UK. Imperial Tobacco Group has reported a strong performance in duty free during the first trading quarter of 2007.
“We delivered a strong set of results in the year ended September 2006, gaining cigarette market shares across all our regions; in 2007 we have made further progress with encouraging performances in many of our markets, supported by our ongoing focus on reducing costs and increasing manufacturing efficiency,” the company said in a statement issued ahead of its annual meeting on Monday.
“The overall anticipated trading performance of the group for the financial year to 30 September 2007 remains in line with our expectations.”
The statement added: “In our Rest of the World region, our cigarette volumes continued to grow with notable successes in Central Europe and duty free.”
Commenting on Q1, Chief Executive Gareth Davis said: “I am pleased that we have again increased our cigarette volumes year on year, further building on our good organic growth in the previous 18 months, and I look forward to delivering another year of record performance.
“With our key brands we have made some excellent progress, including growth in West and JPS volumes and the further international development of Davidoff, following our acquisition of the worldwide cigarette trademark last September.
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“I am pleased that we have again increased our cigarette volumes year on year, further building on our good organic growth in the previous 18 months, and I look forward to delivering another year of record performance.“ |
Gareth Davis, Chief Executive, Imperial Tobacco Group |
Imperial Tobacco’s AGM trading statement 2007: first quarter highlights
Rest of the World
“In our Rest of the World region, our cigarette volumes continued to grow with notable successes in Central Europe and duty free. Our performance in Taiwan continues to improve with growth in West and the introduction of a number of Davidoff line extensions. Elsewhere, Davidoff continued to drive our growth in the Middle East and Russia whilst our value brands, Golden Gate and Moon, performed well in Central Europe. In Africa, we continued to grow our cigarette market shares in most of our domestic and main export markets and in Australia and New Zealand, our market shares have improved on those at September.
“Earlier this month, we acquired a 66% stake in the Estonian distribution company, Tremaco, and the trademark rights to three cigarette brands which account for around 6% of the 2.3 billion Estonian market. A commitment has been given to acquire the balance of Tremaco shares over the next three years. The total financial consideration, including the commitment, will be €0.7 million (£0.5 million) in cash. This acquisition extends our geographic footprint in the Baltic region and will enable Imperial Tobacco products to be sold through Tremaco’s established selling operation.”
UK
“In the UK we have continued to perform well in the first quarter in a resilient market. Duty paid cigarette volumes have remained stable year on year and fine cut tobacco volumes have increased, although we estimate that the annual duty paid cigarette market may reduce by up to -4% in this financial year. This takes into account the anticipated initial declines following the introduction of bans on smoking in public places in Wales, Northern Ireland and England in the coming months.
“Our annual average market shares for cigarette and fine cut tobacco in December were 45.8% and 65.0% respectively (September 2006: 45.5% and 65.3%) with gains in Lambert & Butler and Windsor Blue. Earlier this month we increased the recommended retail price of a pack of 20 cigarettes by 10 pence for all our brands.”
Germany
“In Germany, following the cessation of Singles sales, duty paid cigarette market volumes have increased by +4% in the first quarter, while other tobacco products, including Singles, were down -26%. Excluding Singles, other tobacco products were up +75% year on year. Overall, this resulted in total duty paid cigarette equivalent volumes being down -7%. Cross-border flows of cigarettes are estimated by the National Manufacturers’ Association to have risen to 22.2% in our first quarter compared to 17.7% for the same period in the previous year. In October, we increased the retail price of our brands for the first time in 22 months by 20 cents (€0.20) per pack of 17 cigarettes.
“The migration of former Singles smokers to alternative products is still in the transition stage. However, our newly introduced make-your-own products, West and JPS Single Tobacco, are performing better than expected and earlier this month we launched a second successor product, West Quickies XL. Against this background, our cigarette share grew to an annual average of 21.0% in December (September 2006: 20.7%) with JPS continuing to perform well. Our traditional fine cut share also rose to an average of 16.7% in December (September 2006: 15.6%).”
Rest of Western Europe
“In our Rest of Western Europe region, we increased our cigarette market shares in the majority of markets, particularly in the Netherlands, where we grew our annual average cigarette market share to December to 9.5% (September 2006: 8.9%) and in France, where our share was up to 3.8% (September 2006: 3.4%). The continued excellent performances of Davidoff and West delivered further improvements in our market share in Greece.
“Trading conditions in fine cut tobacco continue to be competitive, but recent initiatives with brands such as JPS are progressing well, supporting our market leadership in this sector. The generally difficult pricing environment we saw in the region last year has shown some signs of improving in recent months with increases in cigarette retail prices in several markets, including in Spain.”
MORE STORIES ON IMPERIAL TOBACCO
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Imperial Tobacco reports rise in profits – 13/11/06
Imperial buys Davidoff cigarette trademark – 06/09/06
Mark Robinson boosts Imperial Tobacco marketing team in global duty free role – 03/07/06
