November 26, 2020
Firm’s annual global results highlight challenge facing the industry
Imperial Brands has revealed steep falls in its global sales of next generation products in its full-year results.
In the first half of the year (ending 30 September), net revenue from Imperial’s next generation products declined by 43 percent, followed by a more modest decline in the second half of the year of nine percent. This gives an overall fall for 2019/2020 of 27 percent.
Stefan Bomard, chief executive of Imperial Brands, says: “NGP has obviously underperformed and investment has not delivered the expected returns. NGP has a role to play for Imperial going forward in meeting consumer needs for reduced risk products. I also want us to be able to make a meaningful contribution to harm reduction, but we will take a much more prudent approach, built around a tightly focused business model.”
In contrast, Bomhard says the firm has seen more positive results from its tobacco divisions. “The tobacco business is resilient and has some good brands, so there is definitely the opportunity to deliver better results over time.”
Tobacco volume sales were down by 2.1 percent globally translating to lower profitability of 3.1 percent. This compares to a lower profitability for next generation products of 34.4 percent.
Whether he results will impact the company’s plans for the UK market will become clear when Imperial Brands completes its strategic review in January.