Imperial Brands has unveiled a new strategy to transform the company with a "revitalised tobacco business" being the “key driver of value creation”.
“We have undertaken a comprehensive strategic review, examining all opportunities for unlocking value. This process has reinforced my view that the Group has solid foundations on which we can build a better and stronger business. Our new detailed five-year plan sets out clear strategic priorities, which will drive targeted investment behind those markets and brands with the greatest opportunities for value creation. We have put the consumer at the centre of everything we do and are beginning to reshape our culture to support the new strategy. This will improve our ways of working and create an agile, collaborative and performance-based business that will deliver a stronger, more consistent performance,” said Chief Executive Stefan Bomhard.
The new strategy is founded on three pillars:
Focus on priority combustible markets: “We will focus our investment and resources around our five most important markets of USA, Germany, UK, Australia and Spain, which represent c. 72 per cent of our combustible operating profit. We have developed highly detailed brand and market plans to support this approach and will increase investment behind a focused set of operational levers to strengthen performance and unlock value.”
Drive value from our broader market portfolio: “Our review of our broader market portfolio has identified additional opportunities to drive future growth whilst realising efficiencies in how we operate these markets. Although these markets are smaller, they benefit from attractive margins and relatively limited investment requirements. We will selectively build those where we have attractive leadership positions, such as Africa and other European markets, and will selectively exit a small number of others where we have a relatively weaker presence.”
Build a targeted NGP business: “We are resetting our NGP strategy with a significantly different approach, informed by consumer insights and validation. We will focus our investment behind heated tobacco opportunities in Europe, and in selective market opportunities in vapour, particularly in the USA. Our oral nicotine business will remain focused on its existing markets within Europe. Our investment will be disciplined and based on detailed market testing. Our aim is to develop a sustainable NGP business that supports our ESG agenda by making a meaningful contribution to harm reduction.”
Find the complete strategy here