By Michael Susin

Imperial Brands outlined its midterm plans to invest in its five largest tobacco markets to drive value in the segment, and backed its targets for fiscal 2025.

The U.K.-listed tobacco manufacturer said on Wednesday that its five-year strategy includes a continued focus in the U.S., Germany, U.K., Spain and Australia--its major tobacco markets--to boost sustained growth and cash delivery. Together, these markets account for around 70% of its adjusted operating profit.

Imperial Brands also said it would scale up its next-generation products to provide growth opportunities, but maintain disciplined investment and market entry criteria.

Next-generation products include vapes and oral nicotine pouches.

These investments will be supported by efficiency initiatives, which are expected to bring around 320 million pounds ($414.3 million) in savings by the end of 2030. Most of this cash will be reinvested, Imperial Brands said.

The tobacco group--which houses Davidoff, Gauloises and JPS among its brands--kept its capital allocation framework, and expects to generate free cash flow of between 2.2 billion and 3.0 billion pounds a year.

"By applying this same performance-driven, consumer-led approach to our wider portfolio of tobacco markets, we expect them to make a greater contribution to our overall performance over the next five years," it said.

The group confirmed its guidance for fiscal 2025 ending Sept. 30, saying it expects revenue growth for the tobacco segment of low-single-digit and double-digit for its next-generation products. Adjusted operating profit is expected to grow by a mid-single-digit percentage.

Shares were down 3.3% to 26.48 pounds in early afternoon trading.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

March 26, 2025 08:59 ET (12:59 GMT)

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