Imperial Brands (IMB) Morgan Stanley Global Consumer & Retail Conference 2025 summary

Strategic pillars and business overview

• Focus on sustainable value generation from tobacco, with strong positions in the U.S., Germany, Spain, and Africa, which together drive the majority of operating profit.

• Next-generation products (NGP) are a key growth pillar, with double-digit growth in nicotine pouches, vape, and heated tobacco over the past three years and a commitment to continue this trajectory for the next five years.

• Emphasis on consumer centricity, data-driven decision-making, and a refreshed leadership team, with 82% of top management new in their roles.

• Guidance for 1%-2% net revenue growth from tobacco, 3%-5% operating profit growth, and annual cash generation of GBP 2-3 billion, supporting high single-digit EPS growth and progressive shareholder returns.

Transition, strategy evolution, and future focus

• Leadership transition has been smooth, with no surprises due to deep internal experience.

• The next five years will see a step up in integrating people, process, technology, and data, with a focus on consumer intimacy and leveraging artificial intelligence.

• The business aims to move from a collection of acquired companies to a unified, agile challenger organization, accelerating transformation by learning from best practices and technology partners.

Combustibles business and market dynamics

• Tobacco volume declines have moderated from -7% to just better than -2% over three years, with long-term trends expected to align with historic averages.

• Pricing power in affordable core markets (U.S., Germany, Spain) offsets volume declines, supporting low single-digit net revenue growth.

• U.K. and Australia face more challenges due to high excise, but are managed for value; Africa delivers 10% of operating profit with strong growth in markets like Ivory Coast, Burkina Faso, and Morocco.

• U.S. market remains attractive, with strong pricing, brand portfolio across segments, and benefits from increased enforcement against illicit vapes.