Annual General Meeting
13 February, 2001Extracts from the Chief Executive's report at the Annual General Meeting on 13 February 2001
Gareth Davis commented:
"Imperial Tobacco is committed to delivering sustained profit growth for the benefit of shareholders. Performance in the first quarter of the financial year to September 2001 is in line with our expectations at the start of the financial year. We are delivering growth through acquisition and organically led international expansion complemented by a strengthened UK presence and an efficient cost base.
In Western Europe, we continue to expand with good performances, notably in France, Benelux, Ireland and throughout Southern Europe, where we have grown market shares and benefited from price increases. In addition, in roll your own and papers, the integration of the Baelen and EFKA businesses, acquired at the beginning of the financial year, is progressing well. As anticipated, the businesses are providing enhanced opportunities for both sales growth and cost synergies.
Outside Western Europe, we have further advanced our cigarette businesses in the Baltic States and the former Soviet Union, supported by a programme of premium brand launches including, to date, the successful introduction of Fusion in five new markets. In Asia Pacific, our new general manager is now in position and is building infrastructure to exploit the new brands that we have developed for that region. We continue to see Africa as a region of substantial future profit potential and despite significantly reduced volumes due to our upward price repositioning we remain committed to growing our business in this challenging region. In Australia, performance continues to be encouraging with further growth in market share, helping offset the market decline following last year's duty and taxation increases.
In the UK, we have achieved significant cigarette market share growth in the first quarter with a 38.8% share in December. This is the result of resilient brand performances across all our portfolio, with a particularly strong contribution from the Richmond brand family. In roll your own, our market share is holding at over 64%, with Drum now accounting for over 11% of the market.
On 29 January, we increased prices across all products in the UK, which will further help offset the impact of market decline, estimated at over 10% in the first quarter.
Our UK operations were enhanced by the acquisition of Mayfair Vending in December, increasing our distribution capability in this important market sector. The integration with our existing Sinclair Collis business is proceeding to plan.
Imperial Tobacco remains firmly focused on realising opportunities across the UK and international markets and I am confident that we will continue to deliver profitable growth for our shareholders.
Board of Directors
As announced within the Report and Accounts, the Company confirms that Sir David Hardy will retire from the Board at the conclusion of today's Annual General Meeting having reached age 70.
We are expecting to announce our interim results on Wednesday 9 May 2001.
For further information please contact:
0117 963 6636
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