (NGP)
Regulatory uncertainty and adverse news flow continues to affect
demand in the US and Europe. We estimate this will result in
significantly lower year-on-year NGP net revenue as well as
increased provisions for slow-moving stock. We are implementing a
further cost savings programme to mitigate some of these short-term
headwinds, which will result in a full year net impact on adjusted
operating profit of c. GBP40m.
In addition, the FDA ban, which comes into force tomorrow, has
resulted in a write-down of our flavoured inventory with a first
half adjusted operating profit impact of c. GBP45m; in line with
our previous estimates.
We believe that NGP provides consumers with potentially less
harmful alternatives to combustible tobacco and offers a
significant growth opportunity over the medium term to complement
our Tobacco business. We support regulation that enforces higher
product and marketing standards, which are critical for creating a
stable and orderly vapour market that we can invest behind.
Tobacco
Our Tobacco business has had a good start in the first three
months of the year with market share trends across the majority of
our priority markets. The Europe division has benefited from
price/mix gains, which have largely offset weaker volume trends.
Our US business remains strong, although financial delivery has
been temporarily affected, as anticipated, by wholesaler destocking
following the year end price increase. The Africa, Asia and
Australasia division has delivered revenue growth reflecting a
strong volume performance and the sell-through of the Australian
duty paid inventory.
Financial guidance
Our effective adjusted tax rate for the year is expected to be
around 21% (2019: 19.1%).
At current exchange rates, we expect a currency translation
headwind on net revenue and adjusted earnings per share of c. 1% at
the half year and c. 3% at the full year.
As previously guided, free cash-flow in FY20 will be affected by
some one-off cash outflows in relation to Russian excise tax
liabilities (c. GBP100m) and the final deferred consideration for
the Von Erl acquisition (c. GBP120m).
Potential divestments
Negotiations on the potential divestment of our Premium Cigar
Division remain ongoing. We continue to consider the potential
divestment of other non-core operations.
ENDS
Investor Contacts Media Contacts
+44 (0)7970 328 +44 (0)7967 467
Peter Durman 903 Alex Parsons 241
+44 (0)7964 110 +44 (0)7967 467
Matt Sharff 921 Simon Evans 684
+44 (0)7581 052
James King 880
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.
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END
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