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Imperial ‘Strongest Growth in Decade’

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Price hikes and growing demand for cigarette alternatives boosted Imperial Brands’ half-year results.

Adjusted operating profit for the six months that ended March 31 increased 2.8 percent in constant currency to £1.67 billion. Adjusted tobacco and next-generation product (NGP) revenue was £3.64 billion, also up 2.8 percent over the comparable 2023 period.

Sales of Imperial’s NGP brands, which include Pulze heated tobacco and Blu e-cigarettes, grew by 16.8 percent.

After years of slow growth and market share losses, Imperial outlined a turnaround plan in 2021 focusing on its five top markets and beefing up investments in NGPs, which are deemed less harmful to health. That strategy is paying off, according to Imperial Brands CEO Stefan Bomhard.

“Investment in consumer capabilities, more agile ways of working and further progress with our performance culture have made Imperial Brands a stronger business better able to deliver an acceleration in financial delivery,” said Bomhard in a statement. “This is demonstrated in the first half with the strongest organic top-line growth in more than 10 years, amid a challenging external environment.

“In tobacco, stronger brands and improved sales execution have enabled us both to consolidate the market share gains in our priority markets achieved in recent years and to deliver a strong price mix of 8.6 percent.

“In next generation products, we are steadily building scale within our footprint and these efforts have resulted in net revenue growth of 16.8 percent on a constant currency basis. In the past six months, we have launched new products in all categories, including our entry into the U.S. oral nicotine market with the new Zone brand. Our improved innovation capabilities, which now include three ‘Sense Hubs’ in Liverpool, Hamburg and Shenzhen, mean we are well set up to adapt to changing consumer preferences and regulatory requirements.

“Pricing actions in tobacco taken in the first half and good momentum in NGP gives us confidence in our ability to deliver full-year results in line with our guidance.”

The company said its turnaround plan would result in further improvement to adjusted operating profit growth, supporting mid-single-digit percentage constant currency compound annual growth rate over the final two fiscal years of the plan.