21st Mar 2007 09:00
Imperial Tobacco Group PLC21 March 2007 Imperial Tobacco will hold a presentation for analysts updating on trading andregulatory matters later today. At this presentation, Gareth Davis, ChiefExecutive, will confirm that Imperial Tobacco Group's overall performance forthe financial year to 30 September 2007 remains fully in line with management'sexpectations. In the UK, we have continued to deliver strong results, with growth in ourannual average cigarette market share to 46.0 per cent in February 2007(September 2006: 45.5 per cent), reflecting good performances from Lambert &Butler and Windsor Blue. Duty paid cigarette market volumes have fallen by amodest 1 per cent in the first five months but we expect a decline to a morenormal level of around 3 per cent in the year to September 2007, following theintroduction of bans on smoking in public places in Wales, Northern Ireland andEngland in the next few months. In Germany, the total white stick market has declined by 5 per cent in the fivemonths to February largely as a result of an increase in cross-border tradefollowing the change in the taxation of Singles from fine cut tobacco tocigarette. The market is changing, with many former Singles consumers migratingto both factory made cigarettes and other tobacco products. We have performedwell, growing our cigarette volumes by 8 per cent over the same period andincreasing our annual average cigarette market share to 21.0 per cent inFebruary (September 2006: 20.7 per cent), reflecting the excellent performanceof JPS. In fine cut tobacco, our volumes have also benefited from the Singlesmigration, including West and JPS Single tobaccos which are performing aboveexpectations. In addition, we have recently launched West Quickies XL withencouraging initial indications. The Rest of Western Europe region has seen an improvement in the pricingenvironment in a number of markets since September 2006, including in Spain, TheNetherlands, Greece & Italy. We have further grown our cigarette share in mostof our markets in the region, although our results continue to be impacted bydeclines in travel retail sales. In the Rest of the World region, we have made positive progress with regionalvolumes growing by 6 per cent over the first five months of this financial year.This builds on our excellent results of last year, with share gains across theregion. In addition, we have progressed a number of projects in the last fewmonths, particularly in the Americas and Asia. In February, we announced the agreed acquisition of Commonwealth Brands in theUnited States for $1.9 billion (£974 million). The members of the Employee StockOwnership Plan, the sole shareholder, voted overwhelmingly in favour of the dealand approval has been granted under the Hart Scott Rodino Act. We continue tofinalise our plans for the launch of additional brands in the US and, followingMSA approval, we are targeting around £50 million additional profit in the US in2009. Following the acquisition of the worldwide Davidoff cigarette trademark lastAugust, we continue to develop this key brand and are very pleased with progressto date. In February we launched Davidoff in Mexico, and we have also signed adistribution agreement with RBH in Canada from April. In Taiwan, we have recently completed negotiations with the Ministry of Financeto build a factory in the north-west of the island at a cost of around £45million. Construction is expected to begin in the next few months withcompletion by the end of 2008. Initially, annual production will be around 6billion cigarettes, broadly equivalent to our current market share of 11.5 percent, but the factory will have primary capacity for 15 billion cigarettes. Weexpect annual savings of £20 million in our financial year to September 2010from a reduction in overall supply chain costs and an improvement in operationalefficiencies. As always, we continue to seek opportunities to improve our cost efficiency inmanufacturing and we are targeting to deliver additional cost savings of around£30 million per annum over the next few years. The closures of our factories inLahr and Liverpool, which we announced last year, will be completed on scheduleby the end of this month. In respect of taxation, we have progressed a number of initiatives, includingthose associated with the Commonwealth Brands acquisition, which should reduceour underlying Group tax rate to around 25 per cent for the years endingSeptember 2007 and 2008, with further reductions possible thereafter. Our strategy continues to be to create shareholder value by growing bothorganically and through acquisitions. Our focus on top line growth, costefficiency and effective cash utilisation gives us confidence in deliveringanother record performance in 2007. The trading update presentation will begin at 12.00pm (GMT). A copy of thepresentation and script will be available on the corporate websitewww.imperial-tobacco.com at the same time. The presentation will be webcast livevia www.imperial-tobacco.com and www.cantos.com Interim results for the year ended 30 September 2007 will be announced onTuesday 1 May 2007. ENDS ENQUIRIES Alex Parsons John Nelson-SmithImperial Tobacco Group Imperial Tobacco GroupGroup Media Relations Manager Investor Relations ManagerTel: +44 (0) 7967 467 241 Tel: +44 (0) 117 933 7032 Simon Evans Garry WilsonImperial Tobacco Group Imperial Tobacco GroupGroup Media Relations Executive Investor Relations ManagerTel: +44 (0) 117 933 7375 Tel: +44 (0) 117 933 7082 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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