Chairman’s AGM Statement – 2020 perspective
30 2020 april
Our primary focus continues to be the health insurance and wellbeing of our workers. To ensure safety that is best and also to minimise the possibility of virus transmission, we now have implemented a number of preventative health measures for the workers all over the world, predicated on country-specific circumstances and federal federal government guidance. This might be particularly necessary for our employees whoever jobs can not be done at home. I wish to thank most of our workers and lovers with their tremendous efforts to help everyone’s wellbeing, along with the popularity of the business enterprise during this period.
Our ESG that is current priority answering the ‘whole of society’ approach needed by the that, once we have actually outlined above. Having said that, i’d like to emphasize the more focus we now have delivered to ESG problems generally speaking during 2019.
Sustainability Front and Centre
As explained in the present Capital Markets Day in March, sustainability is front and centre of every thing we do, so we are in possession of a definite business function to produce “A Better Tomorrow” for several our stakeholders:
- For the customers through providing a larger selection of enjoyable much less high-risk items
- For culture through reducing the all around health and ecological effects of our company
- For the workers by making a powerful and purposeful spot to work, and
- For the investors by regularly delivering against our economic commitments
At our Capital Markets Day, we announced committed brand new sustainability objectives:
- To own 50 million customers of non-combustible items by 2030
- To reach carbon neutrality by that exact same 12 months, and
- To create ahead our existing 2030 ecological targets to 2025
2019 Performance – a Operational that is strong Performance
2019 ended up being characterised by a very good functional performance and we delivered on our three core priorities, to:
- Deliver value in combustibles
- Drive one step improvement in New groups
- Build an easier, faster organisation
We delivered against all our targets that are financial
- Strong reported income development up 5.7% at present prices and 5.6% for an adjusted constant ukrainian dating price foundation, driven by the exceptional performance from our combustibles portfolio, that was up 4.6% additionally for an adjusted rate basis that is constant
- This is run on our strategic combustibles brands, which, driven by continued strong volume and value share development and strong price/mix of 9%, expanded adjusted revenue 5.6% at constant rates, and
- Continued deleveraging of this stability sheet, reducing Adjusted Net Debt**/Adjusted EBITDA*** by 0.5x to 3.5x
- A dividend of 210.4p per ordinary share, a 3.6% enhance, keeping our 65% pay-out policy
This supported further increased investment in brand New groups, focussing on building international brands to aid our differentiated multi-category approach across vapour, tobacco-heating and modern oral products leading to:
- 32% constant money income development in New Categories
- 11 million customers of non-combustible items, and
- New groups income of Ј1.2bn at constant prices, significantly more than doubling revenue from 2 yrs ago and supplying us by having a platform that is vital future development
Tomorrow Building A Better
Jack Bowles marked their first year that is full CEO, delivering strong leads to 2019, and it is accelerating our aspiration to transform our company. The Board and we completely endorse the evolved “A Better Tomorrow” strategy he delivered during the Capital Markets Day along with its eyesight to simplify the Group, drive value from our combustibles profile, and better satisfy consumer that is evolving with new and revolutionary possibly paid down risk services and services and products.
The simplification were only available in 2019 aided by the phase that is first of Quantum, a simple re-evaluation of the way we are organised, including:
- Redesigning administration levels and duplication that is eliminating
- Whilst entrenching accountability, and
- Producing capabilities that are new the organization
Venture Quantum may also launch funds that are valuable further reinvestment in future growth. We announced a phase that is further of task at our present Capital Markets Day as well as in total we try to deliver cost cost savings of Ј1bn over 2020- 2022. This further period will add:
- Operational efficiencies
- Route-to-market focus, and
- Supply chain efficiency
We remain focused on continuing the change of our company in 2020.
I will be extremely pleased to welcome Jerry Fowden, whom brings extensive US encounter into the Board. Allow me to thank Kieran Poynter our Senior Independent Director, who appears down through the Board today. Dimitri Panayotopoulos can be Senior Independent Director after today’s conference.
And while you would expect offered my tenure as Chairman, the Board and Nominations Committee will soon be focussed on succession planning for my role, from where we be prepared to retire at or before our 2021 AGM. Personally I think highly that my successor will inherit a company this is certainly in exemplary form, that we am confident will deliver sustainable growth for several years in the future.
Richard Burrows Chairman
2020 Outlook – Confirming High Single Figure EPS Growth and 65% Dividend Pay-out Policy
We now have regularly delivered on our high figure that is single money profits development target and then we continue steadily to keep this guidance for 2020.
We now have produced start that is strong the season driven by:
- Proceeded value and volume share development of 40bps and 20bps correspondingly
- Good amount development (with a few reap the benefits of a rise in trade and consumer shares), and
- Strong cost mix, with prices in accordance with our plan