Imperial Brands, the powerhouse behind popular cigarette brands JPS and Gauloises, is poised to announce a significant profit increase for the first half of the year, bolstered by strategic tobacco price hikes.
The tobacco giant has navigated the fiscal year with a keen eye on profitability, leading to a forecasted rise in profits. This financial upturn is attributed to a series of calculated tobacco price increases, which have more than offset the volume pressures in certain markets.
Imperial Brands has reported growth in tobacco revenues on a constant currency basis, alongside an uptick in its next-generation products (NGP) business, which includes heated tobacco. Despite declines in combustible tobacco sales in the UK and Germany, the company has seen gains in the US, Spain, and Australia.
The Balancing Act
The company’s success story is one of balance and strategic pricing, ensuring that revenue growth outpaces the industry’s volume challenges. The NGP sector, in particular, is expected to see a mid to high teens growth in net revenues for the first half of 2024, as Imperial Brands continues to invest in expanding this burgeoning segment.
This financial maneuvering is set against the backdrop of a five-year strategy aimed at transforming the business. The company remains confident in delivering full-year accelerated adjusted operating profit growth, in line with its medium-term guidance.
Looking to the Future
As Imperial Brands gears up to share its half-year financial results, the industry watches with anticipation. The company’s ability to adapt and thrive amidst geopolitical and macro-economic pressures is a testament to its resilience and commitment to transformation.
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