Empire Tobacco's 2024 financial report: Operating profit increased by 4.5% to £ 3.887 billion, NGP net revenue increased by 26%

Empire Tobacco's 2024 financial report: Operating profit increased by 4.5% to £ 3.887 billion, NGP net revenue increased by 26%

Imperial Tobacco released its full year 2024 performance report, during which the company's total revenue decreased by 0.2% year-on-year to £ 32.411 billion, and adjusted operating profit increased by 4.5% year-on-year to £ 3.887 billion.
On November 19th, Imperial Brands (IMB) released its annual performance report for the year ended September 30, 2024. During the reporting period, the company's total revenue decreased by 0.2% year-on-year to £ 32.411 billion; Adjusted operating profit increased by 4.5% year-on-year to £ 3.887 billion; The adjusted net revenue of 'Tobacco and Next Generation Products (NGP)' was £ 8.157 billion, a year-on-year increase of 4.6%.

The highlights of this report are as follows:

Net revenue in the tobacco and next-generation product sectors increased by 4.6%;
IMB's market share in its five key markets increased by 0.05%, with four markets achieving market share growth;
The net revenue of the new generation products increased by 26%, with growth achieved in all three regions and an increase in gross profit margin;
The growth of Logista reflects strong tobacco pricing and the benefits brought by last year's acquisitions;
The adjusted earnings per share increased by 10.9%, thanks to profit growth and a reduction in the number of shares, while the reported earnings per share increased by 19.1%;
Strong cash generation capability, with a free cash flow of up to £ 2.4 billion;
IMB plans to launch a capital return of approximately £ 2.8 billion in fiscal year 2025, including £ 1.25 billion in buybacks and a 4.5% increase in dividends for 2024.

IMB's Annual Performance Report as of September 30, 2024 | Source: IMB Official Website

The report mentioned that the overall market share increased by 5 basis points (bps) in the five priority markets, with growth achieved in the US, Germany, Spain, and Australia markets, and a decline in the UK market. In the European market, tobacco and NGP net income have grown strongly, and the market share in Germany has stabilized; In the American market, the successful launch of the modern oral tobacco product Zone has driven NGP's net revenue growth by 29.4%; In the African, Asian, and Middle Eastern markets, tobacco pricing strategies have been effective and market share has further expanded.

It is worth noting that the company's NGP net revenue increased by 26.4%, with growth achieved in all three categories (heated tobacco, e-cigarettes, and modern cigarettes).

The CEO of the company, Stefan Bomhard, stated that,

In the final year of its current strategy, the company has supported another year of accelerated financial growth and increased capital returns by investing in consumer capabilities, cultural transformation, and agile work methods

In the tobacco industry, investments in brand and sales force have enabled us to achieve overall market share growth in five key markets while maintaining a strong pricing strategy. This strategy has, for the first time, stabilized our market share in Germany

In terms of the new generation of products, we expanded our scale in all regions and our net revenue increased by 26.4% at a constant exchange rate. Under our product innovation partnership, we launched new products in three categories, including the successful launch of the 'Zone' brand in the rapidly growing modern oral product category in the United States