Imperial Brands Profits Rise But Hindered By Vaping Blacklash

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Thérèse Esperdy | Imperial Brands

Imperial Brands has released a new financial report showing that report that shows a slightly higher than expected full year sales.

According to this new report, Imperial Brands’ revenue generated by tobacco and next-generation products rose 3.9 percent ($10.29 billion). Analysts were reportedly expecting revenue slightly below this amount. Imperial Brands has adjusted its earnings per share of 273.3 pence. So far this year, shares of Imperial Tobacco are down by 27 percent, impacted mostly due to the e-cigarette category.

Despite the good news, Imperial Brands remains cautious when it comes to its yearly forecast due in part to the challenges it faces from the e-cigarette and vaping categories. There continues to be scrutiny over the e-cigarette and vaping categories in the U.S. brought on by the mysterious vaping-related lung illnesses. Many states have responded to the growing numbers of individuals impacted by the illness with their own bans on e-cigarettes and flavored products. The Trump Administration has also hinted that a ban on flavored e-cigarette products could be imminent [read more here]. Flavored e-cigarette products reportedly make up nearly 30 percent of Imperial’s profits.

“Although we grew NGP (next generation products) revenues by around 50 percent, this was below the level we expected to deliver,” commented Alison Cooper, chief executive of Imperial Brands. “Our delivery was also impacted by an increasingly competitive environment and regulatory uncertainty in the USA. Growth in Europe was also slower, despite achieving leading retail shares in several markets. We have taken the learnings from this year to reset our NGP investment plans for 2020, prioritizing the markets and categories with the highest potential for sustainable, profitable growth. We will scale up investment as the visibility on returns and regulatory uncertainties improves.”

Imperial Brands owns Fontem Ventures, which is the producer of the blu e-cigarette. Despite the growing challenge to the category, Imperial Brands reveals that it plans to launch a new e-cigarette product and that it also has plans to refresh the blu brand.

Imperial Brands has been undergoing many changes this year. Months ago it was announced that Cooper would be stepping down as CEO of the company. Imperial Brands is also working to divest itself from its premium cigar division, including Altadis U.S.A., and is expected to name a buyer by the end of the 2019 [read more here]. In addition to today’s financial report, Imperial Brands announced that Thérèse Esperdy would become the new chairman of the company come Jan. 1, 2020. She is succeeding Mark Williamson, who announced his departure earlier in the year.

In a press release, Esperdy had this to say about her new position: “It is a privilege for me to step up as chairman at Imperial, a company with a rich heritage, some great brands and tremendous people. Clearly this is a challenging time, but there are many opportunities ahead and I am looking forward to working closely with the team to drive the business forward and create value for our shareholders.”

Currently, Esperdy serves as senior independent director at Imperial Brands. She began her career at Lehman Brothers before joining JP Morgan. She has held a number of senior roles at JP Morgan before joining Imperial Brands.

You can view the full financial report from Imperial Brands by clicking here. For all the latest news from Imperial Brands, visit imperialbrandsplc.com.