Post on 27-Jul-2020
1
Sanford Bernstein Conference 2011
Imperial Tobacco Group PLC
London 21 September 2011
2
Disclaimer
Certain statements in this presentation constitute forward-looking statements. Any statement in this presentation 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 a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. 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 presentation. 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 announcement of the half year results 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 presentation should be construed as a profit forecast.
This presentation does not constitute an offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of the Company nor should it form the basis of or be relied on in connection with any contract or commitment whatsoever.
Unlocking Our Potential
Alison Cooper Chief Executive
4
Cost Optimisation
Cost Optimisation
Sales GrowthSales
Growth Cash Utilisation
Cash Utilisation
Execution ExcellenceExecution Excellence Future FoundationsFuture Foundations
Sales Growth DriversSales Growth DriversPortfolio
ManagementPortfolio
Management InnovationInnovation Customer Engagement
Customer Engagement PricingPricing
Consumer CentricConsumer Centric
Key EnablersKey Enablers
Our Strategy
Our Key AssetsOur Key AssetsMarket
FootprintMarket
FootprintTotal
TobaccoTotal
TobaccoBrandEquityBrandEquity PeoplePeople
Delivering Sustainable Shareholder ReturnsDelivering Sustainable Shareholder Returns
5
HY11: Delivering Our Strategy
Building sustainable sales
success across international footprint
driving growth through total tobacco
Disciplined cost management
investing for growth
margins increased
Effectively managing cash
strong 12 month cash conversion
dividend growth ahead of adjusted EPS growth
share buyback commenced May 2011
6
Seeing Things Differently
Doing Things Differently
Unlocking Our Potential
7
Sales Growth Drivers
8
Fast from idea to implementation
Proactively engaging for rational regulation
Our Key Enablers
Understanding consumer needs
9
Maximising Shareholder ReturnsHigh
Margins
Reinvest
Sales Strong Cash Flow
Key Enablers
10
Sales Growth Drivers
More Consumers, More Occasions
11
More Consumers, More Occasions
Brand Equity
Total Tobacco
12
Same Consumer, Multiple Needs for Multiple Occasions
Behavioural Opportunities, Motivational Opportunities
This space appears blank because we have removed the images that appear
in the presentation.
This is because we currently donot feature tobacco product brand
imagery on our website.
13
Davidoff in 2006
This space appears blank because we have removed the images that appear in the presentation.
This is because we currently donot feature tobacco product brand imagery on our website.
14
Davidoff Today
This space appears blank because we have removed the images that appear in the presentation.
This is because we currently donot feature tobacco product brand imagery on our website.
15
120
107105
100
124
FY10FY09FY08FY07FY06
Davidoff Volume Growth6% CAGR* volumes FY06 – FY10
inde
xed
* Compound annual growth rate
16
Habanos Growth
116
100
FY10FY09
Inde
xed
volu
mes
ex
EU
exclusive editions driving sales
This space appears blank because we have removed the images that appear
in the presentation.
This is because we currently donot feature tobacco product brand
imagery on our website.
17
Dynamic German Portfolio
Market Volumes
growing in growing segmentsin
dexe
d sh
are
of m
arke
t (%
)
0
50
100
FY10FY06
shar
e (%
)
Above Value* FMCValue* FMC and FCT
23.4%
21.5%
20
25
FY10FY06
IMT Share of Value* FMC and FCT
* Value defined as sub-mid price FMC segments
IMT Share of Value* FMC and FCT Segments
18
JPS Stick Equivalent Volumes11% CAGR*
152
144
128
100
150
132
119
112
100
FY10
169**
FY09FY08FY07FY06
*Compound annual growth rate; **JPS Germany stick equivalent volumes CAGR of 14% FY06 – FY10
Total JPSJPS Germany
inde
xed
19
Poland Portfolio Success
Market Volumes
responding to consumer demands
0
50
100
FY10FY06
inde
xed
shar
e of
mar
ket (
%)
shar
e (%
)
Above Value FMCValue FMC and FCT
32.8%
27.2%
35
30
25FY10FY06
IMT Share of Value FMC and FCT
IMT Share of Value FMC and FCT Segments
20
Route 66 Stick Equivalent Volumes41% CAGR*
155
124108100
223
155131
100
FY06 FY10
390
320**
FY09FY08FY07
*Compound annual growth rate; **Route 66 Poland stick equivalent volumes CAGR of 34% FY06 – FY10;
Total Route 66Route 66 Poland
inde
xed
21
Sales Growth Drivers
New Consumer Choices
22
Incremental Growth Pipeline
April 2011 September 2011 Ideal 2014
WSE
.
Development
ConceptFeasibility
23
High Return Innovation Model
Consumer Untranslated Needs
Co-created with Consumers
Incremental/Brand Switchers
Total Tobacco, Multi-Market
Product Feature Improvements
Technology Based
Replacement of Slow Moving
FMC Premiumisation
Industry Mindset Imperial Focus
24
Exploiting Scalable Innovation
Patented GlideTec innovation
Consumer “wow” effect
Initial launch in UK – Asda, BP, Shell & Esso
Significant capacity investment
Multi market roll-out planned
25
Innovation Within Value Segment
5
6
7
8
9
10
HY11FY10FY09FY08FY07FY06
JPS German Cigarette Market Share
%
This space appears blank because we have removed the images that appear
in the presentation.
This is because we currently donot feature tobacco product brand
imagery on our website.
26
West Fusion in Russia
0.2%
3.1%
Sep 10May 10Jan 10Sep 09 May 11Jan 11
West Fusion Share of KS SSL Segment (RHS)West Fusion Volume (LHS)
SE
Vol
umes
(m)
% share of K
S S
SL segm
entgrowth within growth segment
27
Sales Growth Drivers
Availability and Advocacy
28
Morocco RTM Strategy
Previous Distribution System New Distribution System
Focus on truck and van deliveries
Cash and Carry’s closed
Improved efficiency and customer service
Telesales operation for greater delivery capacity
Cash and Carry deliveries
Truck deliveries to rural areas
Van deliveries to urban customers
29
Outperforming in Dark Markets
Australia increased share by 1.8% to 18.8% in HY11
Norway market share of snus up 1.1% and cigarettes up 0.3% in HY11
trade marketing optimisation
30
Sales Growth Drivers
Maximising Revenue Growth
31
Enhancing Our Capabilitiesproactively managing pricing and excise
Occasion based pricing approach
Brand Pack Price per Channel strategies
Multivariable scenario modelling
Proactive excise management
Think Ahead Innovate & Lead
32
15
16
17
18
19
HY 11FY 10HY 10FY 09HY 09
% s
hare
of c
igar
ette
mar
ket
Pricing Strategy Drives Growth
Australia UK
0
1
2
3
4
5
abso
lute
cha
nge
in b
rand
% s
hare
of m
arke
t
Source: Imperial estimates
FY 09 HY 10 FY 10 HY 11SterlingWindsor BlueCigarette Share
33
Sales Growth Drivers
34
Maximising Shareholder ReturnsHigh
Margins
Reinvest
Sales Strong Cash Flow
Key Enablers
35
Sanford Bernstein Conference 2011
Imperial Tobacco Group PLC
London 21 September 2011