REG - Imperial Brands PLC - Half-year Financial Report

Imperial BrandsAnnouncement

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RNS Number : 8727D  Imperial Brands PLC  12 May 2026

IMPERIAL BRANDS PLC

Legal Entity Identifier (LEI) No. 549300DFVPOB67JL3A42

Half year results statement

12 May 2026

Performing and transforming

Improving cash and returns

 

REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2026

BUSINESS HIGHLIGHTS*

·      Tobacco net revenue growth of 1.5% supported by robust tobacco
pricing, more than offsetting volume declines

·      NGP net revenue up 7.5%, with double-digit growth in AAACE
(60.0%) and Europe (15.3%), with market share growth in all three NGP
categories

·      Tobacco & NGP net revenue up 1.8%; reported revenue up 0.8%

·      Adjusted operating profit 0.6% higher year-on-year, led by
Europe; reported operating profit down 36.5%, reflecting costs of Delaware
settlement and 2030 Strategy activities

·      Distribution adjusted operating profit down -3.0%, reflecting
lower tobacco profits; reported operating profit down -5.0%

·      Adjusted earnings per share up 5.3% driven by adjusted operating
profit growth and share count reduction; reported earnings per share down
-38.1%, largely driven by reduction in operating profit

·      12-month free cash flow £2.6bn reflecting strong cash conversion
of 98% on 12-month basis

·      Capital returns: £809m share buyback completed in period;
interim dividend increased by 4.0%

·      On track to deliver full year results in line with guidance

·      Strong start to transformation; on track to deliver £320m of
cost savings per annum by 2030 and to becoming a more consumer-focused,
data-led, agile and efficient challenger; strategic partnership with Capgemini

*    All measures at constant currency unless otherwise stated.

Financial summary

                                                              Reported                               Adjusted2
 Six months ended                         2026      2025      Change      2026      2025     Actual  Constant currency(3)

 31 March 2026
 Revenue                             £m   14,719    14,604    +0.8%       -         -        -       -
 Tobacco & NGP net revenue1          £m   -         -         -           3,729     3,664    +1.8%   +1.8%
 Tobacco & NGP operating profit      £m   776       1,294     -40.0%      1,479     1,486    -0.5%   +1.3%
 Operating profit                    £m   925       1,456     -36.5%      1,644     1,652    -0.5%   +0.6%
 Earnings per share                  p    59.9      96.7      -38.1%      127.7     123.9    +3.1%   +5.3%
 Net debt                            £m   (10,943)  (10,471)  -           (10,518)  (9,956)  -       -
 Dividend per share                  p    83.36     80.16     +4.0%       83.36     80.16    +4.0%   +4.0%

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

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

"We have made a positive start to the execution of our evolved 2030 Strategy,
combining consistent operational and financial performance with tangible
progress on our transformation.

In combustibles, robust pricing momentum has continued to deliver low
single-digit growth, at constant currency, in both net revenue and adjusted
operating profit. In next generation products we continue to grow market share
in all three categories. We have seen particularly strong growth in heated
tobacco, following the rollout of our Pulze 3.0 device. Our modern oral
portfolio has grown strongly in European markets, while in the US we have
grown volume share in a competitive market.

Despite the impact of one-offs our first half operational performance has
driven consistent, strong cash flows, which underpin ongoing investment in
growth initiatives and capital returns to shareholders. We are on track with
our £1.45bn share buyback and the interim dividend has been increased by 4%.

While staying laser-focused on in-year delivery, we are also making progress
on self-help activities to drive efficiency and our long-term transformation
to build the capabilities which will underpin our future growth. We are making
good progress on focusing our supply chain footprint and have begun
implementing our strategic partnership with Capgemini.

Looking ahead to the second half, while tensions in the Middle East have led
to a more uncertain macroeconomic environment, we continue to be confident of
delivering a step-up in adjusted operating profit growth, in line with our
full year guidance."

 

DELIVERING AGAINST OUR STRATEGIC PRIORITIES

Driving sustainable value in combustibles

×  Tobacco volumes down -1.5%, with growth in our AAACE region offset by
declines in Europe and the Americas

×  Robust tobacco pricing supports 1.5% growth in tobacco net revenues and
adjusted operating profit

×  Strong pricing in our wider footprint supported good tobacco net revenue
growth in other market clusters, e.g. Africa, Asia, Middle East and Turkey
(AMET) and Southeast Europe

×  Aggregate market share across our priority markets down -16bps as we
continue to balance share and value,

and be more choiceful in focusing on more profitable segments for long-term,
sustainable value creation

Building scale in Next Generation Products

×  Multi-category approach delivering market share gains in all three
categories and strong volume growth in all regions

×  In modern oral, US Zone growing volume share; new product launches in
Skruf and Zone in Nordics and

UK driving growth

×  New pod-based blu bar and blu kit ranges performing well as markets
continue to transition to re-useable systems across Europe; growing share in
UK, France, Germany and New Zealand; double-digit shares in UK, France and
Spain

×  Heated product sales growing strongly, driven by Pulze 3.0 in Europe and
AAACE, particularly Italy, Greece and Czechia

Progress on Transformation

×  Focused on self-help activities to drive efficiency and investment in
capabilities to drive growth

×  On track to deliver £320m cost savings per annum by 2030

×  Strong momentum behind manufacturing footprint rationalisation;
manufacturing and operational excellence

×  Strategic partnership with Capgemini gives us access to new capabilities
to support growth, including data-led insights and agentic AI, that will
enable us to capture new commercial opportunities and deliver efficiencies:
transfer of 386 roles completed in H1

×  Continued rollout of enterprise platforms. Go-lives in Australia and our
Radom manufacturing facility

RESULTS OVERVIEW*

Tobacco & NGP net revenue growth driven by resilient tobacco pricing

×  Tobacco & NGP net revenue up 1.8%

×  Solid tobacco pricing of 3.0% driven by a broad base of markets; tobacco
net revenue up 1.5%

×  Tobacco volumes down -1.5% (to 85.7bn SE) reflecting launches in AAACE
offsetting market size declines in Europe and the USA

×  NGP net revenue up 7.5% as strong growth in Europe and AAACE more than
offset declines in USA

×  Reported revenue grew 0.8%, reflecting volume growth in AAACE, growth in
NGP and gains in Distribution offsetting weaker volumes in Australia

Delivering growth in adjusted operating profits

×  Group adjusted operating profit grew 0.6% on prior year, driven by
improved profitability in tobacco offset by a decline in adjusted operating
profit in Distribution

×  Reported operating profit declined -36.5% reflecting higher costs
relating to the Delaware settlement charges and 2030 Strategy activities

×  Tobacco adjusted operating profit increased 1.5%, driven by pricing
offsetting volume declines and increased investment, as well as impact of
Australia and US tariffs; reported tobacco operating profit down -38.3% at
actual rates due to costs associated with the Delaware settlement and
implementation of 2030 Strategy

×  NGP adjusted loss of £40m, a £3m increase on prior year, reflecting a
strong performance in Europe and AAACE offset by the decline in US NGP net
revenue in H1; reported NGP operating losses reduced £1m reflecting the
decision to transition our legacy myblu vaping business out of the US market,
offsetting lower amortisation of intangibles

×  Distribution adjusted operating profit declined -3.0%, as an improvement
in long-distance transportation was offset

by a decline in tobacco due to lower profit on inventories versus the prior
year

×  Adjusted EPS up 5.3% reflecting increased adjusted operating profit and
reduced share count more than offsetting increased finance costs

×  Reported EPS declined -38.1% as a result of lower operating profits due
to the Delaware settlement and 2030 Strategy costs, a higher tax rate, partly
offset by lower financing costs and reduced share count due to the ongoing
share buyback

Free cash flow supporting investment and shareholder returns

×  Adjusted operating cash conversion of c.98% on a 12-month basis

×  Following the decision of the Supreme Court of Delaware in December 2025,
a payment of £150 million was made

to R J Reynolds in the period; the remaining £162 million to be made in
instalments over the next three years

×  Adjusted net debt £10.5bn; adjusted net debt to EBITDA on a 12-month
basis remained flat at 2.4x; reported net debt £10.9bn; expect around 2.0
times at the year end

×  Interim dividend per share up 4.0% to 83.36 pence, in line with our
progressive dividend policy

×  Ongoing, multi-year evergreen buyback with £1.45bn underway this year

×  Cumulative capital returns from FY21 to HY26 of c.£11.5bn, representing
c.77% of market capitalisation at Capital Markets Day in January 2021

*    All measures at constant currency unless otherwise stated.

OUTLOOK

Our expectations for the financial year are unchanged and in line with our
guidance given in November 2025 and with our medium-term guidance set out at
our Capital Markets Day in March 2025. While the conflict in the Middle East
has resulted in a more uncertain macroeconomic environment, we have not seen a
material impact to date. We will continue to monitor the situation. The longer
this persists, the more likely there could be a more meaningful impact on
input costs and consumer demand, including duty free. We remain focused on
delivering full year results in line with our guidance.

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 is expected to have more of a
benefit in the second half. In NGP we expect a stronger second half, given the
negative impact of one-offs in H1, plus new Zone flavour launches and targeted
execution.

Group adjusted operating profit is expected to grow in the 3% to 5% range, on
a constant currency basis. Growth is expected to accelerate in the second
half, driven by flow through of combustible price increases and operational
gearing, with a stronger performance in both AAACE and the US. In NGP, we
expect continued momentum in Europe and AAACE, and an improved US performance.

After 2030 Strategy costs and the first instalment of the Delaware settlement,
we expect to generate free cash flow of at least £2.2 billion in FY26, in
line with previous guidance. 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 for the full year. At current rates,
foreign exchange translation is expected to be a headwind of 0-1.0% to net
revenue, adjusted operating profit and earnings per share.

Looking beyond the current fiscal year, we remain committed to the plans and
medium-term guidance we provided in our 2030 Strategy in March 2025 to
generate another five years of sustainable growth and long-term shareholder
value through a progressive dividend and an evergreen share buyback.

For a Copy of the full statement

To view the full statement, please visit www.imperialbrandsplc.com/HY26
(http://www.imperialbrandsplc.com/HY26) .

The statement is also available via RNS here:
http://www.rns-pdf.londonstockexchange.com/rns/8727D_1-2026-5-11.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8727D_1-2026-5-11.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 six-month average to the end of March (MHT
- moving half year 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

Lukas Paravicini, Chief Executive, and Murray McGowan, Chief Financial
Officer, will present the results to investors and analysts via a webcast at
09:00 (BST) on 12 May 2026. The presentation slides will be available from
07.00 (BST) on www.imperialbrandsplc.com. A webcast recording and presentation
script will be available after the webcast has concluded.

The webcast will be available on https://edge.media-server.com/mmc/p/2auimbs3
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fedge.media-server.com%2Fmmc%2Fp%2F2auimbs3&data=05%7C02%7CJennifer.Ramsey%40Impbrands.com%7Cca4b13d38e274190995508deace75470%7Cd14c9c9a6bb5430f99ff6c2815b3a95e%7C0%7C0%7C639138307013085146%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=rWzOrjiTgKhUItZFPHngK4WkDuGshvZfpk%2Bx4hu%2FO%2F8%3D&reserved=0)
. To participate in the Q&A session, please register in advance via this
link
https://register-conf.media-server.com/register/BI88a04ca0676f485ca3a32ba4efb94994
(https://register-conf.media-server.com/register/BI88a04ca0676f485ca3a32ba4efb94994)
. 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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