Imperial Tobacco Cautions on Europe as Sales Fall

Source from:  CBS MarketWatch 08/16/2013

Imperial Tobacco PLC Thursday said demand for tobacco in Europe, one of its key markets, continues to be weak as the U.K.-based tobacco group posted a fall in revenue.

MAIN FACTS:

-The maker of Lambert & Butler, Gitanes Blondes and JPS cigarettes said revenue from total stick volumes--combining cigarettes and fine cut tobacco--in the nine months to 30 June 2013 was down 3% and volumes fell 7%. Excluding the impact of trade destocking and foreign exchange, revenue was down 1%.

-Performance in line with full-year expectations. Key strategic brands outperforming market trends.

-Industry volumes in EU and a number of non-EU markets, such as Russia and Ukraine, remain weak. Estimates EU stick equivalent industry volumes down 6%.

-Says excellent fine cut tobacco performance and good growth in premium cigar and snus.

-Says notable progress in many key markets including Germany, Greece, Scandinavia, Australia, Taiwan, Vietnam, Algeria, Kazakhstan and Turkey.

-Cost plans on track, with savings of at least 30 million pounds this year.

-CEO: "Our full-year expectations remain unchanged. We continue to focus on maximising opportunities for our total tobacco portfolio in the EU against a backdrop of weak industry volumes and are driving good in-market performances in Asia-Pacific and Africa and Middle East, with our share improving in many markets."

-Shares closed Wednesday at 2154 pence, valuing the company at 20.89 billion pounds. Enditem