Imperial Brands: Despite E-cigarette Setbacks in the U.S., Full-Year Results Are Still Expected to M

Today, on April 13, news from foreign media reported that cigarette and e-cigarette manufacturer Imperial Brands stated that it expects profit and revenue growth this year to meet expectations, but warned that its next-generation smoke-free products are facing challenges in the U.S.

The company indicated in a brief update to the stock market on Thursday morning that it is on track to achieve its full-year expectations.

It stated that despite a steady performance in the first half, revenue and operating profit are expected to grow this year. However, the company warned of uncertainties in the U.S. that led to a decline in sales of its next-generation products in the first half.

Previously, the U.S. Food and Drug Administration (FDA) issued marketing denial orders for several of Imperial's myblu e-cigarette products last year.

"Driven by strong growth in Europe, NGP revenue in the first half is expected to exceed the previous period, which is enough to offset the decline caused by uncertainties from the myblu marketing denial order in the U.S.," it stated.

Many in the cigarette industry are pinning their hopes on new products like heated tobacco and e-cigarette pens as they seek alternatives to traditional tobacco that causes cancer.

Compared to many international peers, U.S. authorities have a stricter stance on e-cigarettes.

According to today's news, on Wednesday, e-cigarette manufacturer JUUL agreed to pay nearly $500 million to settle allegations from six U.S. states regarding its illegal sales of products to minors.

Imperial Brands has still managed to increase its market share in cigarettes and other combustible products in its three priority markets: the U.S., Spain, and Australia. This offsets declines in the UK and Germany. This means that the company's market share has remained stable for two consecutive years after experiencing several years of decline.

"Our focused investment in priority combustible markets continues to support stable market share," the company stated. "We are consolidating the strong gains made last year, and we expect our total share in the top five markets to remain flat compared to the previous period in the first half."

Derren Nathan, head of equity research at Hargreaves Lansdown, stated that as consumers face increasing pressure, the resilience of tobacco continues. Imperial Brands is further demonstrating its pricing power this year, and it is confident that this will help achieve moderate revenue and profit growth. However, with profits flat in the first half, even a modest full-year growth expectation implies a lot of work in the second half.

"Europe is Imperial's largest market, and while market share growth elsewhere is currently offsetting declines in the UK and Germany, this is something to watch closely."