REG - Imperial Brands PLC - Final Results

Imperial BrandsAnnouncement

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RNS Number : 8902H  Imperial Brands PLC  18 November 2025

IMPERIAL BRANDS PLC

Legal Entity Identifier (LEI) No. 549300DFVPOB67JL3A42

full YEAR RESULTS STATEMENT

18 november 2025

consistent delivery
strong foundations

Report for the year ended 30 september 2025

Business Highlights*

·   Continued strong operational momentum has delivered further broad-based
growth and enabled increased shareholder returns, creating a strong platform
for ongoing value creation over the next five years.

·   Tobacco and NGP net revenue growth of 4.1%, underpinned by double digit
NGP net revenue growth, strong tobacco pricing and stable market share across
five priority markets.  Since FY20 +48 bps market share growth. FY25 reported
revenue declined -0.7%.

·    NGP net revenue up 13.7%, a further year of double-digit growth driven
by oral nicotine in US and Europe, with share growth across all smoke-free
categories; reported NGP revenue up 14.9%.

·    Distribution performance reflects strong tobacco pricing offset by
long-distance transportation.

·    Strong growth in Group adjusted operating profit of 4.6%; reported
operating profit down -1.8%.

·    Adjusted earnings per share up 9.1%, driven by profit growth and share
count reduction; reported EPS down -16.5%.

·    Continued strong cash generation, driven by combustibles business;
free cash flow of £2.7bn.

·   Increased shareholder returns: FY25 dividend up 4.5% and £1.25bn
buyback for FY25 now completed; £10bn returned to shareholders FY21 to FY25;
£1.45bn share buyback for FY26 commenced.

*All measures at constant currency unless otherwise stated

Financial summary

 Twelve months ended                    Reported                                      Adjusted(2)

30 September 2025
                                        2025     2024     Change    2025     2024     Actual  Constant currency(3)
 Revenue                           £m   32,171   32,411   -0.7%     -        -        -       -
 Tobacco & NGP net revenue(1)      £m   -        -        -         8,316    8,157    +1.9%   +4.1%
 Operating profit                  £m   3,490    3,554    -1.8%     3,988    3,911    +2.0%   +4.6%
 Earnings per share                P    251.1    300.7    -16.5%    315.0    297.0    +6.1%   +9.1%
 Net debt                          £m   (8,954)  (8,340)  -         (8,406)  (7,740)  -       -
 Dividend per share                P    160.32   153.42   +4.5%     160.32   153.42   +4.5%   +4.5%

(1.  )( )(Tobacco & NGP net revenue is reported revenue less duty and
similar items, sale of peripheral products and Distribution (Logista)
revenue.)

(2.  )( )(See page 3 for the basis of presentation and the supplementary
section at the end of the financial statements for the reconciliation between
reported and adjusted measures.)

(3.  )( )(Constant currency removes effect of exchange rate movements on the
translation of the results of our overseas operations)(.)

Lukas Paravicini, Chief Executive Officer

"Our consistently strong operational and financial delivery provides a firm
platform on which to build as we embark on the next phase of our strategy. As
I take over as Chief Executive Officer, I want to thank my predecessor, Stefan
Bomhard, for his leadership over the past five years, during which time we
significantly strengthened the company and delivered outstanding returns for
shareholders. Our performance in FY25 adds to our track record of consistent
growth, demonstrating the sustainability of our tobacco business and the
exciting growth opportunities in next generation products.

 

"During the next strategic period, we will evolve the distinctive challenger
approach which has underpinned our recent success. This means we will continue
to invest in consumer insights, innovation and marketing capabilities. We will
also continue to make deliberate, focused choices about which opportunities we
pursue, and develop a simpler, more efficient and more agile organisation.

 

"While our approach is evolutionary, our ambition is bold - to deliver a
step-change in our capabilities and fully unleash the potential of our people.
This transformation will enable us to fulfil our twin strategic priorities -
sustainable value in combustibles and scale in NGP - and realise our purpose
of forging a path to a healthier future for moments of relaxation and
pleasure."

 

Delivering against our strategic priorities

Continued momentum in our combustible business

·   Cigarette volumes down 1.7%, more than offset by strong pricing,
driving net revenue growth of 3.7%, with resilient performance across our
portfolio

·    Aggregate market share for the priority markets was stable year on
year. Over five years, since FY20, share gain of 48 bps

·    Another year of market share gains in Germany (+45 bps) driven by
continued investment in brand equity and sales force

·    US stable (-1 bps) reflecting continued investment in sales excellence
and brand equity, and timing of competitor investments in deep discount
segment. Declines in UK (-85bps) and Spain (-45bps) as we prioritised value
creation over share

·    Australia share gain (+20 bps) through successfully adapting to
regulatory changes and focused investment

Building a sustainable NGP business for a sustainable future

·    Multi-category approach working well, delivering another year of
double-digit net revenue growth (up 13.7%), with market share gains in all
three categories, supported by new product launches and increased distribution

·    Vapour: positive share performance with blu in Europe as market
transitions to reusable devices, with continued expansion of the pod-based blu
kit range; double-digit market shares in UK, Spain and France

·    Modern oral: gaining share and accelerating growth of Zone in USA with
distribution footprint expanded to c. 100,000 stores; positive consumer
feedback to new product innovation in Europe

·    Heated tobacco: positive consumer feedback to recent launch of Pulze
3.0 all-in-one device, for use with iD and iSenzia sticks, continuing to gain
share

·  Over the past five years, cumulative NGP net revenue growth has been 83%,
with adjusted operating losses reduced by 76%

Driving value from our broader market portfolio

·    Good progress in broader geographies, for example our Africa cluster,
which grew tobacco net revenue at 8.9%

·    Driving growth across our NGP portfolios with strong performance in
France, Italy and New Zealand

Progress towards 2030

·    Communicated and embedded evolved strategy with our full workforce -
roll-out included face-to-face events reaching more than 600 senior leaders

· Launched brand-building framework to drive consistent, consumer-focused
approach across priority combustible and NGP brands

·    Progress towards simplifying our operations with the go-live of our
new ERP platform in our first manufacturing site in October

·    Driving efficiencies in supply chain, realising savings from third
party indirect spend, investing in manufacturing excellence, and optimising
factory footprint ongoing

Results Overview*

Tobacco & NGP net revenue growth driven by resilient tobacco price/mix and
volume performance and NGP

·    Continued strong tobacco pricing across all three regions, price mix
of 5.4%

·    Tobacco volumes declined by -1.7% (to 186.9bn SE) as volume declines
have continued to moderate across our footprint

·    NGP net revenue up 13.7% to £368m, a further year of double-digit
growth driven by Europe and USA, which more than offset decline in AAACE.

·    Distribution (Logista) gross profit increased 2.9% as strong tobacco
pricing offset weakness in long-distance transportation

·    Reported revenue declined -0.7%, reflecting the decline in tobacco
revenue due to lower volumes in high excise markets and adverse foreign
exchange movements, largely offset by growth in NGP and Distribution revenues

Accelerating our adjusted profit growth alongside continued investment

·    Group adjusted operating profit grew +4.6%, driven by improved
profitability in tobacco

·    Reported operating profit declined -1.8% driven by strong regional
performance, offset by adverse foreign exchange movements and impairment costs
related to the implementation of our 2030 Strategy

·    Tobacco and NGP adjusted operating profit grew 4.9%, reflecting strong
tobacco pricing offsetting volume declines and continued investment in brand
equity and sales excellence

·    NGP adjusted losses reduced -1.3% to £76m (FY24: £79m), as continued
improvement in gross margin was offset by investment to support the continued
rollout of Zone in the USA and new product launches.

·    Distribution (including eliminations) adjusted operating profit
increased 0.9% as strong tobacco pricing was offset by lower profits in
transportation

·    Adjusted EPS grew 9.1%, reflecting adjusted operating profit growth
and reduced share count, offsetting higher tax, net finance and minority
interest charges. Reported EPS declined -16.5%, reflecting a higher tax
charge, partly offset by the impact of lower finance costs and reduced share
count

Strong free cash flow and disciplined capital allocation framework supports
growing shareholder returns

·    Free cash flow of £2.7bn, reflecting strong cash generation and
one-off tax repayment

·    Adjusted net debt £8.4bn (2024: £7.7bn); adjusted net debt to EBITDA
at 2.0x (FY24: 1.8x); reported net debt £9.0bn (2024: £8.3bn)

·    FY25 dividend per share up 4.5% to 160.32 pence per share, in line
with our progressive dividend policy

·    Ongoing multi-year share buyback: FY25 £1.25bn completed with
£1.45bn underway for FY26

·    Cumulative capital returns over past five years of £10bn

* All measures at constant currency unless otherwise

 

FY26 Outlook

 Our expectations for the coming year are in line with the medium-term guidance
 set out at our Capital Markets Day in March 2025. On a constant currency
 basis, we expect to deliver low-single-digit tobacco and double-digit NGP net
 revenue growth. Tobacco pricing will continue to more than offset cigarette
 volume declines, and in NGP we will continue to grow through consumer-focused
 innovation and disciplined execution.

 For FY26, Group adjusted operating profit is expected to grow in the 3% to 5%
 range, on a constant currency basis, driven primarily by continued profit
 growth from our combustible tobacco business. In line with previous years,
 performance will be weighted to the second half of the year because of the
 phasing of combustible pricing and investment.

 After 2030 Strategy costs, we expect to generate free cash flow of at least
 £2.2 billion in FY26, in line with the guidance provided at the Capital
 Markets Day in March. Growth in operating profit combined with the impact of
 our ongoing share buyback is expected to result in at least high-single-digit
 adjusted earnings per share growth for the full year.  At current rates,
 foreign exchange translation is expected to be a tailwind of around 2.0% to
 2.5% to net revenue, adjusted operating profit and earnings per share.

For a Copy of the full statement

To view a copy of the full statement please click
here: https://www.imperialbrandsplc.com/FY25

and it is also available
here: http://www.rns-pdf.londonstockexchange.com/rns/8902H_1-2025-11-17.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8902H_1-2025-11-17.pdf)

Basis of Presentation

·    To aid understanding of our results, we use 'adjusted' (non-GAAP)
measures to provide a consistent comparison of performance from one period to
the next. Reconciliations between adjusted and reported (GAAP) measures and
further definitions of adjusted measures are provided in the supplementary
information section. Change at constant currency removes the effect of
exchange rate movements on the translation of the results of our overseas
operations. References in this document to percentage growth and increases or
decreases in our adjusted results are on a constant currency basis unless
stated otherwise. These are calculated by translating current year results at
prior year exchange rates.

·  Stick Equivalent (SE) volumes reflect our combined cigarette, fine cut
tobacco, cigar and snus volumes but exclude any NGP volume such as heated
tobacco, modern oral nicotine and vapour.

·    Market share is presented as a 12-month average to the end of
September (MAT - moving annual trend), unless otherwise stated. Aggregate
market share is a weighted average across markets within our footprint

 

Other Information

 Investor Contacts                       Media Contacts
 John Crosse        +44 (0)7484 967 842  Jonathan Oliver  +44 (0)7740 096 018
 Jennifer Ramsey    +44 (0)7974 615 739  Simon Evans      +44 (0)7967 467 684
 Henry Dodd         +44 (0)7941 648 421

Analyst Presentation Webcast

Imperial Brands PLC will be hosting a live webcast at 09:00 (GMT) on 18
November 2025 for investors and investment analysts following the publication
of our annual results at 07:00 (GMT). The webcast will be hosted by Lukas
Paravicini, Chief Executive, and Murray McGowan, Chief Financial Officer. The
presentation will be followed by a question-and-answer session. The
presentation slides will be available on www.imperialbrandsplc.com from 07.00
(GMT). A webcast recording and the presentation script will also be available
after the live webcast has concluded. The webcast will be available on
https://edge.media-server.com/mmc/p/9yt6z6je
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fedge.media-server.com%2Fmmc%2Fp%2F9yt6z6je&data=05%7C02%7Cjohn.crosse%40impbrands.com%7C4b5cd5f9eec9426283e408de1de90080%7Cd14c9c9a6bb5430f99ff6c2815b3a95e%7C0%7C0%7C638981084105238447%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=ix%2FBKr3SMsoS5IvfBvrz%2BZIy3hFfh5Di3jtFe9uzldY%3D&reserved=0)
. To participate in the Q&A session, please register in advance via this
link:
https://register-conf.media-server.com/register/BId328a253eb874df5bce9eaf5bac3b73c
(https://register-conf.media-server.com/register/BId328a253eb874df5bce9eaf5bac3b73c)
.You will then receive the dial-in details and your own PIN to access the live
Q&A session.

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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