![]() #### IMPERIAL BRANDS PLCANNUAL REPORT 2024 ## ACCELERATING ## GROWTH ## WITH ## A CHALLENGER ## MINDSET ![]() INTRODUCTION AND CONTENTS SUPPLEMENTARY INFORMATION Alternative Performance Measures 202 Glossary 210 IMPERIAL BRANDS PLC FINANCIALS Imperial Brands PLC Balance Sheet 213 Imperial Brands PLC Statement of Changes in Equity 214 Notes to the Financial Statements of Imperial Brands PLC 215 SHAREHOLDER INFORMATION Shareholder Information 230 Cautionary Statement 231 MEET OUR PEOPLE Agnès, Mathilde and Emilie, Internal Communications Officer, Social Affairs Manager and Trade Marketing Manager, France cover Samanli, End-to-End Planning Team Manager, Poland 1 Khadar, Information Systems Support Specialist, France 1 Adeline, Merchandising Manager, France 17 Amir, Brand Manager, Austria 24 Justin Norman, Packing Operator, USA 29 Dimitra, Brand Executive, UAE 31 Lalanirina, Emmanuel and Julia, Supply Chain Manager, Process & Industrial Projects Manager and Manufacturing Excellence Manager, Madagascar 42 Andre, Lab Assistant, Germany 65 Chia-Wei and Chang-Wei, Technicians, Taiwan 69 GOVERNANCE Governance at a Glance 90 Board Leadership 92 Board and Culture 101 Section 172 102 Board Statements 103 People, Governance & Sustainability Committee 104 Audit Committee 108 Remuneration Report 115 Directors’ Report 130 FINANCIALS Independent Auditor’s Report 135 Consolidated Income Statement 145 Consolidated Statement of Comprehensive Income 145 Consolidated Balance Sheet 146 Consolidated Statement of Changes in Equity 147 Consolidated Cash Flow Statement 148 Notes to the Consolidated Financial Statements 149 Performance measures used throughout the report Reported (GAAP) Complies with UK-adopted International Accounting Standards and the relevant legislation. Adjusted (Non-GAAP) Non-GAAP measures provide a WUGHWNǭEQORCTKUQPQHRGTHQTOCPEG HTQOǭQPGǭRGTKQFVQVJGPGZV 6JGǭDCUKUǭQHQWTCFLWUVGFOGCUWTGU KUǭGZRNCKPGFKPVJGǭCEEQWPVKPI RQNKEKGUǭCEEQORCP[KPIQWTHKPCPEKCN UVCVGOGPVUCPFVJG#2/ǭUGEVKQP YKVJKPǭ5WRRNGOGPVCT[+PHQTOCVKQP Constant currency basis Removes the effect of exchange rate movements on the translation of the results of our overseas operations. 9GǭVTCPUNCVGEWTTGPV[GCTTGUWNVUCV prior year foreign exchange rates. 5GGǭRCIGHQTOQTGFGVCKNU Market share Market share data is presented CUǭCǭOQPVJOQXKPICXGTCIG weighted across the markets in YJKEJǭYGQRGTCVG Stick equivalent Stick equivalent volumes reflect our EQODKPGFEKICTGVVGHKPGǭEWVǭVQDCEEQ EKICTCPFUPWUǭXQNWOGU For more information see www.imperialbrandsplc.com STRATEGIC REPORT At a Glance 2 Our Consumer Focus 4 Our Investment Case 6 Chair’s Statement 8 Chief Executive’s Statement 10 Business Model 14 Our Strategy 16 Strategic Review 18 KPIs 22 Industry Overview 24 Operating Review 26 Group Financial Review 34 Principal Risks and Uncertainties 42 Stakeholder Engagement 54 Non-Financial and Sustainability Information Statement 58 ESG Review 59 ![]() #### By becoming more consumer focused, more agile and more performance driven we are better #### able to deliver enhanced shareholder returns and meet the needs of our wider stakeholders. ### WE ARE A ### CONSUMER-LED ### CHALLENGER ### BUSINESS www.imperialbrandsplc.com 1 ![]() AT A GLANCE ### DELIVERINGON OUR STRATEGY MARKETS WE OPERATE IN c.120 OUR FOCUSED STRATEGY Strategic pillars A N D C A P A B I L I T I E S T H E B U S I N E S S O P E R A T I O N S D R I V I N G V A L U E F O C U S I N G O N B U I L D I N G A M A R K E T S P O R T F O L I O B U S I N E S S C O N S U M E R A T P E R F O R M A N C E S I M P L I F I E D O U R P R I O R I T Y F R O M O U R B R O A D E R T A R G E T E D N G P T H E C E N T R E O F - B A S E D C U L T U R E A N D E F F I C I E N T #### +5bps DRU AGGREGATE MARKET SHARE OF OUR FIVE PRIORITY COMBUSTIBLE MARKETS (BASIS POINTS) Critical enablers 2024 Tobacco & NGP net revenue growth at constant currency +4.6% TOBACCO AND NGP NET REVENUE (£ BILLION) £8.2bn cDP 24 22 21 £7.6bn £7.7bn 23 £8.0bn £8.2bn +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU2 ![]() £1.25bn cDP NGP NET REVENUE GROWTH AT CONSTANT CURRENCY (PER CENT) FY25 SHARE REPURCHASE ANNOUNCED (£ BILLION) +26.4%  DIVIDEND PER SHARE (PENCE) 153.42p R ABSOLUTE CO 2 EQUIVALENT EMISSIONS SCOPE 1 AND SCOPE 2 MARKET-BASED (TONNES) 89,120t V \*\* 2024 Dividend per share growth +4.5% Our target is to be Net Zero in our direct operations by 2030 \* 2017 is the baseline. \*\* Baseline and previous years have been restated due to Scope 2 market-based emissions correction. 24 22 21 139.08p 141.17p 23 146.82p 153.42p 24 22 17\* 20,326 \*\* 81,089 85,829 \*\* 91,007 23 176,176 \*\* 114,270 15,683 73,437 www.imperialbrandsplc.com 3 ![]() OUR CONSUMER FOCUS ### WE START WITHTHE CONSUMER INTERNATIONAL BRANDS LOCAL JEWELS NEXT GENERATION PRODUCTS (NGP) We put the consumer at the centre of our business, with strong insights guiding our CRRTQCEJǭVQDWKNFKPICRQTVHQNKQQHNQECNCPFKPVGTPCVKQPCNEJCNNGPIGTDTCPFUYJKEJ TGUQPCVGǭYKVJOKNNKQPUQHCFWNVEQPUWOGTUGXGT[FC[ +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU4 ![]() “I used to smoke socially, but vaping KUǭCDKVOQTGOGNNQYCPFVJGVCUVG isn’t so strong. A lot of my friends smoke, so vaping means I’m not left out. I can join in, but in my own way. +ǭNKMGVJCVVJGPGYDNWDCTMKVKU rechargeable, and quite compact.” Claudia, UK “Zone is my go-to pouch, it has a UQHVǭOQWVJHGGNCPFLWUVVJGTKIJVNGXGN of intensity. My friends and family have noticed that I no longer smell of cigarettes, and I have more confidence because of it.” Vonte, USA #### “The best moment to smoke iswhen I am alone, with my coffeeand I have zero issues on my mind. #### A smoker always sees tobaccoquality first, and for me, why wouldI pay more when Gauloises gives #### me the quality I need?” Mohamed, Morocco “I wanted to find something that YQWNFǭPQVUOGNNNKMGCV[RKECNEKICTGVVG would be flavourful and enjoyable to use among friends. I like the iSenzia flavours and I like that the device is small and handy. I like to use Pulze when reading – it’s relaxing.” Julia, Poland www.imperialbrandsplc.com 5 ![]() OUR INVESTMENT CASE ### WHY INVESTIN IMPERIAL? BUILDING A SUSTAINABLE NEXT GENERATION PRODUCT BUSINESS Next generation products (NGP) offer adult smokers a route VQǭUOQMKPIEGUUCVKQPCPFTGOCKPTGNCVKXGN[PCUEGPVKPOCP[ markets. As a challenger, our role is to offer consumers a choice where they have already expressed an NGP preference and where we can leverage our existing customer relationships. 1WTǭRCTVPGTUJKRCRRTQCEJVQRTQFWEVKPPQXCVKQPGPCDNGUWUVQ adapt swiftly to changing consumer preferences and with our consumer focus and disciplined execution we have built an NGP business that offers choice. Aggregate priority market share cumulative 2021-2024 (basis points) # +48bps REVITALISED TOBACCO BUSINESS Investment in our brand equity and sales force initiatives JCUǭGPCDNGFWUVQDCNCPEGOCTMGVUJCTGFGNKXGT[YKVJUVTQPI pricing. The tobacco value creation model remains resilient, with affordability enabling sustainable pricing to offset volume declines. In our top five combustible markets that IGPGTCVGEQHQRGTCVKPIRTQHKVYGJCXGITQYPOCTMGV share after years of declines. This, combined with a more disciplined focus on our broader market portfolio, is driving improved combustible returns. We are a consumer-focused business underpinned by a disciplined capital allocation framework. This gives us the ability to invest in our strategy, while maintaining a strong, efficient balance sheet and delivering enhanced shareholder returns. 24 22 21 £188m £208m 23 £265m £329m NGP net revenue (£ million) £329m +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU6 ![]() SELF-HELP INITIATIVES DELIVERING OPERATIONAL IMPROVEMENT We have identified multiple initiatives to deliver operational improvements that will enhance our decision making and drive efficiencies. For example, we are adopting new ways of working with our enabling functions using a global business service model and implementing a new ERP system to replace QWTNGICE[U[UVGOU COMBINED, THESE ARE GENERATING A STRONG FINANCIAL OUTLOOK Improving tobacco and NGP net revenue trajectory, YKVJCEQORQWPFCPPWCNITQYVJTCVGQHVQ Enhancing profitability through operational leverage, DGVVGTǭIGQITCRJKEOKZHTQOEQPVKPWGFUVCDKNKUCVKQPQHRTKQTKV[ market shares, reduced losses from our investment in NGP and restructuring cost savings driving a mid single-digit compound annual growth rate for Group adjusted operating profit. The business is highly cash generative with low capital intensity, a working capital focus and disciplined capital expenditure producing adjusted operating cash conversion QHǭV[RKECNN[VQ Free cash flow generated in FY24 £2.4bn cDP ENHANCING OUR CAPITAL RETURNS We have a clear capital allocation framework alongside QWTǭUVTCVGI[ 1. Invest in strategic delivery Since our strategy is largely organic and we work with innovation partners, our capital expenditure needs are relatively light. Any M&A is likely to be small. 2. Maintain leverage We are committed to an investment grade credit rating CPFǭYKNNOCKPVCKPQWTNGXGTCIGCVVJGNQYGTGPFQHVJG TCPIGǭVKOGUCFLWUVGFPGVFGDV'$+6&# 3. Progressive dividend growth We have committed to grow our dividend every year, VCMKPIǭKPVQCEEQWPVVJGWPFGTN[KPIDWUKPGUURGTHQTOCPEG 4. Return surplus capital to shareholders We have an ongoing share buyback programme, YKVJǭcDKNNKQPEQOOKVVGFKP(; Further information on our strategy can be found QPRCIGUVQ Capital returns to shareholders committed in FY25 £2.8bn cDP www.imperialbrandsplc.com 7 ![]() CHAIR’S STATEMENT #### Dear Shareholders I am pleased to report a further step-up in performance: operationally, financially, and in the delivery of our ambitious People and Planet objectives. Our success in 2024 builds on the consistent track record we have been developing since the launch of our current strategy four years ago. As we enter the final year of the plan, I couldn’t be more proud of the progress the company has made leaning into our challenger status and embedding the consumer at the heart of everything we do. Against an unpredictable environment, the team has been innovative, resourceful and resilient, and has demonstrated CǭNCUGTHQEWUQPFGNKXGT[QHVJGKTEQOOKVOGPVU While Imperial Brands’ transformation journey continues, CPFǭVJGTGCTGCNYC[UǭTKUMUCUUQEKCVGFYKVJCEJCPIG RTQITCOOGQHVJKUǭCODKVKQPǭCPFǭUECNGKVKUWPFQWDVGFN[ CǭOWEJUVTQPIGTDWUKPGUUVJCPKVǭYCUYJGPYGDGICPVJKU journey in 2021. We are now better able to create predictable and sustainable value for shareholders and meet the needs QHǭQWTYKFGTUVCMGJQNFGTU STARTING WITH THE CONSUMER The scale of our transformation, particularly within our growing consumer capabilities, was brought home to me D[ǭVYQ$QCTFXKUKVUQXGTVJGRCUV[GCT In March, we visited the Czech Republic, a highly competitive market for next generation products (NGP). I was pleased to see our team using a challenger mindset to compete successfully against our larger competitors. Fresh consumer insights were being used to build targeted, differentiated brands. Our agile sales teams were getting new products to market at pace and identifying new channels and promotional opportunities. This activity was underpinned by CǭFGGRUGPUGQHTGURQPUKDKNKV[CPFENGCTN[HQEWUGFQPCFWNV smokers and existing nicotine consumers. Our second visit in July was to our fast-developing innovation centre – or “Sense Hub” – in Liverpool. It is a great case study for Imperial’s challenger way of developing new products. 9GǭUCYJQYQWTVGCOYCUDTKPIKPIVQIGVJGTEQPUWOGTUCPF third-party partners in the same space to drive new insights and accelerate development cycles. This distinctive way of working has taken us from a position four years ago where QWTǭRTQFWEVUYGTGWPEQORGVKVKXGVQCRQKPVPQYYJGTG YGǭJCXGCVVTCEVKXGQHHGTKPIUKPOWNVKRNGECVGIQTKGU ### DEVELOPING ### OUR TRACK RECORD +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU8 ![]() ACCELERATING CAPITAL RETURNS FOR SHAREHOLDERS Our consumer-focused transformation has supported a further improvement in financial performance. This year we met QWTǭUVTCVGIKEQDLGEVKXGUQHNQYUKPINGFKIKVITQYVJKPVQDCEEQ and mid-single-digit adjusted operating profit growth. In NGP, we achieved double-digit net revenue growth while also reducing our losses. We have clearly defined our capital allocation priorities, YJKEJǭUVCTVYKVJKPXGUVOGPVVQUWRRQTVQWTUVTCVGIKEFGNKXGT[ Our objective is to support the long-term sustainable cash flows of the business to enable us to maintain our progressive dividend policy and ongoing share buyback. The Board is recommending a total annual dividend of 153.42 pence per share, which represents an increase of 4.5% on the prior financial year in line with the Group’s progressive policy. 9GǭCNUQCPPQWPEGFCEJCPIGVQVJGHWVWTGFKXKFGPFRC[OGPV profile to four equal dividend payments for FY25 onwards. Smoothing of the dividend payment profile will result in more consistent cash returns to shareholders throughout the year, compared to the current 30:70 split. This is enabled by the strong visibility of cash flows from our portfolio following VJGǭUWEEGUUHWNGZGEWVKQPQHQWTUVTCVGI[ During the five-year period of our current strategy we expect to make total capital returns including dividends and share buybacks of £10 billion – equivalent to 67% of our market value in January 2021 when we launched our strategy. DELIVERING ON PEOPLE AND PLANET OBJECTIVES Our challenger mindset has been important in the way we are now consistently delivering on our People and Planet priorities, which focus on building a healthier future for our consumers, colleagues and wider environment. Our recent progress is a result of the resourcefulness, deep accountability and purposeful collaboration of a great many people in our business. +P5GRVGODGT+MKEMGFQHHCP'5)YGDKPCTHQTKPXGUVQTU9GǭJCXG EQOGCNQPIYC[KPVJGVYQ[GCTUUKPEGQWTRTGXKQWUǭGXGPV EQXGTKPIVJKUVQRKE9GJCXGFTKXGPUKIPKHKECPVǭTGFWEVKQPUKP carbon emissions, waste and workplace accidents. Our broad plan to improve diversity, equity and inclusion is starting to yield results. In particular, we have seen improvements in female representation in senior management. The Board plays a highly engaged role providing support CPFǭEJCNNGPIGVQOCPCIGOGPVCUVJG[FGXGNQRCPFFGNKXGT their ESG plans. Over the past year, we have made further improvements to the way we provide oversight, including CPǭGZRCPUKQPQHVJGTGOKVHQTVJG2GQRNG)QXGTPCPEG Committee, now known as the People, Governance ǭ5WUVCKPCDKNKV[%QOOKVVGGYJKEJKUEJCKTGFD[OG (QTOQTGQP2GQRNGCPF2NCPGV see pages 59-77 (QTVJG2GQRNG)QXGTPCPEG5WUVCKPCDKNKV[ %QOOKVVGGTGRQTVUGGRCIG ENGAGING FOR CONSUMER HEALTH A key ESG priority is to play a growing role in tobacco harm reduction by developing our NGP business and engaging for balanced, strongly enforced regulatory environments. We are building on our long-term commitment to science which analyses the harm reduction potential of our NGP CPFǭVJGKTTGCNYQTNFWUGCUUOQMKPIEGUUCVKQPVQQNU In our major markets, we seek regulation that balances VJGǭPGGFVQOCMGCPCVVTCEVKXGTCPIGQHUOQMGHTGGRTQFWEVU available to adult smokers, while driving out irresponsible products and preventing youth access. We continue to be concerned with policy in some markets which leans towards prohibition. In August, I visited our employees, consumers and customers in Australia, one of the most challenging markets in our portfolio, where around 30% of tobacco products are illicit. The Australian market is a sobering example of the unintended consequences of over-restrictive regulation. Onerous limits on the availability of NGP and extremely high taxation on tobacco products have led to a spiralling trade in illegal products. These prohibitive policies have been damaging both for consumers seeking trusted reduced harm products and for the government, YJKEJǭTGEGKXGUFGETGCUKPIGZEKUGTGXGPWGU BOARD CHANGES Our Board has a strong and diverse mix of skills and experiences, and we continue to develop our capabilities through education sessions and new appointments. In January, we welcomed Julie Hamilton to the Board and to our People, Governance ǭ5WUVCKPCDKNKV[%QOOKVVGG+P1EVQDGTUJGCNUQLQKPGFVJG Remuneration Committee. Julie, who was Chief Commercial and Global Sales Officer at Diageo, has over 30 years’ experience in marketing, strategy and digital transformation. Prior to Diageo, Julie spent 25 years at the Coca-Cola Company where she held a range of leadership positions, including Chief Customer and Commercial Leadership Officer. Diane de Saint Victor has decided to retire from the Board at VJGǭEQPENWUKQPQHVJG#)/&KCPGJCUDGGPCXCNWGF member of the Board, with roles on the Remuneration and 2GQRNG)QXGTPCPEG5WUVCKPCDKNKV[%QOOKVVGGU+YQWNFNKMG VQVJCPMǭ&KCPGHQTJGTKPUKIJVUCPFEQPVTKDWVKQPQXGTVJG RCUVǭVJTGG[GCTUCPFQPDGJCNHQHVJG$QCTFYKUJJGTVJG DGUVǭHQTVJGHWVWTG BECOMING AN EVEN STRONGER CHALLENGER As we enter the final year of our current strategy, QWTǭVTCPUHQTOCVKQPYKNNECTT[QPCVRCEGCUYGEQPVKPWGVQ develop consumer capabilities, agile ways of working and our performance culture. In March 2025, I look forward to joining Stefan and our management team, when we provide detail of our next five-year strategy, which will build on our recent success and evolve Imperial Brands into an even stronger challenger business. Thérèse Esperdy Chair “We are better able to createpredictable and sustainable valuefor shareholders and meet the #### needs of our wider stakeholders.” YYYKORGTKCNDTCPFURNEEQO 9 ![]() CHIEF EXECUTIVE’S STATEMENT As we enter the final year of our current strategy, I am pleased with how we have strengthened the Company and delivered amore consistent performance. Imperial Brands has become a more effective challenger business through new consumer capabilities, agile ways of working, and a high-performance culture. This ongoing transformation is driving improving operational and financial outcomes, and growing capital returns. STRONG PERFORMANCE In combustible tobacco, our focus on operational excellence has enabled us to grow aggregate market share in our five priority markets with a five basis point improvement, while driving further strong pricing. Since the launch of our strategy in 2021, these five largest markets, which account for c.70% of operating profit, have recorded a cumulative aggregate share increase of 48 basis points. This performance is consistent with our strategic objective to hold or grow aggregate share across these markets, balancing market share delivery with value creation. Over the past year, tobacco pricing increased 7.8%, more than offsetting declining volumes, to deliver tobacco net revenue growth of 3.8% at constant currency. In next generation products (NGP), we continue to grow through product innovation and scaling up within our existing market footprint. NGP net revenue grew by 26% on a constant currency basis. At actual exchange rates, this takes our cumulative growth over the four years since 2020 to 64%. The Company’s strong performance has driven constant currency net revenue growth in tobacco and NGP revenue of 4.6% – the strongest like-for-like top-line growth in more than 10 years. Logista in our Distribution segment also contributed positively to our financial results with gross profit up 4.4%. This was driven by strong performance in the underlying business particularly in Spain and Italy as well as the benefit of prior year acquisitions. ### DELIVERING ### ON OUR STRATEGY Imperial Brands PLC | Annual Report and Accounts 202410 ![]() All of this helped to drive Group adjusted operating profit growth of 4.6% at constant currency and reported operating profit growth of 4.5%. A STRONGER CHALLENGER BUSINESS This strong financial performance is underpinned by our transformation into a strong challenger business better CDNGǭVQǭFGNKXGTEQPUKUVGPVITQYVJ Being a successful challenger is about getting closer to consumers, making targeted technology investments to improve agility, and building a culture of high performance. Our Global Consumer Office, set up in 2021, is now well established, with a team of 1,000 experts in insights, innovation, marketing and revenue growth management, working seamlessly with our markets. A highlight of my year was visiting our new sensory laboratory in Shenzhen, which further strengthens our innovation capabilities, helping us link our consumers VQǭQWTǭXCNWGFRCTVPGTU Over the past 12 months, we passed important milestones KPǭQWTNQPIVGTOFKIKVCNKPXGUVOGPVRTQITCOOG+PRCTVKEWNCT KPǭ1EVQDGTVJGHKTUVOCTMGVENWUVGTYGPVNKXGKPQWT project to create a unified enterprise resource planning system replacing 60 legacy systems. We continue to add to our capabilities through senior appointments. During the year we welcomed three new members of the Executive Leadership Team. Priyali Kamath LQKPGFWUHTQO2)CU2TGUKFGPVQH#HTKEC#UKC#WUVTCNCUKC CPF%GPVTCN'CUVGTP'WTQRG&GDQTCJ$KPMU/QQTGDTKPIU deep experience of regulated businesses to the new role of Chief Corporate Affairs Officer. Kevin Massie has been appointed General Counsel, having held a range of senior roles, most recently at the international consumer business 2<ǭ%WUUQPU Across the organisation, we continue to invest in developing our culture. 850 colleagues have now completed Connected Leadership, our intensive seven-day programme which enables our senior people to become better coaches to their teams. This year in our Employee Experience survey we maintained our 74% engagement score, which is one percentage point above the global benchmark. CONSISTENT COMBUSTIBLE PERFORMANCE Our transformation is leading to further success at a market level, where in combustibles we focus on the performance QHǭQWTHKXGRTKQTKV[OCTMGVU Share gains in the US, Germany, Spain and Australia have been offset by a decline in the UK. In the US, our portfolio, which offers adult smokers a brand offering at each key price point, enabled us to continue to gain share. This structured approach, combined with our continued investment in improving our sales and marketing capabilities, has supported more than four years of stable or growing share and an improved financial performance. In Germany, our initiatives have stabilised our market share after more than a decade of steep losses. In Spain, we delivered another year of share gains coupled with improved pricing. The UK and Australia are challenging markets with elevated market size declines caused by high excise and growth in illicit trade. Here, we have continued to balance value ETGCVKQPǭVJTQWIJKPETGCUGFRTKEKPIYJKNGOCPCIKPIQWT market share performance. We are also delivering strong performances in our medium- sized and smaller markets. For example, in our Africa, Asia, #WUVTCNCUKCCPF%GPVTCN'CUVGTP'WTQRGCP###%'TGIKQP we delivered an improved financial performance after a difficult first half which was affected by disruption to shipment timings in the Middle East. SUSTAINABLE GROWTH IN NEXT GENERATION PRODUCTS In NGP, we made significant progress towards our goal of a sustainable business which makes a strong contribution to both Group performance and reducing harm for consumers. For the first time, we reported increased revenue in all three regions. We are also growing revenue and market share across all three categories. In the US, our return to growth was spearheaded by the launch in February of Zone, our modern oral nicotine proposition. Early feedback from both consumers and the retail trade has been extremely positive. In the Europe region, we saw strong growth in vape, led by the UK and supported by new products including the 1,000-puff blu bar disposable and the rechargeable blu bar kit. In this category, we now have a highly competitive product portfolio focused on responsibly meeting the needs of adult smokers and existing nicotine consumers. In AAACE, improving revenues were supported by progress in VJGJGCVGFECVGIQT[+PQWTHQEWUOCTMGVUKP%GPVTCN'CUVGTP Europe, we are building consumer loyalty and securing our fair share against strong competition. Our iSenzia tea-based heat sticks are emerging as an important addition to our offering. Following the launch of our strategy in 2021, we needed to reset our NGP operations while we gathered consumer insights and modernised our product portfolio. Now, following a period of test-and-learn launches, we are operating at scale with NGP available in over 20 markets. In eight markets, NGP account for 20% or more of total tobacco and NGP net revenue and in 11 markets, we have brands which occupy top three positions in their categories. Our growing success has meant that we have been able to continue to reduce losses while continuing to invest in future growth. We still have a long way to go on this journey, but we have built the foundations for a sustainable business, underpinned by disciplined investment and increased agility to meet changing consumer needs. “Being a successful challengeris about getting closer toconsumers, making targetedtechnology investments to #### improve agility, and buildingCǭEWNVWTGQHJKIJRGTHQTOCPEGŭ YYYKORGTKCNDTCPFURNEEQO 11 ![]() CHIEF EXECUTIVE’S STATEMENT continued TOWARDS A HEALTHIER FUTURE Our NGP business is not just growing consistently – it is also growing responsibly. During the year we completed several scientific studies YJKEJǭXCNKFCVGFVJGRQVGPVKCNQHQWTPGYRTQFWEVUVQUWRRQTV smokers seeking to quit cigarettes. We maintain rigorous marketing standards to ensure YGǭQPN[ǭVCTIGVCFWNVUYJQCNTGCF[UOQMGQTEQPUWOG PKEQVKPGǭRTQFWEVU#FFKVKQPCNN[YGEQPVKPWGVQGPICIG YKVJǭRQNKE[OCMGTUVQFGXGNQRUVTQPITGIWNCVQT[TGIKOGU which build trust in NGP by minimising youth access and eliminating illegal products. Strong progress continues to be made on our other People ǭ2NCPGVRTKQTKVKGUKPENWFKPIQWTŬ6TKRNG320 Productivity gains 10% Employee engagement 24 22 21 66% 74% 74% 74% 73% Global benchmark 23 YYYKORGTKCNDTCPFURNEEQO 21 ![]() KPIs #### We use key performance indicators to assess the progressYGCTGOCMKPIKPǭFGNKXGTKPIQWTRWTRQUGXKUKQPCPFUVTCVGI[  &GHKPKVKQPUHQTHKPCPEKCN-2+UECPDGHQWPFKP5WRRNGOGPVCT[+PHQTOCVKQP #### FINANCIAL KPIs 1 Tobacco & NGP net revenue (£bn) Performance 6QDCEEQ0)2PGVTGXGPWGITGYD[ǭCV CEVWCNGZEJCPIGTCVGUCPFKPETGCUGFD[ǭ QPCEQPUVCPVEWTTGPE[DCUKU6QDCEEQǭPGV TGXGPWGYCUWRCVEQPUVCPVEWTTGPE[ TGHNGEVKPIRTQITGUUOCFGKPVJGVYQ EQODWUVKDNGUVTCVGIKERTKQTKVKGUQHŬHQEWUQP QWTRTKQTKV[OCTMGVUŭCPFŬFTKXKPIXCNWGHTQO QWTDTQCFGTRQTVHQNKQŭ \* 'ZENWFKPI4WUUKC Tobacco & NGP adjusted operating margin (%) Performance /CTIKPUFGENKPGFDCUKURQKPVUCVCEVWCN TCVGUCPFDCUKURQKPVUCVEQPUVCPVEWTTGPE[ 9JKNGITQUUOCTIKPUKPETGCUGFVJGFGENKPGKP CFLWUVGFQRGTCVKPIOCTIKPKUCTGUWNVQH KPHNCVKQPCPFKPETGCUGFFGRTGEKCVKQP \* 'ZENWFKPI4WUUKC Performance 0)2TGXGPWGITGYD[QPCEQPUVCPV EWTTGPE[DCUKUKPVJG[GCT6JKUITQYVJKP QWTǭ0)2TGXGPWGTGHNGEVUQWTUVTCVGIKERTKQTKV[ VQŬDWKNFCVCTIGVGF0)2DWUKPGUUŭCPFVJG UVGRWRKPKPXGUVOGPVFWTKPIVJGRGTKQF Performance 1WTŬHQEWUQPQWTRTKQTKV[OCTMGVUŭJCUGPCDNGF WUVQUVCDKNKUGVJGOCTMGVUJCTGNQUUYG GZRGTKGPEGFHQTCPWODGTQH[GCTU9GDCNCPEG OCTMGVUJCTGYKVJXCNWGETGCVKQPUQYGCTG PQNQPIGTVJGOCLQTOCTMGVUJCTGFQPQTVQ QWTǭEQORGVKVQTUKPQWTJKIJGTXCNWGOCTMGVU )CKPUKPVJG75)GTOCP[5RCKPCPF #WUVTCNKCQHHUGVFGENKPGUKPVJG7- Performance Adjusted earnings per share increased ǭCVǭCEVWCNGZEJCPIGTCVGUCPFKPETGCUGF QPCEQPUVCPVEWTTGPE[DCUKU4GRQTVGF GCTPKPIURGTUJCTGITGY6JKUOQXGOGPV KUGZRNCKPGFKPVJG)TQWR(KPCPEKCN4GXKGY \* 'ZENWFKPI4WUUKC Adjusted earnings per share (pence) R #### HOW WE ARE #### PERFORMING NGP net revenue (£m) R Aggregate priority market share vs prior year (basis points) R R KPIs used as bonus and LTIP performance criteria for Executive Directors. See Remuneration Report QPǭRCIGUHQTOQTGKPHQTOCVKQP 24 23 21 £7.6bn 22 £7.7bn\* £8.0bn £8.2bn 24 23 21 246.5p 22 264.8p\* 278.8p 297.0p Performance #FLWUVGFPGVFGDVVQ'$+6&#TGFWEGFVQZ KP(;ENQUGVQQWTECRKVCNCNNQECVKQPVCTIGV QHZVQZ#FLWUVGFPGVFGDVTGFWEGFVQ cDKNNKQPCHVGTcDKNNKQPQHTGVWTPUVQ UJCTGJQNFGTUXKCFKXKFGPFCPFUJCTGDW[DCEM '$+6&#KPETGCUGF[GCTQP[GCTTGHNGEVKPI the growth in adjusted operating profit FWTKPIVJGHKPCPEKCN[GCT Adjusted net debt to EBITDA (multiple) R 24 23 21 2.2x 22 2.0x 1.9x 1.8x Performance CFLWUVKPIECUJEQPXGTUKQPQH YCUǭJKIJGTVJCPVJGRTKQT[GCTFWGVQ CPǭKORTQXGOGPVKPYQTMKPIECRKVCN Adjusted operating cash conversion rate (%) R 24 23 21 83% 22 102% 92% 100% 24 23 2221 -2bps +10bps +35bps +5bps Dividend per share (pence) Performance 6JGFKXKFGPFITGYTGHNGEVKPIQWT RTQITGUUKXGFKXKFGPFRQNKE[CPFKPNKPG YKVJǭQWTECRKVCNCNNQECVKQPRQNKE[ 24 23 21 139.08p 22 141.17p 146.82p 153.42p 24 23 21 £188m 22 £208m £265m £329m 24 23 21 43.5% 22 44.4%\* 44.7% 44.0% A N D C A P A B I L I T I E S T H E B U S I N E S S O P E R A T I O N S D R I V I N G V A L U E F O C U S I N G O N B U I L D I N G A M A R K E T S P O R T F O L I O B U S I N E S S C O N S U M E R A T P E R F O R M A N C E S I M P L I F I E D O U R P R I O R I T Y F R O M O U R B R O A D E R T A R G E T E D N G P T H E C E N T R E O F B A S E D C U L T U R E A N D E F F I C I E N T +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU22 ![]() #### NON-FINANCIAL KPIs 1,2 Absolute Scope 1 and 2 market-based C0 2 equivalent emissions (tonnes) 3 R Performance 9GJCXGUGGPCFGETGCUGKPQWTVQVCN 5EQRGCPF5EQRGOCTMGVDCUGFGOKUUKQPU HTQOQWTDCUGNKPG[GCT6JGDCUGNKPG CPFRTGXKQWU[GCTUũFCVCJCUDGGPTGUVCVGF FWGVQVJGEQTTGEVKQPKP5EQRGOCTMGV DCUGFGOKUUKQPUTGNCVKPIVQVJGUQWTEGQH JGCVCPFUVGCOKPQWTHCEVQT[KP6ȨTMK[G  &GHKPKVKQPUHQTPQPHKPCPEKCN-2+UECPDGHQWPF KPǭVJG'5)4GXKGYQPRCIGUCPFKPVJG 4GRQTVKPI%TKVGTKCFQEWOGPVCXCKNCDNGCV YYYKORGTKCNDTCPFURNEEQO  %GTVCKPPQPHKPCPEKCNFCVCJCUDGGP KPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2'; WPFGTVJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG +5#'UVCPFCTF';ũU#UUWTCPEG1RKPKQPKU CXCKNCDNGQPQWTYGDUKVG1WTTGRQTVKPIUEQRGCPF FGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKC documentRWDNKUJGFQPQWTYGDUKVG 5GGYYYKORGTKCNDTCPFURNEEQOUWUVCKPCDKNKV[ HQTOQTGKPHQTOCVKQP  1WTGPXKTQPOGPVCNFCVCHQNNQYUVJGTGRQTVKPI RGTKQF3HKPCPEKCN[GCTVQ3HKPCPEKCN[GCT 6JKUKUVQCNNQYHQTFCVCEQNNGEVKQP XCNKFCVKQPCPFGZVGTPCNCUUWTCPEG1WTTGRQTVKPI UEQRGCPFFGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI %TKVGTKCFQEWOGPVRWDNKUJGFQPQWTYGDUKVG  1WTJGCNVJCPFUCHGV[FCVCKUHQTVJGHWNN HKPCPEKCN[GCT1WTTGRQTVKPIUEQRGCPFFGHKPKVKQPU CTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKCFQEWOGPV RWDNKUJGFQPQWTYGDUKVG Performance 4GVWTPQPKPXGUVGFECRKVCNKORTQXGFKPVJG [GCTD[DRUVQDGPGHKVKPIHTQOC TGFWEVKQPKP(;KPXGUVGFECRKVCNEQORCTGF VQVJGRTKQT[GCTOCKPN[FWGVQVJGHQTGKIP GZEJCPIGKORCEVQPKPVCPIKDNGCUUGVU Return on invested capital (%) R Lost time accident frequency rate (per 200,000 hours) 4 Performance #NVJQWIJYGJCXGTGFWEGFVJGPWODGTQH NQUVǭVKOGCEEKFGPVUKP(;VJGNQUVVKOG accident rate has remained unchanged from NCUV[GCTFWGVQCEQTTGURQPFKPITGFWEVKQP KPǭJQWTUYQTMGF 9GJCXGUGGPCFGETGCUGKPVJG.6#TCVG EQORCTGFVQVJGDCUGNKPG[GCT 24 23 19 0.40 0.30 22 0.24 0.30 24 23 21 16.5% 22 17.7% 18.5% 19.7% Scope 1 Total value is total Scope 1 and Scope 2 market-based absolute CO 2 e emissions Scope 2 market-based 2024202320222017 114,270 91,007 81,089 73,437 15,683 176,176 \* 85,829 \* 20,326 \* Waste (tonnes) 3 Performance 1WTVCTIGVKUVQTGFWEGYCUVGD[ D[ǭǭ9GJCXGGZEGGFGFVJKUVCTIGV YKVJǭCǭTGFWEVKQPKPYCUVGEQORCTGF VQǭVJGǭDCUGNKPG[GCT9GYKNNUGVC PGYǭYCUVGTGFWEVKQPVCTIGVUWDLGEVVQ '5)ǭ%QOOKVVGGCRRTQXCN 24 23 17 49,141 35,744 22 41,969 33,211 Total shareholder return R Performance 9GJCXGFGNKXGTGFVQVCNUJCTGJQNFGT TGVWTPUǭQHǭQXGTVJGRTKQTVJTGG[GCT RGTKQF&GNKXGT[KPNKPGYKVJQWTIWKFCPEG UWRRQTVUITQYKPIKPXGUVQTEQPHKFGPEG KPǭQWTǭOCPCIGOGPVVGCOũUCDKNKV[VQ KORNGOGPVǭQWTUVTCVGI[ 0 40 80 120 160 200 2024202320222021 Imperial Brands total return Energy consumption (GWh) 3 R Performance 9GUGVCVCTIGVVQTGFWEGCDUQNWVGGPGTI[ EQPUWORVKQPD[D[XGTUWUVJG ǭDCUGNKPG[GCT+P(;YGGZEGGFGF VJKUǭVCTIGVYKVJCTGFWEVKQPEQORCTGF VQǭVJGDCUGNKPG[GCT9GYKNNUGVCPGY GPGTI[ǭTGFWEVKQPVCTIGVUWDLGEVVQ '5)ǭ%QOOKVVGGCRRTQXCN 1WTTGNCVKXGGPGTI[EQPUWORVKQP KUǭǭM9JcOPGVTGXGPWG 24 23 17 875 650 22 712 595 Employee experience 6QOQPKVQTVJGRTQITGUUQHQWTEWNVWTCN EJCPIGRTQITCOOGYGEQPFWEVCP CPPWCN'ORNQ[GG'ZRGTKGPEGUWTXG[ +Pǭ(;QWTGORNQ[GGGPICIGOGPVUEQTG YCUVJGUCOGNGXGNCUVJGRTKQT [GCTCPFCDQXGVJGINQDCNDGPEJOCTM 2CTVKEKRCVKQPKPVJGUWTXG[YCU #FFKVKQPCNN[YGJCXGFGXGNQRGFCP KPVGTPCNDGURQMGKPFGZYKVJYJKEJVQ OQPKVQTVJGQWVEQOGQHQWTNGCFGTUJKR VCNGPVFGXGNQROGPVRTQITCOOGU /QTGPQPHKPCPEKCNRGTHQTOCPEG indicators can be found in the '5)ǭ4GXKGYQPRCIGUCPF in our 4GRQTVKPI%TKVGTKCFQEWOGPV CXCKNCDNGQPQWTYGDUKVG YYYKORGTKCNDTCPFURNEEQO 23 ![]() INDUSTRY OVERVIEW ### GLOBAL MARKET ### CONTEXT As the highly regulated global market for tobacco transforms into a more diverse market for nicotine across multiple categories, Imperial is leveraging its challenger mindset to deliver for consumer needs and EQPUWOGTǭJGCNVJ EVOLVING CONSUMER DEMAND The global nicotine market represents US$ 957 billion of retail UCNGUYKVJQHVJKUCEEQWPVGFHQTD[EQODWUVKDNGVQDCEEQ Within combustible tobacco, cigarettes remain the largest ECVGIQT[YKVJOQTGVJCPVTKNNKQPEQPUWOGFGCEJ[GCT However, the development and consumer adoption of next generation products (NGP) and smokeless tobacco over the past decade has led to retail sales of US$ 77 billion, accounting HQTVJGTGOCKPKPI0)2GPEQORCUUGUXCRKPIRTQFWEVU JGCVGFVQDCEEQFGXKEGUCPFUVKEMUCPFQTCNPKEQVKPGRQWEJGU Despite the well-known health risks of smoking, more than QHVJGYQTNFũUCFWNVRQRWNCVKQPUVKNNEJQQUGVQUOQMG 1WTǭEQPUWOGTUVGNNWUVJG[XCNWGQWTRTQFWEVUHQTVJGOQOGPVU QHTGNCZCVKQPCPFRNGCUWTGVJG[RTQXKFG/CP[QHVJGUG consumers also tell us that they are looking for potentially NGUUǭJCTOHWNCNVGTPCVKXGUVQVTCFKVKQPCNEQODWUVKDNGRTQFWEVU but that they have yet to find a perfect replacement for EKICTGVVGU(QTOQTGKPHQTOCVKQPUGGRCIGU This means we are seeing a growing diversity of behaviour, with consumers using different products for different OQOGPVUKPVJGKTFC[ Our strategy prepares us for a market where multiple nicotine categories coexist, but these market developments are not YKVJQWVVJGKTEJCNNGPIGU#ITGCVGTPWODGTQHPKEQVKPGRTQFWEV categories introduces supply chain complexity – which Imperial OKVKICVGUWUKPICUVTQPIUWRRNKGTRCTVPGTUJKROQFGN+VCNUQ introduces regulatory complexity, which can be harder to OKVKICVG(QTOQTGKPHQTOCVKQPUGGRCIGU Thanks to our focused investments in transformation, we are now well placed to provide much greater consumer choice and VQOCMGCRQUKVKXGEQPVTKDWVKQPVQVJKUYKFGTOCTMGVVTCPUKVKQP PROMOTING HARM REDUCTION Regional and market regulators have diverse policies VQYCTFUǭVQDCEEQJCTOTGFWEVKQP2WDNKEJGCNVJDQFKGUCITGG KVǭKUVJGUOQMGETGCVGFD[VJGDWTPKPIQHVQDCEEQNGCHVJCV contains most of the harmful chemicals responsible for UOQMKPITGNCVGFFKUGCUG6JKUKUPQVCNYC[UTGHNGEVGFKPRQNKE[ Some governments, such as the UK and New Zealand, JCXGǭRQNKEKGUVJCVUWRRQTVGZKUVKPIUOQMGTUũVTCPUKVKQP VQǭRQVGPVKCNN[NGUUJCTOHWNRTQFWEVUCPFVJGUGOCTMGVU JCXGǭUGGPRQUKVKXGRWDNKEJGCNVJDGPGHKVU Other governments and the World Health Organization (WHO) FQPQVTGEQIPKUGVJGRWDNKEJGCNVJDGPGHKVUQH0)26JKUKUQHVGP FWGVQCUQNGHQEWUQPEQPEGTPUCDQWVC[QWVJCEEGUUŬQPTCORŭ This is an important consideration, although it should not detract from the much larger – and scientifically substantiated – value of the “off-ramp” that NGP can provide to many OKNNKQPUQHGZKUVKPIUOQMGTU We will continue to advocate for policies that embrace the EQPEGRVQHVQDCEEQJCTOTGFWEVKQP +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU24 ![]() NAVIGATING REGULATION AND EXCISE 6JGVTCFKVKQPCNVQDCEEQOCTMGVTGOCKPUJGCXKN[TGIWNCVGF Such regulation continues to evolve and remains a significant influence on how we manufacture, advertise and sell our RTQFWEVUCPFJQYQWTEQPUWOGTUDW[CPFGPLQ[VJGO 4GIWNCVKQPXCTKGUYKFGN[CETQUUTGIKQPUCPFOCTMGVU Nationally, countries such as New Zealand and Australia JCXGǭWPXGKNGFEQORTGJGPUKXGRTQITCOOGUQHPGYTGIWNCVKQP while other countries such as the US and Greece have further developed product-by-product approval pathways for the OCTMGVKPIQHVQDCEEQCPFPKEQVKPGRTQFWEVU At a regional level, the EU is re-examining its Tobacco Products Directive, Tobacco Advertising Directive and 6QDCEEQ'ZEKUG&KTGEVKXG Combustible tobacco is heavily taxed, contributing more than €80 billion to European governments alone each year, and is often seen as a non-controversial source of urgent additional IQXGTPOGPVHWPFKPI High excise taxes are also a tool governments use to curb EQODWUVKDNGFGOCPF'ZEKUGVCZGUXCT[UQOGCTGDCUGFQPC percentage share of the retail price while others are linked to inflation, such as in the UK, where we have seen drastic excise TKUGUQXGTVJGNCUV[GCT Imperial Brands supports reasonable and rational regulation QHǭVQDCEEQCPFPKEQVKPGRTQFWEVU9GDGNKGXG0)2QHHGTRQVGPVKCN harm reduction and should be subject to excise rates at significantly lower levels than combustible products to help GPEQWTCIGUOQMGTVTCPUKVKQP We are also clear that all our products are for adult nicotine EQPUWOGTUQPN[(QTOQTGKPHQTOCVKQPUGGRCIGU Global nicotine market retail sales: #### US$ 957 billion of which NGP and smokeless tobacco accounts for: US$ 77 billion 5QWTEG'WTQOQPKVQT Cigarettes consumed globally each year: #### 5.3 trillion 5QWTEG'WTQOQPKVQT Percentage of world’s adult population who smoke: >20% 5QWTEG1WT9QTNFKP&CVCQTI Combustible tobacco tax contribution to European governments: #### €80 billion Source: EU Commission (2022, last full year available) COMBATTING ILLICIT TRADE The prevalence of the illicit trade in tobacco and nicotine products means that we face competition from a criminal UWRRN[EJCKP Illicit tobacco deprives the responsible industry of revenue, deprives governments of vital excise and deprives consumers of VJGUGEWTKV[QHGPLQ[KPITKIQTQWUN[VGUVGFJKIJSWCNKV[RTQFWEVU The illicit trade is a complex phenomenon, driven by economic, RTCEVKECNCPFRQNKVKECNHCEVQTU Where governments have adopted aggressive policies against NGP to limit the development of the nicotine market, we have seen negative consequences for population-level public health CPFVJGITQYVJQHCPKNNKEKVVTCFGKP0)2 At the extreme end is the difference between New Zealand, where the legalisation of vape coincided with a steep fall in youth smoking rates, and Australia, where there has never been CUKIPKHKECPVNGICNOCTMGVHQT0)2CPF[GVCDNCEMOCTMGVVJTKXGU (KIJVKPIKNNKEKVVTCFGTGSWKTGUCEQQTFKPCVGFCRRTQCEJHTQO IQXGTPOGPVCPFKPFWUVT[+ORGTKCNEQPVKPWGUVQYQTMYKVJ enforcement agencies and to encourage proportionate regulation that will minimise the likelihood of nicotine RTQFWEVUDGKPIVCTIGVGFD[ETKOKPCNQTICPKUCVKQPU YYYKORGTKCNDTCPFURNEEQO 25 ![]() OPERATING REVIEW HEADLINES • (KPCPEKCNRGTHQTOCPEGFTKXGPD[UVTQPIRTKEKPI CETQUUǭOWNVKRNGOCTMGVUCUXQNWOGFGENKPGTCVGU continue to improve • Encouraging stabilisation in German market share, with market share growth in Spain and decline in VJGǭ7- • Leveraging our local jewel brand strategy to drive operational and financial performance • NGP net revenue performance reflects scale building KPǭGZKUVKPIOCTMGVUCPFPGYRTQFWEVKPPQXCVKQPU • Successful roll-out of new vapour products including the 1,000-puff blu bar disposable and the rechargeable blu bar kit during the year • Adjusted operating profit growth reflects strong combustible performance and improving NGP ITQUUǭOCTIKPU Tobacco volume -3.7% Tobacco & NGP net revenue\* +5.6% Tobacco net revenue\* +4.5% NGP net revenue\* +20.5% Adjusted operating profit\* +7.5% \* %JCPIGCVEQPUVCPVEWTTGPE[ #### EUROPEREGION AT A GLANCE Our results in Europe are driven by strong combustible pricing, an improvement in volume decline rates and growth in NGP PGVǭTGXGPWG Strategic initiatives in our priority markets supported our EQODWUVKDNGVQDCEEQRGTHQTOCPEG+P)GTOCP[YGFGNKXGTGF an encouraging stabilisation in market share after more than CFGECFGQHOCTMGVUJCTGFGENKPGU+PXGUVOGPVUKPQWTUCNGU force size and capabilities have led to an improvement of our retailer coverage and mean we are better able to take advantage QHOCTMGVQRRQTVWPKVKGU9GNGXGTCIGFQWTRQTVHQNKQCPFTGXGPWG management capabilities to support the roll-out of new formats KPDQVJVJGRTGOKWOCPFVJGXCNWGRTKEKPIRQKPVU+P5RCKP QWTǭDTCPFGSWKV[KPXGUVOGPVUUWRRQTVGFRTKEGǭKPETGCUGUYJKNG UVKNNFGNKXGTKPIOCTMGVUJCTGITQYVJ5VTQPIUCNGUITQYVJYCU driven by our local jewel brands strategy with a new value RTQRQUKVKQPYKVJ(QTVWPC)1VQECRVWTGFQYPVTCFKPICUVJG RTKEKPINCFFGTGZRCPFUCPFCHQEWUQPMG[FKUVTKDWVKQPEJCPPGNU In the UK, our continued brand equity investment in our NQECNǭLGYGNDTCPFUWPFGTRKPPGFVJGTQNNQWVQHCPGYHKPG EWVǭQHHGTCPFUWRRQTVGFRTKEGKPETGCUGUYJKEJJGNRGFVQRCTVKCNN[ OKVKICVGǭVJGEJCNNGPIKPIOCTMGVXQNWOGFGENKPGUCPFOCTMGV UJCTGFGENKPGU Tobacco volumes were broadly in line with long-term decline TCVGUCV)GTOCPXQNWOGUDGPGHKVGFHTQOVJGGCUKPIQH pressures on consumer incomes combined with an encouraging OCTMGVUJCTGRGTHQTOCPEG6JKUQHHUGVVJGKORCEVQHGNGXCVGF excise regimes in markets, such as the UK, which contributed to EQPVKPWKPIRTGUUWTGQPXQNWOGUKPVJQUGOCTMGVU6QDCEEQPGV TGXGPWGKPETGCUGFCVEQPUVCPVEWTTGPE[TGHNGEVKPICUVTQPI RTKEGOKZQHYJKEJOQTGVJCPQHHUGVVJGXQNWOGFGENKPGU Our NGP portfolio has delivered strong net revenue growth QHǭCVEQPUVCPVEWTTGPE[YKVJITQYVJCETQUUCNNVJTGG ECVGIQTKGUCUYGICKPGFUECNGKPQWTGZKUVKPIOCTMGVHQQVRTKPVU Our consumer-led partnership model on NGP innovation UWRRQTVGFPGYRTQFWEVTQNNQWVUKPCNNVJTGGECVGIQTKGU+PXCRKPI KPVJG7-(TCPEGCPF5RCKPYGKPVTQFWEGFCPGYFKURQUCDNG FGXKEGWPFGTVJGDNWDTCPFYJKEJǭFGNKXGTUCPKPETGCUGF RWHHU#FFKVKQPCNN[KPTGURQPUGVQEQPUWOGTFGOCPFHQTC more sustainable product, towards the end of the year we TQNNGFQWVQWTRQFDCUGFDNWDCTMKVKP(TCPEGCPFVJG7- offering consumers the same experience as blu bar but with a TGEJCTIGCDNGDCVVGT[+PJGCVGFVQDCEEQYGKPVTQFWEGFK5GP\KC tea-based heat sticks into Italy and Greece to extend choice VQǭCFWNVUOQMGTUYKVJHNCXQWTGFPQPVQDCEEQUVKEMUYJKEJ ECPǭDGWUGFKPQWT2WN\GFGXKEGU+POQFGTPQTCNPKEQVKPG we continue to meet evolving consumer preferences with HNCXQWTNCWPEJGUKP1% of asset value. 9GJCXGCFQRVGFCTKUMDCUGFCRRTQCEJVQCFFTGUU ENKOCVGTGNCVGFTKUMUD[CPCN[UKPIKFGPVKHKGFTKUMUCPF QRRQTVWPKVKGUCPFKPVGITCVKPIVJGKTOCPCIGOGPVKPVQQWT %NKOCVG%JCPIGUVTCVGI[4GEQIPKUKPIVJGETKVKECNTQNGQH ENKOCVGǭTKUMCPFQRRQTVWPKV[OCPCIGOGPVVJGUGEQPUKFGTCVKQPU JCXGKPHQTOGFQWT(;DWUKPGUURNCPU+VũUKORQTVCPV VQǭPQVGVJCVCRCTVHTQOOCTMGVVJGTKUMUOGPVKQPGFCDQXG CTGǭPQVFGGOGFHKPCPEKCNN[UKIPKHKECPVCUFGHKPGFKP6CDNG YJGTGǭUKIPKHKECPEGKUOGCUWTGFCUOQTGVJCPQHCUUGVXCNWG #HVGTEQPFWEVKPIVJKUCPCN[UKUYGCFLWUVGFQWT%NKOCVG %JCPIGUVTCVGI[VQGPUWTGEQORTGJGPUKXGEQPUKFGTCVKQPQH VJGUGTKUMUCPFQRRQTVWPKVKGU9GJCXGKORNGOGPVGFCEVKQP RNCPUCKOGFCVOKPKOKUKPIVJGKTRQVGPVKCNKORCEV +PQWTTKUMOCVTKZHQWPFQPRCIG'PXKTQPOGPV KPENWFKPIVJGTGRWVCVKQPCNTKUMUQHPQVFGNKXGTKPIQWTENKOCVG EJCPIGUVTCVGI[KUHNCIIGFCUCRTKPEKRCNTKUM)QKPIHQTYCTF YGYKNNENQUGN[OQPKVQTVJGUGHCEVQTUKPVGITCVKPIVJGOKPVQ QWTDWUKPGUUTKUMOCPCIGOGPVRTCEVKEGU IMPACT, RISK MITIGATION, AND ASSOCIATED METRICS AND TARGETS #OQPIVJGHQWTTKUMUKFGPVKHKGFKP6CDNGURGEKHKEEQPVTKDWVKPI TKUMUJCXGDGGPFGGOGFOQUVOCVGTKCNEQPVTKDWVKPIVQVJG GUVKOCVGFHKPCPEKCNKORCEV9GFGVCKNVJGUGKPVJGHQNNQYKPI HQWTRCIGUVCDNGUCPFCURCTVQHQWTDWUKPGUURNCPPKPI CPFENKOCVGUVTCVGI[CEVKXKVKGU #NVJQWIJVJGCPCN[UGUEQXGTVJGRGTKQFWRVQYGDGNKGXG VJCVCOQTGFGVCKNGFGZCOKPCVKQPQXGTC[GCTJQTK\QPDGVVGT CNKIPUYKVJQWTDWUKPGUURNCPPKPICPFTKUMOCPCIGOGPV JQTK\QPUCUKNNWUVTCVGFKP6CDNG TABLE 2: ALL RISKS ARE CONSIDERED WITHIN A 10-YEAR TIME HORIZON Our timeframe used in CDP Short Medium .QPI 0-1 years 1-3 years 3-10 years Alignment to our business planning 5JQTVVGTO business RNCPPKPIE[ENG 3-year business RNCPPKPIE[ENG )QQFYKNN KORCKTOGPV TKUMJQTK\QP 1. /CZKOWOHKPCPEKCNKORCEVVCMGPHQTVJGUEGPCTKQOQUVNKMGN[VQRTQFWEGCJKIJGTHKPCPEKCNKORCEV 2. #UUWOKPIPQFGECTDQPKUCVKQPOGCUWTGUCTGVCMGPD[+ORGTKCN$TCPFU 3. +PCEEQTFCPEGYKVJ+ORGTKCN$TCPFUũTKUMCUUGUUOGPVQWTENKOCVGEJCPIGUVTCVGI[KPENWFGUCEVKQPVQOKVKICVGVJGUGTKUMUYJKEJKHVCMGPUJQWNFCHHGEVVJGNKMGN[HKPCPEKCN KORCEVCUCRTQRQTVKQPQHCUUGVXCNWGCUYGNNCUECRKVCNKUGQPQRRQTVWPKVKGU 4. %QUVCXQKFCPEGCUCTGUWNVQHGPGTI[VTCPUKVKQP YYYKORGTKCNDTCPFURNEEQO 81 ![]() $CUGFQPVJGUEGPCTKQCPCN[UKUWPFGTVCMGPKPYGJCXG CUUGUUGFPKPGRJ[UKECNTKUMUKPENWFKPIEQCUVCNKPWPFCVKQP UQKNUWDUKFGPEGUWTHCEGYCVGTHNQQFKPITKXGTKPGHNQQFKPI GZVTGOGYKPFHQTGUVHKTGCPFYCVGTUVTGUU6JGUGTKUMUCRRN[ VQDQVJQWTFKTGEVQRGTCVKQPUCPFQWTVQDCEEQRWTEJCUKPI TGIKQPU(TQOVJKUCPCN[UKUYGJCXGKFGPVKHKGFHQWTETKVKECN RJ[UKECNTKUMU+P6CDNGYGQWVNKPGVJGRQVGPVKCNHKPCPEKCN KORCEVQHEJTQPKECPFCEWVGYGCVJGTGXGPVU6JGURGEKHKETKUMU EQPVTKDWVKPIVQVJKUKORCEVCTGQWVNKPGFKP6CDNGUVQ TABLE 3 CHRONIC DROUGHT RISK Short Medium Long Scenario materiality o% o% +ORCEVRTGFKEVGFCUCTGUWNVQHQWT ENKOCVGEJCPIGUVTCVGI[ Predicted impact &TQWIJVRQUGUCTKUMVQQWTVQDCEEQHCTOUCPFDTQCFGTUWRRN[ EJCKPYKVJCRQVGPVKCNKORCEVQPTGXGPWGU &GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV Associated opportunity 2TQLGEVUTGICTFKPICFCRVCVKQPYCVGTCPFFGEGPVUVCPFCTF QHǭNKXKPIHQTHCTOGTUCUUGVQWVYKVJKPVJGHCTOGTNKXGNKJQQFU RKNNCTQHQWT'5)UVTCVGI[RCIG 5WUVCKPCDNGUQWTEKPIQHYQQFHKDTGHQTQWTRCEMCIKPI CPFǭRTQFWEVUYJKEJJGNRUVQUVCDKNKUGNQECNTKUMUQHFTQWIJV Mitigating actions 1WTVQDCEEQNGCHRTQEWTGOGPVUVTCVGI[TGNKGUQPCPQWVUQWTEGF OQFGNYKVJQHVJGNGCHUQWTEGFHTQOVJKTFRCTVKGUKP 9GJCXGKFGPVKHKGFKPVGTEJCPIGCDNGVQDCEEQUCETQUUUWRRNKGTU CPFNQECVKQPUGPCDNKPIWUVQGUVCDNKUJEQPVKPIGPE[UQWTEKPI QRVKQPUHQTQWTVQDCEEQNGCHUWRRN[%QNNCDQTCVKPIENQUGN[ YKVJǭUWRRNKGTUKUGUUGPVKCNHQTKORNGOGPVKPIGHHGEVKXG OKVKICVKQPCPFCFCRVCVKQP1WTINQDCNTKUMDCUGFCRRTQCEJ KPXQNXGUCPCN[UKPIMG[VQDCEEQUQWTEKPINQECVKQPUCVTKUM KPǭQTFGTVQCFFTGUURQVGPVKCNEJCNNGPIGU +P(;YGKORNGOGPVGFYCVGTCEEGUURTQLGEVUKPEQNNCDQTCVKQP YKVJHCTOGTUCETQUU$TC\KN/Q\CODKSWGCPF+PFKC#FFKVKQPCNN[ YKVJKPQWTDTQCFGTUWRRN[EJCKPYGRTQEWTGYQQFHKDTGRTQFWEVU HQTPQPVQDCEEQOCVGTKCNU06/UCPFRCEMCIKPICKOKPIHQT UWUVCKPCDNGYQQFHKDTGUQWTEKPID[1WTQPIQKPI GHHQTVUKPXQNXGYQTMKPIENQUGN[YKVJUWRRNKGTUVQCEJKGXG UWUVCKPCDN[UQWTEGFYQQFHKDTGHQTQWTRCEMCIKPICPFYGCTG GZRNQTKPIYC[UVQGZVGPFVJKUKPKVKCVKXGVQKPENWFG06/U For further details, please refer to page 68. Related metrics and targets • cURGPVQPYCVGTCEEGUURTQLGEVUKP(; • QHQWTRCEMCIKPIKUHTQOUWUVCKPCDN[UQWTEGFYQQFHKDTG LINKS TO OUR ESG STRATEGY TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE 2TQFWEVUWRRN[  2NGCUGTGHGTVQVJG4GRQTVKPI%TKVGTKCFQEWOGPVHQTOGVJQFFGHKPKVKQPCPFUEQRG TABLE 4 CHANGES IN TOBACCO CROP YIELD Short Medium Long Scenario materiality o% o% +ORCEVRTGFKEVGFCUCTGUWNVQHQWT ENKOCVGEJCPIGUVTCVGI[ Predicted impact 6JGTGKUCTKUMVJCVNGCHUWRRN[KUFKUTWRVGFFWGVQVJGUGGXGPVU YJKEJOC[CHHGEVQWTCDKNKV[VQIGPGTCVGTGXGPWGU-G[HCEVQTU EQPVTKDWVKPIVQVJKUUKVWCVKQPKPENWFGYCVGTCEEGUUEJCNNGPIGU HQTVQDCEEQHCTOGTUCUYGNNCUEQPEGTPUTGNCVGFVQUQKNJGCNVJ CPFDKQFKXGTUKV[ &GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV Associated opportunity 2TQLGEVUTGICTFKPICFCRVCVKQPYCVGTCPFFGEGPVUVCPFCTFQH NKXKPIHQTHCTOGTUCUUGVQWVYKVJKPVJGHCTOGTNKXGNKJQQFU RKNNCTQHQWT'5)UVTCVGI[RCIG Mitigating actions 9JKNGYGCPVKEKRCVGUQOGTGXGPWGFGENKPGFWGVQFKUTWRVKQPU KPVJGCITKEWNVWTCNUWRRN[EJCKPVJGTGKUCRQVGPVKCNQHHUGV HTQOǭKPETGCUGFVQDCEEQ[KGNFUKPEGTVCKPTGIKQPUFWGVQTKUKPI VGORGTCVWTGU1WTVQDCEEQNGCHRTQEWTGOGPVUVTCVGI[NGXGTCIGU UWRRNKGTGZRGTVKUGKPVQDCEEQEWNVKXCVKQPGPUWTKPIEQPVKPIGPE[ UQWTEKPIQRVKQPUCTGCXCKNCDNG#FFKVKQPCNN[YKVJKPQWTNGCH UWRRN[EJCKPYGOCKPVCKPCRRTQZKOCVGN[OQPVJUũYQTVJ QHǭNGCHUVQEMVQOKVKICVGENKOCVGTGNCVGFKPVGTTWRVKQPUCPF OKPKOKUGVJGTKUMQHUJQTVCIGU #URCTVQHQWTVQDCEEQNGCHGPICIGOGPVGHHQTVUYGEQNNCDQTCVG YKVJUWRRNKGTUVQGPEQWTCIGHCTOGTUVQEWNVKXCVGEQORNGOGPVCT[ QTUGEQPFCT[ETQRU For further details, please refer to page 70. Related metrics and targets • QHQWTVQDCEEQNGCHUWRRNKGTUD[URGPFCTGGPICIGF KPǭYCVGTTKUMRTQLGEVU • QHQWTFKTGEVN[EQPVTCEVGFHCTOGTUITQY EQORNGOGPVCT[ǭETQRU LINKS TO OUR ESG STRATEGY TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE 2TQFWEVUWRRN[ #### PHYSICAL RISKS:CHRONIC WEATHER 4GHGTVQRCIGHQTOQTGFGVCKNUQPNKPMUVQQWT '5)UVTCVGI[CPFRCIGHQTJQYYGOCPCIGTKUM Lower impact Medium impact High impact ESG REVIEW continued +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU82 ![]() TABLE 5 INCREASED FREQUENCY AND SEVERITY OF EXTREME WEATHER EVENTS Short Medium Long Scenario materiality o% o% +ORCEVRTGFKEVGFCUCTGUWNVQHQWT ENKOCVGEJCPIGUVTCVGI[ Predicted impact +PQWTVQDCEEQNGCHUWRRN[EJCKPYGCPVKEKRCVGCFGENKPGKP TGXGPWGUFWGVQUWRRN[EJCKPFKUTWRVKQPUKORCEVKPIRTQFWEVKQP ECRCEKV[\*QYGXGTVJGCPCN[UGUKPFKECVGVJCVVJGDWUKPGUU TGOCKPUTGNCVKXGN[WPCHHGEVGFD[DQVJEJTQPKECPFCEWVG RJ[UKECNTKUMUKPVJGUJQTVVGTO 4GICTFKPIQWTOCPWHCEVWTKPIQRGTCVKQPUQWTNGCUGFHCEVQT[ KPǭVJG&QOKPKECP4GRWDNKEKUGZRGEVGFVQDGOQUVCHHGEVGF RTKOCTKN[FWGVQUWTHCEGYCVGTHNQQFKPI2J[UKECNTKUMUKP QVJGTǭNQECVKQPUYGTGFGGOGFKOOCVGTKCN &GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV Associated opportunity +ORTQXGFCFCRVCVKQPCPFOKVKICVKQPCVUKVGUFKTGEVN[KORCEVU QPKPUWTCPEGRTGOKWOU Mitigating actions 6QGPUWTGQRGTCVKQPCNEQPVKPWKV[YGJCXGCRQNKE[HQTCNN QWTǭOCPWHCEVWTKPIUKVGUVQRWVTQDWUVDWUKPGUUEQPVKPWKV[ RNCPUKPǭRNCEG #FFKVKQPCNN[YGJCXGINQDCNRTQRGTV[FCOCIGCPFDWUKPGUU KPVGTTWRVKQPKPUWTCPEGVJTQWIJ(/)NQDCNYJKEJEQXGTU RQVGPVKCNRTQRGTV[FCOCIGTGUWNVKPIHTQOYGCVJGTTGNCVGFGXGPVU (/)NQDCNEQPFWEVUVJQTQWIJTKUMCUUGUUOGPVUCVGCEJUKVG RGTHQTOKPICRRTQZKOCVGN[VQUKVGXKUKVUCPPWCNN[ 6JGKTǭHQEWUKPENWFGUGXCNWCVKPIHKTGTKUMUCPFPCVWTCN ECVCUVTQRJGU9JGPICRUCTGKFGPVKHKGFTGEQOOGPFCVKQPU CTGǭRTKQTKVKUGFDCUGFQPGZRGEVGFNQUUGU1XGTVJGRCUVHKXG [GCTU+ORGTKCNJCUUWEEGUUHWNN[KORNGOGPVGFOQTGVJCP ǭ(/)NQDCNPCVWTCNJC\CTFTGEQOOGPFCVKQPU +PQWTVQDCEEQUWRRN[EJCKPYGCEVKXGN[RCTVKEKRCVGKPTGNKGH CPFEQOOWPKV[UWRRQTVFWTKPIGZVTGOGYGCVJGTGXGPVU CUǭRCTVQHQWTEQOOKVOGPVVQJGNRVQDCEEQHCTOGTUCEJKGXG CǭFGEGPVUVCPFCTFQHNKXKPI+P(;YGEQNNCDQTCVGFYKVJ UWRRNKGTUVQRTQXKFGTGNKGHKPVJGVQDCEEQITQYKPITGIKQPU CHHGEVGFD[E[ENQPG(TGFFKGKP/Q\CODKSWG1WTGHHQTVU HQEWUGFQPKORTQXKPICEEGUURTQXKFKPIHQQFTGNKGH CPFǭGPJCPEKPIHCTOKPIKPHTCUVTWEVWTG Related metrics and targets • 9GJCXGCRQNKE[HQTQHQWTOCPWHCEVWTKPIUKVGUVQJCXG DWUKPGUUEQPVKPWKV[RNCPUKPRNCEGVQOKVKICVGCP[RQVGPVKCN KPVGTTWRVKQPVQQRGTCVKQPU LINKS TO OUR ESG STRATEGY TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE 2TQFWEVUWRRN[  01## TABLE 6 SEVERE HURRICANE RISK Short Medium Long Scenario materiality o% o% +ORCEVRTGFKEVGFCUCTGUWNVQHQWT ENKOCVGEJCPIGUVTCVGI[ Predicted impact 9JKNGUWRRN[EJCKPFKUTWRVKQPUCPFVJGKTKORCEVQPRTQFWEVKQP ECRCEKV[EQWNFRQVGPVKCNN[NGCFVQFGETGCUGFTGXGPWGU VJGǭCPCN[UKUKPFKECVGUVJCVUVQTOUCTGNKMGN[VQKPETGCUGKP UGXGTKV[D[CRRTQZKOCVGN[QXGTVJG st century  . 9GJCXGUQOGUKVGUUWEJCUQWTHCEVQTKGUKP2WGTVQ4KEQ &QOKPKECP4GRWDNKECPFVJG2JKNKRRKPGUYJKEJCTGURGEKHKECNN[ GZRQUGFVQCPKPETGCUKPITKUMQHUGXGTGJWTTKECPGU &GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV Associated opportunity +ORTQXGFCFCRVCVKQPCPFOKVKICVKQPCVUKVGUFKTGEVN[KORCEV KPUWTCPEGRTGOKWOU Mitigating actions 9KVJKPQWTFKTGEVQRGTCVKQPUVJG)TQWROCKPVCKPUUWRRN[ EJCKPEQPVKPIGPE[RNCPUCPFKPUWTCPEGEQXGTCIGVQCFFTGUU VJKUTKUM#FFKVKQPCNN[YGGZRNQTGCNVGTPCVKXGUQWTEKPIQRVKQPU HQTQWTDTQCFGTVQDCEEQUWRRN[EJCKP 1WTKPUWTGT(/)NQDCNEQPFWEVUQPUKVGXKUKVUVQCPCN[UG YKPFǭGZRQUWTGUYKVJCURGEKHKEHQEWUQPUKVGUNQECVGFKP MPQYPJKIJYKPF\QPGU&WTKPIVJGUGGXCNWCVKQPU(/)NQDCN CUUGUUGUVJGTGUKNKGPEGQHDWKNFKPIGPXGNQRGU6JKUKPENWFGU GZCOKPKPIWRNKHVRTGUUWTGUQPTQQHU[UVGOUFGDTKUKORCEV QPǭDWKNFKPIYCNNUCPFVJGGHHGEVUQHJKIJYKPFUQPQVJGT GNGOGPVUUWEJCUFQEMFQQTU(/)NQDCNRTQXKFGURTCEVKECN TGEQOOGPFCVKQPUVQGPJCPEGTGUKNKGPEGGPEQORCUUKPIDQVJ RJ[UKECNKORTQXGOGPVUCPFJWOCPGNGOGPVRTQEGFWTGU UWEJǭCUGOGTIGPE[TGURQPUGRNCPPKPI Related metrics and targets • 9GJCXGCRQNKE[HQTQHQWTOCPWHCEVWTKPIUKVGUVQ JCXGDWUKPGUUEQPVKPWKV[RNCPUKPRNCEGVQOKVKICVGCP[ RQVGPVKCNKPVGTTWRVKQPVQQRGTCVKQPU • 9GYKNNOGCUWTGVJGRGTEGPVCIGQHVQDCEEQNGCHRTQFWEGF KPǭJKIJTKUMNQECVKQPUYKVJCNVGTPCVGUQWTEKPIQRVKQPU LINKS TO OUR ESG STRATEGY TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE 2TQFWEVUWRRN[ #### PHYSICAL RISKS:ACUTE WEATHER YYYKORGTKCNDTCPFURNEEQO 83 ![]() TABLE 7 POLICY AND LEGAL Short Medium Long Scenario materiality o% o% +ORCEVRTGFKEVGFCUCTGUWNVQHQWT ENKOCVGEJCPIGUVTCVGI[ Predicted impact 6JGGOGTIGPEGQHTGIWNCVKQPUNKMGECTDQPVCZCVKQPCPFECTDQP RTKEKPIOGEJCPKUOUOC[NGCFVQKPETGCUGFEQUVU &GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV Associated opportunity #VTCPUKVKQPVQTGPGYCDNGGPGTI[ECPCXQKFVJGUGEQUVU UGGǭQWTENKOCVGTGNCVGFQRRQTVWPKV[TGPGYCDNGGPGTI[UQWTEKPI Mitigating actions 6QCFFTGUUVJGKORCEVQHECTDQPRTKEKPICPFGOGTIKPITGIWNCVKQPU YGTGN[QPQWTENKOCVGEJCPIGUVTCVGI[URGEKHKECNN[ǭCKOKPI VQǭCEJKGXG0GV 5 years | | Non-derivative financial liabilities: | | | | | | | | Bank loans | 34 | 34 | 34 | – | – | – | | Capital market issuance | 8,663 | 10,218 | 1,497 | 1,911 | 2,752 | 4,058 | | Trade payables | 1,499 | 1,499 | 1,499 | – | – | – | | Lease liabilities | 386 | 435 | 96 | 82 | 144 | 113 | | Total non-derivative financial liabilities | 10,582 | 12,186 | 3,126 | 1,993 | 2,896 | 4,171 | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2023 | | | | Contractual | | | | | | | Balance sheet | cash flows | | Between 1 and | Between 2 and | | | £ million | amount | total | <1 year | 2 years | 5 years | > 5 years | | Non-derivative financial liabilities: | | | | | | | | Bank loans | 51 | 51 | 49 | 2 | – | – | | Capital market issuance | 9,330 | 10,663 | 1,767 | 1,951 | 3,651 | 3,294 | | Trade payables | 1,507 | 1,507 | 1,507 | – | – | – | | Lease liabilities | 349 | 406 | 82 | 70 | 114 | 140 | | Total non-derivative financial liabilities | 11,237 | 12,627 | 3,405 | 2,023 | 3,765 | 3,434 | Capital management The Group defines capital as adjusted net debt and equity and manages its capital structure through an appropriate balance of debt and equity in order to drive an efficient mix for the Group. Besides the minimum capitalisation rules that may apply to subsidiaries in certain countries, the Group’s only externally imposed capital requirements are interest cover and gearing covenants contained within its core external bank debt facilities, with which the Group was fully compliant during the current and prior periods and expects to be so going forward. Management have assessed that the likelihood of a future covenant breach is remote. The Group continues to manage its capital structure to maintain investment grade credit ratings which it monitors by reference to a number of key financial ratios, including ongoing consideration of the return of capital to shareholders via regular dividend payments and share buybacks and in on-going discussions with the relevant rating agencies. As at 30 September 2024 the Group was rated Baa3/positive outlook by Moody’s Investor Service Ltd, BBB/A-2/stable outlook by Standard and Poor’s Credit Market Services Europe Limited and BBB/F2/stable outlook by Fitch Ratings Limited. The Group regards its total capital as follows. | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Adjusted net debt | 7,740 | 8,026 | | Equity attributable to the owners of the parent | 5,442 | 6,021 | | Total capital | 13,182 | 14,047 | Hedge accounting The Group has investments in foreign operations which are consolidated in its financial statements and whose functional currencies are euros or US dollars. Where it is practicable and cost effective to do so, the foreign exchange rate exposures arising from these investments are hedged through the use of cross-currency swaps, foreign exchange swaps and foreign currency denominated debt. www.imperialbrandsplc.com 179 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued The Group only designates the undiscounted spot element of the cross-currency swaps, foreign exchange swaps and foreign currency debt as hedging instruments. Changes in the fair value of the cross-currency swaps and foreign exchange swaps attributable to changes in interest rates and the effect of discounting are recognised directly in profit or loss within the “Net finance costs” line. These amounts are, therefore, not included in the hedge effectiveness assessment. Net investment gains and losses are reported in exchange movements within other comprehensive income and the hedging instrument foreign currency gains and losses deferred to the foreign currency revaluation reserve are detailed in the statement of changes in equity. The Group establishes the hedging ratio by matching the notional balance of the hedging instruments with an equal notional balance of the net assets of the foreign operation. Given that only the undiscounted spot element of hedging instruments is designated in the hedging relationship, no ineffectiveness is expected unless the notional balance of the designated hedging instruments exceeds the total balance of the foreign operation’s net assets during the reporting period. The foreign currency risk component is determined as the change in the carrying amount of designated net assets of the foreign operation arising solely from changes in spot foreign currency exchange rates. All net investment hedges were fully effective at 30 September 2024. The following table sets out the maturity profile of the hedging instruments used in the Group's net investment hedging strategies: | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2024 | | | Total | | | Maturity | | | | notional | | Between 1 and | Between 2 and | | | £ million | balance | <1 year | 2 years | 5 years | > 5 years | | Bonds | (4,595) | (438) | (1,103) | (2,120) | (934) | | Cross-currency swaps | (5,501) | (1,715) | (1,099) | (1,581) | (1,106) | | | (10,096) | (2,153) | (2,202) | (3,701) | (2,040) | £ million | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2023 | | | Total | | | Maturity | | | | notional | | Between 1 and | Between 2 and | | | | balance | <1 year | 2 years | 5 years | > 5 years | | Bonds | (3,897) | – | (433) | (2,645) | (819) | | Cross-currency swaps | (5,986) | (1,447) | (1,214) | (1,971) | (1,354) | | Foreign exchange swaps | (541) | (541) | – | – | – | | | (10,424) | (1,988) | (1,647) | (4,616) | (2,173) | +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU180 ![]() The following table contains details of the hedging instruments and hedged items used in the Group's net investment hedging strategies: | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2024 | | | | | Carrying amount | | Changes in fair | | | | | | | value used for | | | Notional | | | | calculating hedge | | £ million | balance | Assets | Liabilities | Balance sheet line item | in-effectiveness | | Hedging instrument: | | | | | | | Bonds | 4,595 | – | 4,584 | Borrowings | 321 | | Cross-currency swaps | 5,501 | 118 | 76 | Derivative financial instruments | 213 | | Foreign exchange swaps | – | – | – | Derivative financial instruments | 6 | | Hedged item: | | | | | | | Investment in a foreign operation | n/a | 10,096 | – | | 540 | | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2023 | | | | | Carrying amount | | Changes in fair | | | | | | | value used for | | | | | | | calculating hedge | | £ million | Notional balance | Assets | Liabilities | Balance sheet line item | in-effectiveness | | Hedging instrument: | | | | | | | Bonds | 3,897 | – | 3,929 | Borrowings | 338 | | Cross-currency swaps | 5,986 | – | 249 | Derivative financial instruments | 75 | | Foreign exchange swaps | 541 | 1 | – | Derivative financial instruments | 14 | | Hedged item: | | | | | | | Investment in a foreign operation | n/a | 10,424 | – | | 427 | Reconciliation of changes in the value of net investment hedges: £ million | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2024 | | | At the | | Other | | | | | beginning of | Income | comprehensive | Designations/(de- | At the end | | | the year | statement | income | designations) | of the year | | Derivatives in net investment hedges of foreign | (248) | 71 | 219 | – | 42 | | operations | | | | | | | Bonds in net investment hedges of foreign operations | (3,929) | 42 | 321 | (1,018) | (4,584) | | Total | (4,177) | 113 | 540 | (1,018) | (4,542) | | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2023 | | | At the | | Other | | | | | beginning of | Income | comprehensive | Designations/(de- | At the end | | £ million | the year | statement | income | designations) | of the year | | Derivatives in net investment hedges of foreign | (338) | 1 | 89 | – | (248) | | operations | | | | | | | Bonds in net investment hedges of foreign operations | (5,414) | (3) | 338 | 1,150 | (3,929) | | Total | (5,752) | (2) | 427 | 1,150 | (4,177) | The Group also treats certain permanent intragroup loans that meet relevant qualifying criteria under IAS 21 as part of its net investment in foreign operations where appropriate. Intragroup loans with a notional value of 3,714 million (£3,099 million equivalent) (2023: 3,714 million (£3,217 million equivalent)) were treated as part of the Group’s net investment in foreign operations at the balance sheet date.  www.imperialbrandsplc.com 181 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued Fair value estimation and hierarchy All financial assets and liabilities are carried on the balance sheet at amortised cost, other than derivative financial instruments which are carried at fair value. Derivative fair values are determined based on observable market data such as yield curves, foreign exchange rates and credit default swap prices to calculate the present value of future cash flows associated with each derivative at the balance sheet date (Level 2 classification hierarchy per IFRS 7). Market data is sourced from a reputable financial data provider and valuations are validated by reference to counterparty valuations where appropriate. Some of the Group's derivative financial instruments contain early termination options and these have been considered when assessing the element of the fair value related to credit risk. On this basis the reduction in reported net derivative liabilities due to credit risk is £12 million (2023: £2 million) and would have been a £15 million (2023: £5 million) reduction without considering the early termination options. There were no changes to the valuation methods or transfers between hierarchies during the year. With the exception of capital market issuance, the fair value of all financial assets and financial liabilities is considered approximate to their carrying amount. Netting arrangements of financial instruments The following tables set out the Group's financial assets and financial liabilities that are subject to netting and set-off arrangements. | | | | | | | --- | --- | --- | --- | --- | | | | | | 2024 | | | Gross | Net financial | Related | | | | financial | assets/ | amounts not | | | | assets/ | (liabilities) per | set-off in the | | | £ million | (liabilities) | balance sheet | balance sheet | Net | | Assets | | | | | | Derivative financial instruments | 474 | 474 | (462) | 12 | | Liabilities | | | | | | Derivative financial instruments | (809) | (809) | 462 | (347) | | | | | | | | --- | --- | --- | --- | --- | | | | | | 2023 | | | Gross | Net financial | Related | | | | financial | assets/ | amounts not | | | | assets/ | (liabilities) per | set-off in the | | | £ million | (liabilities) | balance sheet | balance sheet | Net | | Assets | | | | | | Derivative financial instruments | 950 | 950 | (817) | 133 | | Liabilities | | | | | | Derivative financial instruments | (1,003) | (1,003) | 817 | (186) | The table below sets out the Group's accounting classification of each class of financial assets and liabilities: | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2024 | | | Fair value | Fair value | Assets and | | | | | | through | through other | liabilities at | | | | | | income | comprehensive | amortised | | | | | £ million | statement | income | cost | Total | Current | Non-Current | | Trade and other receivables | – | – | 2,524 | 2,524 | 2,487 | 37 | | Cash and cash equivalents | – | – | 1,078 | 1,078 | 1,078 | – | | Derivatives | 356 | 118 | – | 474 | 144 | 330 | | Total financial assets | 356 | 118 | 3,602 | 4,076 | 3,709 | 367 | | Borrowings | – | – | (8,697) | (8,697) | (1,191) | (7,506) | | Trade and other payables | – | – | (8,659) | (8,659) | (8,659) | – | | Derivatives | (733) | (76) | – | (809) | (187) | (622) | | Lease liabilities | – | – | (386) | (386) | (86) | (300) | | Total financial liabilities | (733) | (76) | (17,742) | (18,551) | (10,123) | (8,428) | | Total net financial assets/(liabilities) | (377) | 42 | (14,140) | (14,475) | (6,414) | (8,061) |  +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU182 ![]() | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2023 | | | Fair value | Fair value | Assets and | | | | | | through | through other | liabilities at | | | | | | income | comprehensive | amortised | | | | | £ million | statement | income | cost | Total | Current | Non-current | | Trade and other receivables | – | – | 2,323 | 2,323 | 2,297 | 26 | | Cash and cash equivalents | – | – | 1,345 | 1,345 | 1,345 | – | | Derivatives | 949 | 1 | – | 950 | 126 | 824 | | Total financial assets | 949 | 1 | 3,668 | 4,618 | 3,768 | 850 | | Borrowings | – | – | (9,381) | (9,381) | (1,499) | (7,882) | | Trade and other payables | – | – | (8,705) | (8,705) | (8,705) | – | | Derivatives | (754) | (249) | – | (1,003) | (174) | (829) | | Lease liabilities | – | – | (349) | (349) | (81) | (268) | | Total financial liabilities | (754) | (249) | (18,435) | (19,438) | (10,459) | (8,979) | | Total net financial assets/(liabilities) | 195 | (248) | (14,767) | (14,820) | (6,691) | (8,129) | Derivatives classified as fair value through other comprehensive income relate to cross-currency swaps and foreign exchange swaps designated as hedges of foreign currency denominated net investments. The Group only designates the undiscounted foreign exchange spot element of these derivative instruments and the changes in fair value related to this element are posted to other comprehensive income. Changes in the fair value of these derivative instruments attributable to changes in interest rates and the effect of discounting are recognised in the income statement. The Group also designates certain external borrowings as hedges of foreign currency denominated net investments and the foreign exchange revaluation of those external borrowings is recognised in other comprehensive income. The carrying value at 30 September 2024 of those external borrowings included in the above table is £4,639 million (2023: £3,929 million). All of the Group's net investment hedges remain effective. 22. DERIVATIVE FINANCIAL INSTRUMENTS The Group’s derivative financial instruments held at fair value, are as follows. | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | 2024 | | | 2023 | | £ million | Assets | Liabilities | Net fair value | Assets | Liabilities | Net fair value | | Current derivative financial instruments: | | | | | | | | Interest rate swaps | 65 | (54) | 11 | 30 | (66) | (36) | | Foreign exchange contracts | 1 | (4) | (3) | 12 | (5) | 7 | | Cross-currency swaps | 78 | (129) | (51) | 84 | (103) | (19) | | Total current derivatives | 144 | (187) | (43) | 126 | (174) | (48) | | Non-current derivative financial instruments: | | | | | | | | Interest rate swaps | 240 | (365) | (125) | 745 | (652) | 93 | | Cross-currency swaps | 90 | (257) | (167) | 79 | (177) | (98) | | Total non-current derivatives | 330 | (622) | (292) | 824 | (829) | (5) | | Total carrying value of derivative financial | | | | | | | | instruments | 474 | (809) | (335) | 950 | (1,003) | (53) | | Analysed as: | | | | | | | | Interest rate swaps | 305 | (419) | (114) | 775 | (718) | 57 | | Foreign exchange contracts | 1 | (4) | (3) | 12 | (5) | 7 | | Cross-currency swaps | 168 | (386) | (218) | 163 | (280) | (117) | | Total carrying value of derivative financial | | | | | | | | instruments | 474 | (809) | (335) | 950 | (1,003) | (53) | The classification of these derivative assets and liabilities under the IFRS 7 fair value hierarchy is provided in note 21.  www.imperialbrandsplc.com 183 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued Maturity of obligations under derivative financial instruments Derivative financial instruments have been classified in the balance sheet as current or non-current on an undiscounted contractual basis based on spot rates as at the balance sheet date. For the purposes of the above and following analysis, maturity dates have been based on the likelihood of any early termination options being exercised with consideration to counterparty expectations and market conditions prevailing as at 30 September 2024. The table below summarises the Group's derivative financial instruments by maturity based on their remaining contractual cash flows as at 30 September 2024. The amounts disclosed are the undiscounted cash flows calculated using interest rates and spot rates of exchange prevailing at the relevant balance sheet date. Contractual cash flows in respect of the Group's non-derivative financial instruments are detailed in note 21. | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | 2024 | | | | | Contractual | | | | | | | | Balance sheet | cash flows | | Between 1 and | Between 2 and | | | £ million | | amount | total | <1 year | 2 years | 5 years | >5 years | | Net settled derivatives | | (114) | 194 | 10 | 1 | 117 | 66 | | Gross settled derivatives | | (221) | – | – | – | – | – | | • | receipts | – | 20,719 | 6,490 | 2,730 | 5,762 | 5,737 | | • | payments | – | (20,770) | (6,497) | (2,719) | (5,772) | (5,782) | | | | (335) | 143 | 3 | 12 | 107 | 21 | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | 2023 | | | | | Contractual | | | | | | | | Balance sheet | cash flows | | Between 1 and | Between 2 and | | | £ million | | amount | total | <1 year | 2 years | 5 years | >5 years | | Net settled derivatives | | 57 | 200 | (3) | 34 | 143 | 26 | | Gross settled derivatives | | (110) | – | – | – | – | – | | • | receipts | – | 17,822 | 5,429 | 4,010 | 5,283 | 3,100 | | • | payments | – | (17,675) | (5,374) | (3,941) | (5,247) | (3,113) | | | | (53) | 347 | 52 | 103 | 179 | 13 | Derivatives as hedging instruments As outlined in note 21, the Group hedges its underlying interest rate exposure and foreign currency translation exposures in an efficient, commercial and structured manner, primarily using interest rate swaps and cross-currency swaps. Foreign exchange contracts are used to manage the Group’s short term liquidity requirements in line with short term cash flow forecasts as appropriate. The Group does not apply cash flow or fair value hedge accounting, as permitted under IFRS 9, which results in fair value gains and losses attributable to derivative financial instruments being recognised in net finance costs unless they are designated as hedges of a net investment in foreign operations, in which case they are recognised in other comprehensive income. Interest rate swaps To manage interest rate risk on its borrowings, the Group issues debt in the market or markets that are most appropriate at the time of raising new finance with regard to currency, interest denomination or duration, and then uses interest rate swaps to re-base the debt into the appropriate proportions of fixed and floating interest rates. Interest rate swaps are also transacted to manage and re-profile the Group's interest rate risk over the short, medium and long term in accordance with the Treasury Operations Policy as approved by the Treasury Committee. Fair value movements are recognised in net finance costs in the relevant reporting period. As at 30 September 2024, the notional amount of interest rate swaps outstanding that were entered into to convert fixed rate borrowings into floating rates of interest at the time of raising new finance was £6,349 million equivalent (2023: £8,111 million equivalent) with a fair value of £339 million liability (2023: £714 million liability). The fixed interest rates vary from 1.3% to 5.4% (2023: 1.3% to 7.9%), and the floating rates are based on EURIBOR, SONIA and SOFR. As at 30 September 2024, the notional amount of interest rate swaps outstanding that were entered into to convert the Group's debt into the appropriate proportion of fixed and floating rates to manage and re-profile the Group's interest rate risk was £12,119 million equivalent (2023: £11,622 million equivalent) with a fair value of £225 million asset (2023: £771 million asset). The fixed interest rates vary from 3.1% receivable to 4.0% payable (2023: 3.1% receivable to 4.0% payable), and the floating receivable rates reference EURIBOR and SOFR. This includes forward starting interest rate swaps with a total notional amount of £4,719 million equivalent (2023: £4,055 million equivalent) with tenors between 1 and 10 years, starting between October 2024 and May 2032.  +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU184 ![]() Cross-currency swaps The Group enters into cross-currency swaps to convert the currency of debt into the appropriate currency with consideration to the underlying assets of the Group as appropriate. Fair value movements are recognised in net finance costs in the relevant reporting period unless the swaps are designated as hedges of a net investment in foreign operations, in which case the fair value movement attributable to changes in foreign exchange rates are recognised in other comprehensive income. As at 30 September 2024, the notional amount of cross-currency swaps entered into to convert sterling debt into the desired currency was £1,000 million (2023: £1,600 million) and the fair value of these swaps was £76 million net liability (2023: £111 million net liability); the notional amount of cross-currency swaps entered into to convert US dollar debt into the desired currency was US$ 6,950 million (2023: US$ 5,250 million) and the fair value of these swaps was £142 million net liability (2023: £6 million net liability). This includes forward starting cross-currency swaps with a total notional amount of US$ 1,250 million equivalent (2023: no forward starting cross- currency swaps) with tenors of 4.5 years, starting in July 2025. Foreign exchange contracts The Group enters into foreign exchange contracts to manage short-term liquidity requirements in line with cash flow forecasts. As at 30 September 2024, the notional amount of these contracts was £842 million equivalent (2023: £2,020 million equivalent) and the fair value of these contracts was a net liability of £3 million (2023: £7 million net asset). Hedges of net investments in foreign operations As at 30 September 2024, cross-currency swaps with a notional amount of 6,593 million (2023: 6,910 million) were designated as hedges of net investments in foreign operations. During the year, foreign exchange translation gains amounting to £213 million (2023: £75 million gains) were recognised within exchange movements in other comprehensive income in respect of cross-currency swaps designated as hedges of a net investment in foreign operations. No hedging ineffectiveness occurred during the year (2023: £nil). As at 30 September 2024, foreign exchange swaps with a notional amount of nil (2023: 624 million) were designated as hedges of net investments in foreign operations. During the year, foreign exchange translation gains amounting to £6 million (2023: £14 million gains) were recognised within exchange movements in other comprehensive income in respect of foreign exchange swaps that had been designated as hedges of a net investment in foreign operations. No hedging ineffectiveness occurred during the year (2023: £nil). The movements in other comprehensive income due to net investment hedging in the period were as follows: | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Foreign exchange gains on borrowings | 321 | 338 | | Foreign exchange gains on derivative financial instruments | 219 | 89 | | | 540 | 427 | 23. DEFERRED TAX ASSETS AND LIABILITIES Deferred tax relates to the following: | | | | | | | --- | --- | --- | --- | --- | | | Consolidated | Consolidated | Consolidated | Consolidated | | | income | income | balance | balance | | | statement | statement | sheet | sheet | | £ million | 2024 | 2023 | 2024 | 2023 | | Temporary differences on depreciation and amortisation | (53) | 164 | (711) | (716) | | Retirement benefits | (5) | (9) | 48 | 30 | | Tax credits and losses | 393 | 6 | 579 | 282 | | Accruals, provisions and other temporary differences | (48) | (3) | 193 | 186 | | Deferred tax benefit | 287 | 158 | | | | Net deferred tax assets/(liabilities) | | | 109 | (218) | Reflected in the consolidated balance sheet as follows | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Deferred tax assets | 889 | 653 | | Deferred tax liabilities | (780) | (871) | | | 109 | (218) | www.imperialbrandsplc.com 185 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued Reconciliation of net deferred tax liabilities | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | At 1 October | (218) | (522) | | Credited to the income statement | 287 | 158 | | Credited to other comprehensive income | 36 | 134 | | Credited to equity | 2 | 1 | | Acquisitions | – | (15) | | Exchange movements | 2 | 22 | | Other movements | (16) | 4 | | As at 30 September | 109 | (218) | Unrecognised deferred tax assets | | | | | | | --- | --- | --- | --- | --- | | | Gross | Net | Gross | Net | | £ million | 2024 | 2024 | 2023 | 2023 | | Tax losses | 245 | 64 | 235 | 62 | | Tax credits | 806 | 282 | 15 | 15 | | Other temporary differences | 77 | 22 | 84 | 24 | | | 1,128 | 368 | 334 | 101 | Analysis of unrecognised deferred tax assets by expiry date | | | | | | | --- | --- | --- | --- | --- | | | Gross | Net | Gross | Net | | £ million | 2024 | 2024 | 2023 | 2023 | | Tax losses expiring: | | | | | | No expiry | 245 | 64 | 235 | 62 | | | 245 | 64 | 235 | 62 | | Tax credits expiring: | | | | | | Within 1 year | – | – | 15 | 15 | | No expiry | 806 | 282 | – | – | | | 806 | 282 | 15 | 15 | | Other temporary differences expiring: | | | | | | No expiry | 77 | 22 | 84 | 24 | | | 77 | 22 | 84 | 24 | In December 2021, the OECD issued model rules for a new global minimum tax framework (Pillar Two), applicable for multinational enterprise groups with global revenue over 750 million. The legislation implementing the rules in the UK was substantively enacted on 20 June 2023 and will apply to the Group from the financial year ending 30 September 2025 onwards. The Group has applied the mandatory exception under IAS 12 in relation to the accounting for deferred tax assets and liabilities arising from the implementation of the Pillar Two model rules. Based on the assessments carried out so far, although additional tax liabilities are expected to be incurred, the Group does not expect any significant exposure to Pillar Two income taxes in those jurisdictions where the minimum tax requirement is not met, based predominantly on the data for the year ended 30 September 2023. The Group is continuing to review this legislation and monitors the status of implementation of the model rules outside of the UK to assess the potential impact. Included within net deferred tax liabilities are deferred tax assets recognised of £213 million (2023: £257 million) for tax credits arising in the Group's Spanish business. These tax credits have no time expiry. Utilisation of these tax credits is restricted to 50% of the Spanish business' taxable profits arising in any given year; those tax law restrictions extend the period over which the deferred tax assets would otherwise be recovered. The Group considers there to be forecast future taxable profits which support the recognition of these long term deferred tax assets. The period over which these deferred tax assets are utilised is sensitive to forecasting assumptions about future growth rates (which may be influenced by the future effects of climate change) and regulatory changes. Any material effects of climate change in the long term could extend the period over which the deferred tax asset will be recovered but as the tax credits do not expire, the Group considers there is positive evidence that sufficient future taxable profits would still be available. Based on a range of forecast scenarios modelling sensitivities (including the future effects of climate change) these deferred tax assets are expected to be utilised over a period of 16 years. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU186 ![]() Included within net deferred tax liabilities are deferred tax assets recognised for retirement benefits of £98 million (2023: £88 million) arising in the Group's German business. These deferred tax assets are expected to be recovered both by way of utilisation against the reversal of deferred tax liabilities of £49 million (2023: £40 million) arising in the Group's German business and by way of utilisation against future taxable profits. The Group considers there to be forecast future taxable profits which support the recognition of these long term deferred tax assets. Based on a range of forecast scenarios modelling sensitivities these deferred tax assets are expected to be recovered over a period of 20-40 years corresponding to the life of the pension scheme. The period over which these deferred tax assets are utilised is sensitive to forecasting assumptions about future growth rates of the underlying business (which may be influenced by the future effects of climate change) and regulatory changes. Included within net deferred tax liabilities are deferred tax assets recognised for intangibles of £179 million (2023: £199 million) arising in the Group's Dutch business. These deferred tax assets are expected to be recovered by way of utilisation against future taxable profits. The Group considers there to be forecast future taxable profits which support the recognition of these long term deferred tax assets. The period over which these deferred tax assets are utilised is sensitive to forecasting assumptions about future growth rates (which may be influenced by the future effects of climate change) and regulatory changes. These deferred tax assets are expected to be recovered over a period of 15 years corresponding to the life of the intangibles. Included within net deferred tax liabilities are deferred tax assets recognised of £293 million (2023: £0 million) in relation to tax credits brought forward within the Group’s Maltese treasury centre, recognised as a result of clarifying tax guidance issued by the tax authorities during FY24 and the resulting intention to utilise these brought forward tax credits against taxable income arising from long-term loans of a fixed term tenure, which were refinanced during the financial year. The period over which these deferred tax assets are utilised is sensitive to forecasting assumptions about future growth rates of the underlying business (which may be influenced by the future effects of climate change) and regulatory changes. The Group considers there is positive evidence that sufficient future taxable profits would still be available. Based on a range of forecast scenarios modelling sensitivities these deferred tax assets are expected to be utilised over a period of 5-10 years. Tax losses arising within the Maltese group in periods prior to the formation of tax fiscal units, are kept in abeyance and therefore unavailable for utilisation within the fiscal unit and no deferred tax asset has been recognised thereon, but amounts are included within unrecognised deferred tax. We have reviewed the recoverability of deferred tax assets in overseas territories in the light of forecast business performance. In 2024 we have recognised deferred tax assets of £3 million that were previously unrecognised (2023: recognised deferred tax assets of £6 million that were previously unrecognised) on the basis that it is more likely than not that these are recoverable. A deferred tax liability of £46 million (2023: £43 million) is recognised in respect of taxation expected to arise on the future distribution of unremitted earnings totalling £2.17 billion (2023: £2 billion). The temporary differences associated with investments in the Group's subsidiaries, associates and joint ventures for which a deferred tax liability has not been recognised in the periods presented, aggregate to £1,472 million (2023: £1,477 million) for which a deferred tax liability of £37 million (2023: £38 million) has not been recognised. No liability has been recognised because the Group is in a position to control the timing of the reversal of those temporary differences and it is probable that such differences will not reverse in the foreseeable future.  www.imperialbrandsplc.com 187 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued 24. RETIREMENT BENEFIT SCHEMES The Group operates a number of retirement benefit schemes for its employees, including both defined benefit and defined contribution schemes. The Group's three principal schemes are defined benefit schemes and are operated by Imperial Tobacco Limited (ITL) in the UK, Reemtsma Cigarettenfabriken GmbH in Germany and ITG Brands in the USA; these schemes represent 66%, 16% and 7% of the Group's total defined benefit obligations (2023: 64%, 15% and 9%) and 0%, 41% and 11% of the current service cost (2023: 22%, 32% and 8%) respectively. Imperial Tobacco Pension Fund The UK scheme, the Imperial Tobacco Pension Fund ("ITPF"), was closed to future accrual on 30 September 2023. All active members are now enrolled into the defined contribution scheme as of 1 October 2023 alongside all new employees that have joined since 1 October 2010. Former active members of the defined benefit section of the ITPF are now deferred members who are able to draw their pension in the same way as an existing deferred member and are in receipt of annual inflationary increases as existing deferred members. The impact of the closure to future accrual was reported in the 2023 consolidated income statement. A further cost of £5.6 million is reported in the 2024 consolidated income statement due to a legal ruling in the year which has become applicable to ITL. The ruling required some elements of the compensation paid in 2023 to be subject to income tax and national insurance which ITL agreed to cover for impacted members if such a ruling were made. The ITPF defined benefit obligation comprises 78% in respect of pensioners and dependants, 22% in respect of deferred members and has a weighted average maturity of 12 years. The ITPF operates under trust law and is managed and administered by the Trustees on behalf of the members in accordance with the terms of the Trust Deed and Rules and relevant legislation. The ITPF assets are held by the trust. The main risk for the company in respect of the ITPF is that additional contributions are required if the assets are not expected to be sufficient to pay for the benefits. The investment portfolio is subject to a range of risks typical of the asset classes held, such as liquidity to manage the Liability Driven Investment (LDI) portfolio, credit exposure within investment funds and exposure to the property market. The ITPF holds a buy-in policy with Standard Life as an asset; this covers around 61% of the pensioner defined benefit obligation. The buy-in eliminates investment return, longevity, inflation and funding risks in respect of those benefits covered. The ITPF also has access to a loan facility to provide short-term liquidity to support the LDI portfolio in the event of significant changes in government bond yields. The main uncertainties affecting the level of benefits payable under the ITPF are future inflation levels, as these impact increases to pensions, and the actual longevity of the membership. The contributions paid to the ITPF are set by the ITPF Scheme Actuary every three years. The Scheme Actuary is an external consultant, appointed by the Trustees. Principal factors that the Scheme Actuary will have regard to include the covenant offered by the company, the level of risk in the ITPF, the expected return on assets, the results of the funding assessment on the Technical Provisions basis and the expected cost of securing benefits if the ITPF were to be wound up. The latest valuation agreed at 31 March 2022 reported a 118% funding ratio on the Technical Provisions basis. ITL and the Trustee agreed to maintain the existing dynamic contribution schedule, which means ITL’s annual contributions will reduce or increase depending on the ITPF valuation going forward. The level of ITL's annual contribution to the ITPF was nil for the year to 31 March 2024, although £8.4 million was paid into an escrow account over this period. ITL does not expect to pay any contributions to the ITPF or the escrow account for the year to 31 March 2025. Further contributions were agreed to be paid by ITL in the event of a downgrade of the Group's credit rating to non- investment grade by either Standard & Poor's or Moody's, if a funding deficit were to exist. In addition, a surety guarantee with a total value of £120 million and a parental guarantee from Imperial Brands PLC remains in place. In certain circumstances, surplus funds in the defined benefit section of the ITPF may be used to finance defined contribution section contributions on ITL's behalf with company contributions reduced accordingly. The IAS 19 measurement of the defined benefit obligation is sensitive to the assumptions made about future inflation as well as the assumptions made about life expectancy. It is also sensitive to the discount rate, which depends on market yields on sterling denominated AA corporate bonds. The main differences between the Technical Provisions and IAS 19 assumptions are a more prudent longevity assumption for Technical Provisions and a different approach to setting the discount rate. A consequence of the ITPF’s investment strategy, with a proportion of the assets invested in return-seeking assets, is that the difference between the market value of the assets and the IAS 19 defined benefit obligation may be relatively volatile. The ITPF has a pension surplus on the IAS 19 measure and, in line with IFRIC 14, recognition of the net asset on the fund is only appropriate where it can be recovered. The ITPF trust deed gives the company an ability to receive a refund of surplus assets assuming the full settlement of liabilities in the event of a wind-up. Furthermore, in the ordinary course of business the Trustee has no rights to unilaterally wind up the ITPF or otherwise augment the benefits due to the ITPF's members. Based on these circumstances, any net surplus in the ITPF is recognised in full. The Reemtsma Cigarettenfabriken Pension Plan The German scheme, the Reemtsma Cigarettenfabriken Pension Plan (RCPP), is primarily a career average pension plan, though a small group of members have final salary benefits. The RCPP defined benefit obligation comprises 52% in respect of pensioners and dependants, 23% in respect of deferred members and 25% in respect of active members and has a weighted average maturity of 16 years. The RCPP was closed to new members from 1 January 2020, but existing active members at that date continue to accrue benefits. The RCPP is unfunded and the company pays benefits as they arise. The RCPP obligations arise under a works council agreement and are subject to standard German legal requirements around such matters as the benefits to be provided to employees who leave service, and pension increases in payment. Over the next year Reemtsma Cigarettenfabriken GmbH expects to pay £24 million (2023: £24 million) in respect of benefits. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU188 ![]() The main uncertainties affecting the level of benefits payable under the RCPP are future inflation levels, as these impact increases to pensions, and the actual longevity of the membership. The IAS 19 measurement of the defined benefit obligation and the current service cost are sensitive to the assumptions made about the above variables, as well as the discount rate, which depends on market yields on euro denominated AA corporate bonds. ITG scheme The main US pension scheme, the ITG Scheme held by ITG Brands, is a defined benefit pension plan that is closed to new entrants. The ITG Scheme defined benefit obligation comprises 79% in respect of pensioners and dependants, 3% in respect of deferred members and 18% in respect of active members and has a weighted average maturity of nine years. ITG Brands transacted a partial buy-out of some of the pensioner and dependant population during 2024. The buy-out resulted in a 2024 income statement credit of £4.8 million The ITG Scheme is funded and benefits are paid from the ITG Scheme assets. Contributions to the plan are determined based on US regulatory requirements. ITG Brands made no contributions this year and is not expected to make any contributions in the next year. Annual benefits in payment are assumed not to increase from current levels. The main uncertainty affecting the level of benefits payable under the plan is the actual longevity of the membership. Other key uncertainties impacting the plan include investment risk and potential past service benefit changes from future union negotiations. The IAS 19 measurement of the defined benefit obligation and the service cost are sensitive to the assumptions made about the above variables, as well as the discount rate, which depends on market yields on US dollar denominated AA corporate bonds. Other plans Other plans of the Group include various pension plans, other post-employment and long-term employee benefit plans in several countries of operation. Some of the plans are funded, with assets backing the obligations held in separate legal vehicles such as trusts, whilst others are operated on an unfunded basis. The benefits provided, the approach to funding and the legal basis of the plans reflect their local territories. IAS 19 requires that the discount rate for calculating the defined benefit obligation and service cost is set according to the level of relevant market yields on corporate bonds where the market is considered "deep", or government bonds where it is not. For the year ended 30 September 2024 the Group included one new scheme in the IAS 19 position. In Ireland, the Company and Trustees agreed to offer a lump sum to deferred members of the plan which was completed in 2024. In the US, the Company also agreed a partial pensioner buy-out with our smaller defined benefit plan alongside the ITG Scheme and also agreed changes to our post retirement medical plan with the unionised population. www.imperialbrandsplc.com 189 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued The results of the most recent available actuarial valuations for the various plans have been updated to 30 September 2024 in order to determine the amounts to be included in the Group's consolidated financial statements. The aggregate IAS 19 position is as follows: Defined benefit plans £ million | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | 2024 | | | 2023 | | | DBO | Assets | Total | DBO | Assets | Total | | At 1 October | (3,370) | 2,977 | (393) | (3,609) | 3,541 | (68) | | Consolidated income statement expense: | | | | | | | | Current service cost | (18) | – | (18) | (25) | – | (25) | | Settlements gains/(losses) | 109 | (107) | 2 | 2 | (6) | (4) | | Past service income | 12 | – | 12 | 9 | – | 9 | | Cost of termination benefits | (2) | – | (2) | (5) | – | (5) | | Net interest (expense)/income on net defined benefit | | | | | | | | (liability)/asset | (171) | 160 | (11) | (165) | 178 | 13 | | Administration costs paid from plan assets | – | (5) | (5) | – | (5) | (5) | | Cost recognised in the income statement | | | (22) | | | (17) | | Remeasurements: | | | | | | | | Actuarial gain/(loss) due to liability experience | 13 | – | 13 | (132) | – | (132) | | Actuarial (loss)/gain due to financial assumption | | | | | | | | changes | (161) | – | (161) | 234 | – | 234 | | Actuarial gain due to demographic assumption | | | | | | | | changes | 1 | – | 1 | – | – | – | | Return on plan assets excluding amounts included | | | | | | | | in net interest income/(expense) above Remeasurement effects recognised in other | – | 44 | 44 | – | (478) | (478) | | comprehensive income | | | (103) | | | (376) | | Cash: | | | | | | | | Employer contributions | – | 55 | 55 | – | 59 | 59 | | Benefits paid directly by the Company | 247 | (247) | – | 265 | (265) | – | | Net cash | | | 55 | | | 59 | | Changes to immaterial benefit plans categorised as an IAS 19 obligation recognised in the prior year | (11) | – | (11) | (8) | – | (8) | | Exchange movements | 64 | (33) | 31 | 64 | (47) | 17 | | Total other | | | 20 | | | 9 | | At 30 September | (3,287) | 2,844 | (443) | (3,370) | 2,977 | (393) | Retirement benefit scheme costs charged to operating profit | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Defined benefit expense in operating profit | 11 | 30 | | Defined contribution expense in operating profit | 23 | 16 | | Total retirement benefit scheme cost in operating profit | 34 | 46 | Split as follows in the consolidated income statement: | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Cost of sales | 12 | 15 | | Distribution, advertising and selling costs | 13 | 20 | | Administrative and other expenses | 9 | 11 | | Total retirement benefit scheme costs in operating profit | 34 | 46 | Assets and liabilities recognised in the consolidated balance sheet | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Retirement benefit assets | 376 | 414 | | Retirement benefit liabilities | (819) | (807) | | Net retirement benefit liability | (443) | (393) | +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU190 ![]() Key figures and assumptions used for major plans | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | 2024 | | | 2023 | | £ million unless otherwise indicated | ITPF | RCPP | ITG Scheme | ITPF | RCPP | ITG Scheme | | Defined benefit obligation (DBO) | 2,157 | 524 | 235 | 2,142 | 496 | 311 | | Fair value of scheme assets | (2,459) | – | (264) | (2,481) | – | (337) | | Net defined benefit (asset)/liability | (302) | 524 | (29) | (339) | 496 | (26) | | Current service cost | – | 7 | 2 | 6 | 8 | 2 | | Employer contributions | – | 23 | – | – | 23 | – | | Principal actuarial assumptions used (% per annum) | | | | | | | | Discount rate | 5.1 | 3.4 | 4.8 | 5.6 | 4.2 | 5.7 | | Future salary increases | n/a | 3.1 | n/a | n/a | 3.5 | n/a | | Future pension increases | 3.2 | 2.0 | n/a | 3.4 | 2.4 | n/a | | Inflation | 3.1 | 2.0 | 2.3 | 3.4 | 2.4 | 2.3 | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2024 | | | | ITPF | | RCPP | | ITG Scheme | | | Male | Female | Male | Female | Male | Female | | Life expectancy at age 65 years: | | | | | | | | Member currently aged 65 | 21.2 | 22.6 | 20.9 | 24.3 | 19.8 | 21.9 | | Member currently aged 50 | 22.0 | 23.9 | 22.9 | 25.9 | 21.0 | 23.0 | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2023 | | | | ITPF | | RCPP | | ITG Scheme | | | Male | Female | Male | Female | Male | Female | | Life expectancy at age 65 years: | | | | | | | | Member currently aged 65 | 21.2 | 22.5 | 20.8 | 24.2 | 19.7 | 21.7 | | Member currently aged 50 | 21.9 | 23.8 | 22.8 | 25.8 | 20.8 | 22.8 | Assumptions regarding future mortality experience are set based on advice that uses published statistics and experience in each territory. In particular for the ITPF, SAPS S3 (2023: SAPS S3) tables are used with various adjustments for different groups of members, reflecting observed experience. The largest group of members uses the SAPS S3 All Pensioner Male Amounts Middle table with a 105% multiplier. An allowance for improvements in longevity is made using the 2021 (2023: 2021) CMI improvement rates with a long-term trend of 1.25% per annum. Sensitivity analysis for key assumptions at the end of the year Sensitivity analysis is illustrative only and is provided to demonstrate the degree of sensitivity of results to key assumptions. Generally, estimates are made by re-performing calculations with one assumption modified and all others held constant. % increase in DBO | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | 2024 | | | 2023 | | | ITPF | RCPP | ITG Scheme | ITPF | RCPP | ITG Scheme | | Discount rate: 0.5% decrease | 5.7 | 8.1 | 4.9 | 5.6 | 8.1 | 4.5 | | Rate of inflation: 0.5% decrease | (4.3) | (5.6) | n/a | (4.2) | (5.7) | n/a | | One-year increase in longevity for a member currently age | | | | | | | | 65, corresponding changes at other ages | 3.6 | 4.1 | 4.2 | 3.5 | 4.2 | 4.4 | The sensitivity to the inflation assumption change includes corresponding changes to the future salary increases and future pension increases assumptions, but is assumed to be independent of any change to discount rate. We estimate that a 0.5% decrease in the discount rate at the start of the year would have increased the consolidated income statement pension expense by approximately £8 million (2023: £12 million). www.imperialbrandsplc.com 191 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued An approximate split of the major categories of ITPF scheme assets is as follows: | | | | | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | | | Percentage of | | Percentage of | | | | ITPF scheme | | ITPF scheme | | £ million unless otherwise indicated | Fair value | assets | Fair value | assets | | Bonds - index linked government / LDI funds | 487 | 19.8 | 351 | 14.1 | | Property including ground leases | 446 | 18.1 | 488 | 19.7 | | Secured finance and private debt funds | 463 | 18.8 | 620 | 25.0 | | Insurance contract (buy-in policy) | 1,035 | 42.1 | 1,044 | 42.1 | | Other - including cash and short-term loan drawings | 28 | 1.1 | (22) | (0.9) | | | 2,459 | 100.0 | 2,481 | 100.0 | The primary investment objective is to invest the ITPF's assets in an appropriate and secure manner such that members' benefit entitlements can be paid as they fall due. The majority of the assets are non-quoted. The ITPF holds £nil of self-invested assets (2023: £nil). An approximate split of the major categories of ITG Scheme assets is as follows: | | | | | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | | | P e r c e n t a g e o f | | Percentage of | | | | I TG Schem e | | ITG Scheme | | £ million unless otherwise indicated | F a i i r v a l u e | a s s e t s | Fair value | assets | | Bonds - government, corporate and other | 122 | 46.2 | 203 | 60.2 | | Other - including derivatives, commodities and cash | 142 | 53.8 | 134 | 39.8 | | | 264 | 100.0 | 337 | 100.0 | e f e s The majority of the assets are non-quoted. 25. PROVISIONS | | | | | | | --- | --- | --- | --- | --- | | | | | | 2024 | | | | Employment | | | | £ million | Restructuring | related claims | Other | Total | | At 1 October 2023 | 180 | 144 | 90 | 414 | | Additional provisions charged to the consolidated income statement | – | 14 | 34 | 48 | | Amounts used | (46) | (36) | (22) | (104) | | Unused amounts reversed | – | (3) | (30) | (33) | | Exchange movements | (4) | (7) | (3) | (14) | | At 30 September 2024 | 130 | 112 | 69 | 311 | Analysed as: | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Current | 89 | 148 | | Non-current | 222 | 266 | | | 311 | 414 | Restructuring provisions relate mainly to the 2021 Strategic Review Programme and Cost Optimisation programmes (see note 6). The restructuring provision is split between the 2021 Strategic Review Programme of £63 million (2023: £88 million) and other programmes of £67 million (2023: £92 million). Employment-related claims provisions include £23 million (2023: £31 million) relating to local employment requirements including holiday pay and £25 million (2023: £28 million) of distribution requirements relating to employment and duty. An amount of £64 million (2023: £85 million) has been provided for employment-related claims arising from a number of legacy legal disputes. Although the Company continues to appeal a number of these claims, in the current year the Group has resolved to engage with certain counterparties where a valid claim has been established. There are uncertainties relating to the estimation and quantification of this provision and amounts may change in the future, but this provision is expected to be utilised within the next two years. Other provisions include £29 million (2023: £38 million) relating to various local tax or duty requirements, £8 million (2023: £9 million) of market exit provisions and £12 million for factory closure provisions (2023: £30 million). The provisions are spread throughout the Group and payment will be dependent on local statutory requirements. Most of the provisions will also be utilised within the next two years, though certain employee-related and restructuring provisions may be required to be held for a period of up to 10 years where they relate to requirements to provide benefits for defined periods of time after an employee leaves employment. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU192 ![]() 26. SHARE CAPITAL | | | | | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | | | Ordinary shares 10p each | | Ordinary shares 10p each | | | Number | £ million | Number | £ million | | Authorised, issued and fully paid: | | | | | | 1 October | 968,590,194 | 97 | 1,020,697,237 | 103 | | Shares cancelled | (54,087,312) | (6) | (52,107,043) | (6) | | 30 September | 914,502,882 | 91 | 968,590,194 | 97 | On 5 October 2023, the Board approved a £1,100 million share buyback programme in order to return capital to shareholders. The first tranche purchased 30,317,505 shares for a cost of £550 million. Upon completion of the purchase, these shares were cancelled and transferred to the capital redemption reserve. For the second tranche of the programme, the Group has entered into an irrevocable and non-discretionary arrangement to buy back shares up to £550 million. The second tranche commenced on 11 March 2024 and in the period to 30 September 2024 54,087,312 shares have been bought back and cancelled at a cost of £1,020 million. The stamp duty and other tax costs were £12 million and the fees charged for the share repurchase were £1 million. Upon completion of the purchase, these shares were cancelled and transferred to the capital redemption reserve. As at 30 September 2024, the Group has recognised a liability of £90 million for the remaining shares to be purchased. For the year ended 30 September 2024 the amounts recognised in the share premium and capital redemption reserves were £5,833 million (2023: £5,833 million) and £16 million (2023: £10 million) respectively. 27. SHARE SCHEMES The Group operates four types of share-based incentive programmes, designed to incentivise staff and to encourage them to build a stake in the Group. Share Matching Scheme Awards are made to eligible employees who are invited to invest a proportion of their eligible bonus in shares for a period of three years, after which matching shares are awarded on a 1:1 ratio, plus dividend equivalents. Long-Term Incentive Plan (LTIP) Awards of shares under the LTIP are made to the Executive Directors and senior executives at the discretion of the Remuneration Committee. They vest three years after grant and are subject to performance criteria. Dividend equivalents accrue on vested shares. Sharesave Plan Options are granted to eligible employees who participate in a designated savings scheme for a three-year period. Discretionary Share Awards Plan (DSAP) Under the DSAP, one-off conditional awards are made to individuals to recognise exceptional contributions within the business. Awards, which are not subject to performance conditions and under which vested shares do not attract dividend roll-up, will normally vest on the third anniversary of the date of grant subject to the participant’s continued employment. The limit of an award under the DSAP is capped at 25% of the participant’s salary at the date of grant. Shares used to settle awards under the DSAP will be market purchased. Further details of the schemes including additional criteria applying to Directors and some senior executives are set out in the Directors' Remuneration Report. www.imperialbrandsplc.com 193 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued Analysis of charge to the consolidated income statement | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Share Matching Scheme | 2 | 2 | | Long-Term Incentive Plan | 28 | 27 | | Sharesave Plan | 1 | 1 | | Discretionary Share Awards Plan | 1 | 1 | | | 32 | 31 | The awards are predominantly equity settled. The balance sheet liability in respect of cash-settled schemes at 30 September 2024 was £3.5 million (2023: £3.4 million). Reconciliation of movements in awards/options | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2024 | | | | | | | Sharesave | | | Share | | | | weighted | | | Matching | | | | average | | | Scheme | LTIP | Sharesave | DSAP | exercise | | Thousands of shares unless otherwise indicated | awards | awards | options | awards | price £ | | Outstanding at 1 October 2023 | 453 | 8,502 | 1,686 | 173 | 13.72 | | Granted | 172 | 4,341 | 445 | 73 | 15.96 | | Cancelled/forfeited/lapsed | (20) | (1,608) | (138) | (11) | 13.61 | | Exercised | (234) | (2,670) | (453) | (24) | 13.10 | | Outstanding at 30 September 2024 | 371 | 8,565 | 1,540 | 211 | 14.78 | | Exercisable at 30 September 2024 | – | – | 42 | – | 13.09 | | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2023 | | | Share | | | | Sharesave | | | Matching | | | | weighted | | | | | | | average | | | Scheme | LTIP | Sharesave | DSAP | exercise | | Thousands of shares unless otherwise indicated | awards | awards | options | awards | price £ | | Outstanding at 1 October 2022 | 486 | 8,120 | 1,934 | 120 | 13.21 | | Granted | 161 | 3,853 | 862 | 67 | 13.24 | | Cancelled/forfeited/lapsed | (18) | (2,402) | (90) | (11) | 12.63 | | Exercised | (176) | (1,069) | (1,020) | (3) | 12.38 | | Outstanding at 30 September 2023 | 453 | 8,502 | 1,686 | 173 | 13.72 | | Exercisable at 30 September 2023 | – | – | 264 | – | 12.37 | The weighted average Imperial Brands PLC share price at the date of exercise of awards and options was £20.06 (2023: £18.28). The weighted average fair value of Sharesave options granted during the year was £3.40 (2023: £3.26). +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU194 ![]() Summary of awards/options outstanding at 30 September 2024 | | | | | | --- | --- | --- | --- | | | | Vesting | | | | Number of | period | Exercise price | | | awards/options | remaining | of options | | Thousands of shares unless otherwise indicated | outstanding | in months | outstanding £ | | Share Matching Scheme | | | | | 2022 | 128 | 5 | n/a | | 2023 | 122 | 17 | n/a | | 2024 | 121 | 29 | n/a | | Total awards outstanding | 371 | | | | Long-Term Incentive Plan | | | | | 2022 | 2,313 | 5 | n/a | | 2023 | 2,675 | 17 | n/a | | 2024 | 3,577 | 29 | n/a | | Total awards outstanding | 8,565 | | | | Sharesave Plan | | | | | 2021 | 42 | – | 13.09 | | 2022 | 244 | 10 | 14.56 | | 2023 | 815 | 22 | 14.29 | | 2024 | 439 | 34 | 15.96 | | Total options outstanding | 1,540 | | | | Discretionary Share Awards Plan | | | | | 2022 | 74 | 5 | n/a | | 2023 | 65 | 18 | n/a | | 2024 | 72 | 29 | n/a | | Total options outstanding | 211 | | | The vesting period is the period between the grant of awards or options and the earliest date on which they are exercisable. The vesting period remaining and the exercise price of options outstanding are weighted averages. Participants in the Sharesave Plan have six months from the maturity date to exercise their options. Participants in the LTIP generally have seven years from the end of the vesting period to exercise their options. The exercise price of the options is fixed over the life of each option. Pricing For the purposes of valuing options to calculate the share-based payment charge, the Black-Scholes option pricing model has been used for the Share Matching Scheme, Sharesave Plan, Discretionary Share Awards Plan and one Long-Term Incentive Plan with no market conditions. A summary of the assumptions used in the Black-Scholes model for 2024 and 2023 is as follows: | | | | | | --- | --- | --- | --- | | | | | 2024 | | | Share | | | | | Matching | | | | | Scheme | Sharesave | DSAP | | Risk-free interest rate % | 4.2 | 4.3 | 4.2 | | Volatility (based on 3-year history) % | 25.0 | 24.1 | 25.0 | | Expected lives of options granted years | 3.0 | 3.0 | 3.0 | | Dividend yield % | 7.6 | 7.6 | 7.6 | | Fair value £ | 14.56 | 3.40 | 14.55 | | Share price used to determine exercise price £ | 18.31 | 19.80 | 18.31 | | Exercise price £ | n/a | 15.96 | n/a | www.imperialbrandsplc.com 195 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued | | | | | | --- | --- | --- | --- | | | | | 2023 | | | Share | | | | | Matching | | | | | Scheme | Sharesave | DSAP | | Risk-free interest rate % | 4.0 | 4.4 | 4.1 | | Volatility (based on 3-year history) % | 33.1 | 27.7 | 33.2 | | Expected lives of options granted years | 3.0 | 3.0 | 3.0 | | Dividend yield % | 8.2 | 8.2 | 8.2 | | Fair value £ | 16.04 | 3.30 | 14.72 | | Share price used to determine exercise price £ | 20.53 | 17.88 | 18.84 | | Exercise price £ | n/a | 14.29 | n/a | Market conditions were incorporated into the Monte Carlo method used in determining the fair value of LTIP awards at grant date. Assumptions in 2024 and 2023 are given in the following table: | | | | | --- | --- | --- | | % | 2024 | 2023 | | Future Imperial Brands share price volatility | 18.1 | 23.3 | | Future Imperial Brands dividend yield | – | – | | Share price volatility of the tobacco and alcohol comparator group | 15.4-23.1 | 15.9-63.5 | | Correlation between Imperial Tobacco and the alcohol and tobacco comparator group | 18.9 | 21.4 | Employee Share Ownership Trusts The Imperial Tobacco Group PLC Employee and Executive Benefit Trust and the Imperial Tobacco Group PLC 2001 Employee Benefit Trust (the Trusts) have been established to acquire ordinary shares in the Company to satisfy rights to shares arising on the exercise and vesting of options and awards. The purchase of shares by the Trusts has been financed by a gift of £19.2 million and an interest free loan of £147.5 million. In addition the Group has gifted treasury shares to the Trusts. None of the Trusts' shares has been allocated to employees or Executive Directors as at 30 September 2024. All finance costs and administration expenses connected with the Trusts are charged to the consolidated income statement as they accrue. The Trusts have waived their rights to dividends and the shares held by the Trusts are excluded from the calculation of basic earnings per share. Shares held by Employee Share Ownership Trusts | | | | | --- | --- | --- | | Millions of shares | 2024 | 2023 | | At 1 October | 1.6 | 3.7 | | Gift of shares from Treasury | 2.0 | – | | Distribution of shares held by Employee Share Ownership Trusts | (3.3) | (2.1) | | At 30 September | 0.3 | 1.6 | The shares in the Trusts are accounted for on a first in first out basis and comprise nil shares acquired in the open market (2023: nil) and 0.3 million (2023: 1.6 million) treasury shares gifted to the Trusts by the Group. 2.0 million shares (2023: no shares) were gifted to the Trusts in the financial year 2024. 28. TREASURY SHARES Subject to authorisation by special resolution, the Group may purchase its own shares in accordance with the Companies Act. Any shares which have been bought back may be held as treasury shares or, if not so held, must be cancelled immediately upon completion of the purchase, thereby reducing the amount of Group’s issued share capital. Shares held in treasury do not qualify for dividends. Shares purchased under the share buyback programme initiated on 5 October 2023 were cancelled immediately on completion of the purchase. During the financial year 2.0 million shares were gifted to Employee Share Ownership Trusts (2023: no movements). | | | | | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | | Millions of | | Millions of | | | | shares | Value | shares | Value | | £ million unless otherwise indicated | (number) | £ | (number) | £ | | At 1 October | 70.3 | 2,183 | 70.3 | 2,183 | | Gifted to Employee Share Ownership Trusts | (2.0) | – | – | – | | At 30 September | 68.3 | 2,183 | 70.3 | 2,183 | | Percentage of issued share capital | 7.5 | n/a | 7.3 | n/a |  +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU196 ![]() 29. COMMITMENTS Capital commitments | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Contracted but not provided for: | | | | Property, plant and equipment and software | 207 | 97 | 30. CONTINGENT LIABILITIES The following summary includes updates to matters that have developed since the 2023 Annual Report and Accounts. USA state settlement agreements In November 1998, the major United States cigarette manufacturers, including Reynolds and Philip Morris, entered into the Master Settlement Agreement (“MSA”) with 52 US states and territories and possessions. These cigarette manufacturers previously settled four other cases, brought by Mississippi, Florida, Texas and Minnesota, by separate agreements with each state (collectively with the MSA, the “State Settlement Agreements”, with Mississippi, Florida, Texas and Minnesota known collectively as the “Previously Settled States”). ITG Brands (ITGB) is a party to the MSA and to the Mississippi, Minnesota, and Texas State Settlement Agreements. In connection with its 12 June 2015 acquisition of four cigarette brands (Winston, Salem, Kool and Maverick, referred to as the “Acquired Brands”) from Reynolds and Lorillard, ITGB has been involved in litigation and other disputes with the Previously Settled States, Philip Morris, and Reynolds in their state courts. Delaware ITGB is involved in litigation with Reynolds in the Delaware court that has jurisdiction over disputes under the Asset Purchase Agreement (APA) for the Acquired Brands. The current case in progress involves Reynolds’ claim to indemnity for Florida settlement payments. The issue in this case is whether ITGB has satisfied its obligations to use “reasonable best efforts” to join the settlement with Florida under the APA and whether regardless of that “reasonable best efforts” requirement ITGB is required to indemnify Reynolds for amounts the Florida Court has required Reynolds to pay. On 30 September 2022, the trial court granted summary judgment to Reynolds and denied summary judgment to ITGB. It held that the Florida court’s determination that ITGB did not assume payments under the Florida settlement unless it agreed to do so was not binding on the Delaware courts under principles of issue preclusion. It further held that as a matter of law the contract provisions were unambiguous and no evidence was required, and that ITGB had assumed and was required to indemnify Reynolds for Florida settlement payments. The Court did not determine the amount of Reynolds’ damages but left that question open for further proceedings. On 2 October 2023 the Court issued an initial order on damages. The court rejected ITGB’s claim that no damages could be assessed but declined to decide the amount of damages and other issues until after a trial. A trial was held on 8-9 July 2024 and a decision is now pending. After trial court proceedings on damages are completed, ITGB will have the right to appeal (including from the court’s earlier determinations) to the Delaware Supreme Court. Reynolds’ claim for indemnification in Delaware is limited at most to the amounts it has been required to pay under the Florida determination described above, plus interest and attorney’s fees. ITGB continues to deny that indemnity is appropriate and intends to appeal that determination. ITGB further contends that Reynolds’ damages should be substantially reduced by the amount by which Reynolds’ settlement payments have been reduced through operation of the “profit adjustment” by reason of ITGB not becoming a party to the Florida settlement as well as by reason of Reynolds’ and third-parties’ conduct. On 31 October 2023 Philip Morris USA moved to intervene in the damages determination on the theory that any profit adjustment gain belongs to Philip Morris, not ITGB or Reynolds. On 1 April 2024 the court denied intervention. Amounts at issue range up to US$ 250 million through 2023, plus future payments of up to US$ 27 million annually going forward plus interest of approximately US$ 68 million and attorney fees. Based on the current facts and circumstances it is currently unclear as to what level of damages will become payable in this case. MSA Previously Settled States Reduction The MSA contains a downward adjustment, called the Previously Settled States Reduction, which reduces aggregate payments made by Philip Morris, Reynolds, and ITGB by a specified percentage each year. The State of California, later joined by the remainder of the MSA states and by Philip Morris, challenged the application of that Reduction to ITGB for every year from 2016 forward, claiming that it cannot apply to ITGB since it is not making settlement payments to Florida, Minnesota, or Texas under their settlements. The Independent Auditor to the MSA, which initially addresses disputes related to payments, has rejected that challenge every year. It is possible that one of the parties making the challenge may seek to arbitrate the claim under the MSA. The PSS Reduction provides annual MSA payment reductions of c.US$ 65 million. Overall summary of liability position associated with USA state settlement agreements The Group’s legal advice is that it has a strong position on pending claims related to the Acquired Brands and the Group therefore considers that no provision is required for these matters. www.imperialbrandsplc.com 197 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued Product liability investigations The Group is currently involved in a number of legal cases in which claimants are seeking damages for alleged smoking and health related effects. In the opinion of the Group’s lawyers, the Group has meritorious defences to these actions, all of which are being vigorously contested. Although it is not possible to predict the outcome of the pending litigation, the Directors believe that the pending actions will not have a material adverse effect upon the results of the operations, cash flow or financial condition of the Group. This assessment of the probability of economic outflows at the year-end is a judgement which has been taken by management. Consequently, the Group has not provided for any amounts in respect of these cases in the financial statements. There have been no material updates to matters in any product liability investigations in the period since the 2023 Annual Report and Accounts. Competition authority investigations Spain On 12 April 2019 the Spanish National Commission on Markets and Competition (CNMC) announced penalties against Philip Morris Spain, Altadis, JT International Iberia and Logista. Altadis and Logista received fines of 11.4 million and 20.9 million, respectively, from the CNMC. According to the decision, Altadis and Logista are alleged to have infringed competition law by participating in an exchange of sales volume data between 2008 and February 2017. The CNMC considers that this conduct had the effect of restricting competition in the Spanish tobacco market. Both companies believe that the arguments made by the CNMC that define this conduct as anti-competitive are flawed. In June 2019, both Altadis and Logista commenced appeals to the CNMC’s decision, and the fines imposed in the Spanish High Court where they believe they will be successful, a decision supported by external legal counsel. In September 2019 Altadis and, separately, Logista arranged bank guarantees for the full amount of the fines with the result that payment of the fines had been suspended pending the outcome of the appeals. Therefore, provision for these amounts is not considered appropriate. In both the Altadis and Logista appeals, the parties have concluded their submissions to the Court and a judgment is awaited in 2024/2025 In parallel to the main proceedings against the CNMC decision, on 28 February 2023, the Supreme Court annulled the unannounced inspection carried out by the CNMC officials on Altadis' premises in February 2017 for lack of consent by Altadis. Therefore, all the documents and evidence seized by the CNMC during Altadis' inspection have to be returned to the company and should be struck out from the CNMC decision. It remains to be seen the impact of this Court decision on the main proceedings. Other litigation US Helms-Burton litigation Imperial Brands PLC has been named as a defendant in a civil action in federal court in Miami, Florida under Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (“Helms-Burton”) filed on 6 August 2020. Title III provides United States nationals with a cause of action and a claim for treble damages against persons who have “trafficked” in property expropriated by the Cuban government. Although the filed claim is for unquantified damages, we understand the claim could potentially reach approximately US$ 365 million, based on the claimants’ claim to own 90% of the property, which they value at US$ 135 million (and then treble based on the claimants’ interpretation of the legislation). The claim is based on allegations that Imperial, through Corporación Habanos S.A. (a joint venture between one of Imperial’s now former subsidiaries and the Cuban government), has “trafficked” in a factory in Havana, Cuba that the Cuban government confiscated from the claimants’ ancestor in the early 1960s, by using the factory to manufacture, market, sell, and distribute Habanos cigars. At the time the claim was filed against Imperial and up until the conclusion of the Brexit “transition period” on 31 December 2020, Imperial was subject to an EU law known as the EU Blocking Statute (Regulation (EC) No. 2271/96), which conflicts with Helms-Burton, protected Imperial against the impact of Title III, and impacted how Imperial might respond to the threatened litigation. The EU Blocking Statute has been transposed into domestic law with only minimal changes. Accordingly, on 10 January 2021, Imperial submitted an application to the UK Department for International Trade for authorisation from the Secretary of State for International Trade to defend the action or, at a minimum, to file and litigate a motion to dismiss the action and this was granted on 8 February 2021. Following a lengthy motion to dismiss proceedings, on 28 November 2023, a magistrate issued a recommended ruling, and recommended dismissal of the case in its entirety as against Imperial on three separate grounds. On 8 April 2024, the judge adopted the magistrate’s recommendation that the case be dismissed for lack of personal jurisdiction and entered an order dismissing and closing the case. The Claimants filed an appeal against the judge’s dismissal of the claim on 7 May 2024. The claimants’ appeal submissions were filed on 16 August 2024 and the Group response was submitted on 16 October 2024. The appellate court has not scheduled a hearing in the appeal, however it is likely that a hearing will be held in spring 2025. A decision on the appeal will follow the hearing. No provision has been made for potential liabilities related to this claim. UK In June 2020, the Group responded to a claimant law firm’s allegation of human rights issues in the Malawian tobacco supply chain, which included allegations relating to child and forced labour. In December 2020, a claim was filed in the English High Court against Imperial Brands plc, Imperial Tobacco Limited and four of its subsidiaries (the Imperial Defendants) and two entities in the British American Tobacco (the BAT Defendants) group by a group of Malawian tobacco farm workers. The Imperial Defendants have acknowledged service and confirmed to the claimants that they intend to defend the claim in full. The Imperial Defendants have not yet been required to file their defence. The deadline for the Imperial and BAT Defendants to do so has been postponed pending other case management actions and will be determined at a subsequent case management hearing after the completion of a matching exercise (which will seek to establish whether the claimants worked for farmers who grew tobacco purchased by either Defendant group). That hearing is not likely to take place before 2025. The claim is unquantified and given the early stage of the litigation a provision would not be appropriate. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU198 ![]() 31. NET DEBT The movements in cash and cash equivalents, borrowings, and derivative financial instruments in the year were as follows: | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Derivative | Liabilities | Cash | | | | Current | Lease | Non-current | financial | from financing | and cash | | | £ million | borrowings | liabilities | borrowings | instruments | activities | equivalents | Total | | At 1 October 2023 | (1,499) | (349) | (7,882) | (53) | (9,783) | 1,345 | (8,438) | | Reallocation of current borrowings from non- current borrowings | (1,673) | – | 1,673 | – | – | – | – | | Cash flow | 1,760 | 107 | (1,660) | 34 | 241 | (203) | 38 | | Change in accrued interest | 37 | (14) | (21) | 12 | 14 | – | 14 | | Change in fair values | – | – | – | (119) | (119) | – | (119) | | New leases, terminations and modifications | – | (144) | – | – | (144) | – | (144) | | Exchange movements | 184 | 14 | 384 | (209) | 373 | (64) | 309 | | At 30 September 2024 | (1,191) | (386) | (7,506) | (335) | (9,418) | 1,078 | (8,340) | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Derivative | Liabilities | Cash | | | | Current | Lease | Non-current | financial | from financing | and cash | | | £ million | borrowings | liabilities | borrowings | instruments | activities | equivalents | Total | | At 1 October 2022 | (1,011) | (248) | (8,996) | (87) | (10,342) | 1,850 | (8,492) | | Reallocation of current borrowings from non- current borrowings | (1,536) | – | 1,536 | – | – | – | – | | Cash flow | 891 | 92 | (835) | 64 | 212 | (349) | (137) | | Change in accrued interest | 2 | (10) | (24) | 1 | (31) | – | (31) | | Change in fair values | – | – | – | 139 | 139 | – | 139 | | New leases, terminations and modifications | – | (106) | – | – | (106) | – | (106) | | Acquisitions | – | (84) | – | – | (84) | – | (84) | | Exchange movements | 155 | 7 | 437 | (170) | 429 | (156) | 273 | | At 30 September 2023 | (1,499) | (349) | (7,882) | (53) | (9,783) | 1,345 | (8,438) | Average reported net debt during the year was £10,037 million (2023: £10,072 million). Analysis by denomination currency | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2024 | | £ million | GBP | EUR | USD | Other | Total | | Cash and cash equivalents | 356 | 179 | 129 | 414 | 1,078 | | Total borrowings | (1,014) | (3,383) | (4,291) | (9) | (8,697) | | | (658) | (3,204) | (4,162) | 405 | (7,619) | | Effect of cross-currency swaps | 1,022 | (5,532) | 4,292 | – | (218) | | | 364 | (8,736) | 130 | 405 | (7,837) | | Lease liabilities | (39) | (265) | (47) | (35) | (386) | | Derivative financial instruments | | | | | (117) | | Net debt | | | | | (8,340) | www.imperialbrandsplc.com 199 ![]() CONSOLIDATED FINANCIAL STATEMENTS continued NOTES TO THE FINANCIAL STATEMENTS continued | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | 2023 | | £ million | GBP | EUR | USD | Other | Total | | Cash and cash equivalents | 177 | 405 | 324 | 439 | 1,345 | | Total borrowings | (1,631) | (3,417) | (4,319) | (14) | (9,381) | | | (1,454) | (3,012) | (3,995) | 425 | (8,036) | | Effect of cross-currency swaps | 1,576 | (6,016) | 4,323 | – | (117) | | | 122 | (9,028) | 328 | 425 | (8,153) | | Lease liabilities | (43) | (247) | (26) | (33) | (349) | | Derivative financial instruments | | | | | 64 | | Net debt | | | | | (8,438) | 32. RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT | | | | | --- | --- | --- | | £ million | 2024 | 2023 | | Decrease in cash and cash equivalents | (203) | (349) | | Cash flows relating to derivative financial instruments | 34 | 64 | | Repayment of lease liabilities | 107 | 92 | | Increase in borrowings | (3,848) | (1,462) | | Repayment of borrowings | 3,948 | 1,518 | | Change in net debt resulting from cash flows | 38 | (137) | | Other non-cash movements including revaluation of derivative financial instruments | (105) | 108 | | Lease liabilities | (144) | (190) | | Exchange movements | 309 | 273 | | Movement in net debt during the year | 98 | 54 | | Opening net debt | (8,438) | (8,492) | | Closing net debt | (8,340) | (8,438) | The increase in borrowings and repayment of borrowings reflect the cash flow movements relating to borrowings outstanding at the start and at the end of each financial year; cash flows relating to short-term borrowings drawn down and repaid within the year are not included in this analysis. 33. NON-CONTROLLING INTERESTS Material non-controlling interests Detailed below is the summarised financial information of Logista, being a subsidiary where the non-controlling interest of 49.99% is considered material to the Group. Summarised balance sheet at 30 September | | | | | --- | --- | --- | | Euro million | 2024 | 2023 | | Current assets | 6,290 | 6,246 | | Current liabilities | (6,990) | (6,983) | | Current net liabilities | (700) | (737) | | Non-current assets | 1,790 | 1,816 | | Non-current liabilities | (449) | (482) | | Non-current net assets | 1,341 | 1,334 | | Net assets | 641 | 597 | Summarised statement of comprehensive income for the year ended 30 September | | | | | --- | --- | --- | | Euro million | 2024 | 2023 | | Revenue | 12,986 | 12,428 | | Profit for the year | 308 | 274 | | Other comprehensive income | – | 3 | | Total comprehensive income | 308 | 277 |  +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU200 ![]() Summarised cash flow statement for the year ended 30 September | | | | | --- | --- | --- | | Euro million | 2024 | 2023 | | Cash flows from operating activities | 397 | 308 | | Cash flows from investing activities | (51) | (83) | | Cash flows from financing activities | (370) | (250) | | Net decrease in cash and cash equivalents | (24) | (25) | 34. POST BALANCE SHEET EVENTS Share buybacks On 5 October 2023 Imperial Brands PLC (‘the Company’) announced a share buyback programme to repurchase up to £1.1 billion of shares. This programme completed on 29 October 2024 with the Company having repurchased 4,010,463 million shares for a total consideration of £90 million in the period from 1 October 2024 to 29 October 2024. On 8 October 2024 Imperial Brands PLC ("the Company") announced the start of a new ongoing share buyback programme, to initially repurchase up to £1.25 billion of shares in the period to 29 October 2025. On 30 October 2024, in order to execute the first tranche of this buyback, the Company announced it had had entered into an irrevocable and non-discretionary arrangement with its broker Morgan Stanley & Co. International Plc to buy back up to £625 million of its shares commencing from 30 October 2024 and expected to end no later than 29 April 2025. 35. RELATED UNDERTAKINGS In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates, and joint ventures, the principal activity, the full registered address and the effective percentage of equity owned by Imperial Brands PLC, as at 30 September 2024, are provided in the entity financial statements of Imperial Brands PLC. There are no material related parties other than Group companies. www.imperialbrandsplc.com 201 ![]() SUPPLEMENTARY INFORMATION #### ALTERNATIVE PERFORMANCE MEASURES Use of alternative performance measures Management believes that non-GAAP or alternative performance measures provide an important comparison of business performance and reflect the way in which the business is controlled. The alternative performance measures seek to remove the distorting effects of a number of significant gains or losses arising from transactions which are not directly related to the ongoing underlying performance of the business and may be non-recurring events or not directly within the control of management. Accordingly, alternative performance measures exclude, where applicable, amortisation and impairment of acquired intangibles, profit/loss on disposal of subsidiaries, Russia, Ukraine and associated market costs, restructuring costs, business acquisition and disposal costs, fair value adjustment and impairment of other financial assets, charges related to legal provisions, structural changes to defined benefit pension schemes, fair value and exchange gains and losses on financial instruments, post-employment benefits net financing cost/income, and related tax effects and tax matters. Other significant gains or losses which are not representative of the underlying business may also be treated as adjusting items where there is appropriate justification. The alternative performance measures in this report are not defined terms under IFRS and may not be comparable with similarly titled measures reported by other companies. The alternative performance measures that are used by the Group are defined and reconciled back to the associated IFRS metrics as detailed below. Summary of key adjusting items The items excluded from adjusted performance results are those which are one-off in nature or items which arose due to acquisitions and are not influenced by the day-to-day operations of the Group, and the movements in the fair value of financial instruments which are marked to market and not naturally offset. Adjusted net finance costs also excludes all post-employment benefit net finance cost/income since pension assets and liabilities and redundancy and social plan provisions do not form part of adjusted net debt. This allows comparison of the Group's cost of debt with adjusted net debt. The adjusted performance measures are used by management to assess the Group's financial performance and aid comparability of results year on year. Consolidated income statement adjusting items The following tables summarise the key items recognised within the consolidated income statement that have been treated as adjusting items: Adjusting items recognised within administrative and other expenses £ million 2024 2023 Russia, Ukraine and associated markets – (4) Amortisation and impairment of acquired intangibles (353) (347) Fair value adjustment and impairment of other financial assets – (36) Loss on disposal of subsidiaries – (1) Charges related to legal provisions – (85) Structural changes to defined benefit pension schemes (4) (12) Total adjusting administrative and other expenses (357) (485) Total non-adjusting administrative and other expenses (485) (455) Administrative and other expenses (842) (940) +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU202 ![]() Amortisation and impairment of acquired intangibles Acquired intangibles are amortised over their estimated useful economic lives where these are considered to be finite. Acquired intangibles considered to have an indefinite life are not amortised. Any negative goodwill arising is recognised immediately in the income statement. The Group excludes from adjusted performance measures the amortisation and impairment of acquired intangibles, other than software and internally generated intangibles, and the deferred tax associated with amortisation of acquired intangibles. It is recognised that there may be some correlation between the amortisation charges derived from the acquisition value of acquired intangibles, and the subsequent future profit streams arising from sales of associated branded products. However, the amortisation of intangibles is not directly related to the operating performance of the business. Conversely, the level of profitability of branded products is directly influenced by day-to-day commercial actions, with variations in the level of profit derived from branded product sales acting as a clear indicator of performance. Given this, the Group’s view is that amortisation and impairment charges do not clearly correlate to the ongoing variations in the commercial results of the business and are therefore excluded to allow a clearer view of the underlying performance of the organisation. The deferred tax arising on intangibles which are either being amortised or are fully amortised is excluded on the basis that amortisation of intangibles is not directly related to the operating performance of the business. The related current cash tax benefit is retained in the adjusted measure to reflect the ongoing tax benefit to the Group. Total amortisation and impairment for the year is £399 million (2023: £392 million) of which £353 million (2023: £347 million) relates to acquired intangibles and is adjusting and £46 million (2023: £45 million) relates to internally generated intangibles and is non adjusting. In the year ended 30 September 2024 adjusting items all relate to amortisation. £345 million (2023: £339 million) is attributable to Tobacco & NGP and £8 million (2023: £8 million) is attributable to Distribution. Fair value adjustment and impairment of other financial assets As the movement in the fair value of loan receivables associated with the investment in Auxly Cannabis Group Inc. has the potential to be significant and does not show a fair representation of the day-to-day operational performance of the asset, it is treated as an adjusting item. No fair value adjustments have been recognised in the year ended 30 September 2024. The fair value adjustment in the prior year includes changes in the carrying value of certain financial assets held by ITG Brands. Charges related to legal provisions The adjusting item relates to legal provisions that the Group has provided for (see note 25). These are potential liabilities arising from a number of legacy legal disputes across the Group that have been in the courts for several years and which the Group have considered as being unrelated to ongoing business performance and therefore adjusted. The final settlement and agreement of these cases still remain uncertain but future outflows are still expected. Structural changes to defined benefit pension schemes These are non-recurring pension scheme restructuring costs (see note 24). These comprise £6 million of costs following a tax legal ruling that became applicable in relation to the closure of a defined benefit retirement scheme in the UK during the prior year, £4 million of settlement losses in relation to a lump sum offered to deferred members of a defined benefit retirement scheme in Ireland, and £6 million of settlement gains following the partial buy-out of some of the pensioner and dependent population of defined benefit retirement schemes in the USA. The prior year included £8 million of net costs related to the closure of the UK defined benefit retirement scheme to future accrual and a £4 million settlement charge on the full closure of the New Zealand defined benefit scheme. Adjusting items recognised within share of profit of investments accounted for using the equity method £ million 2024 2023 Share of profit of investments accounted for using the equity method 9 7 Adjusting items recognised within tax £ million 2024 2023 Deferred tax on amortisation of acquired intangibles – (4) Tax on net foreign exchange and fair value gains and losses on financial instruments 224 89 Tax on post-employment benefits net financing cost 5 – Tax on charges relating to legal provisions 2 26 Tax on structural changes to defined benefit pension schemes – 3 Tax on fair value adjustment and impairment of other financial assets – 5 Tax on interest settlements (1) 2 Recognition of deferred tax assets 293 212 Provision for state aid tax recoverable 101 – Uncertain tax positions (164) (207) Prior year adjustments 57 – Total adjusting taxation charges 517 126 Other non-adjusting taxation charges (799) (781) Reported tax (282) (655) www.imperialbrandsplc.com 203 ![]() SUPPLEMENTARY INFORMATION continued ALTERNATIVE PERFORMANCE MEASURES continued Tax adjustments related to other pre-tax adjusting items The adjusted tax charge has been calculated to include the tax effects of a number of pre-tax adjusting items including the amortisation of acquired intangibles, net foreign exchange gains and losses, fair value movements on financial instruments, restructuring costs and post-employment benefits net financing cost. Significant one-off tax charges or credits The adjusted tax charge also excludes significant one-off tax charges or credits arising from: • prior period tax items (including re-measurement of deferred tax balances on a change in tax rates); or • a provision for uncertain tax items not arising in the normal course of business; or • newly enacted taxes in the year; or • tax items that are closely related to previously recognised tax matters, and are excluded from our adjusted tax charge to aid comparability and understanding of the Group’s performance. The recognition and utilisation of deferred tax assets relating to tax losses and tax credits not historically generated in the normal course of business are excluded on the same basis. Recognition of deferred tax assets Significant one-off tax charges or credits arising from prior period items, and arising due to a change of facts and circumstances in the current year, are excluded from the adjusted tax charge. The recognition of a deferred tax asset in relation to tax credits brought forward within the Group’s Maltese treasury centre, has been recognised as a result of clarifying tax guidance issued by the tax authorities during the year ended 30 September 2024 and the resulting intention to utilise these brought forward tax credits against forecast taxable income relating to loans refinanced for a further fixed term tenure during the financial year. Provision for state aid tax recoverable Significant one-off tax charges or credits arising from prior period items are excluded from the adjusted tax charge. The receivable booked for the state aid tax recoverable is therefore excluded from the adjusted tax charge on this basis. Uncertain tax positions Significant one-off tax charges or credits arising from a provision for uncertain tax items not arising in the normal course of business are excluded from the adjusted tax charge. Prior period tax items Significant one-off tax charges or credits arising from prior period items are excluded from the adjusted tax charge. A review of the historic current tax position of Imperial Tobacco International GmbH was undertaken resulting in a prior year adjustment of £53 million. In line with the policy, the relevant tax effect has been adjusted out. Tax on unrecognised losses The recognition and utilisation of deferred tax assets relating to losses not historically generated in the normal course of business are excluded from the adjusted tax charge. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU204 ![]() DEFINITIONS AND RECONCILIATIONS OF ALTERNATIVE PERFORMANCE MEASURES A) Tobacco & NGP net revenue Tobacco & Next Generation Products (NGP) net revenue comprises associated revenue less duty and similar items, excluding peripheral products. Management considers this an important measure in assessing the performance of Tobacco & NGP operations. The Group recognises revenue on sales to Logista, a Group company, within its reported Tobacco & NGP revenue figure. As the revenue calculation includes sales made to Logista from other Group companies but excludes Logista's external sales, this metric differs from revenue calculated under IFRS accounting standards. For the purposes of alternative performance measures on net revenue the Group treats Logista as an arm’s length distributor on the basis that contractual rights are in line with other Third Party suppliers to Logista. Variations in the amount of inventory held by Logista results in a different level of revenue compared to that which is included within the income statement. For tobacco product sales, inventory level variations are normally not significant. Reconciliation from Tobacco & NGP revenue to Tobacco & NGP net revenue 2024 2023 £ million Tobacco NGP Total Tobacco NGP Total Revenue 21,708 376 22,084 22,114 299 22,413 Duty and similar items (13,877) (47) (13,924) (14,364) (34) (14,398) Sale of peripheral products (3) – (3) (3) – (3) Net revenue 7,828 329 8,157 7,747 265 8,012 B) Distribution gross profit Distribution gross profit comprises the Distribution segment revenue less the cost of distributed products. Management considers this an important measure in assessing the performance of Distribution operations. Reconciliation from Distribution revenue to Distribution gross profit £ million 2024 2023 Distribution revenue 11,104 10,819 Distribution cost of sales (9,601) (9,353) Distribution gross profit 1,503 1,466 C) Adjusted operating profit Adjusted operating profit is calculated as operating profit amended for a number of adjustments; the principal changes are detailed below. This measure is separately calculated and disclosed for Tobacco, NGP and Distribution where appropriate. Reconciliation from profit before tax to adjusted operating profit £ million 2024 2023 Profit before tax 3,029 3,111 Net finance costs 534 298 Share of profit of investments accounted for using the equity method (9) (7) Operating profit 3,554 3,402 Russia, Ukraine and associated markets – 4 Amortisation and impairment of acquired intangibles 353 347 Fair value adjustment and impairment of other financial assets – 36 Loss on disposal of subsidiaries – 1 Charges related to legal provisions – 85 Structural changes to defined benefit pension schemes 4 12 Total adjustments 357 485 Adjusted operating profit 3,911 3,887 www.imperialbrandsplc.com 205 ![]() SUPPLEMENTARY INFORMATION continued ALTERNATIVE PERFORMANCE MEASURES continued Reconciliation from Tobacco & NGP operating profit to adjusted operating profit 2024 2023 £ million Tobacco NGP Total Tobacco NGP Total Operating profit/(loss) 3,321 (83) 3,238 3,262 (156) 3,106 Russian, Ukraine and associated markets – – – 4 – 4 Amortisation and impairment of acquired intangibles 341 4 345 334 5 339 Fair value adjustment and impairment of other financial assets – – – 20 16 36 Loss on disposal of subsidiaries – – – 1 – 1 Charges related to legal provisions – – – 85 – 85 Structural changes to defined benefit pension schemes 4 – 4 12 – 12 Adjusted operating profit/(loss) 3,666 (79) 3,587 3,718 (135) 3,583 Reconciliation from Distribution operating profit to Distribution adjusted operating profit £ million 2024 2023 Distribution operating profit 322 298 Amortisation of acquired intangibles 8 8 Distribution adjusted operating profit 330 306 See note 12 for details on amortisation and impairment and note 24 for details on structural changes to defined benefit pension schemes. D) Adjusted operating profit margin Adjusted operating profit margin is adjusted operating profit divided by net revenue expressed as a percentage (see note 3). This measure is separately calculated and disclosed for the Tobacco & NGP and Distribution businesses where appropriate. There is no reconciliation required for this metric. E) Adjusted net finance costs Adjusted net finance costs excludes the movements in the fair value of financial instruments which are marked to market and not naturally offset. This measure also excludes all post-employment benefit net finance costs since pension assets and liabilities and redundancy and social plan provisions do not form part of adjusted net debt. This allows comparison of the Group's cost of debt with adjusted net debt. IFRS 9 requires that all derivative financial instruments are recognised in the consolidated balance sheet at fair value, with changes in the fair value being recognised in the consolidated income statement unless the instrument satisfies the hedge accounting rules under IFRS and the Group chooses to designate the derivative financial instrument as a hedge. The Group hedges underlying exposures in an efficient, commercial and structured manner. However, the strict hedging requirements of IFRS 9 may lead to some commercially effective hedge positions not qualifying for hedge accounting. As a result, and as permitted under IFRS 9, the Group has decided not to apply cash flow or fair value hedge accounting for its derivative financial instruments. However, the Group does apply net investment hedging, designating certain borrowings and derivatives as hedges of the net investment in the Group’s foreign operations, as permitted by IFRS 9, in order to reduce income statement volatility. The Group excludes fair value gains and losses on derivative financial instruments and exchange gains and losses on borrowings from adjusted net finance costs. Fair value gains and losses on the interest element of derivative financial instruments are excluded as there is no direct natural offset between the movements on derivatives and the interest charge on debt in any one period, as the derivatives and debt instruments may be contracted over different periods, although they will reverse over time or are matched in future periods by interest charges. The fair value gains on derivatives are excluded as they can introduce volatility in the finance charge for any given period. Fair value gains and losses on the currency element of derivative financial instruments and exchange gains and losses on borrowings are excluded as the relevant foreign exchange gains and losses on the instruments in a net investment hedging relationship are accumulated as a separate component of other comprehensive income in accordance with the Group’s policy on foreign currency. Fair value movements arising from the revaluation of contingent consideration liabilities are adjusted out where they represent one-off acquisition costs that are not linked to the current period underlying performance of the business. Fair value adjustments on loans receivable measured at fair value are excluded as they arise due to counterparty credit risk changes that are not directly related to the underlying commercial performance of the business. The net interest on defined benefit assets or liabilities, together with the unwind of discount on redundancy, social plans and other long- term provisions, are reported within net finance costs. These items together with their related tax effects are excluded from our adjusted earnings measures, as they primarily represent charges associated with historic employee benefit commitments, rather than the ongoing current period costs of operating the business. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU206 ![]() Reconciliation from reported net finance costs to adjusted net finance costs £ million 2024 2023 Reported net finance costs 534 298 Fair value gains on derivative financial instruments 513 707 Fair value losses on derivative financial instruments (632) (568) Exchange gains on financing activities 9 10 Net fair value and exchange (losses)/gains on financial instruments (110) 149 Interest income on net defined benefit assets 22 43 Interest cost on net defined benefit liabilities (33) (30) Post-employment benefits net financing (cost)/income (11) 13 Tax interest cost (10) (50) Effect of discounting on long-term provisions (1) – Adjusted net finance costs 402 410 Comprising: Interest income on bank deposits (16) (12) Interest cost on lease liabilities 14 10 Interest cost on bank and other loans 404 412 Adjusted net finance costs 402 410 F) Adjusted tax charge The adjusted tax charge is calculated by amending the reported tax charge for significant one-off tax charges or credits, as detailed in the table below. The adjusted tax rate is calculated as the adjusted tax charge divided by the adjusted operating profit before tax. Reconciliation from reported tax to adjusted tax £ million 2024 2023 Reported tax 282 655 Deferred tax on amortisation of acquired intangibles – (4) Tax on net foreign exchange and fair value gains and losses on financial instruments 224 89 Tax on post-employment benefits net financing cost 5 – Tax on charges relating to legal provisions 2 26 Tax on structural changes to defined benefit pension schemes – 3 Tax on fair value adjustment and impairment of other financial assets – 5 Tax on interest settlements (1) 2 Recognition of deferred tax assets 293 212 Provision for state aid tax recoverable 101 – Uncertain tax positions (164) (207) Prior year adjustments 57 – Adjusted tax charge 799 781 www.imperialbrandsplc.com 207 ![]() SUPPLEMENTARY INFORMATION continued ALTERNATIVE PERFORMANCE MEASURES continued G) Adjusted earnings per share Adjusted earnings is calculated by amending the reported basic earnings for all of the adjustments recognised in the calculation of the adjusted operating profit, adjusted finance costs and adjusted tax charge metrics as detailed above. Adjusted earnings per share is calculated by dividing adjusted earnings by the weighted average number of shares. Reconciliation from reported to adjusted earnings and earnings per share 2024 2023 £ million unless otherwise indicated Earnings per share (pence) Earnings Earnings per share (pence) Earnings Reported basic 300.7 2,613 252.4 2,328 Russia, Ukraine and associated markets – – 0.4 4 Amortisation and impairment of acquired intangibles 40.6 353 38.0 351 Fair value adjustment and impairment of other financial assets – – 3.4 31 Loss on disposal of subsidiaries – – 0.1 1 Charges related to legal provisions (0.2) (2) 6.4 59 Structural changes to defined benefit pension schemes 0.5 4 1.0 9 Net fair value and exchange movements on financial instruments (13.1) (114) (25.8) (238) Post-employment benefits net financing cost/(income) 0.7 6 (1.4) (13) Tax interest cost 1.3 11 5.2 48 Effect of discounting on long-term provisions 0.1 1 – – Recognition of deferred tax assets (33.7) (293) (23.0) (212) Provision for state aid tax recoverable (11.6) (101) – – Uncertain tax positions 18.9 164 22.4 207 Prior year adjustments (6.6) (57) – – Adjustments above attributable to non-controlling interests (0.6) (4) (0.3) (3) Adjusted 297.0 2,581 278.8 2,572 Adjusted diluted 295.3 2,581 277.1 2,572 H) Return on invested capital (ROIC) Return on invested capital measures the effectiveness of capital allocation and is calculated by dividing adjusted operating profit after tax by the annual average of: intangible assets, property, plant and equipment, net assets held for sale, inventories, trade and other receivables and trade and other payables. The equivalent tax charge is calculated by multiplying the adjusted effective tax rate for the Group by adjusted operating profit. The annual average is defined as the average of the opening and closing balance sheet values. £ million unless otherwise stated 2024 2023 2022 Reported operating profit 3,554 3,402 2,683 Adjusting items (see section C) 357 485 1,011 Adjusted operating profit 3,911 3,887 3,694 Equivalent tax charge (888) (871) (827) Net adjusted operating profit after tax 3,023 3,016 2,867   Working capital (2,772) (2,567) (2,823) Intangibles 15,938 16,944 17,777 Property, plant and equipment 1,561 1,617 1,659 Invested capital 14,727 15,994 16,613 Average annual invested capital 15,361 16,304 16,240 Return on invested capital (%) 19.7 18.5 17.7 I) Constant currency Constant currency removes the effect of exchange rate movements on the translation of the results of our overseas operations. The Group translates current year results at prior year foreign exchange rates. An analysis of all key metrics can be found in the Group Financial Review. J) Adjusted net debt Management monitors the Group's borrowing levels using adjusted net debt which excludes interest accruals, lease commitments and the fair value of derivative financial instruments providing commercial hedges of interest rate risk. The adjusted net debt metric is used in monitoring performance against various debt management obligations including covenant compliance. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU208 ![]() Adjusted net debt calculation £ million 2024 2023 Reported net debt (8,340) (8,438) Accrued interest 95 125 Lease liabilities 386 349 Fair value of interest rate derivatives 119 (62) Adjusted net debt (7,740) (8,026) Average adjusted net debt during the year was £9,506 million (2023: £9,574 million). K) Adjusted net debt to earnings before interest, taxation, depreciation and amortisation (EBITDA) multiple This is defined as adjusted net debt divided by adjusted EBITDA. Adjusted net debt is measured at balance sheet foreign exchange rates, with a full reconciliation shown in table J above. Adjusted EBITDA is calculated as adjusted operating profit plus amortisation, depreciation and impairments. An analysis of all key metrics can be found in the Group Financial Review. The reconciliation from adjusted operating profit to adjusted EBITDA is shown below. £ million 2024 2023 Adjusted operating profit (see section C above) 3,911 3,887 Depreciation, amortisation and impairments 294 270 Adjusted EBITDA 4,205 4,157 L) Adjusted operating cash conversion Adjusted operating cash conversion is calculated as cash flow from operations pre-restructuring and before interest and tax payments less net capital expenditure relating to property, plant and equipment, software and intellectual property rights as a percentage of adjusted operating profit. Adjusted operating cash conversion calculation £ million unless otherwise stated 2024 2023 Net cash flows generated from operating activities 3,307 3,129 Tax 888 590 Net capital expenditure (321) (254) Restructuring 43 98 Cash flow post capital expenditure pre interest and tax 3,917 3,563 Adjusted operating profit 3,911 3,887 Adjusted operating cash conversion 100% 92% M) Free cash flow Free cash flow is operating profit adjusted for certain cash and non-cash items. The principal adjustments are depreciation, working capital movements, net capex, restructuring cash flows, tax cash flows, cash interest and minority interest dividends. Net cash flows generated from operating activities to free cash flow £ million 2024 2023 Net cash generated from operating activities 3,307 3,129 Net capital expenditure (321) (254) Cash interest (416) (407) Minority interest dividends (136) (104) Free cash flow 2,434 2,364 www.imperialbrandsplc.com 209 ![]() SUPPLEMENTARY INFORMATION continued #### GLOSSARY Financial terms Adjusted closing net debt Adjusted closing net debt is measured at balance sheet foreign exchange rates, with a full reconciliation shown within section J of the supplementary information. Adjusted earnings per share This is an alternative performance measure which is defined within section G of the supplementary information. Adjusted EBITDA Adjusted EBITDA is calculated as adjusted operating profit plus amortisation, depreciation and impairments. Adjusted net debt This is an alternative performance measure which is defined within section J of the supplementary information. Adjusted net debt to EBITDA multiple This is an alternative performance measure. Adjusted net debt is defined within section J of the supplementary information. EBITDA is defined within section K of the supplementary information Adjusted net finance costs This is an alternative performance measure which is defined within section E of the supplementary information. Adjusted (Non-GAAP) Non-GAAP measures provide a useful comparison of performance from one period to the next. Adjusted operating cash conversion This is an alternative performance measure which is defined within section L of the supplementary information. Adjusted operating profit This is an alternative performance measure which is defined within section C of the supplementary information. Adjusted operating profit margin Adjusted operating profit margin is calculated as adjusted operating profit divided by net revenue. Adjusted tax charge This is an alternative performance measure which is defined within section F of the supplementary information. Aggregate priority market share Aggregate weighted market volume share, based on our five priority markets (USA, Germany, UK, Spain and Australia). Market volume share is calculated based on a 12-month moving annual total (MAT) volume share position from October to September. The market volume size used in the weighting calculation is based on a constant prior year end actual market size. All in cost of debt Adjusted net finance costs divided by the average net debt in the year. Cash conversion Cash conversion is calculated as cash flow from operations pre-restructuring and before interest and tax payments less net capital expenditure relating to property, plant and equipment, software and intellectual property rights as a percentage of adjusted operating profit. Constant currency Removes the effect of exchange rate movements on the translation of the results of our overseas operations. The Group translates current year results at prior year foreign exchange rates. Dividend per share Dividend per share represents the total annual dividends, being the sum of the paid interim dividend and the proposed final dividend for the financial year. DBO Dividend Benefit Obligation. EBITDA Earnings before interest, taxation, depreciation and amortisation. EPS Earnings per share GAAP Generally accepted accounting principles. Market share Market share data is presented as a 12-month moving average weighted across the markets in which we operate. Net debt to EBITDA Adjusted closing net debt divided by adjusted EBITDA. Reported (GAAP) Reported (GAAP) complies with UK-adopted International Accounting Standards and the relevant legislation. Return on invested capital This is an alternative performance measure which is defined within section H of the supplementary information. Stick equivalent volumes Stick equivalent volumes reflect our combined cigarette, fine cut tobacco, cigar and snus volumes but exclude any NGP volume such as heated tobacco, modern oral nicotine and vapour. Tobacco & NGP net revenue/ Distribution gross profit This is an alternative performance measure which is defined within sections A and B of the supplementary information. Total shareholder return Total shareholder return is the total investment gain to shareholders resulting from the movement in the share price and assuming dividends are immediately reinvested in shares. +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU210 ![]() Other AAACE Africa, Asia and Australasia and Central & Eastern Europe. BERG Business Employee Resource Groups CDP Carbon Disclosure Project CEO Chief Executive Officer CFO Chief Financial Officer CO 2 E Carbon Dioxide Equivalent CSRD The Corporate Sustainability Reporting Directive DEI Diversity, Equity and Inclusion Distribution Logistics Segment ECLT Eliminating Child Labour in Tobacco Growing Foundation EFRAG European Financial Reporting Advisory Group ELT Executive Leadership Team EPR Extended Producer Responsibility Scheme ERP Enterprise Resource Planning ESG Environmental, Social and Governance ESRS European Sustainability Reporting Standards EU European Union EVP Electronic Vape Products EY Ernst & Young LLP FCT Fine Cut Tobacco FDA US Food and Drug Administration FMC Factory Made Cigarettes FMCG Fast Moving Consumer Goods GHG Greenhouse Gas GRI Global Reporting Initiative GWh / KWh Gigawatt-Hour / Kilowatt-Hour HRIA Human Rights Impact Assessment HT Heated Tobacco HTP Heated Tobacco Products ILO International Labour Organization IOSH Institution of Occupational Safety and Health IPM Integrated Pest Management ISAE International Standard for Assurance Engagements ISO International Organization for Standardization IVMS In Vehicle Monitoring System KPI Key Performance Indicators LCWG Leaf Compliance Working Group Leaf CARE Leaf Compliance and Response Programme LGBTQ+ Lesbian, Gay, Bisexual, Transgender, Queer or Questioning, Intersex, Asexual, and More LTA Lost Time Accident LTIP Long Term Incentive Plans MMC Mass Market Cigars MOND Modern Oral Nicotine Delivery MPI Manufacturer’s Price Increase MSCI Morgan Stanley Capital International index NGOs Non-Government Organisation NGP Next Generation Products NTM Non-Tobacco Materials OHSE Occupational Health Safety and Environment OND Oral Nicotine Delivery Category PDCA Plan Do Check Act www.imperialbrandsplc.com 211 ![]() SUPPLEMENTARY INFORMATION continued GLOSSARY continued Other continued PG&S Purchased Goods and Services PGS Committee People, Governance and Sustainability Committee PPE Personal Protective Equipment Priority markets Top 5 combustible markets USA, Germany, UK, Spain and Australia PSHG Product Stewardship and Health Group RECs Renewable Energy Certificates SASB Sustainable Accounting Standards Board SBTi Science Based Targets initiatives SCIA Supply Chain Impact Assessments SDGs Sustainable Development Goals SE Stick Equivalent volumes reflect our combined cigarette, fine cut tobacco, cigar and snus volumes SECR Streamlined Energy and Carbon Reporting SER Supplier Engagement Rating STP Sustainable Tobacco Programme T&Cs Terms and Conditions TCFD Task Force on Climate-Related Financial Disclosures Tobacco & NGP Tobacco & Next Generation Products UK United Kingdom UN SDGs United Nations Sustainable Development Goals WDI Workforce Disclosure Initiative +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU212 ![]() IMPERIAL BRANDS PLC FINANCIALS #### IMPERIAL BRANDS PLC BALANCE SHEET at 30 September 2024 £ million Notes 2024 2023 F Fixe d d assets Investments iii 7,968 7,968 C Curren t t assets Debtors iv 1,929 2,597 C Creditors : : amount s s fallin g g du e e withi n n on e e year v (189) (74) N Ne t t curren t t assets 1,740 2,523 N Ne t t assets 9,708 10,491 C Capita l l an d d reserves Called up share capital vi 91 97 Capital redemption reserve 16 10 Share premium account 5,833 5,833 Retained earnings - brought forward 4,551 6,733 Retained earnings - profit for the year 1,616 136 Retained earnings - share options reserve 14 – Retained earnings - dividends paid (1,299) (1,312) Retained earnings - repurchase of shares (1,114) (1,006) T Tota l l shareholders ' ' funds 9,708 10,491 As permitted by section 408(3) of the Companies Act 2006, the profit and loss account of the Company is not presented. The profit attributable to shareholders, dealt with in the financial statements of the Company, is £1,616 million (2023: £136 million). The financial statements on pages 213 to 229 were approved by the Board of Directors on 18 November 2024 and signed on its behalf by:  Director www.imperialbrandsplc.com 213 ![]() IMPERIAL BRANDS PLC FINANCIALS continued #### IMPERIAL BRANDS PLC STATEMENT OF CHANGES IN EQUITY for the year ended 30 September 2024 £ million Share premium and capital redemption Retained earnings Share capital Total equity At 1 October 2023 97 5,843 4,551 10,491 Profit for the year – – 1,616 1,616 Total comprehensive income – – 1,616 1,616 Transactions with owners Share options reserve – – 14 14 Repurchase of shares (6) 6 (1,114) (1,114) Dividends paid – – (1,299) (1,299) At 30 September 2024 91 5,849 3,768 9,708 At 1 October 2022 103 5,837 6,733 12,673 Profit for the year – – 136 136 Total comprehensive income – – 136 136 Transactions with owners  Repurchase of shares (6) 6 (1,006) (1,006) Dividends paid – – (1,312) (1,312) At 30 September 2023 97 5,843 4,551 10,491 Total distributable reserves were £3,754 million (2023: £4,537 million). +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU214 ![]() #### NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC I. ACCOUNTING POLICIES Basis of preparation and statement of compliance with FRS 101  Imperial Brands PLC (the Company) is the ultimate parent company within the Imperial Brands group of companies (the Group). The Company is a public company limited by shares, incorporated in England and Wales and its principal activity continued to be that of holding investments. The Company's registered number is 3236483 and its registered address is 121 Winterstoke Road, Bristol, BS3 2LL. The average number of employees (all Directors and Senior Management) during the financial year was seven. The Directors of the Group manage the Group's risks at a Group level, rather than at an individual entity level. These risks are detailed in note 2 Accounting Estimates and Judgements of the Group's financial statements. These financial statements were prepared in accordance with the Companies Act 2006 as applicable to Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101), and applicable accounting standards. The financial statements have been prepared on the historical cost basis, and as a going concern. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. As permitted by section 408(3) of the Companies Act 2006, no separate profit and loss account has been presented for the Company.  As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available in the preparation of the financial statements, as detailed below:  • Paragraph 38 of IAS 1 'Presentation of financial statements' - comparative information requirements in respect of: (i) paragraph 79(a)(iv) of IAS 1; • The following paragraphs of IAS 1 'Presentation of financial statements': (i) 10(d) - statement of cash flows; (ii) 10(f) - a statement of financial position as at the beginning of the preceding period when an entity applied an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements; (iii) 16 - statement of compliance with all IFRS; (iv) 38A - requirement for minimum of two primary statements, including cash flow statements; (v) 38B-D - additional comparative information; (vi) 40A-D - requirements for a third statement of financial position; (vii) 111 - cash flow information; and (viii) 134-136 - capital management disclosures;  • IAS 7 'Statement of cash flows'; • Paragraph 30 and 31 of IAS 8 'Accounting Policies, changes in accounting estimates and errors' - requirement for the disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet effective; • Paragraph 17 of IAS 24 'Related party disclosures' - key management compensation; • The requirements in IAS 24 'Related party disclosures' to disclose related party transactions entered into between two or more members of a group; • The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 'Share-based Payment'; • IFRS 7 'Financial Instruments: Disclosures'; and • Paragraphs 91 to 99 of IFRS 13 'Fair value measurement' - disclosure of valuation techniques and inputs used for fair value measurement of assets and liabilities. The material accounting policies, which have been applied consistently are set out below. The Directors do not consider there to be any critical accounting estimates or judgements in respect of the Company; see note 2 Accounting Estimates and Judgements of the consolidated financial statements for further detail. Investments Investments held as fixed assets comprise the Company's investment in subsidiaries and are shown at historic purchase cost less any provision for impairment. An annual review of investments is performed for indicators of impairment. If indicators of impairment are identified investments are tested for impairment to ensure that the carrying value of the investment is supported by their recoverable amount. Dividends Final dividends are recognised as a liability in the period in which the dividends are approved by shareholders, whereas interim dividends are recognised in the period in which the dividends are paid. Dividends receivable are recognised as an asset when they are approved. www.imperialbrandsplc.com 215 ![]() IMPERIAL BRANDS PLC FINANCIALS continued NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued Financial instruments  Receivables held under a hold to collect business model are stated at amortised cost. The calculation of impairment provisions is subject to an expected credit loss model, involving a prediction of future credit losses based on past loss patterns. The approach involves the recognition of provisions relating to potential future impairments, in addition to impairments that have already occurred. The expected credit loss approach involves modelling of historic loss rates, and consideration of the level of future credit risk. Expected loss rates are then applied to the gross receivables balance to calculate the impairment provision.  Treasury shares When the Company purchases its own equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity until the shares are reissued or disposed of. When such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, increases shareholders' funds. When such shares are cancelled they are transferred to the capital redemption reserve.  Income taxes Judgement is involved in determining whether the Company is subject to a tax liability or not in line with tax law. Where liabilities exist, estimation is often required to determine the potential future tax payments. The Company recognises provisions for tax based on estimates of the taxes that are likely to become due. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the current income tax and deferred tax provisions in the period in which such determination is made.  New accounting standards There have been no changes to accounting standards that have significantly impacted the accounting or disclosures within the financial statements for the year ended 30 September 2024.  New accounting standards that are effective after the year ended 30 September 2024 There are a number of amendments and clarifications to IFRS, effective in future years and, with the exception of IFRS 18 - Presentation and Disclosure in Financial Statements, none of these are expected to significantly impact the Company's results or financial position. IFRS 18 - Presentation and Disclosure in Financial Statements This new accounting standard is effective for the year ended 30 September 2028 and will involve a change to the structure of the primary financial statements. This requires entities to classify income and expenses into five categories - operating, investing, financing, income tax and discontinued operations. In addition, certain ‘non-GAAP’ measures – alternative performance measures (APMs) – will now form part of the audited financial statements, and require mandatory definitions and reconciliation to GAAP measures. The Company is presently reviewing the impact of this standard which is expected to fundamentally change the structure of the presentation of the Income statement. As the Company does not present an Income Statement, the impact of the standard is not expected to be significant.  +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU216 ![]() II. DIVIDENDS Distributions to ordinary equity holders Pence per share £ million 2024 2023 2022 2024 2023 2022 Cash:       December 51.82 49.31 48.47 461 464 458 March 51.82 49.32 48.49 453 457 458 June 22.45 21.59 21.27 193 196 202 September 22.45 21.59 21.27 192 195 202 Total 148.54 141.81 139.50 1,299 1,312 1,320 The dividends note, which previously contained details of both paid and proposed distributions, has been reformatted. The table now aligns the paid dividends with the equivalent amount recorded as a payment to equity shareholders of the parent company shown within the Consolidated Statement of Changes in Equity. Details of proposed dividends are given in narrative form below. The change in the format of this note does not constitute a restatement within the requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The declared third interim dividend for the year ended 30 September 2024 of 54.26 pence per share amounts to a proposed dividend of £459 million, which will be paid in December 2024. The proposed final dividend for the year ended 30 September 2024 of 54.26 pence per share amounts to a proposed dividend payment of £459 million in March 2025 based on the number of shares ranking for dividend at 30 September 2024, and is subject to shareholder approval. If approved, the total dividend paid in respect of 2024 will be £1,303 million (2023: £1,305 million). The dividend paid during 2024 is £1,299 million (2023: £1,312 million). III. INVESTMENTS Cost of shares in Imperial Tobacco Holdings (2007) limited £ million 2024 2023 At 1 October 7,968 7,968 At 30 September 7,968 7,968 The Directors confirm that the carrying value of the investment is supported by the cash flows generated by the underlying assets. A list of the subsidiaries of the Company is shown in the section on Related Undertakings below. IV. DEBTORS £ million 2024 2023 Amounts owed from Group undertakings 1,929 2,597   Amounts owed from Group undertakings are unsecured, interest bearing, have no fixed date for repayment and are repayable on demand. V. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR £ million 2024 2023 Amounts owed by Group undertakings 35 34 Bank overdrafts 2 2 Contracted liability for share buyback 90 – Other creditors 62 38 189 74 Amounts owed by Group undertakings are unsecured, interest bearing, have no fixed date for repayment and are repayable on demand.  www.imperialbrandsplc.com 217 ![]() IMPERIAL BRANDS PLC FINANCIALS continued NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued VI. CALLED UP SHARE CAPITAL 2024 2023  Ordinary shares 10p each Ordinary shares 10p each Number £ million Number £ million Authorised, issued and fully paid:   1 October 968,590,194 97 1,020,697,237 103 Shares cancelled (54,087,312) (6) (52,107,043) (6) 30 September 914,502,882 91 968,590,194 97 On 5 October 2023, the Board approved a £1,100 million share buyback programme in order to return capital to shareholders. The first tranche purchased 30,317,505 shares for a cost of £550 million. Upon completion of the purchase, these shares were cancelled and transferred to the capital redemption reserve. For the second tranche of the programme, the Group has entered into an irrevocable and non-discretionary arrangement to buy back shares up to £550 million. The second tranche commenced on 11 March 2024 and in the period to 30 September 2024 54,087,312 shares have been bought back and cancelled at a cost of £1,020 million. The stamp duty and other tax costs were £12 million and the fees charged for the share repurchase were £1 million. Upon completion of the purchase, these shares were cancelled and transferred to the capital redemption reserve. As at 30 September 2024, the Group has recognised a liability of £90 million for the remaining shares to be purchased. For the year ended 30 September 2024 the amounts recognised in the share premium and capital redemption reserves were £5,833 million (2023: £5,833 million) and £16 million (2023: £10 million) respectively. VII. RESERVES Treasury shares Subject to authorisation by special resolution, the Group may purchase its own shares in accordance with the Companies Act. Any shares which have been bought back may be held as treasury shares or, if not so held, must be cancelled immediately upon completion of the purchase, thereby reducing the amount of Group’s issued share capital. Shares held in treasury do not qualify for dividends. Shares purchased under the share buyback programme initiated on 5 October 2023 will be cancelled immediately on completion of the purchase. During the financial year 2.0 million shares were gifted to Employee Share Ownership Trusts (2023: no movements). £ million unless otherwise indicated 2024 2023 Millions of shares (number) Value £ Millions of shares (number) Value £ At 1 October 70.3 2,183 70.3 2,183 Gifted to Employee Share Ownership Trusts (2.0) – – – At 30 September 68.3 2,183 70.3 2,183 Percentage of issued share capital 7.5 n/a 7.3 n/a  +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU218 ![]() VIII. GUARANTEES The Company provides guarantees to the following subsidiaries under section 479A of the Companies Act 2006, whereby the subsidiaries, incorporated in the UK, are exempt from the requirements of the Act relating to the audit of individual accounts for the financial year ending 30 September 2024: • Imperial Tobacco Holdings (2007) Limited • Imperial Tobacco Ventures Limited • Rizla UK Limited • Imperial Tobacco Overseas (Polska) Limited • La Flor de Copan UK Limited • Tabacalera de Garcia UK Limited • Imperial Brands Ventures Limited • Nerudia Consulting Limited • Imperial Brands Ventures Finance Limited • Imperial Brands Ventures Holdings (1) Limited • Imperial Brands Ventures Holdings (2) Limited The Company has guaranteed various committed and uncommitted borrowings facilities and liabilities of certain UK and overseas undertakings. As at 30 September 2024, the amount guaranteed is £13,791 million (2023: £14,138 million). Many of the committed revolving credit facilities remain undrawn as at 30 September 2024 but the maximum potential exposure under each facility has been included due to the ongoing commitment; only drawn utilised balances have been included for facilities that are uncommitted in nature. The Company has also provided a parent guarantee to the Imperial Tobacco Pension Trustees Ltd (including their £300 million revolving credit facility), the main UK pension scheme. The Directors have assessed the fair value and expected credit loss of the above guarantees and do not consider them to be material. They have therefore not been recognised on the balance sheet. IX. POST BALANCE SHEET EVENTS Share buybacks On 5 October 2023 Imperial Brands PLC (‘the Company’) announced a share buyback programme to repurchase up to £1.1 billion of shares. This programme completed on 29 October 2024 with the Company having repurchased 4,010,463 million shares for a total consideration of £90 million in the period from 1 October 2024 to 29 October 2024. On 8 October 2024 Imperial Brands PLC ("the Company") announced the start of a new ongoing share buyback programme, to initially repurchase up to £1.25 billion of shares in the period to 29 October 2025. On 30 October 2024, in order to execute the first tranche of this buyback, the Company announced it had had entered into an irrevocable and non-discretionary arrangement with its broker Morgan Stanley & Co. International Plc to buy back up to £625 million of its shares commencing from 30 October 2024 and expected to end no later than 29 April 2025. X. RELATED PARTY DISCLOSURES Details of Directors’ emoluments and interests are provided within the Directors’ Remuneration Report. The Directors Remuneration Report includes details on salary, benefits, pension and share plans. These disclosures form part of the financial statements. RELATED UNDERTAKINGS In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates, and joint ventures, the principal activity, the country of incorporation and the effective percentage of equity owned, as at 30 September 2024 are disclosed below. With the exception of Imperial Tobacco Holdings (2007) Limited, which is wholly owned by the Company, none of the shares in the subsidiaries is held directly by the Company.  www.imperialbrandsplc.com 219 ![]() IMPERIAL BRANDS PLC FINANCIALS continued NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued SUBSIDIARIES: REGISTERED IN ENGLAND AND WALES, WHOLLY OWNED Name Principal activity and registered address   Altadis NewCo Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Attendfriend Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  British Tobacco Company Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Congar International UK Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England Imperial Brands Enterprise Finance Limited Provision of treasury services to other Group companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Brands Finance PLC Provision of treasury services to other Group companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Brands Ventures Finance Limited (v) Provision of finance to other Group companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Brands Ventures Holdings Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Brands Ventures Holdings (1) Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Brands Ventures Holdings (2) Limited (xi) Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Brands Ventures Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Investments Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Altadis Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Capital Assets (1) Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Capital Assets (2) Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Capital Assets (3) Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Capital Assets (4) Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Group Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Holdings (1) Limited (iv) Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Holdings (2007) Limited (iv) Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Holdings Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Initiatives Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Lacroix Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Limited Manufacture, marketing and sale of tobacco products in the UK 121 Winterstoke Road, Bristol BS3 2LL England Imperial Tobacco Overseas (Polska) Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Overseas Holdings (1) Limited (viii) Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Overseas Holdings (2) Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Overseas Holdings (3) Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England Imperial Tobacco Overseas Holdings (4) Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Overseas Holdings Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Overseas Limited (x) Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England  Imperial Tobacco Pension Trustees (Burlington House) Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England   +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU220 ![]() SUBSIDIARIES: REGISTERED IN ENGLAND AND WALES, WHOLLY OWNED CONTINUED Name Principal activity and registered address Imperial Tobacco Pension Trustees Limited (iv) Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England Imperial Tobacco Ventures Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England ITG Brands Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England Joseph & Henry Wilson Limited Licensing rights for the manufacture and sale of tobacco products 121 Winterstoke Road, Bristol BS3 2LL England Nerudia Limited Research and development of e-vapour products 121 Winterstoke Road, Bristol, BS3 2LL, England Nerudia Consulting Limited Research and development of e-vapour products 121 Winterstoke Road, Bristol, BS3 2LL, England La Flor de Copan UK Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England Park Lane Tobacco Company Limited Dormant 121 Winterstoke Road, Bristol, BS3 2LL, England Rizla UK Limited Entity ceased trading 121 Winterstoke Road, Bristol, BS3 2LL, England Tabacalera de Garcia UK Limited Holding investments in subsidiary companies 121 Winterstoke Road, Bristol, BS3 2LL, England SUBSIDIARIES: INCORPORATED OVERSEAS, WHOLLY OWNED Name Country of incorporation Principal activity and registered address 1213509 B.C. Limited Canada Holding investments in subsidiary companies Suite 1700, Park Place, 666 Burrard Street, Vancouver, BC. V6C 2X8, Canada Altadis Canarias S.A.U. (ii) Spain Marketing and sale of tobacco products in the Canary Islands C/Comandante Azcarraga 5, Madrid, 28016, Spain Altadis Holdings USA Inc United States of America Holding investments in subsidiary companies 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA Altadis Middle East FZCO United Arab Emirates Sales and marketing of tobacco products in the Middle East P.O. Box. No. 261718, Jebel Ali Free Zone, Dubai, 261718, United Arab Emirates Altadis Ocean Indien S.A.S. France (La Reunion Island) Sales and distribution of tobacco products in La Reunion Island ZI n° 2 - BP 256 - 97457 Saint Pierre Cedex, La Reunion Altadis S.A.U. Spain Manufacture, sales and distribution of tobacco products in Spain C/Comandaute Azcarraga 5, Madrid 28016, Spain Altadis Shade Company LLC United States of America Manufacture and sale of tobacco products in the USA 217 Shaker Road, Somers, CT, 06071, USA Athena IP Vermogensverwaltungs GmbH Germany Davidoff cigarette trademark owner Behringstrasse 122 A, 22763, Hamburg Cacique, SA - Comércio, Importaçao e Exportaçao Brazil Dormant Rua Marechal Deodoro, 690 - Centro Arapiraca, Alagoas, Brazil Commonwealth Brands Inc United States of America Manufacture and sale of tobacco products in the USA 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA Congar International Corp (Delaware) United States of America Manufacturing and distribution of mass market cigars Road 14, Km. 72.2, Ave. Antonio R. Barcelo, Cayey, DE, PR 00736, USA Connecticut Shade Corporation United States of America Holding investments in subsidiary companies 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA Consolidated Cigar Holdings Inc (vii) United States of America Holding investments in subsidiary companies 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA Coralma International S.A.S. France Holding investments in subsidiary companies 122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France Dunkerquoise des Blends S.A.S. France Tobacco processing 122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France Ets L Lacroix Fils NV/SA Belgium Manufacture and sale of tobacco products in Belgium Sint-Bavostraat 66, 2610 Wilrijk, Belgium Fontem (Beijing) Technology Solutions Limited (i) People’s Republic of China Research and development Room 201, Floor 2, Building 6, Yuan Dong science and technology park, 6 Hepingli North Street, Dong Cheng District, Beijing, 100013, China Fontem Canada Limited Canada Import and distribution of tobacco and tobacco related products in Canada C/O BDO Canada LLP, 6940 Mumford Road, Suite 510, Halifax, NS, B3L 0B&, Canada Fontem US LLC United States of America Sales and marketing of tobacco products in the US 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA Fontem Ventures B.V. The Netherlands Holding investments in subsidiary companies Radarweg 60, Amsterdam, 1043 NT, The Netherlands www.imperialbrandsplc.com 221 ![]() IMPERIAL BRANDS PLC FINANCIALS continued NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued SUBSIDIARIES: INCORPORATED OVERSEAS, WHOLLY OWNED CONTINUED Name Country of incorporation Principal activity and registered address Huotraco International Limited Cambodia Production and marketing of tobacco products No 299, Preah Ang Duong Street, Sangkat Wat Phnom, Khan Daunh Penh, Phnom Penh, Cambodia Imperial Brands Bulgaria EOOD (i) Bulgaria Manufacture and sale of tobacco products in Bulgaria EN 1 Building, floor 8, 1 Atanas Dukov Str. 1407 Sofia, Bulgaria Imperial Brands CR s.r.o. Czech Republic Sales and marketing of tobacco products in the Czech Republic Karla Englie 3201/6, 15 00, Praha 5 Imperial Brands Finance Netherlands B.V. The Netherlands Provision of finance to other Group companies Slachtedijk 28a, 8501 ZA, Joure, Netherlands Imperial Brands Finland Oy Finland Sales and marketing of tobacco products in Finland Auriga Business Center, Juhana Herttuan Puistokatu 21, 20100 Turku Imperial Brands Global Duty Free & Export S.L. Spain Sale and export of duty-free tobacco products C/Comandaute Azcarraga 5, Madrid 28016, Spain Imperial Brands Hellas S.A. Greece Sales and marketing of tobacco products in Greece 300 Klisthenous Str, 15344 Gerakas, Attikis, Athens, Greece Imperial Brands Holdings International B.V. The Netherlands Provision of finance to other Group companies Slachtedijk 28a, 8501 ZA, Joure, Netherlands Imperial Brands Italia S.r.l. Italy Sales and marketing of tobacco products in Italy Via Luca Passi 22, Roma, 00166, Italy Imperial Brands Japan G.K (v) Japan Sales and marketing of tobacco products in Japan Shiodome Shibarikyu Building 21, 1-2-3 Kaigan Minato-ku, Tokyo, Japan Imperial Brands La Romana Dominican Republic Manufacture of cigars in the Dominican Republic Industrial Free Zone #1, La Romana, Domincan Republic Imperial Brands Luxembourg sarl Luxembourg Sale of tobacco products in Luxembourg 56 Rue Charles Martel, L-2134, Luxembourg Imperial Brands Malta Limited Malta Provision of finance to other Group companies Office 3, AX Business Centre, Ground Floor, Triq id-Difiza Civili Mosta, MST 1741, Malta Imperial Brands Norway A.S. Norway Sales and marketing of tobacco products in Norway Ryensvingen 2-4, 0680, Oslo, Norway Imperial Brands Portugal, Sociedade Unipessoal Lda Portugal Advertising and support management 144, 7 DT, Avenida da Liberdade, Lisbon, Portugal Imperial Brands Services Polska spolka z.o.o Poland Central Manufacturing and Central Supply Chain Jankowice, Przemyslowa 1, 62-080 Tarnowo Padgorne, Poland Imperial Brands Ventures LLC United States of America Holding investments in subsidiary companies 251 Little Falls Drive, Wilmington, DE 19808 USA Imperial Finance Ireland Limited Ireland Provision of finance to other Group companies 21 Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland Imperial Finance Malta Ltd Malta Provision of finance to other Group companies Office 3, AX Business Centre, Ground Floor, Triq id-Difiza Civili Mosta, MST 1741, Malta Imperial Tobacco (Asia) Pte. Ltd Singapore Trading of tobacco-related products 9 Raffles Place, #26-01 Repulic Plaza, Singapore, 048619 Imperial Tobacco Australia Limited Australia Sales and marketing of tobacco products in Australia John Player Special House, Level 4, 4-8 Inglewood Place, Norwest, NSW 2153, Australia Imperial Tobacco Austria Marketing Service GmbH Austria Marketing of tobacco products in Austria Zieglergasse 6, A-1070 Vienna, Austria Imperial Tobacco BH doo (i) Bosnia-Herzegovina Marketing and distribution of tobacco products in Bosnia Adema Buce, Sarajevo, 71000, Bosnia & Herzegovina Imperial Tobacco Distribution Romania srl Romania Marketing and distribution of tobacco products in Romania Nicolae Canea Street no. 140-160, EOS Business Park, 1st Floor North, 2nd District, Bucharest, Romania Imperial Tobacco EFKA Management GmbH Germany Manufacture of tobacco products in Germany Behringstrasse 122 A, 22763, Hamburg Imperial Tobacco España, S.L.U. Spain Holding investments in subsidiary companies C/Comandaute Azcarraga 5, Madrid 28016, Spain Imperial Tobacco Estonia OÜ Estonia Dormant Veskiposti 2, 10138 Tallinn, Tallinn , Estonia Imperial Tobacco Holdings International B.V. The Netherlands Provision of finance to other Group companies Slachtedijk 28a, 8501 ZA, Joure, Netherlands Imperial Tobacco Intellectual Property Limited Ireland Ownership of trademarks 21, Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU222 ![]() SUBSIDIARIES: INCORPORATED OVERSEAS, WHOLLY OWNED CONTINUED Name Country of incorporation Principal activity and registered address Imperial Tobacco International GmbH Germany Export and marketing of tobacco products Behringstrasse 122 A, 22763, Hamburg Imperial Tobacco Ireland Unlimited Company (v) Ireland Dormant 6th Floor, 2 Grand Canal Square, Dublin 2, Ireland Imperial Tobacco Italy S.r.l. Italy Holding investments in subsidiary companies Via Luca Passi 22, Roma, 00166, Italy Imperial Tobacco Kyrgyzstan LLC (i) Kyrgyzstan Marketing and distribution of tobacco products in Kyrgyzstan 115, Ibraimov Street, 10th Floor, Business Center 'Asyl-Tash', Bishkek, 720021, Kyrgyzstan Imperial Tobacco La Romana S.A.S. France Manufacture of cigars in the Dominican Republic 320, Rue Saint-Honore, Paris, 75001, France Imperial Tobacco Magyarország Dohányforgalmázo Kft (Imperial Tobacco Hungary) Hungary Sales and marketing of tobacco products in Hungary Váci út 141, 1138, Budapest, Hungary Imperial Tobacco Management Luxembourg sarl Luxembourg Holding investments in subsidiary companies 56 Rue Charles Martel, L-2134, Luxembourg Imperial Tobacco Marketing Sdn Bhd Malaysia Trading of tobacco products (in liquidation) 12th Floor Menara Symphony, No 5 Jalan Prof, Khoo Kay Kim, Seksyey, 46200 Petaling Jaya, Selangor, Malaysia Imperial Tobacco New Zealand Limited New Zealand Manufacture and sale of tobacco products in New Zealand Level 24, 157 Lambton Quay, Wellington Central, Wellington 6011, New Zealand Imperial Tobacco Polska Manufacturing S.A. Poland Manufacture of tobacco products in Poland Ul. Tytoniowa 2/6, Radom, 26-600, Poland Imperial Tobacco Polska S.A. Poland Manufacture and sale of tobacco products in Poland Jankowice, ul. Przemyslowa 1, Pl-62-080, Tarnowo-Podgome, Poland Imperial Tobacco Production Ukraine (i) Ukraine Manufacture of tobacco products in Ukraine ul. Akademika Zabolotnogo, 35, 03026, Kiev, Ukraine Imperial Tobacco SCG doo Beograd (i) Serbia Marketing and distribution of tobacco products in Serbia Milutina Milankovica 11a, Novi Beograd, Serbia Imperial Tobacco Sigara ve Tutunculuck Sanayi Ve Ticaret A.S. Turkey Manufacture of tobacco products in Turkey Kecilikoy OSB, Mah Ahmet Tutuncuoglu Cad. No.11, 45030 Yunusemre, Manisa, Turkey Imperial Tobacco Slovakia A.S. Slovak Republic Sales and marketing of tobacco products in the Slovak Republic 7A Galvaniho, 824 53 Bratislava, Slovakia Imperial Tobacco Taiwan Co. Limited Taiwan Sales and marketing of tobacco products in Taiwan 6F1-2 No.2 Sec. 3, Minsheng E road, Zhongshen District, Taipei, Taiwan, Province of China Imperial Tobacco Taiwan Manufacturing Company Limited Taiwan Manufacture of tobacco products in Taiwan No 8 Cyunyi Road, Jhunan, MiaoLi County 350, Taiwan Province of China Imperial Tobacco Tutun Urunleri Satis Ve Pazarlama A.S. Turkey Sales and marketing of tobacco products in Turkey Kecilikoy OSB, Mah Ahmet Tutuncuoglu Cad. No.11, 45030 Yunusemre, Manisa, Turkey Imperial Tobacco Ukraine (i) Ukraine Sales and marketing of tobacco products in Ukraine ul. Akademika Zabolotnogo, 35, 03026, Kiev, Ukraine Imperial Tobacco US Holdings BV The Netherlands Holding investments in subsidiary companies 121, Winterstoke Road, Bristol, BS3 2LL Imperial Tobacco West Africa S.A.S. (i) Cote D'Ivoire Holding investments in subsidiary companies Cocody-Nord, Quartier Gendarmerie, TF 5937, 01 B.P. 724 Abidjan Imperial Tobacco Zagreb doo (i) Croatia Dormant (in liquidation) Julija Kniefera 7, HR-100, Croatia IMPTOB South Africa (Pty) Limited South Africa Provision of services to other Group companies 5 Sandwood Hills, Dunkirk Estate, Zimbali, South Africa ITG Brands Holdco LLC United States of America Holding investments in subsidiary companies 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA ITG Brands LLC United States of America Marketing and distribution of tobacco products in the USA 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA ITG Cigars Inc United States of America Manufacture and sale of cigars in the USA 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA ITG Holdings USA Inc (ix) United States of America Holding investments in subsidiary companies 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA ITL Pacific (HK) Limited Hong Kong Manufacture and sale of tobacco and tobacco related products Room 3905-06, 39th Floor, Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong Imperial Ventures Malta Limited Malta Provision of finance to other Group companies Office 3, AX Business Centre, Ground Floor, Triq id-Difiza Civili Mosta, MST 1741, Malta www.imperialbrandsplc.com 223 ![]() IMPERIAL BRANDS PLC FINANCIALS continued NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued SUBSIDIARIES: INCORPORATED OVERSEAS, WHOLLY OWNED CONTINUED Name Country of incorporation Principal activity and registered address JAW-Invest Oy Finland Trademark owner Auriga Business Center, Juhana Herttuan puistokatu 21, 20100 Turku, Findland John Player & Sons Limited Ireland Sales and marketing of tobacco products in the Republic of Ireland 21, Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland JSNM SARL France Trademark owner 122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France MYBLU Spain S.L. Spain Marketing and sale of e-vapour products in Spain CR. Robledo de Chavela, S/N. San Lorenzo del Escorial, Madrid, 28200, Spain Millennium Tobacco Unlimited Company Ireland Provision of finance to other Group companies 21, Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland Newglade International Unlimited Company Ireland Dormant 6th Floor, 2 Grand Canal Square, Dublin 2, Ireland Petone Vapes Limited New Zealand Non-trading Russell McVeagh, Level 24, 157 Lambton Quay, Wellington Central, Wellington, 6011 , New Zealand Philippine Bobbin Corporation Philippines Manufacture of tobacco-related products Cavite Economic Zone, Phase II, Rosario, Cavite, Philippines Real Club de Golf la Herrería S.A. Spain Management of golf course CR. Robledo de Chavela, S/N. San Lorenzo del Escorial, Madrid, 28200, Spain Reemtsma Cigarettenfabriken GmbH Germany Manufacture and sale of tobacco products in Germany Behringstrasse 122 A, 22763 Hamburg, Germany Skruf Snus AB Sweden Manufacture, marketing, sales of tobacco products in Sweden PO Box 3068, Stockholm, SE-103 61, Sweden Société Centrafricaine de Cigarettes S.A. (i) Central African Republic Manufacture and distribution of cigarettes in Central African Republic Rue David Dacko, BP 1446, Bangui, Central African Republic Société Centrafricaine de Distribution Sarl (i) Central African Republic Dormant Avenue Boganda Pk4, Bangui, Central African Republic Société du Mont Nimba Sarl (i) Guinee Conakry In liquidation BP 3391, Conakry, Guinea Société Nationale d’Exploitation Industrielle des Tabacs et Allumettes S.A.S. France Manufacture and sale of tobacco products in France, and export of tobacco products 200-216 rue Raymond Losserand, Paris, 75014, France Société pour le Développement du Tabac en Afrique S.A.S. France Purchasing company 122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France System Designed to Africa Sarl Morocco Distribution of tobacco products Km 17, Route national de Rabat, Ain Harrouda, Morocco Tabacalera de Garcia Limited Bermuda Holding investments in subsidiary companies Claredon House, 2 Church Street, Hamilton, HM 11 Bermuda Tahiti Tabacs SASU France, Papeete (Tahiti) Distribution of tobacco products in Denmark and Greenland PK 4, 300 Côté mer, 98701 Arue, BP 20692 Papeete, French Polynesia Tobaccor S.A.S. (v) France Holding investments in subsidiary companies 122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France Tobana 3DVA, trgovsko podjetje, d.o.o. Slovenia Retail of products in Slovenia Cesta 24., junija 90, SI 1231 Ljubljana - rnue, Slovenia Tobana Grosist d.o.o. Slovenia Marketing and distribution in Slovenia Cesta 24., junija 90, SI 1231 Ljubljana - rnue, Slovenia Tobana Ljubljana d.o.o. (v) Slovenia Sales and marketing tobacco products in Slovenia Cesta 24., junija 90, SI 1231 Ljubljana - rnue, Slovenia Van Nelle Tabak Nederland B.V. (x) The Netherlands Manufacture and sale of tobacco products in the Netherlands Slachtedijk 28a, 8501 ZA, Joure, Netherlands Van Nelle Tobacco International Holdings B.V. The Netherlands Sale of tobacco and tobacco-related products Slachtedijk 28a, 8501 ZA, Joure, Netherlands Von Erl. Gmbh (i) Austria Sale of e-vapour products in the US and Europe Hegelgasse 13/26, 1010 Vienna, Austria +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU224 ![]() SUBSIDIARIES: INCORPORATED OVERSEAS, PARTLY OWNED Name Country of incorporation Principal activity and registered address Percentage owned 3 For One, SA Belgium Holding Company Avenue Hermann-Debroux 54. 1160 Anderghem (Belgium) 50.0 24 Hours B.V The Netherlands Courier Express Sector Wijkermeerstraat 31, 2131 HB, Hoofddorp, The Netherlands 50.0 Albacetrans, S.L.U Spain Freight forwarding company Poligono Industrial Campollano, Avenida Sexta, 0.02007 Albacete, Spain 50.0 Belgium Parcels Service, Srl Belgium Specialist in the urgent distribution of pharmaceutical product in Belgium and Luxembourg Avenue Hermann-Debroux 54. 1160 Anderghem (Belgium) 50.0 Be To Be Pharma, S.L.U. Spain Distribution of pharmaceuticals C/ Trigo, 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Carbo Collbatalle, S.L.U. Spain Transportation of food at a controlled temperature Zona Franca, Sector E, Calle L, No 6-8. 08040 Barcelona, Spain 50.0 CDIL - Companhia de Distribuicao Integral Logista Portugal, SA. Portugal Marketing and sale of tobacco and other products, and payment services in Portugal Edificio Logista, Rua do Vale da Fote Coberta, 153 E 167, 2890-182, Alcochete, Portugal 50.0 Compagnie Agricole et Industrielle des Tabacs Africains S.A.S. France Management company 143 bd Romain Rolland, Cedex 14, Paris, 75685, France 99.9 Compagnie Réunionnaise des Tabacs S.A.S. France, St Pierre (La Reunion Island) Manufacture of cigarettes ZI n° 2 - BP 256 - 97457 Saint Pierre Cedex, La Reunion 98.9 Compañía de Distribución Integral de Publicaciones Logista S.L.U. (iv) Spain Distribution of published materials and other products Avenida de Europa No.2, Edificio Alcor Plaza/Ala Este Planta 4a - Modulo 3, Alcorcor, Madrid, 28922, Spain 50.0 Compañía de Distribución Integral Logista Polska, sp. Z o.o. Poland Distribution of tobacco products in Poland Avenida Jerozolimskie 96 - 7ª Planta, Edificio Equator II 133/131, 02-304 Varsaw, Poland 50.0 Compañía de Distribución Integral Logista S.A.U. Spain Distribution of tobacco products in Spain C/ Trigo, 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Distribuidora Valenciana de Ediciones S.A.U. Spain Distribution of published materials and other products in Valencia Pedrapiquers 5, Poligono Industrial Vara de Quart, Valencia, 46014, Spain 50.0 Dronas 2002, S.L.U. Spain Industrial parcel and express delivery service Energía, 25-29; Polígono Industrial Nordeste, Sant Andreu de la Barca, Barcelona, 08740, Spain 50.0 German-Ex B.V. The Netherlands Courier Express Sector Wijkermeerstraat 31, 2131 HB, Hoofddorp, The Netherlands 50.0 Herinvemol, S.L. Spain Freight forwarding company Carretera De Madrid, KM. 276. 30500 Molina De Segura (Murcia), Spain 50.0 Imperial Tobacco TKS a.d. (i) Macedonia Manufacture, marketing and distribution of tobacco products in Macedonia ul 11, Oktomvri 125, P O Box 37, 1000 Skopje, Macedonia 99.1 Imperial Tobacco TKS a.d. - Dege Kosove Kosovo Manufacture, marketing and distribution of tobacco products in Kosovo Rrafshi i Kosoves, Nr. 80 (Magjistralja M2: Prishtine-Shkup, km i 2-te Vetermik) Prishtine, Republic of Kosovo 99.1 Imprimerie Industrielle Ivoirienne SA (i) Cote D'Ivoire Printing company Zone Industrielle du Banco, Lots No 147-149-150, 01 BP 4124, Yopougon/Abdjan, Cote d'Ivoire 78.8 Innoreste, S.L.U. Spain Freight forwarding company Carretera De Madrid-Cartegena, KM. 376. 30500 Molina de Segura (Murcia), Spain 50.0 www.imperialbrandsplc.com 225 ![]() IMPERIAL BRANDS PLC FINANCIALS continued NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued SUBSIDIARIES: INCORPORATED OVERSEAS, PARTLY OWNED CONTINUED Name Country of incorporation Principal activity and registered address Percentage owned La Mancha 2000, S.A., Sociedad Unipersonal Spain Distribution services Trigo 39, Poligno Industrial Polvoranca - 28914 Leganes, Madrid, Spain 50.0 Logesta Deutschland Gmbh, Sociedad Unipersonal Germany Long haul transportation in Germany Pilotystrasse, 4, 80538 München, Germany 50.0 Logesta Lusa LDA Portugal Long haul transportation in Portugal Edifico Logista, Rua do Vale da Fonte Coberta, 153 E 167, 2890-182 Alcochete, Portugal 50.0 Logista France Holding S.A. France Holding investments in subsidiary companies Inmeuble Le Bristol, 27 Avenue des Murs du Parc, 94300 Vincennes, France 50.0 Logista France S.A.S. France Holding investments in subsidiary companies Inmeuble Le Bristol, 27 Avenue des Murs du Parc, 94300 Vincennes, France 50.0 Logesta Freight France Sarl France Long haul transportation in France Inmeuble Le Bristol, 27 Avenue des Murs du Parc, 94300 Vincennes, France 50.0 Logista Freight Italia S.R.L Italy Long haul transportation in Italy Via Valadier, 37 - 00193 Roma, Italy 50.0 Logista Freight Polska S.r.l. Poland Long haul transportation in Poland Av. Jerozolimskie 96 - 7ª Planta Edificio Equator II, Varsovia, Poland 50.0 Logista Freight, S.A.U Spain Long haul transportation services in Spain C/ Trigo, 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Logistica Integral, S.A. (iii) Spain Holding investments in subsidiary companies C/ Trigo, 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Logista Italia Spa Italy Long haul transportation in Italy Via Valadier, 37 - 00193 Roma, Italy 50.0 Logista Payments, S.L.U. Spain Provision of financial services C/ Trigo, 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Logista Pharma Canarias, S.A.U. Spain Pharmaceutical products logistics in Canary Islands C/ Entreríos Nave 3; Las Palmas de Gran Canaria, 35600, Spain 50.0 Logista Pharma Italia, S.r.l. Italy The logistics, storage and distribution throughout the Italian territory of pharmaceutical, cosmetics and sanitary products Via Valadier, 37 - 00193 Roma, Italy 50.0 Logista Pharma S.A.U. Spain Distribution of pharmaceuticals C/ Trigo Núm. 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Logista Promotion et Transport S.A.S. France Marketing and distribution of tobacco products in France Inmeuble Le Bristol, 27 Avenue des Murs du Parc, 94300 Vincennes, France 50.0 Logista Regional de Publicaciones, S.A.U. Spain Marketing, distribution and sale to points of sale in Spain. Avenida de Europa No.2, Edificio Alcor Plaza/Ala Este Planta 4a - Modulo 3, Alcorcor, Madrid, 28922, Spain 50.0 Logista Retail France S.A.S. France Long haul transportation in France Inmeuble Le Bristol, 27 Avenue des Murs du Parc, 94300 Vincennes, France 50.0 Logista Retail Italia S.P.A Italy Wholesale to tobacconists in Italy Via Valadier, 37 - 00193 Roma, Italy 50.0 Logista Retail S.A.U Spain Sale of tobacco products in Spain C/ Trigo, 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Logista Strator, SLU Spain Distribution of POS software C/ Trigo, 39 - Polígono Industrial Polvoranca, Leganés, Madrid, 28914, Spain 50.0 Logista Transport Europe B.V. The Netherlands Holding company Wijkermeerstaat 31. 2131 HB, Hoofddorp, The Netherlands 50.0 Logista, Transportes, Transitários e Pharma, Lda. Portugal Industrial parcel delivery and pharmaceutical distribution in Portugal Edifico Logista, Rua do Vale da Fonte Coberta, 153 E 167, 2890-182 Alcochete, Portugal 50.0 +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU226 ![]() SUBSIDIARIES: INCORPORATED OVERSEAS, PARTLY OWNED CONTINUED Name Country of incorporation Principal activity and registered address Percentage owned MABUCIG Industries SA Burkina Faso Manufacture of cigarettes in Burkina Faso No 55, Rue 19.14, , B.P. 94, Kodeni, - Bobo Dioulasso, Burkina Faso 72.7 MABUCIG SA (Manufacture Burkinabe de Cigarette) Burkina Faso Manufacture of cigarettes in Burkina Faso Zone Industrielle de Bobo-Dioulasso, Secteur No 19, Rue 19.14 No adressage 55, B.P. 94 - Bobo Dioulasso, Burkina Faso 72.7 Macotab S.A.S. (Manufacture Corse des Tabacs) France, Bastia Manufacture and sales of cigarettes Route Nationale 193, Furiani, 20600, France 99.9 Manufacture de Cigarettes du Tchad SA Tchad Manufacture and distribution of cigarettes in Chad 0502 rue 1039, Arrondissement 1, N'DJamena, Chad 95.0 Midsid – Sociedade Portuguesa de Distribução, S.A.U Portugal Wholesale of tobacco and other products Edificio Logista, Pracetta do Vale Da Fonte, Coberta 153/167, Freguesia de Alcochete, Portugal 50.0 Mosca China Logistics Ltd China Freight forwarding company 603, no.32 Hong Kong Road, Nanfang district, Qingdao City 50.0 Mosca Italia, Srl Italy Transport activities Via Roma 2, Cap, 16121, Rome, Italy 50.0 Mosca Maritimo Baleares, S.L. Spain Freight forwarding company Carretera De Madrid, S/N. 30500 Molina de Segura (Murcia), Spain 50.0 Mosca Maritimo , S.L.U. Spain Freight forwarding company Carretera De Madrid, S/N. 30500 Molina de Segura (Murcia), Spain 50.0 Mosca Portugal, Lda Portugal Freight forwarding company Santa Iria, Na Avenida Casal SA Serra No 9 50.0 MTOA SA (i) Senegal Manufacture and sales of cigarettes in Senegal Km 2-5 Bld du Centenaire de la commune de Dakar, Dakar, Senegal 98.3 Ordimur, SLU Spain Freight forwarding company Calle Argentina, Margen Izquierda, Poligono Industrial La Serreta, 30500 Molina de Segura, Murcia 50.0 Publicaciones y Libros SA Spain Publishing company Avenida de Europa No.2, Edificio Alcor Plaza/Ala Este Planta 4a - Modulo 3, Alcorcor, Madrid, 28922, Spain 50.0 Reemtsma Kyrgyzstan OJSC (i) Kyrgyzstan In liquidation 115, Ibraimov Str., 10th Floor, Business Center "Asyl-Tash",, Bishkek, Kyrgyzstan 99.7 S3T Pte Ltd (i) Singapore Holding investments in subsidiary companies 9 Raffles Place, #26-01 Republic Plaza, Singapore 048619 51.0 SACIMEM SA (i) Madagascar Manufacture of cigarettes in Madagascar 110 Antsirabe - Madagascar, Route d'Ambositra, BP 128, Madagascar 65.4 SGEL Libros, S.L.U. Spain Edition and distribution of books and non- periodical publication both in Spain and in any other foreign country Polígono Industrial La Quinta, Avda Castilla La Mancha, 2, Nave 3-4, 19171 Cabanillas del Campo, Guadalajara 50.0 SITAB Industries SA (i) Cote D'Ivoire Manufacture of cigarettes in Cote D'Ivoire Rue de I'Industrie - Lot No 19, 01 - BP 607, Bouake, Cote d'Ivoire 75.9 SITAR Holding S.A.S. France (La Reunion Island) Holding investments in subsidiary companiesr Z.I n2, B.P. 256, 97457 Saint Pierre, IIe de la Reunion, France 99.0 Société Africaine d’Impression Industrielle SA (i) Senegal Manufacture and distribution of cigarettes in Senegal route de Bel Air - Km 2200, Dakar, Senegal 99.8 Société des Cigarettes Gabonaises SA (i) Gabon In liquidation 2381 bld Léon MBA, BP 2175, Libreville, Gabon 87.8 Société Industrielle et Agricole du Tabac Tropical SA (i) Congo Manufacture and distribution of cigarettes in Congo Avenue de la Pointe Hollandaise, Mpila, BP 50, Brazzaville, Congo 89.7 www.imperialbrandsplc.com 227 ![]() IMPERIAL BRANDS PLC FINANCIALS continued NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued SUBSIDIARIES: INCORPORATED OVERSEAS, PARTLY OWNED CONTINUED Name Country of incorporation Principal activity and registered address Percentage owned Société Ivoirienne des Tabacs SA (i) (iii) Cote D'Ivoire Manufacture and distribution of cigarettes in Côte d’Ivoire Cocody-Nord, Quartier Gendarmerie, TF 5937, 01 B.P. 724 Abidjan 74.9 Société Marocaine des Tabacs SA Morocco Manufacture and distribution of cigarettes in Morocco 87 Rue Hamed El Figuigui , Casablanca, 20500, Morocco 99.9 SOCTAM SA (i) Madagascar Manufacture and distribution of cigarettes in Mali 15 Rue Geoges V, Mahajanga, Madagascar 50.5 SOTCHADIS S.A.S. Chad Non-trading 502 Rue 1039, BP 852, N'Djamena, Chad 95.0 Speedlink Worldwide Express B.V. The Netherlands Courier express sector Wijkermeerstraat 31, 2131 HB, Hoofddorp, The Netherlands 50.0 Transportes El Mosca Murcia, S.A.U. Spain Freight forwarding company Carretera Madrid-Cartagena, KM. 376.30500, Molina de Segura (Murcia), Spain 50.0 Transportes El Mosca, S.A.U. Spain Freight forwarding company Carretera Madrid-Cartagena, KM. 376.30500, Molina de Segura (Murcia), Spain 50.0 ASSOCIATES: INCORPORATED OVERSEAS Name Country of incorporation Principal activity and registered address Percentage owned Alcome S.A.S. France Waste management 88 avenue des Ternes, Paris, 75017, France 24.0 Azur Finances SA Cameroon Holding investments in subsidiary companies B.P 1105, Douala, Cameroon 20.0 Compañia Española de Tabaco en Rama SA (Cetarsa) (i) Spain Production and sale of raw tobacco Avenida de las Angustias, 20, 10300 Navalmoral de la Mata, Cáceres, Spain 20.8 Distribuidora de Ediciones SADE, S.A. Spain Distribution of published materials and other products in Spain Calle B, esquina calle 4, s/n. Sector B, Polígono Industrial Zona Franca, 08040 Barcelona, Spain 35.0 Distribuidora de Publicaciones del Sur, S.A. Spain Distribution of published materials and other products Polígono Industrial Pineda, Carretera de Cádiz a Dos Hermanas, Km 547, Nave D. 41014 Sevilla, Spain 25.0 Distribución de Publicaciones Siglo XXI, Guadalajara Spain Distribution of published materials and other products in Spain Francisco Medina y Mendoza, 2, 19171 Cabanillas del Campo, Guadalajara, Spain 40.0 Entreprises des Tabacs en Guinée (i) Guinée Conakry Dormant B.P 3391, Conakry, Guinea 34.0 Lao Tabacco Limited Laos Manufacture and distribution of cigarettes in Laos KM 8, Thadeua Road, P O Box 181, Vientiane, Lao People's Democratic Republic 43.7 Logista Libros S.L. Spain Distribution of books Avda. Castilla La Mancha, 2 - Naves 3-4 del Polígono Industrial La Quinta, Cabanillas del Campo, Guadalajara, Spain 25.0 Promotion et Distribution a Madagascar (i) Madagascar Distribution of cigarettes in Madagascar Tour ZITAL Ankorondrano, Antananarivo, Madagascar 33.4 SITABAC S.A. Cameroon Manufacture and distribution of tobacco products in Cameroon 113 Rue Kitchener, 1067 Bonanjo, Douala, Cameroon 34.5 Sociedad Anonima Distribuidora De Ediciones Spain Publications distribution Calle B, esquina calle 4, s/n. Sector B, Polígono Industrial Zona Franca, 08040 Barcelona, Spain 35.0 Société Internationale des Tabacs Malgaches (i) Madagascar Leaf processing BP 270, 401 Mahajanga, Madagascar 47.9 Société Nationale des Tabacs et Allumettes du Mali S.A. (i) Mali Manufacture and distribution of cigarettes in Mali Route Sotuba - Z.I., BP 59, Bamako, Mali 28.0 SPAK-EKO a.s. Slovak Republik Recycling of tobacco o products in Slovak Republik Vajnorská 100/B 831 04 Bratislava 25.0 +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU228 ![]() JOINT VENTURES: INCORPORATED OVERSEAS CONTINUED Name Country of incorporation Principal activity and registered address Percentage owned Global Horizon Ventures Limited Hong Kong Sales and marketing of cigarettes in Asia Room 3907-08, 39th Floor, Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong 50.0 Intertab S.A. (i) Switzerland Holding investments in subsidiary companies Société Fiduciaire Suisse-Coopers & Lybrand S.A., Route de la Glâne 107, Villars-sur-Glâne, 1752, Switzerland 50.0 West Tobacco Pte Ltd (i) Singapore Dormant 1 Harbourfront Avenue #14-07, Keppel Bay Tower, 098632 Singapore 50.0 PARTNERSHIPS The Group also owns the following partnerships Name Country Principal activity, registered address and principal place of business Fabrica de Tabacos La Flor de Copan S de R.L. de CV Honduras Holding investments in subsidiary companies Registered address and principal place of business: Apartado Postal 209, Colonia Mejia-García, Santa Rosa de Copán, Honduras Imperial Tobacco (Efka) GmbH & Co. KG Germany Manufacture of tubs in Germany Registered address and principal place of business: Behrinstrasse 122 A,, Hamburg, 22763, Germany Imperial Tobacco Kazakhstan LLP (i) Kazakhstan Marketing and distribution of tobacco products in Kazakhstan Registered address and principal place of business: 3rd Floor, Prime Business Park, 100/2 Nursultan Nazarbayev Avenue, Medeuskiy District, Almaty, 050000, Kazakhstan ITG Brands Holdpartner LP United States of America Marketing and sale of tobacco products in United States of America Registered address and principal place of business: 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA The subsidiaries listed were held throughout the year and the consolidated Group financial statements include all the subsidiary undertakings identified. All dormant UK entities have taken the exemption available to not have an audit of their financial statements. Unless otherwise stated the entities are unlisted, have one type of ordinary share capital and a reporting period ending on 30 September each year. (i) December year end (ii) March year end (iii) Listed entity (iv) Holding of one type of ordinary share only (where more than one type of share is authorised/in issue). Only applicable to partly owned entities. Percentage ownership is shown in the tables above. (v) Holding of two types of ordinary share (where more than one type of ordinary share is authorised/in issue). Only applicable to 100% owned subsidiaries. (vi) Holding of preference shares only (vii) Holding of ordinary and preference shares (viii) Holding of ordinary and redeemable shares (ix) Holding of ordinary and deferred shares (x) Holding of two types of ordinary share and redeemable shares The percentage of issued share capital held by the immediate parent and the effective voting rights of the Group are the same except for Imperial Tobacco Italy S.r.l. where the entire share capital, and therefore 100% of the voting rights, are held by a number of Group companies. www.imperialbrandsplc.com 229 ![]() SHAREHOLDER INFORMATION #### SHAREHOLDER INFORMATION FINANCIAL CALENDAR AND DIVIDENDS Half year results are expected to be announced in May 2025 and the Full year results in November 2025. The Annual General Meeting of the Company will be held on Wednesday 29 January 2025 at 9.30am at the Bristol Marriott Royal Hotel, College Green, Bristol BS1 5TA. The Notice of Meeting and explanatory notes about the resolutions to be proposed are set out in the circular enclosed with this Report. Dividends are generally paid at the end of March, June, September and December. Payment of the 2024 final dividend, if approved, will be on 31 March 2025 to shareholders on the Register of Members at the close of business on 21 February 2025. The associated ex-dividend date will be 20 February 2025. SHARE DEALING SERVICE Our Registrar offers Shareview Dealing, a service which allows you to buy or sell Imperial Brands PLC ordinary shares if you are a UK resident. You can deal on the internet or by phone. Log on to www.shareview.co.uk/dealing or call them on 03456 037 037 between 8am and 4.30pm Monday to Friday HQTǭOQTGKPHQTOCVKQPCDQWVVJKUUGTXKEG+H[QWYKUJVQUGNN your Imperial Brands PLC ordinary shares, you will need [QWTǭUJCTGJQNFGTTGHGTGPEGPWODGTYJKEJ[QWECPHKPFQP your share certificate. INDIVIDUAL SAVINGS ACCOUNT Investors in Imperial Brands PLC ordinary shares may take advantage of a low-cost Individual Savings Account (ISA) CPFǭ+PXGUVOGPV#EEQWPVYJGTGVJG[ECPJQNFVJGKT+ORGTKCN Brands PLC ordinary shares electronically. The ISA and Investment Account are operated by Equiniti Financial Services Limited. For further information please go to www.shareview.co.uk/ dealing or call Equiniti on 0345 0700 720. DIVIDEND REINVESTMENT PLAN Imperial Brands PLC has set up a dividend reinvestment plan (DRIP) to enable shareholders to use their cash dividend to buy further Imperial Brands PLC ordinary shares in the market. Further information can be obtained from Equiniti on 0371 384 2037 (+44 371 384 2037 if calling from outside the UK) or online at www.shareview.co.uk. AMERICAN DEPOSITARY RECEIPT FACILITY Imperial Brands PLC ordinary shares are traded on the OTCQX International Premier platform in the form of American Depositary Shares (ADSs) using the symbol ‘IMBBY’. The ADS facility is administered by J.P. Morgan Chase, N.A. and enquiries should be directed to them at the address shown opposite. WEBSITE Information on Imperial Brands PLC is available on our website: www.imperialbrandsplc.com. Equiniti also offers a range of shareholder information online. You can access information on your holdings, indicative share prices and dividend details and find practical help on transferring shares or updating your details at: www.shareview.co.uk. REGISTERED OFFICE 121 Winterstoke Road Bristol BS3 2LL +44 (0)117 963 6636 Incorporated and domiciled in England and Wales No: 3236483 REGISTRAR Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA +44 (0)371 384 2037\* +44 (0)371 384 2255\* text phone for shareholders with hearing difficulties \* Lines are open 8.30am to 5.30pm, Monday to Friday excluding public holidays in England and Wales. AMERICAN DEPOSITARY RECEIPT FACILITY EQ Shareowner Services P.O. Box 64504 St. Paul, MN 55164-0504 Toll-free number inside USA: +1-800-990-1135\* From outside the USA: +1 651-453-2128\* Online: Visit: www.shareowneronline.com, then scroll down to ‘Contact Us’ information. For more contacts visit: https://adr.com/contact/jpmorgan \* Lines are open Monday to Friday 7am to 7pm (Central Time US). CORPORATE BROKERS Morgan Stanley & Co. International Plc 20 Bank Street Canary Wharf London E14 4AD +44 (0)20 7425 8000 Barclays Bank PLC 1 Churchill Place Canary Wharf London E14 5HP +44 (0)20 7623 2323 AUDITOR Ernst & Young LLP 1 More London Place London SE1 2AF +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU230 ![]() Certain statements in this report constitute or may constitute forward-looking statements. Any statement in this report that is PQVǭCUVCVGOGPVQHJKUVQTKECNHCEVKPENWFKPIYKVJQWVNKOKVCVKQPVJQUGTGICTFKPIVJG%QORCP[ũUHWVWTGGZRGEVCVKQPUQRGTCVKQPU financial performance, financial condition and business is or may be a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied in any forward-looking statement. These risks and uncertainties include, among other factors, changing economic, financial, business or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this report. As a result, you are cautioned not to place any reliance on such forward-looking statements. The forward-looking statements reflect knowledge and information available at the date of this report and the Company undertakes no obligation to update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this report should be construed as a profit forecast or profit estimate and no statement in this report should be interpreted to mean that the future earnings per share of the Company for current or future financial years will necessarily match or exceed the historical or published earnings per share of the Company. This report has been prepared for, and only for the members of the Company, as a body, and no other persons. The Company, its Directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this report is shown or into whose hands it may come, and any UWEJǭTGURQPUKDKNKV[QTNKCDKNKV[KUGZRTGUUN[FKUENCKOGF #### CAUTIONARY STATEMENT YYYKORGTKCNDTCPFURNEEQO 231 ![]() #### NOTES +ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU232 ![]() Printed by Park Communications on FSC® certified paper. Park works to the EMAS standard and its Environmental Management System is certified to ISO 14001. This publication has been manufactured using 100% offshore wind electricity sourced from UK wind. 100% of the inks used are vegetable oil based, 95% of press chemicals are recycled for further use and, on average 99% of any waste associated with this production will be recycled and the remaining 1% used to generate energy. This document is printed on Max Ultrawhite, both papers are made of material from well-managed, FSC®-certified forests and other controlled sources. The pulp used in this product is bleached using an elemental chlorine free (ECF) process. Designed and produced by Black Sun Global. ![]() Registered Office Imperial Brands PLC 121 Winterstoke Road Bristol BS3 2LL UK www.imperialbrandsplc.com A digital version of this Annual Report is available online: www.imperialbrandsplc.com