Imperial Volumes Soar on The Back of Acquisitions

Source from:  Tobacco Reporter 11/26/2008

The Imperial Tobacco Group sold 292 billion cigarettes during the 12 months to the end of September, 46 per cent more than it sold during the previous 12 months, according to the company's preliminary results released today. The 2008 results benefited from the first full year's contribution from Commonwealth Brands in the US and the consolidation of Altadis from January 25. Excluding Altadis, Imperial's cigarette volumes increased by 3.4 per cent, from 200.3 billion to 207.1 billion, an increase that was itself accounted for by the change from the part-year to full-year contribution from Commonwealth. Sales in the US rose by 7.1 billion to 14.2 billion between 2007 and 2008. Excluding Altadis, UK sales fell by 6.5 per cent to 21.4 billion, sales in Germany fell by 4.4 per cent to 19.5 billion and sales in the 'rest of Europe' fell by 8.2 per cent to 18.0 billion. In the 'rest of the world' region, volumes rose by 2.8 per cent to 134.0 billion. This picture was largely repeated in respect of fine-cut sales excluding Altadis, with volume declines in the UK, Germany and the 'rest of Europe', but increases in the US and the 'rest of the world'. Overall, fine-cut sales, excluding Altadis, were down 5.3 per cent to 23,150 tonnes. Summarising today's announcement, Gareth Davis, chief executive, said, "In a year of significant achievement we have completed the acquisition of Altadis and grown our cigarette volumes and shares in mature and emerging markets. Our performance has enabled us to increase our dividend distribution by 26 per cent to ￡588 million, building on our long track record of creating sustainable value for our shareholders. "Excellent results in Eastern Europe, Africa and the Middle East were complemented by further share gains in the European Union and rapid expansion in the USA. "Our international premium cigarette brands, Davidoff and Gauloises Blondes, are driving growth in emerging markets, while our strength in value brands and products has enabled us to capitalise on down-trading in mature markets, a trend which is likely to continue in the current environment. "We have made further very good progress with the integration of Imperial Tobacco and Altadis, particularly in France where we recently completed the consultation process and where we expect to begin implementing our projects in early 2009. "We are comfortable with our current financing position and our business is highly cash generative. We are resilient in times of economic downturn and remain focused on efficiently integrating the two businesses, whilst maximising the enhanced growth opportunities presented by our versatile portfolio and extended geographic reach." Imperial's net revenue from tobacco during the year to September 30, at ￡5,238 million was up by 60 per cent and, with the acquisition of Altadis, Imperial for the first time earned money from 'logistics distribution fees': ￡607 million. Adjusted profit from operations was up by 51 per cent to ￡2,230 million while adjusted attributable earnings were up by 26 per cent to ￡1,159 million. The full year dividend per share was up four per cent to 63.1p, while the adjusted earnings per share were up 15 per cent to 136.9p. Profit from operations was down 18 per cent to ￡1,157 million. Enditem