Tobacco group Imperial Brands said smokers have cut down their purchases of cigarettes after strong buying during the pandemic, prompting increased volume declines and a flat revenue outlook for the first half, excluding Russia.
During the pandemic, customers had given big tobacco firms such as Imperial a boost as they had more cash to spend and more chances to smoke.
As expected, Imperial Brands said its exit from Russia would result in revenue for the six months that ended 31 March to be 'slightly below' from a year earlier.
Next Generation Products
In the first-half, Next Generation Products (NGP) revenues are expected to be ahead of the prior period, driven by strong growth in Europe, more than offsetting declines in the US, driven by uncertainty caused by the marketing denial order for myblu, the company noted.
The company stepped up product and market launches in all categories of next generation products (NGP), including the rollout of its heated tobacco proposition, Pulze and iD, in seven European markets.
In the vapour category, it launched the blu 2.0 product in the UK, Spain, France, Czech Republic and Portugal.
On Track To Meet Annual Expectations
The maker of Winston cigarettes and Backwoods cigars said it was on track to meet its annual expectations and its outlook of growing revenue and operating profit, despite the lacklustre first half.
Adjusted operating profit for the first six months was also hit by increased investments in next-generation products, along with the exit from Russia and lower volumes, it said.
The company, which transferred its Russian business to local investors last year, said excluding the impact of its Russian business, net revenue was expected to be flat on a constant currency basis.