Imperial Brands PLC

Welcome and thank you for joining our interim results presentation. I'm joined today by Oliver Tant, our Chief Financial Officer, and Peter Derman, our Investor Relations Director. Lucas Paravicini, our incoming Chief Financial Officer, is also with us. Lucas joined Imperial and the Board on the 1st of May. He will be formally appointed CFO tomorrow and will work with Oliver to ensure a smooth and orderly handover. Before getting into the results, let me hand over to Lukas for a few brief words.

Thank you, Stefan, and good morning, everyone. I'm delighted to be able to join the team this morning and to have this opportunity to introduce myself. Perhaps a little bit of my background. I've spent 20 years in the consumer goods industry, working in a range of senior finance and operational roles in large international companies. I was at Nestle for 22 years and worked across a range of parts of the business in Switzerland and in several Latin American markets. I also spent six years at Fonterra, the world's largest dairy cooperative, and responsible for some well-known leading dairy brands, joining first as a CFO and then becoming chief operating officer of its global consumer and food service business. So I bring a blend of strong financial experience and commercial expertise, and have specific experience of driving significant change programs, including implementing global shared services in large international organizations, all of which should be relevant for Imperium. I'm really pleased to be joining the company at such a great time as we begin to implement the new strategy and drive the changes necessary to strengthen performance and to deliver sustainable shareholder value. I'm eager to get to grips with the business and to a time where we can meet in person. I'm looking forward to establishing a transparent engagement with all investors. Thank you. I'll now hand back to Stefan.

Thank you, Lukas. Today, I will start by providing some performance highlights, and then Oliver will take you through the financial results in more detail. I will then give you more colour on how we're implementing the new strategy and some of the operational actions to strengthen performance. I will conclude with our outlook and priorities for 2021 and will look forward to taking your questions after that. I'm pleased with the progress we've made on implementing the new strategy we announced in January. The one thing I'm most encouraged by In these results, it's the progress we've made on stabilizing the aggregate market share performance in our top five priority markets, following several years of consecutive decline. It reflects an improving momentum from an increased focus on collaboration and performance management with these markets, which are all part of the important changes we've made over the past year. In NGP, The actions we have taken over the past year to focus our investments and improve returns have delivered a further reduction in losses. This is about resetting the business and creating a sound foundation so we can make a meaningful contribution to harm reduction over time. It has been a good start to the year as we start to build momentum with growth in net revenue, operating profit and strong cash flow. And I would like to thank all of our people for their great work in ensuring the business continues to move forward in a COVID-19 environment. So I'm pleased with the start of the year and will remain on track to deliver our full year results in line with guidance. As I touched on earlier, our market share in the five priority markets increased modestly by six basis points compared to a 37 basis points decline last in the same period last year. Share gains in the US, UK and Spain were partially offset by share declines in Germany and Australia, which will take time to turn around. We grew net revenue by 3.5% driven by strong pricing in tobacco and better NGP sales against a relatively weak comparator period. The business has performed well in spite of the coronavirus continuing to influence consumer and customer buying patterns. The lack of international travel has impacted our duty-free sales and also affected demand across markets. Oliver will provide more details later. Our gross and operating profit of 8.1% was driven by a better performance in NGP against the period affected by write-downs, and a sharper focus on investment, prioritizing the markets with the best prospects for growth. A stronger performance at Logista also contributed to profit growth. Also, tobacco revenue grew, tobacco profitability was affected by some temporary factors that Oliver will take you through in a moment. The good news is underlying tobacco profitability, excluding these factors, grew almost 5%, reflecting our strategic focus on driving performance from our five most important and most profitable markets. We also delivered another strong cash performance on a 12-month basis with net cash flow of £2.5 billion, supporting our debt reduction priorities. Since unveiling the new strategy in January, I've been focused on implementation and taking actions to improve performance. It will take time to get to where we need to be as a business, but I believe we are making the right choices to create value for our shareholders. A key element of the right choices is the clear market prioritization we've now put in place, and we're beginning to realign investments to support the strategic initiatives in our five priority markets. In NGP, we've taken steps to reset our approach and we're managing operations in a much more measured and disciplined manner. I want to see this part of Imperial flourish to enable us to make a meaningful contribution to harm reduction. Our plans for market trials in heated tobacco and vapour are on track. This means Investing in markets where we believe we can succeed and withdrawing from markets where we don't think we can create shareholder value with our NGP portfolio. Another key priority that has been to assemble the right leadership team with the necessary leadership qualities to deliver the new strategy. The team brings together new capabilities, skills and expertise from outside the industry. and blends them with the existing valuable experience we have in tobacco at the senior executive level, as well as more widely in the business. I'm pleased that alongside our new strategy, we have been able to attract some very high-caliber individuals with blue-chip FMCG experiences like Nestle, Unilever or PepsiCo to the tobacco industry. Beyond this, We're also beginning to implement the organizational changes and adopt the new ways of working we highlighted in the strategy update. I will outline later the changes we're already making to our sales and marketing organization to streamline and simplify our operations. Before I hand over to Oliver for his financial review, this is Oliver's last results presentation from payroll. and I would like to take this opportunity to thank Oliver for his seven and a half years of service to Imperial. On a personal note, I also want to thank him for the very warm welcome he extended to me when I joined the group, and for the help and support he gave me with my induction. I wish you all the best for your retirement. Oliver, over to you.