29th Jan 2008 07:00
Imperial Tobacco Group PLC29 January 2008 Annual General Meeting Interim Management Statement 29th January 2008 Ahead of the Annual General Meeting to be held later today, Imperial TobaccoGroup PLC (Imperial Tobacco) is publishing its first Interim ManagementStatement: Trading Summary The overall anticipated trading performance of Imperial Tobacco (excludingAltadis) for the financial year to 30 September 2008 remains in line with ourexpectations. We anticipate providing further financial information on theenlarged Imperial Tobacco Group ahead of the close period for our interimresults for the six months to 31 March 2008. Commenting, Gareth Davis, Chief Executive, will say: "2007 was another record year for Imperial Tobacco with growth in cigarettevolumes, cigarette market share gains and excellent performances from our keybrands. In the first quarter of 2008 many of these positive trends continuedwith further growth in earnings, cigarette volumes and share gains in manymarkets." "I was delighted to announce the completion of the acquisition of Altadis lastweek and look forward to making the most of the many new opportunities that nowlie ahead for our business. I am confident that the combined talents of ouremployees, our extended geographic reach and our broad multi-product portfoliowill significantly strengthen our competitive position and create sustainablevalue for our shareholders." Altadis Update On 25 January 2008 Imperial Tobacco announced the successful completion of itstakeover offer for Altadis S.A. (Altadis). The acquisition of Altadis will befinanced through new bank facilities and an underwritten rights issue, which wecurrently estimate will be no more than £5 billion, to be completed by 18 July2008. The actual size of the rights issue will be dependent upon a numberof factors. We remain committed to sizing the rights issue at the minimum levelrequired to maintain an investment grade credit rating. On 25 January 2008 Imperial Tobacco also announced its intention to file atakeover offer for all of the shares in Compania de Distribucion IntegralLogista S.A. (Logista) not already owned by Altadis within three months of thedate on which Imperial Tobacco acquired control of Altadis. Altadis currentlyowns approximately 59.62 per cent of the shares of Logista. Such an offer willbe unconditional and at a price of €52.50 per Logista share. This values theoffer for the Logista shares not already owned by Altadis at approximately €910million (excluding treasury shares). The purchase of all of the minority shares in Logista will not significantlyinfluence the size of the rights issue and we currently estimate that it couldincrease by around £200 million when compared to selling down all of Altadis'holding of 59.62 per cent of the entire issued share capital of Logista. The first quarter highlights are set out below. UK In the UK, our portfolio of leading brands started the financial yearpositively. We estimate that the total UK cigarette market fell 4 per cent to 47.0 billionin the year to December partly reflecting the public smoking bans implemented in2007. Despite increased competitor activity in the first quarter, our annual averagemarket share for cigarette was stable at 46.4 per cent with good performancesfrom Windsor Blue and the King Size variants of Lambert & Butler and Richmond.Earlier this month we increased the recommended retail price of a pack of 20cigarettes by an average of 11 pence across our portfolio. Our fine cut tobaccoshare was 63.1 per cent in the year to December (September 2007: 63.6 per cent).Gold Leaf, launched in June last year in the value segment, continued to buildon its positive momentum with a December spot share of 1.9 per cent. (September2007 1.6 per cent). Germany In Germany, we grew our shares in both cigarette and other tobacco products. We estimate that the overall tobacco market in the year to December was down 6per cent to 126 billion cigarette equivalents. This continues to reflect thecessation of the Singles product in April 2006 along with the impact ofsuccessive tax increases on cross-border flows into Germany. Against this backdrop our cigarette share grew to an annual average of 21.4 percent in December (September 2007: 21.3 per cent) with ongoing strong growth fromJPS. West continued to be impacted by downtrading. In October, we launched Route66 cigarettes to complement our existing portfolio and take advantage of thecontinued growth in the value segment. We increased our recommended retail priceby €0.10 on our Big Boxes of 24 cigarettes for West and Peter Stuyvesant inOctober. In December, we also increased recommended retail prices of the 100mmvariants of West, Peter Stuyvesant and R1 by €0.20 per pack. Our market share ofother tobacco products was up to 19.6 per cent (September 2007: 19.1 per cent)as our share of the Single Tobacco make your own segment continued to grow. Rest of Western Europe In our Rest of Western Europe region we delivered cigarette share gains in mostof our markets. The pricing environment in the region continued to improve withrecent price increases in Spain and Italy. JPS strengthened its position across the region, most notably in the Netherlandsand France where it lifted overall annual average shares to 10.8 per cent(September 2007: 10.6 per cent) and 4.1 per cent (September 2007: 4.0 per cent)respectively. Davidoff continued to grow in many markets, with regional volumesup 20 per cent. Although the regional fine cut tobacco market remains extremelycompetitive, our value initiatives Zilver and Evergreen continue to perform wellin The Netherlands with our annual average share up to 51.7 per cent in December(September 2007: 51.1 per cent). However, our overall regional fine cut tobaccoperformance has been impacted by declines in travel retail volumes. USA In the USA, we continue to be pleased with the performance of the Commonwealthbrand portfolio. We also introduced some of our own products in a number ofstates and we anticipate that the launch profile will accelerate as the yearprogresses. In November, we were pleased to receive confirmation that our application tojoin the Master Settlement Agreement as a Subsequent Participating Manufacturerhad been approved. We expect the registration process for the relevant ImperialTobacco brands to be completed in the next few months, slightly later thanoriginally expected. We launched our new fine cut tobacco brand Premier in anumber of States. Complementing this, we re-designed and re-launched Bali Shagand McClintock, the fine cut tobacco brands we acquired from Peter Stokkebye inJuly 2007. In October, we implemented a trade price increase of $0.70 per cartonacross our cigarette portfolio. Rest of the World In the Rest of the World region, our cigarette volumes and shares continued togrow in many markets. We had good performances in Eastern Europe where Classic performed well inUkraine and West helped to grow our share in Turkey. In Czech Republic, brandhighlights were Moon and Davidoff and in Africa sales volumes improved acrossthe majority of Western and Central African markets with Excellence doing wellin Senegal and Burkina Faso. In Taiwan trading conditions were challenging withincreased competition and downtrading and, in common with other premium brands,Davidoff was under pressure. However, in the growing value segment, we built onthe West franchise with the launch of West 100s. In December 2007 we further expanded our Scandinavian operations with theacquisition of the trademark rights to the Norwegian fine cut tobacco brandsEventyr, Bristol and Asbjornsens Original from the tobacco company AsbjornsenTobaksfabrik. These three premium brands have a combined share of around 6 percent of the Norwegian fine cut tobacco market. The consideration wasinsignificant in the context of Imperial Tobacco Group. Manufacturing Group productivity continues to improve through our constant focus on costs andwith the benefit of volume growth. Following the installation of new machinery in Volgograd and Kiev in 2007, weincreased production capacity to meet growing demand, including for our Slimsand Superslims brand variants. Construction of our new factory in Taiwan continues with the commencement ofproduction expected by the end of September 2008. Enquiries John Nelson-Smith Tel: +44 (0) 117 933 7032(Investor Relations Manager) Nicola Tate Tel: +44 (0) 117 933 7082(Investor Relations Manager) Alex Parsons(Head of Corporate Communications) Tel: +44 (0) 117 933 7241 Simon Evans Tel: +44 (0) 117 933 7375(Group Press Officer) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Imperial Brands