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Annual Report and Accounts 2025
A STRONGER
CHALLENGER
BUSINESS
A STRONGER
CHALLENGER
BUSINESS
Imperial Brands is a global consumer
business with a distinctive challenger
role in the transformation of the tobacco
and nicotine industry.
Our evolved strategy is building a
more consumer-centric, focused, and
agile enterprise, delivering consistent,
sustainable growth.
Building on our strong foundations, we
are getting even closer to our consumers,
creating differentiated combustible and
next generation products (NGP), and
evolving into a simpler, data-led
organisation which enables our people
to do their best work, every day.
USA
Germany
UK
Spain
Australia
CONTENTS
STRATEGIC REPORT
A challenger business 2
Our strategy 4
Investment proposition 14
Chair’s Statement 16
Chief Executive’s Statement 18
KPIs 22
Industry overview 25
Operating review 26
Financial review 30
Non-financial and sustainability
information statement 38
ESG review 39
TCFD 54
Principal risks and uncertainties 66
GOVERNANCE 76
FINANCIALS 125
INDEPENDENT AUDITOR’S REPORT 126
SUPPLEMENTARY INFORMATION 193
IMPERIAL BRANDS PLC FINANCIALS 202
SHAREHOLDER INFORMATION 216
For more information visit
www.imperialbrandsplc.com
* Africa, Asia, Australasia and Central
& Eastern Europe.
INTERNATIONAL AND LOCAL
COMBUSTIBLE BRANDS
BRANDS IN EACH NGP
CATEGORY
PRIORITISING OUR
HIGHEST VALUE
COMBUSTIBLE MARKETS
Chart illustrating regional split of FY25 Tobacco & NGP net revenue
of £8.3 billion. Reported revenue £32.2 billion.
AMERICAS
35%
EUROPE
42%
AAACE*
23%
BRANDS REFLECTING OUR CONSUMER PREFERENCES
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Imperial Brands PLC Annual Report and Accounts 2025
1
Our position as the smallest of the major international companies in the industry enables
us to get closer to consumers, innovate fast, and spot value that larger competitors overlook.
BUSINESS MODEL
UNLOCKING THE
VALUE OF ‘CHALLENGER’
A CHALLENGER
BUSINESS…
RESULTING IN
A COMPELLING
INVESTMENT
PROPOSITION…
CONSISTENTLY DRIVING
GROWTH.
WITH AN EVOLVED
STRATEGY…
Our transformation into a
stronger challenger business
is delivering consistent
financial and non-financial
performance.
We deliver enhanced
capital returns by playing
to our natural strengths
as a challenger business.
Our challenger mindset
drives our success.
It promotes agility and high
performance, and is integral
to fulfilling our purpose and
achieving our vision.
See more on page 3
See more on page 4
See more on page 14
See more on page 15
OUR
STRATEGY
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VALUE CREATION
PURPOSE & VISION
Visit www.imperialbrandsplc.com/whoweare
for more on the part we play in our transforming industry
CULTURE
Read more about our high-
performance culture on page 12
Read about how building a stronger challenger
business benefits our stakeholders on page 14
STRATEGY
Read about our strategy to build a stronger
challenger business on page 4
CONSUMER
CENTRIC
BUSINESS MODEL CONTINUED
HOW OUR CHALLENGER
APPROACH CREATES VALUE
WE START WITH THE CONSUMER
We get closer to our consumers by developing deep
insights which inform our focused approach to brand
building and innovation.
AMBITIOUS PURPOSE AND VISION
Our purpose is to forge a path to a healthier future
for moments of relaxation and pleasure. Our vision
is to build a strong challenger business powered
by responsibility, focus and choice.
OUR DISTINCTIVE STRATEGY
Our strategy is consumer-centric and focused, building
differentiated brands and making investments to create
a more agile, data-led organisation.
A HIGH-PERFORMANCE CULTURE
We are committed to excellence in our consumer
capabilities, sales execution and manufacturing.
We want our people to be able to do their best
work every day.
SUSTAINABLE VALUE CREATION
This approach has led to a more consistent and
sustainable performance, enabling reinvestment
in growth and returns for shareholders.
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OUR
STRATEGY
D
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BUSINESS MODEL CONTINUED
THE VALUE OF ‘CHALLENGER’
A REFRESHED STRATEGY
Our 2030 plan will make
us more consumer-centric,
focused and agile.
In March 2025, we laid out a five-year strategy
which is both a confident evolution and a
step-up in our ambitions.
This plan is aligned to our well-established
long-term purpose of forging a path to a
healthier future for moments of relaxation
and pleasure.
Our strategy is built around the simple idea
that, as the smallest of the global tobacco
and nicotine businesses, we are at our best
when we behave as a challenger.
For us, being a challenger is, above all, about
getting closer to our consumers, staying
focused on the biggest opportunities for
growth, and investing to enable our people
to act with greater agility.
STRATEGIC PILLARS
Our 2030 strategy has two focused objectives:
DRIVE SUSTAINABLE VALUE
IN COMBUSTIBLES
We focus on the five markets that are our
largest profit contributors. The United States,
Germany, United Kingdom, Spain and
Australia represent c.70% of adjusted tobacco
operating profit. Within these markets, we
have identified specific areas for investment
by category, brand and sales channel. We aim
to maintain our aggregate market share across
these five markets to drive sustainable
growth and cash delivery. We apply the same
performance-driven, consumer-led approach
to our wider portfolio of markets.
BUILD SCALE IN NEXT
GENERATION PRODUCTS
Our fast-growing NGP business is founded on
deep insights into our consumers, attractive
propositions across all categories, and
products available in markets where the
category has been created and we have
existing distribution. We are further
developing our understanding of consumers,
creating more differentiated brands and
enhancing our sales capabilities. We are
committed to annual double-digit net revenue
growth in NGP, building a more significant NGP
business which contributes profit and cash.
Read about our priority combustible
markets on page 6
Read about our targeted approach
to NGP on page 7
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BUSINESS MODEL CONTINUED
STRATEGIC ENABLERS
Successful delivery of these objectives will be underpinned by three strategic enablers – our key capabilities and ways of working:
Read about how we understand our
consumers on pages 8-9
Read about how we are unlocking
higher performance on page 12
Read about how we are building
a more agile business on page 13
SIMPLIFIED, EFFICIENT
AND DATA-LED ORGANISATION
We have begun major data programmes,
including the introduction of a new global
enterprise resource planning platform, and the
full benefits of these will be felt during the next
strategic period. We have also now identified
further opportunities to create a simpler, leaner
and more agile organisation. We will leverage
our global scale, drive efficiencies in our supply
chain through manufacturing excellence,
and enable our people to make more informed
decisions through better use of data.
HIGH-PERFORMANCE
CULTURE
Responding to a legacy of global acquisitions
which had been loosely integrated, we have
been creating a culture where accountabilities
are clear, deep collaboration across geographies
is fostered and long-term thinking is enabled.
Our data shows this emerging performance
culture has been a driver of commercial
success. We see opportunities to unlock
higher performance by investing selectively
in leadership skills, improving business
planning and introducing more connected
ways of working.
DIFFERENTIATED CONSUMER
AND BRAND CAPABILITIES
Through blending global FMCG experience
with deep tobacco knowledge, we have built
a distinctive consumer team, who have
developed our capabilities in insights, brand
building and innovation. We see opportunities
to create further value by refining and focusing
our approach. This includes deeper insights
into specific target groups, the development
of more differentiated, ‘challenger’ brands,
and innovation targeted to address the most
important needs of our consumers.
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BUSINESS MODEL CONTINUED
We target the most attractive
opportunities through a focus
on our priority combustible
markets.
While we have a presence in more than 100
countries worldwide, we primarily focus on
the five markets which account for 70% of
adjusted tobacco operating profit. In these
markets, we offer a portfolio of products
meeting differing consumer preferences and
price points. In each market we have defined
priorities by category, brand and sales
channel, which we call our “must-win battles”.
OUR FIVE PRIORITY MARKETS CONTRIBUTE OVER 70% OF ADJUSTED TOBACCO OPERATING PROFIT
USA
PROPORTION OF
NET REVENUE*
35%
MARKET SHARE
11%
PRIORITY MARKET
SHARE MOVEMENTS
-1bp
* Tobacco & NGP net revenue.
GERMANY
PROPORTION OF
NET REVENUE*
14%
MARKET SHARE
19%
PRIORITY MARKET
SHARE MOVEMENTS
+45bps
* Tobacco & NGP net revenue.
UK
PROPORTION OF
NET REVENUE*
6%
MARKET SHARE
37%
PRIORITY MARKET
SHARE MOVEMENTS
-85bps
* Tobacco & NGP net revenue.
SPAIN
PROPORTION OF
NET REVENUE*
5%
MARKET SHARE
26%
PRIORITY MARKET
SHARE MOVEMENTS
-45bps
* Tobacco & NGP net revenue.
AUSTRALIA
PROPORTION OF
NET REVENUE*
2%
MARKET SHARE
32%
PRIORITY MARKET
SHARE MOVEMENTS
+20bps
* Tobacco & NGP net revenue.
STRATEGIC PILLAR ONE
DRIVE SUSTAINABLE VALUE
IN COMBUSTIBLES
KEY BRANDS KEY BRANDS KEY BRANDS KEY BRANDS KEY BRANDS
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BUSINESS MODEL CONTINUED
MARKET SHARE
GROWTH IN FY25
2
160bps
MARKET SHARE
GROWTH IN FY25
2
60bps
MARKET SHARE
GROWTH IN FY25
2
130bps
KEY
MARKETS
KEY
MARKETS
KEY
MARKETS
INDUSTRY REVENUE PROJECTIONS
1
£bn INDUSTRY REVENUE PROJECTIONS
1
£bn INDUSTRY REVENUE PROJECTIONS
1
£bn
FY30
£6.2bn
FY20
£0.9bn
FY25
£3.3bn
FY30
£6.2bn
FY20
£2.3bn
FY25
£5.3bn
FY30
£4.3bn
FY20
£0.5bn
FY25
£2.6bn
UK
Spain
France
Germany
Italy
Greece
Poland
Czechia
USA
Norway
Sweden
Austria
We participate in established
categories where we have
strong existing routes
to market.
Our NGP market footprint is focused on the
United States and Europe. Within individual
markets we prioritise the categories which
have the strongest growth prospects and are
well established. So, in the US and Nordics
we focus on modern oral. Western Europe is
where we focus on vaping, and our southern
and eastern European markets are where
we lead with heated products.
NET REVENUE GROWTH
*
13.7%
* At constant currency.
STRATEGIC PILLAR TWO
BUILD SCALE IN NEXT
GENERATION PRODUCTS
VAPOUR HEATED TECHNOLOGY MODERN ORAL
1. Imperial Brands internal estimates for Group footprint. Markets included represent >85% NGP net revenues.
2. Vapour share based on retail sales value. Aggregated ‘closed system’ share based on UK, FR, SP, GE, IT, GR combined. UK is blu share and excludes ‘multi-pods’ and ‘big puff’. Heated shares
based on volume/stick across CZ, GR, IT, PL, HU, BU combined. Modern oral share based on volume/can. Aggregated share based on SE, NO, USA. USA share is based on sell-through (wholesale
to retail), MSAi data to 4 October 2025.
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We focus on deeply
understanding very
specific types of
consumers – those
for whom our brands
have most appeal.
BUSINESS MODEL CONTINUED
STRATEGIC ENABLER ONE
WE LEARN FROM
OUR CONSUMERS
We invest in deep insights
to understand our consumers’
needs and preferences.
Globally, there are more than 1 billion
smokers and nicotine consumers. As a
challenger business, our role is to build
a deep understanding of a focused subset
of these consumers – those for whom our
brands and products strongly resonate.
BECKER,
USA
“I choose Winston because of the
true tobacco taste and consistent
quality. With a Winston, in the
morning it helps me get my day
started and, in the evening, it helps
me relax and reflect on my day.”
MARKUS,
GERMANY
“I don’t think there’s another cigarette
brand that offers such great additional
flavours. I appreciate the obviously
high quality of the tobacco and the
modern yet traditional image of the
Gauloises brand.”
PAOLA POCCI
CHIEF CONSUMER OFFICER
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BUSINESS MODEL CONTINUED
LIVIA,
UK
“The device is a good size and
a simple shape. It holds nicely in
your hand and looks premium with
its metallic feel. I also prefer blu
because it has a nice taste that’s
not too strong or overwhelmingly
sweet. It is a bit more subtle and
doesn’t leave too much of its fruity
smell around me.”
GABRIELLA,
ITALY
“Pulze is a device that gets straight
to the point. It’s linear, light, what
you see is what you get. I feel like
it’s closer to my personality –
determined and with clear ideas
without frills. The price is good
and together with the advice of my
tobacconist, it’s given me the push
to change my way of using tobacco.”
VICTORIA,
SPAIN
“Fortuna is a brand that’s the most
talked about, the best known,
I know lots of people who smoke it
and I enjoy it. I also really like that
it comes in different pack sizes,
which I choose depending on the
moment. My favourite moment of
relaxation is at night, after dinner.”
SEAN,
USA
“Zone has the right feel in my
mouth because it has just the right
level of moisture. I also enjoy the
flavour; it’s not overwhelming or
artificial like some other pouches.
I feel more productive, no more
going outside for smoke breaks, but
the biggest benefit is that there’s no
trace of smell afterward.”
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BUSINESS MODEL CONTINUED
STRATEGIC ENABLER ONE
WE LEVERAGE INSIGHTS TO
BUILD CHALLENGER BRANDS
INTERNATIONAL BRANDS LOCAL JEWELS NEXT GENERATION PRODUCTS
We are developing differentiated brands
meeting clear consumer needs.
Our recently developed global Brand Building Framework
adds greater rigour to how we identify our target consumers,
develop compelling marketing campaigns, and drive positive
commercial outcomes.
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BUSINESS MODEL CONTINUED
STRATEGIC ENABLER ONE
WE DRIVE TARGETED
INNOVATION
We are developing strong offerings in all
next generation product categories while
continuing to innovate in tobacco.
We choose to identify specific types of consumers and focus
on the innovations that address their particular needs.
Consumer feedback on blends and flavours or NGP device
prototypes is captured in real-time at our Sense Hubs, where
our innovation activities are centred, and feedback to our
third-party partners is provided immediately.
Our scientists and regulatory experts are closely involved in the
innovation process to ensure we maximise the harm reduction
potential of our NGP, while minimising unintended use.
This collaborative way of working gives us the agility to better
respond to changes in consumer trends, ensuring we innovate
faster, more responsibly and with greater precision.
INNOVATIONS IN TOBACCO
INTRODUCING A NEW FORMAT
Our insights in Germany showed
there was an unmet need for a slim
format cigarette, an offering not
available from any other mainstream
international brand in the market. We
created JPS Slims for these specific
consumers, using our agile innovation
model to bring a differentiated brand
to market at speed.
REDEFINING A TRUSTED BRAND
Gauloises is a trusted brand in
Morocco, but our insights identified
evolving consumer expectation for
a smoother cigarette with the same
premium feel. In response we rapidly
developed Gauloises Rich Gold,
a Virginia blend cigarette. Our
consumer insights also informed
the modern, premium feel of the
product packaging.
EMBRACING CONSUMER CULTURE
Backwoods consumers are culturally
fluent and socially influential. To
deepen cultural relevance and build
lifestyle equity through brand building
we developed the City Pack collector’s
edition series. Differentiated
packaging focuses on unique urban
cultures across the US. Editions
include New Orleans, LA, Chicago,
Houston, Atlanta and Detroit.
INNOVATIONS IN NEXT GENERATION PRODUCTS
REFRESHING OUR VAPING PORTFOLIO
Our investment in new ethnographic
studies and qualitative research
revealed that blu vape consumers
prefer trusted brands, gimmick-free
products and simpler, more authentic
adult flavours. blu bar kit and blu box
kit rechargeable vapes, paired with
new flavours, were co-created with
consumers at our Liverpool Sense
Hub and quickly brought to market.
RETHINKING MODERN ORAL NICOTINE
Our European modern oral nicotine
consumers seek authentic flavour
experiences, and our insights also
established an untapped opportunity
for a moister product. We have
developed an enhanced triple-fibre
pouch, which demonstrates notable
performance advantage in the
key metrics that matter to our
consumers: nicotine delivery,
taste and mouthfeel.
REPLICATING THE SMOKER EXPERIENCE
Our third-generation heated platform
device more closely replicates the
smoking experience and focuses
on the features that matter most
to our consumers. Developed at
our Hamburg Sense Hub, Pulze 3.0
is the smallest all-in-one device on
the market, offers 25+ sessions on
a single charge and features a unique
rollerball insertion method.
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BUSINESS MODEL CONTINUED
STRATEGIC ENABLER TWO
WE NURTURE A
HIGH-PERFORMANCE CULTURE
The development of a
performance culture has
been a key enabler for our
recent success.
Over the next strategic period, we intend to
further strengthen our culture, ensuring our
people have the right technology, data and
processes to do their best work every day.
The foundation of our performance culture has
been our behaviours, which we developed with
our people in 2021. Since then, we have put in
place initiatives which have reinforced these
behaviours, including:
The creation of a global consumer team
and investments in insights, marketing
and insights capabilities
New ways of working to remove silos, for
example, through the creation of a global
sales excellence network
Training for our top 1,000 leaders to become
better coaches to their teams
More rigorous performance management
at both a business and individual level.
Over the next few years, through investments
in tech and ways of working we will become
a fully integrated organisation with common
processes, technology and data.
This will enable us to move towards a genuinely
high-performance culture where we deliver
excellence in consumer capabilities and sales,
and throughout our enabling functions.
Our focus in 2025 has been on building a
clear and consistent understanding of our
refreshed strategic and cultural ambitions
among our people.
We have done this through a structured
programme of engagement for all segments
of our workforce including:
A series of seven face-to-face events for our
600 top leaders across all three of our regions
TV shows bringing to life key elements
of our strategy for our global workforce
Virtual Q&A sessions with our CEO and
other senior leaders
Toolkits to enable people leaders to hold
conversations with their teams about how
they can each make a distinctive contribution
to our strategy
While this engagement work continues,
feedback so far is encouraging, with 94% of our
leaders saying they feel confident to explain
our strategy.
OUR BEHAVIOURS
Our five behaviours are well embedded
and act as a clear guide for how we operate.
We are all brand builders.
We are all sales people.
We all have a role to play
in delivering a high-
performance culture.
MEMBER OF OUR LEADERSHIP COMMUNITY
WHAT OUR LEADERS ARE
SAYING ABOUT OUR CULTURE
AND STRATEGY
97%
understand our 2030 strategy
94%
are confident in their ability to explain
key elements of the strategy
96%
understand the cultural and behavioural
shift which needs to be made
96%
know what it means to be a challenger
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BUSINESS MODEL CONTINUED
STRATEGIC ENABLER THREE
A TRANSFORMATION
DRIVEN BY TECH & DATA
DIGITAL TRANSFORMATION
By integrating our processes, people, data
and technology, we are creating a more agile,
simplified, efficient and data-led organisation.
We continue to roll out our enterprise
resource planning (ERP) platform in service
of our ambition to become a simpler, more
efficient organisation. This is a key step
to becoming a business which makes the
most of its global scale to create significant
efficiencies while empowering local teams.
Our new platform went live in the UK & Ireland
in FY25, followed by our Radom factory in
Poland in October 2025. We are rolling out the
programme to all markets and factories over
the next four years, with the next wave of
deployments in our Australasia cluster
scheduled for early 2026.
Connecting and integrating our technology
platforms will make us more efficient and
free up time to focus on what really matters
– our consumers and customers.
MANUFACTURING
Across our factory footprint, we are building
excellence and strengthening our focus on
efficiency, quality, and health and safety.
Our Manufacturing Excellence System (MES)
includes a standardised operating model to
unlock efficiencies. MES helps us monitor data
and yield, enforces automatic specifications
and enhances product traceability. These
improvements will deliver a step change
in organisational capabilities and support
our strategic delivery.
We are investing in planning and forecasting
solutions and enhancing our tobacco leaf and
blending systems. Integrating our new ERP
into our supply chain will lead to greater agility,
responsiveness and consistency, and create
opportunities for continuous performance
improvements.
We review the utilisation rate of our global
manufacturing footprint to ensure that this is
optimised. In October, we announced we were
withdrawing from our Langenhagen factory in
Germany. Our focus is on ensuring a fair and
transparent process for affected employees.
SALES
We continue to expand our sales capabilities,
building excellence into the DNA of our sales
teams through better use of technology and
data to drive sharper insights and knowledge
sharing. To accelerate our progress and the
sharing of best practice we have established
a global centre for sales excellence, which
brings together our diverse regional teams.
In the US, our largest market, we have
used our improved data to optimise the
deployment of our sales force by geography
and channel. This analysis is becoming ever
more detailed and localised, helping us focus
coverage on the specific cities and counties
with the best returns.
Combined with investment in an expanded
sales force, these tools help us visit more
customers, reduce administrative workload
and optimise our marketing activations.
These techniques are now being rolled
out across our priority markets’ sales teams
and we will be making further investments
during the next strategic period.
We are investing in tech and
data to improve agility and
efficiency across our value chain
and to simplify the way we work.
Our ambition over the next strategic period
is to complete our transformation from a loose
collection of businesses brought together
during a period of acquisition to an integrated,
agile organisation.
This will unlock the full potential of our global
scale to create significant efficiencies and further
harness our growing consumer capabilities.
We see opportunities to connect the world-class
talent we have assembled in the organisation
and to improve end-to-end processes. We will
leverage data analytics on an enterprise-wide
basis and apply artificial intelligence more
effectively to empower our people to make
faster, more insightful decisions.
£600m
Cash investment in technology, data
and processes and manufacturing
excellence over the next four years
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BUSINESS MODEL CONTINUED
A COMPELLING INVESTMENT PROPOSITION
We play to our natural
strengths as a challenger
business. This means getting
close to our consumers,
staying focused and acting
with agility.
ENHANCING
CAPITAL RETURNS
We have a clear
capital allocation
framework
alongside
our strategy:
INVEST
IN STRATEGY
Since our strategy is
largely organic and we
work with innovation
partners, our capital
expenditure needs are
relatively light. We have
committed to invest
in our transformation
and consider small
strategic acquisitions.
MAINTAIN
LEVERAGE
We are committed to
an investment grade
credit rating and will
maintain our leverage
at the lower end of the
range 2.0-2.5 times
adjusted net debt/
EBITDA.
PROGRESSIVE
DIVIDEND GROWTH
We have committed
to grow our dividend
every year, taking into
account the underlying
business performance.
RETURN SURPLUS
CAPITAL TO
SHAREHOLDERS
We have committed
to an evergreen share
buyback up to 2030,
with £1.45 billion share
repurchase announced
for FY26.
A SUSTAINABLE,
CASH-GENERATIVE
TOBACCO BUSINESS
A TARGETED,
FAST-GROWING
NEXT GENERATION
NICOTINE BUSINESS
A TRANSFORMATION
TO BECOME A
SIMPLER, MORE
DATA-ENABLED
BUSINESS
A CONSISTENT,
STRONG FINANCIAL
OUTLOOK
DELIVERY ON OUR
COMMITMENT TO A
HEALTHIER FUTURE
Focused investments in
brands and sales execution
underpin stable market
share and enable strong
pricing, leading to growing
revenue. In the majority of
our focus markets, tobacco
remains affordable –
creating opportunities for
sustainable, long-term value.
Our flexible, partnership
approach to innovation
and focused market entry
framework are building
a disciplined, sustainable
NGP business. We are
committed to annual
double-digit revenue
growth and, as we build
scale, we are moving
towards profitability.
Targeted investments
in technology, data and
processes are enabling our
people to get closer to our
consumers, to focus on the
big levers which drive value
and to act with greater
agility. This is enabling
us to become a stronger
challenger and deliver
more sustainable growth.
Our strategy supports
our strong medium-term
financial outlook, to grow
adjusted earnings per share
by at least high-single digit
at constant currency, to
deliver annual free cash
flow of at least £2.2 billion
and to maintain our
disciplined approach
to capital allocation.
Our business model is
aligned to a long-term
consumer trend towards
potentially less harmful
smoke-free nicotine
products. As we
responsibly scale our NGP
operations we will play an
increasingly material role
in reducing the harm
caused by tobacco.
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TOBACCO AND NGP
NET REVENUE GROWTH*
(%)
GROUP ADJUSTED
OPERATING PROFIT GROWTH*
(%)
ADJUSTED EARNINGS
PER SHARE GROWTH*
(%)
ANNOUNCED SHARE
REPURCHASE
(£bn)
FY25: 4.1% FY25: 4.6% FY25: 9.1% FY26: £1.45bn
2025
2024
2023
2022
2021
4.1%
4.6%
1.4%
2.3%
1.4%
2025
2024
2023
2022
2021
4.6%
4.6%
3.9%
1.9%
4.8%
2025
2024
2023
2022
2021
9.1%
10.9%
4.3%
4.9%
2.8%
2026
2025
2024
2023
£1.45bn
£1.25bn
£1.10bn
£1.00bn
NGP NET REVENUE GROWTH
AT CONSTANT CURRENCY
(%)
+13.7%
2024: +26.4%
REPORTED OPERATING
PROFIT
(£bn)
£3.5bn
2024: £3.6bn
REPORTED EARNINGS
PER SHARE
(Pence)
251.1p
2024: 300.7p
DIVIDEND
PER SHARE
(Pence)
160.32p
2024: 153.42p
BUSINESS MODEL CONTINUED
CONSISTENTLY DELIVERING GROWTH
OUR STRONG TRACK RECORD CONTINUES
* Change at constant currency.
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CHAIR’S STATEMENT
SET UP FOR
SUSTAINABLE
GROWTH
THÉRÈSE ESPERDY
CHAIR
Dear shareholder,
I am pleased to report the successful
completion of our ambitious five-year strategy
to turn around Imperial Brands and build a
strong challenger business.
Alongside strong operational progress, over
the past year we managed a smooth leadership
transition with Lukas Paravicini succeeding
Stefan Bomhard as Chief Executive Officer.
Stefan retires from our business having
significantly strengthened our operations,
enabled us to deliver a more consistent
financial performance and set us on a course
for further success.
Delivering against our strategy
This has been another year of strong
operational delivery in both tobacco and next
generation products (NGP).
This performance, delivered despite continued
economic uncertainty and softening consumer
confidence in some key markets, adds to our
five-year track record of sustainable, broad-
based improvement. I would like to thank all
our people for their hard work and dedication
to our consumers and customers.
Guiding our success has been the targeted
challenger strategy which we launched in
January 2021. This strategy was built on three
principles: putting the consumer first, staying
focused on the biggest growth opportunities,
and transforming our organisation to become
simpler, more efficient and more agile.
During this period, we increased aggregate
market share in our priority combustible
markets by +48 basis points, delivered a 83%
increase in NGP net revenue, grew earnings
per share by 24% and made capital returns
totalling £10 billion.
Imperial Brands is a significantly stronger
business than it was five years ago, delivering
consistent growth and highly sustainable
shareholder returns.
We are better able to
create predictable and
sustainable value for
shareholders and meet
the needs of our wider
stakeholders.
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CHAIR’S STATEMENT CONTINUED
Leadership transition
On 30 September 2025, Stefan retired as CEO.
He will remain on the Board until 31 December
2025 and continue to be available to the
company until May 2026.
Stefan was succeeded by Lukas Paravicini,
who had been our Chief Financial Officer (CFO)
since 2021. Lukas has played a key role in the
strengthening of our business and has led the
ongoing programme to transform our
technology and data capabilities.
At the same time Murray McGowan, previously
our Chief Strategy and Development Officer,
took over from Lukas as CFO and joined our
Board. Murray, who joined Imperial Brands
in July 2020, oversaw the development of both
the company’s initial five-year strategy and
our refreshed 2030 plan.
Once again, I would like to thank Stefan for his
outstanding contribution to Imperial Brands’
renewed success. He has been an inspirational
leader, driving the improvements in our
capabilities and culture which have led to the
comprehensive turn-around of this company.
Stefan leaves behind a strong platform for
future growth, and on behalf of the Board,
I wish him all the very best in his retirement.
During the past five years, we have
comprehensively refreshed our senior
leadership team with strong hires from other
global consumer businesses and by nurturing
internal talent. This means we now have a
deep management bench ready to lead the
company through the next strategic period.
Our 2030 ambition
In March 2025, we unveiled an evolved strategy
covering the period to 2030. This is both a
confident evolution of our existing approach
and a step-up in our ambitions.
+13.7%
Growth in NGP net revenue in FY25
£2.8bn
Capital returns to investors during FY25
We see opportunities to deliver consistent
growth by investing further in our consumer
capabilities to create more differentiated brands,
and by becoming a data-led, more agile,
high-performance organisation.
While staying focused on delivering our plans for
FY25, we have also been building the capabilities
needed to deliver our long-term ambitions.
Our priorities over the next five years will be to
create sustainable value in combustibles, build
scale in NGP, and continue to provide highly
attractive returns to shareholders.
Moving towards a healthier future
By growing our NGP business, we are making
a more material contribution to reducing the
harm caused by smoking.
Our consumer insights teams and scientists
continue to ensure our smoke-free products
are effective in helping adult smokers to quit
and stay away from cigarettes.
We also engage with policymakers and
regulators to promote a deeper understanding
of the positive impact of NGP and campaign
against extreme prohibitionary measures,
which result in unintended consequences,
including the spiralling of illicit trade.
Aligned to our business strategy, progress has
been made on other material environmental,
social and governance priorities. We are
pleased that against our benchmark years,
we have reduced Scope 1 and 2 market-based
carbon emissions by 72% and cut absolute
waste across our operations by 36%.
Enhancing returns within a disciplined
framework
Five years ago we articulated clearly defined
capital allocation priorities and have applied
that framework rigorously. Our first priority is
always the investment needs of the business.
Next, we ensure we maintain an investment
grade credit rating and our net debt is within
our target ratio of 2.0 to 2.5 times EBITDA.
We then seek to provide a progressive
dividend, reflecting the underlying growth
of the business. The Board recommended two
further quarterly dividends of 40.08 pence per
share for FY25 with a total annual dividend of
160.32 pence, representing growth of 4.5% on
an underlying basis. Finally, we return surplus
capital through share buybacks. We have
committed to “evergreen” buybacks every
year up to 2030, and during FY26 we will make
repurchases totalling £1.45 billion, which we
expect to complete by 28 October 2026.
Further Board changes
Diane de Saint Victor retired from the Board at
our 2025 annual general meeting. We recently
announced that Abbe Luersman will join us in
January 2026 as a Non-Executive Director. Abbe
is an experienced human resources leader in
global businesses and has an impressive track
record in organisational design, integration,
cultural change and transformation – areas
of strategic importance for Imperial Brands.
We look forward to working with Abbe when
she arrives in the New Year.
Outlook
While we have accomplished much in the past
five years, Imperial’s transformation journey
will continue, with significant opportunities
still ahead. Although there are always risks
associated with an ambitious change
programme, I am confident that under the
executive leadership of Lukas and Murray,
Imperial Brands will continue to deliver
strong returns to shareholders, while moving
purposefully towards a healthier future.
THÉRÈSE ESPERDY
CHAIR
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This has been another year of strong
performance, which demonstrates the
sustainability of our combustibles business
and the exciting growth opportunities in next
generation products.
This has also been a year of transition in terms
of both strategy and leadership. 2025 marked
the successful completion of our five-year plan
to build a strong challenger business and the
start of our refreshed 2030 strategy, which is
both a confident evolution and an important
step-up in our ambitions.
On 1 October, Stefan Bomhard passed on the
baton of executive leadership to me, and at the
same time Murray McGowan assumed the role
of Chief Financial Officer. I would like to thank
Thérèse and the Board for their confidence in
me, and I want to express my gratitude to
Stefan for his guidance and friendship during
the four years we have worked together.
Since we announced the leadership transition
in May 2025, I have visited all our regions and
spent time with many of our people. I have
been impressed by my colleagues’ enthusiasm
for our refreshed strategy, their thoughtful
insights and their ambition to build an even
stronger business.
A confident evolution – and a step-up
in ambition
During the next strategic period, we will evolve
the distinctive challenger approach which has
been the source of our recent success. This
means we will continue to invest in the insights,
innovation and marketing capabilities which
get us closer to our consumers. We will continue
to make deliberate, focused choices about
which opportunities we pursue. We will also
continue to transform to become a simpler,
more efficient and more agile organisation.
CHIEF EXECUTIVE’S STATEMENT
EXTENDING OUR
HIGH-QUALITY
TRACK RECORD
We have successfully
delivered on our five-year
plan – while continuing our
long-term transformation.
LUKAS PARAVICINI
CHIEF EXECUTIVE OFFICER
Our strong operational
and financial delivery
during fiscal year 2025
and over the past five
years provides a firm
platform on which
to build as we embark
on the next phase of
our strategy.
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While our approach is evolutionary, our ambition
is bold. We see significant opportunities to
deliver a step-change in our capabilities –
and, as a result, drive even more sustainable,
consistent commercial outcomes. Through
investments in ways of working and technology
– including artificial intelligence – we will
complete our long-term journey from a collection
of businesses assembled through acquisition
to a fully integrated organisation with common
processes and data. This will allow us to fully
unleash the potential of the talent we have
been developing over the past five years and
create a truly high-performance culture.
This transformation will enable us to fulfil our
twin strategic priorities – sustainable value in
combustibles and scale in NGP – and realise
our purpose of forging a path to a healthier
future for moments of relaxation and pleasure.
Building on strong foundations
Our strong operational and financial delivery
over the past five years provides a firm platform
on which to build as we embark on the next
phase of our strategy. Our performance during
the 2025 fiscal year, which was in line with our
public commitments, adds to our track record
of progress across our key operational and
financial metrics.
In combustibles, we drove a strong price-mix
of 5.4%, more than offsetting volume decline.
Within our footprint, volume declines were
more moderate than in recent years. This
resulted in growth in tobacco net revenue of
3.7% at constant currency. On a reported basis,
tobacco revenue declined -2.9%.
In our five priority markets, market share
was stable. This means that since FY20,
our cumulative aggregate share in our top
five markets has outperformed our target,
increasing by 48 basis points.
In NGP, net revenue grew by 13.7% at constant
currency, another year of double-digit revenue
growth, in line with our commitment. On a
reported basis, NGP revenue grew 14.9%. This
was a broad-based performance with top-line
growth and share gains across all categories.
Over the past five years, our cumulative NGP
net revenue growth has been 83%.
At constant currency, tobacco and NGP net
revenue grew by 4.1%. Our Distribution segment
contributed positively to our results with gross
profit up 2.9% at constant currency, reflecting
strong tobacco pricing offsetting weakness in
long-distance transportation. This helped to
deliver Group adjusted operating profit growth
of 4.6% at constant currency. Reported operating
profit at actual rates declined -1.8%, reflecting
strong regional performance, partly offset by
adverse foreign exchange movements and
costs related to the implementation of the 2030
Strategy. This growth in adjusted operating
profit alongside the reduction in share count
as a result of our ongoing share buyback,
underpinned growth in adjusted earnings per
share of 9.1% at constant currency. On a reported
basis, earnings per share declined -16.5%.
Guided by our well-established and rigorous
capital allocation framework, the Board has
recommended an increase to the underlying
dividend of 4.5% for FY25, and an increase to
£1.45 billion for our share buyback for FY26.
During the five-year period from FY21 to FY25
inclusive, we delivered cumulative capital
returns of £10 billion, and during FY26 we
expect to deliver further capital returns
of c.£2.8 billion.
Sustainable growth in combustibles
Our performance in combustibles highlights
the sustainability of our portfolio of markets
and brands. In our major markets, we benefit
from a range of brands across all price points.
Our success has been driven by our long-term
investments in the capabilities of our sales
teams and in developing more differentiated
brands. Our more focused, consumer
insights-led approach to brand building can
be most clearly seen in our latest campaigns
for Winston and Backwoods in the US,
and Gauloises in Germany.
In the US, as a result of our targeted
investments in Winston, the brand has gained
share within the premium segment. Over the
last five years this brand has grown share in its
segment by over 20 basis points. At the same
time, we have benefited from the growth in
the discount segment.
In Germany, we have now delivered two
successive years of market share growth,
reversing the previous long-term trend of
share losses. We have gained share in both
the premium segment and in the value end
of the market where Paramount continues
to perform well.
In Spain, following a steady gain of 30 bps
in market share over the last four years we
decided to prioritise delivering value through
pricing. With tobacco continuing to be affordable,
we expect this market will remain highly
sustainable over the long term.
CHIEF EXECUTIVE’S STATEMENT CONTINUED
+9.1%
Adjusted earnings per share growth
on a constant currency basis
+£2.7bn
Free cash flow generation
£1.45bn
FY26 share repurchase announced
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CHIEF EXECUTIVE’S STATEMENT CONTINUED
In heated products, we focus on markets in
Southern and Eastern Europe where this is the
leading NGP category. During FY25, we have
been rolling out our new Pulze 3.0 device,
aimed at consumers seeking a better flavour
delivery and an affordable experience close
to combustible tobacco.
In Europe we have eight markets where NGP
now accounts for more than 20% of our tobacco
and NGP net revenue. In all NGP categories
we now have a focused view of our target
consumers, competitive propositions and
growing share.
Furthering harm reduction
As we build scale in our NGP business, we
prioritise investment in consumer insights
and science to better understand our real-world
contribution on harm reduction. Our most
recent research looked at the behaviour of adult
smokers with no plans to quit, when introduced
to blu vapes. Six months into the survey, 40%
of participants had either significantly reduced
smoking cigarettes or stopped completely.
In our priority markets, we continue to engage
with policymakers to build an understanding
of the positive role that responsibly marketed
NGP can play.
Developing our strategic capabilities
While delivering on our in-year plans, we
have also made progress on our long-term
transformation. As part of our ongoing
investment in consumer capabilities, over the
past year we have been rolling out our global
brand building framework. This new, more
rigorous approach is delivering greater clarity
on our target consumers, their distinctive
needs and the creation of winning
marketing campaigns.
Through our global network for sales
excellence, we continue to invest in technology
and training for our customer-facing teams.
The scaling of industry best practice, including
the broad adoption of artificial intelligence tools
will be a significant focus in the coming years.
As we have previously signalled, in the UK and
Australia, high excise and the resultant growing
illicit trade have led to reductions in overall
market value. However, I have been pleased at the
skill and dedication of our teams in capturing
value in these markets, balancing pricing and
market share performance. In the UK, we also
have an opportunity to offset declines in the
combustible market through the development
of a material NGP business.
We also saw a positive contribution from
our wider market portfolio. Our African cluster
delivered an especially strong performance,
with double-digit revenue growth across our
sub-Saharan markets.
Building scale in next generation products
Our focus on our consumers and disciplined
execution has delivered further progress in
NGP. FY25 saw continued innovation with
product launches in all categories across
our priority markets.
In the US we are focused on the fast-growing
modern oral category. Here, our Zone brand,
launched in February 2024, has now been
rolled out to a store footprint of c.100,000, and
continues to receive strong feedback from
consumers and our retail partners. In oral
nicotine, we have also continued to see strong
growth in the Nordics, where we launched a
new pouch design and flavours. We have also
just launched Zone in the UK.
In vape, our focus is on the major western
European markets where NGP consumers have
expressed a preference for this category. In the
context of more moderate category growth and
significant regulatory change in some markets,
our products continue to perform strongly.
Our new pod-based blu kit range, which we
have been progressively rolling out since the
second half of last year, has helped us establish
double-digit share in the UK, Spain and France.
Our consumers tell us they like the authentic
flavours and distinctive, high-quality design,
and regard blu as a trusted brand.
As part of our commitment to build a simpler,
more efficient and data-led organisation, we
are introducing a new platform for enterprise
resource planning – and this global programme
remains on track with our first production site
now live.
We continue to invest in improving the
effectiveness and efficiency of our global supply
chain. Alongside this ongoing activity, we
announced in October our intention to withdraw
from our Langenhagen factory in Germany.
Our decision followed a careful review of our
global manufacturing network and was made
necessary by declining utilisation aligned to
long-term, market-wide reductions in tobacco
volumes. We have been focused on ensuring
that the consultation process is as transparent
and fair as possible for all affected employees.
Over the past five years, we have developed a
culture which is more collaborative, accountable,
inclusive and able to balance near-term delivery
with long-term planning. We have built a deep
management bench by making smart hires
from the wider consumer sector and nurturing
our home-grown talent. During the next
strategic period, we see an opportunity to
build an even higher performing culture. Our
ambition is to equip our people with the right
processes, technology and data to enable them
to do their best work every day. Since March,
we implemented a structured programme to
socialise our strategy with our people, so all
colleagues understand their distinctive role in
delivering on our commitments. This included
a total of seven face-to-face leadership events,
which engaged more than 600 of our senior
people – and also provided me with a great
opportunity to spend time with our global teams.
A consistent aspect of our performance culture
is to drive further improvement in the health,
safety and wellbeing of our people. The absolute
number of lost time accidents has remained
unchanged on the previous year, down 47%
compared to our baseline year, highlighting
the importance of stepping up our efforts
to improve safety.
Allocating capital with discipline
We will continue with our existing clear and
transparent capital allocation framework. We
have four priorities: invest behind our strategy
to drive sustainable growth; maintain a strong
and efficient balance sheet, with leverage at
the low end of our 2.0 to 2.5 times net debt to
EBITDA range; a progressive dividend, reflecting
the underlying growth of the business; and
finally, return surplus capital to shareholders.
Following this framework, the dividend for
FY25 grew 4.5% on an underlying basis, in line
with adjusted operating profit. Having completed
the FY25 share buyback of £1.25 billion, the
strong momentum of the business has enabled
us to increase the share buyback for FY26 to
£1.45 billion. As announced in March, we have
committed to an evergreen share buyback over
the next five years to 2030, with the quantum
decided each year in line with this framework.
Outlook
Our expectations for the coming year are in
line with the medium-term guidance set out at
our Capital Markets Day in March 2025. On a
constant currency basis, we expect to deliver
low-single-digit tobacco and double-digit NGP
net revenue growth. Tobacco pricing will
continue to more than offset cigarette volume
declines, and in NGP we will continue to grow
through consumer-focused innovation and
disciplined execution.
For FY26, Group adjusted operating profit is
expected to grow in the 3% to 5% range, on a
constant currency basis, driven primarily by
continued profit growth from our combustible
tobacco business.
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CHIEF EXECUTIVE’S STATEMENT CONTINUED
In line with previous years, performance
will be weighted to the second half of the year
because of the phasing of combustible pricing
and investment.
After 2030 Strategy costs, we expect to
generate free cash flow of at least £2.2 billion
in FY26, in line with the guidance provided
at the Capital Markets Day in March.
Growth in operating profit combined with
the impact of our ongoing share buyback are
expected to result in at least high-single-digit
adjusted earnings per share growth for the
full year at constant currency. At current rates,
foreign exchange translation is expected to be
a tailwind of around 2.0% to 2.5% to net revenue,
adjusted operating profit and earnings per share.
The rigour of the plans which underpin our
refreshed strategy and the commitment of
our people give me continued confidence we
will deliver on our operational and financial
commitments and create consistent,
sustainable value for shareholders.
LUKAS PARAVICINI
CHIEF EXECUTIVE OFFICER
EXECUTIVE LEADERSHIP TEAM
EXPERIENCE
Lukas joined the business in 2021
as Chief Financial Officer and was
an architect of our 2030 strategy.
He previously held senior roles
at ED&F Man Holdings, Fonterra
and Nestlé.
EXPERIENCE
Deborah is an experienced
Corporate Relations Director
drawing on more than 20 years of
international experience in sectors
including energy, technology,
retail and e-commerce.
EXPERIENCE
Priyali has 25 years’ extensive
experience across general
management, marketing, and people
and culture. Prior to joining Imperial,
she held multiple leadership
positions at Procter & Gamble.
EXPERIENCE
Sami has broad experience of
transforming supply chains and
driving operational excellence in
global consumer businesses. Prior
roles include Chief Supply Officer at
Reckitt and Chief Operations Officer
at Arla Foods.
EXPERIENCE
Kim joined our US business in 2019
and has a successful track record
of more than 30 years in sales and
executive leadership roles, having
previously held roles at The Kellogg
Company and Pepsi Bottling Group.
EXPERIENCE
In his prior role as Chief Strategy &
Development Officer, Murray led the
development of our 2030 Strategy.
He has also held financial and
operational roles for consumer
businesses including Costa Coffee.
EXPERIENCE
Alison joined Imperial Brands in
2020 from Inchcape plc where she
was Chief Human Resources Officer.
She has also held a number of senior
positions at Whitbread, Hutchison
and United Utilities.
EXPERIENCE
Kevin’s 20 years’ experience of
international legal practice across
regulated and consumer goods sectors
includes roles at Tullow Oil, Ashurst
and PZ Cussons, where he was General
Counsel & Company Secretary.
EXPERIENCE
Before joining Imperial Brands in 2021,
Paola worked at Procter & Gamble
for 22 years in several leadership
positions across Europe, the Middle
East, the US and China, and across
multiple FMCG categories.
EXPERIENCE
Aleš has considerable experience
in tobacco having worked in a
number of senior international roles
(UK, Central and Eastern Europe,
Travel Retail Spain) at Imperial
Brands for more than 20 years.
MURRAY
McGOWAN
CHIEF FINANCIAL
OFFICER
ALISON CLARKE
CHIEF PEOPLE
AND CULTURE
OFFICER
KEVIN MASSIE
CHIEF LEGAL, RISK,
GOVERNANCE AND
COMPLIANCE
OFFICER
PAOLA POCCI
CHIEF CONSUMER
OFFICER
ALEŠ
STRUMINSKÝ
PRESIDENT,
EUROPE REGION
LUKAS
PARAVICINI
CHIEF EXECUTIVE
OFFICER
DEBORAH
BINKS-MOORE
CHIEF CORPORATE
AFFAIRS OFFICER
PRIYALI KAMATH
PRESIDENT,
AFRICA, ASIA,
AUSTRALASIA,
AND CENTRAL &
EASTERN EUROPE
(AAACE) REGION
SAMI NAFFAKH
CHIEF SUPPLY
CHAIN OFFICER
KIM REED
PRESIDENT
AND CEO,
AMERICAS
REGION
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2025
2024
2023
2022
2021
8.3
8.2
8.0
7.7*
7.6
2025
2024
2023
2022
2021
369
329
265
208
188
2025
2024
2023
2022
2021
44.1
44.0
44.7
44.4*
43.5
2025
2024
2023
2022
2021
0
5
10
35
(2)
OUR
STRATEGY
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KPIs
DELIVERING
PROGRESS AGAINST
OUR TARGETS
Our key performance indicators
allow our stakeholders to see
the progress we are making in
delivering our purpose, vision
and strategy.
WHY THIS IS IMPORTANT
We monitor our tobacco & NGP adjusted operating margin to illustrate
how our focused approach generates value from our growth.
PERFORMANCE
Margins increased 10 basis points at actual rates and 30 basis points
at constant currency.
* Excluding Russia.
WHY THIS IS IMPORTANT
To drive sustainable value in our combustible markets, we aim to
maintain stable aggregate cigarette market share across our five most
profitable markets: US, Germany, the UK, Spain and Australia.
FY25 PROGRESS
Our focused approach to combustible markets has enabled us to deliver
stable aggregate market share during the period, with gains in Germany
and Australia offsetting declines in the US, UK and Spain.
WHY THIS IS IMPORTANT
Measures our ability to build scale in our NGP business.
PERFORMANCE
NGP net revenue grew by 13.7% on a constant currency basis
in the year.
WHY THIS IS IMPORTANT
We monitor the growth of sales of these products to illustrate how our
focused approach generates growth.
PERFORMANCE
Tobacco & NGP net revenue grew by 1.9% at actual exchange rates and
increased by 4.1% on a constant currency basis. Tobacco net revenue
was up 3.7% at constant currency.
* Excluding Russia.
TOBACCO & NGP ADJUSTED OPERATING MARGIN
%
AGGREGATE PRIORITY MARKET SHARE VS PRIOR YEAR
BASIS POINTS
NGP NET REVENUE
£M
TOBACCO & NGP NET REVENUE
£BN
FINANCIAL KPIs
1
1. Definitions for financial KPIs can be found in Supplementary Information.
KPIs used as bonus and LTIP performance
criteria for Executive Directors.
For more information see
Remuneration Report on pages 102-118
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2025
2024
2023
2022
2021
160.32
153.42
146.82
141.17
139.08
50
100
150
200
250
300
350
20242023 2025202220212020
Imperial
Brands
total return
2025
2024
2023
2022
2021
20.7
19.7
18.5
17.7
16.5
2025
2024
2023
2022
2021
2.0x
1.8x
1.9x
2.0x
2.2x
2025
2024
2023
2022
2021
97
100
92
102
83
2025
2024
2023
2022
2021
315.0
29 7.0
278.8
264.8*
246.5
KPIs CONTINUED
WHY THIS IS IMPORTANT
Growth in our adjusted earnings per share illustrates the value created
by our focused challenger strategy for each shareholder.
PERFORMANCE
Adjusted earnings per share increased 6.1% at actual exchange rates
and increased 9.1% on a constant currency basis. Reported earnings
per share declined -16.5%. This movement is explained in the
Group Financial Review.
* Excluding Russia.
WHY THIS IS IMPORTANT
Growth in our dividend per share illustrates the growth of our annual
cash distribution for each shareholder.
PERFORMANCE
The dividend grew 4.5% reflecting our progressive dividend policy and
in line with our capital allocation policy.
WHY THIS IS IMPORTANT
While our business model remains highly cash generative,
this is a measure of how we allocate our capital over time.
PERFORMANCE
Return on invested capital improved in the year by 100bps to 20.7%,
benefiting from a reduction in FY25 average invested capital compared
to the prior year, mainly due to the foreign exchange impact on
intangible assets.
WHY THIS IS IMPORTANT
Share price performance and dividend payouts together reflect
the returns investors have received for having confidence in our
management’s ability to implement our strategy.
PERFORMANCE
We have delivered total shareholder returns of 241% over the prior
five-year period.
WHY THIS IS IMPORTANT
We have a disciplined capital allocation policy, ensuring investment
to support our strategic delivery and maintaining a strong efficient
balance sheet, keeping our leverage at around the lower end of our
2.0x to 2.5x range.
PERFORMANCE
Adjusted net debt to EBITDA increased to 2.0x in FY25, at the low end of
our capital allocation target of 2.0x to 2.5x. Adjusted net debt increased
to £8.4 billion, after £2.8 billion of returns to shareholders via dividend
and share buyback. The year-on-year increase in EBITDA, reflecting
the growth in adjusted operating profit during the financial year was
offset by an increase in adjusted net debt.
WHY THIS IS IMPORTANT
The cash characteristics of our business remain highly attractive,
with low capex needs supporting strong operating cash flow.
PERFORMANCE
2025 adjusting cash conversion of 97% was lower than the prior year
due to an increase in working capital.
ADJUSTED EARNINGS PER SHARE
PENCE
DIVIDEND PER SHARE
PENCE
RETURN ON INVESTED CAPITAL
%
TOTAL SHAREHOLDER RETURN
ADJUSTED NET DEBT TO EBITDA
MULTIPLE
ADJUSTED OPERATING CASH CONVERSION RATE
%
FINANCIAL KPIs
1
CONTINUED
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information
2025
2024
2023
2022
2017 (base year)
15,064
A
Scope 2
73,437
66,646
A
Scope 1
15,683
20,32681,089
85,82991,007
114,270 176,176
2025
2024
2023
2022
2017 (base year)
57 7
A
595
650
712
875
2025
2024
2023
2022
2019 (base year)
0.29
A
0.30
0.30
0.24
0.40
2025
2024
2023
2022
2017 (base year)
31,599
A
33,211
35,744
41,969
49,141
KPIs CONTINUED
ABSOLUTE SCOPE 1 AND 2 MARKET-BASED C0
2
EQUIVALENT EMISSIONS
TONNES
3
ENERGY CONSUMPTION
GWH
3
LOST TIME ACCIDENT FREQUENCY RATE
PER 200,000 HOURS
4
WASTE
TONNES
3
WHY THIS IS IMPORTANT
Reducing our Scope 1 and Scope 2 market-based emissions underpins
our Climate Change ESG priority.
PERFORMANCE
We have seen a 72% decrease in our total Scope 1 and Scope 2
market-based emissions from our 2017 baseline year. This has been
driven by our increased use of electricity purchased from traceable
renewable sources, our energy efficiency programme, and
volume decreases.
WHY THIS IS IMPORTANT
Reducing lost time accident (LTA) rate underpins our Employee Health,
Safety & Wellbeing ESG priority.
PERFORMANCE
Since FY19, LTAs have fallen by 47%, while total hours worked declined
by 26%, mainly due to our exit from Russia, Japan and the Premium
Cigars business. These regions made up 14% of hours worked but only
2% of LTAs, so the LTA rate did not improve in line with absolute
reduction in accidents.
The number of LTAs remained unchanged from FY24, reinforcing the
need to step up our efforts to achieve the 2030 target of a 75% reduction
in LTA rate.
WHY THIS IS IMPORTANT
Reducing our energy consumption underpins our Climate Change
ESG priority.
PERFORMANCE
We set a target to reduce our absolute energy consumption by 45% by
2030 from a 2017 baseline year. We achieved a 34% decrease in energy
consumption compared to the base year. We estimate that in FY25
around 60% of this decrease is due to the implementation of efficiency
programmes in our factories and fleet.
Our 2025 relative energy consumption is 69,340 kWh/£m net revenue.
1. Definitions for non-financial KPIs can be found in the ESG Review
on pages 39-53 and in the Reporting Criteria document available at
www.imperialbrandsplc.com.
2. Select 2025 non-financial data has been independently assured
by Ernst & Young LLP (EY) under the limited assurance requirements
of the ISAE 3000 standard.
3. Our 2025 environmental data follows the reporting period Q4 financial year
2024 to Q3 financial year 2025. This is to allow for data collection, validation
and external assurance. Our reporting scope and definitions are detailed
in the Reporting Criteria document published on our website.
4. Our health and safety data is for the full 2025 financial year. Our reporting
scope and definitions are detailed in the Reporting Criteria document
published on our website.
A. Data has been independently assured by Ernst & Young LLP (EY) under the
limited assurance requirements of the ISAE 3000 standard. EY’s Assurance
Opinion is available on our website. Our reporting scope and definitions are
detailed in the Reporting Criteria document published on our website.
See www. https://www.imperialbrandsplc.com/people-and-planet/
our-esgperformance for more information.
WHY THIS IS IMPORTANT
Reducing our waste underpins our Packaging & Waste ESG priority.
PERFORMANCE
Our original target was to reduce waste by 20% by 2030 from a 2017
baseline year. In FY25, we achieved a 36% reduction in absolute waste,
surpassing the target ahead of schedule. Building on this progress, we
have set a new target to reduce waste in our operations by 50% by 2035,
relative to the 2017 baseline.
NON-FINANCIAL KPIs
1,2
More non-financial performance indicators can be found in the ESG Review
on pages 39-53 and in our Reporting Criteria document available on
our website
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GLOBAL MARKET CONTEXT
We take a focused approach towards our
international market footprint. In combustibles
around 70% of our operating profit comes from
five priority markets: the United States,
Germany, the United Kingdom, Spain and
Australia. In NGP, we operate only where there
is strong and growing consumer demand and
where we have strong existing routes to
market. This means our NGP operations are
concentrated in Europe and the United States.
Our analysis indicates that, in aggregate, the
tobacco value creation model continues to be
sustainable across our priority markets. Over
the past five years the combined combustible
revenue pool in our five largest markets grew
by a CAGR of 1.8%, reaching £39 billion in FY25.
During the next strategic period up to 2030
we expect to see a divergence in combustible
market growth rates within our footprint.
Markets including the US, Germany and Spain,
where tobacco is affordable and excise rises are
proportionate, are expected to see continued
growth in legal market size. However, those
markets characterised by expensive legal
products and above-inflation tax increases are
likely to experience continued growth in the
illicit and non-duty-paid trade at the expense
of the domestic legal market. In Australia where
a packet of 20 cigarettes costs on average £24,
the illicit trade is estimated to account for
more than half of total tobacco consumed.
The UK market is moving in a similar direction
with a recent survey suggesting that 46% of
cigarettes are non-duty paid, of which 15%
are illicit. Partnering with industry peers and
retailers, we continue to engage governments
to address both the demand- and supply-side
drivers of the illegal trade.
In NGP, aggregate market size in our footprint
has grown at a CAGR of 25% over the past
five years. During this period, we have been
growing market share within this footprint
for modern oral and heated products, and for
all three categories last year. We expect
double-digit annual growth in market size to
continue in the period up to 2030. Preferences
by category will continue to vary by market
depending on local regulatory frameworks
and consumer behaviour, with modern oral
emerging as a major category in the US, vape
remaining the dominant platform in much
of western Europe, and heated tobacco
increasingly popular in southern and eastern
Europe. Across our NGP footprint, we continue
to engage for proportionate and enforceable
regulation to build trust in the category for
adult consumers seeking potentially less
harmful alternatives to smoking and to
minimise unintended use.
Over the past year, we have seen diverse
developments in policy and regulation across
our key markets.
In the US, the change in federal administration
led to the FDA announcing the withdrawal of
its proposed rules to prohibit menthol in
cigarettes and characterising flavours in cigars.
To advance, these proposals would now need
to be reintroduced, which is unlikely under the
current administration. We see also a long-term
trend towards states and local government
becoming more active in tobacco and nicotine
regulation – and we are developing our corporate
affairs capabilities to align with this shift.
In Germany, Federal elections were held
in February, with Friedrich Merz elected as
Chancellor in May. The political fragility in
Germany during the first half of 2025 hindered
any material excise structure change. The
current German Tax Model is set to expire at
the end of 2026. Discussions are ongoing for
the prolongation of the current excise calendar
beyond 2026, and we expect a new tax model to
be characterised by modest annual increases.
In the UK, the Labour Government
reintroduced the Tobacco and Vapes Bill
in 2024. The Bill introduced a generational
smoking ban to anyone born after 2009, as
well as further restrictions on advertising and
promotion for NGP. In addition, it empowers
ministers to put forward secondary legislation
to regulate flavours, packaging and display
of EVP, and to introduce a new retail licencing
scheme to curb the illicit market. The earliest
the Bill could receive Royal Assent is 2026.
Further consultations on the secondary
legislation will follow after Royal Assent.
The Spanish government adopted a
multiannual anti-tobacco plan (2024-2027) with
the objective of implementing comprehensive
policies to reduce the consumption of tobacco
and NGP. The plan is starting to materialise
under two legislative proposals – the Royal
Decree and the Tobacco Bill.
In Australia, the Public Health Bill was
passed in December 2023, and the subsequent
regulations were approved in March 2024.
The Department of Health also mandated filter
health warnings with a compliance deadline
of 1 April 2025. While the current government
remains unsupportive of NGP, it has moved
away from a prescription-only model for vapes
to allow over-the-counter sales in pharmacies.
The EU Commission has acknowledged
further delays to the finalisation of its Tobacco
Products Directive (TPD) evaluation work,
which is now targeted to conclude in Q2 2026.
We therefore expect the revised TPD proposal
in late 2027 at the earliest.
The EU Tobacco Excise Directive (EUTED)
proposal was published in July foreseeing
an increase in minimum excise duties on
combustibles and the inclusion of duties for
NGP. The proposal will be negotiated during
FY26 with in-market application expected
between CY28 and CY29.
The Conference of the Parties (COP) and
Meeting of the Parties (MOP) are major biennial
global tobacco control events, held under the
aegis of the World Health Organisation’s
Framework Convention on Tobacco Control
(FCTC). The 11th COP and 4th MOP are due to
take place in November 2025, with the focus
of this year’s COP on environmental issues,
industry liability, forward-looking tobacco
control measures, industry interference and
harm reduction narrative.
The latest UN Global Plastics Treaty session
was held in August 2025. The session was
intended to be the final round of negotiations,
leading to the adoption of a legally binding
treaty addressing the full lifecycle of plastics.
There was little agreement between the two
major country blocs, with big differences in
views and the scope of the treaty. The session
was formally adjourned with no consensus
and no treaty adopted. Negotiations are
expected to resume at a later date, although
it is unclear when and where they will be held.
OUR EVOLVING
OPERATING
ENVIRONMENT
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OPERATING REVIEW
EUROPE:
STRONGER
BRANDS
AND SALES
EXECUTION
ALEŠ STRUMINSKÝ
PRESIDENT, EUROPE REGION
Strong financial performance driven by
pricing as volume decline rates eased across
the region
Tobacco & NGP net revenue grew 4.5% at
constant currency reflecting strong combustible
pricing, with price mix of 5.5%, offsetting volume
declines of -1.3%. NGP net revenue grew 8.8%
as we navigated the disposable vapour ban in
some countries and the market transition to
reusable devices, and against the rollout of new
pod-based reuseable devices in the second half
of the 2024 fiscal year. At actual rates tobacco
& NGP net revenue grew 3.3%.
Adjusted operating profit grew 6.7% at
constant currency, driven by a strong tobacco
performance and a significant reduction in
NGP losses. At actual exchange rates, adjusted
operating profit grew 6.3%.
Germany turnaround continued with market
share growth
In Germany, we delivered a second year of
market share growth following a prolonged
period of market share losses, as investments
in our strategic initiatives continued to gain
traction. Germany remains an attractive and
highly competitive market, with a market
volume decline of -1.9% in FY25, good
affordability and a well-signalled excise regime.
Sales force investments last year enabled us to
expand our retailer coverage while capability
enhancements supported improved agility to
capture channel shifts. We manage our brand
portfolio across all key price segments with
focused brand equity investments supporting
share gains for Paramount, our value brand,
and for Gauloises within the premium segment.
Spanish market share performance improved
in second half
In Spain, tobacco industry volumes were flat at
–0.6% year on year despite the implementation
of a new tax structure in January 2025. In the
first half of the year, we took advantage of the
steady improvements in market share over the
past four years to realise value through pricing.
Brand equity investments in local jewel brand,
Ducados, and global brand, West, together with
subsequent adjustments at specific price points,
led to a recovery in share in the second half of
the year. This focus on value drove strong
adjusted operating profit growth.
UK market an important profit contributor
to the Group
In the UK, we prioritised value creation,
successfully balancing price with market
share performance. The UK market remains
an important value contributor to the Group.
Industry volume declines remain relatively
high at -16.6%, as the market has been
impacted by above inflation excise increases
particularly in fine cut tobacco. We increased
prices in January which partially offset the
impact of market volume declines. We used
our consumer insights and strong retail
relationships to successfully launch our
Paramount brand into this dark market and
gain share, meeting consumer demand for
quality with value for money.
NGP net revenue growth supported
by innovation
Our NGP portfolio has delivered net revenue
growth of 8.8% at constant currency, with
product launches and innovations across
all three categories. Growth was slower in
the second half, as we annualised a period
of product launches and strong growth in the
prior year. In vaping, we successfully navigated
the disposable bans in the UK and France having
progressively rolled out our pod-based blu kits
from the second half of last year. In the UK
consumer demand for our rechargeable kits
supported our increase in vapour market share
(now in excess of 10%). In Germany and Spain
we launched our blu bar kit as consumer
preferences moved from disposable to pod-based
vapour products. In heated technology, during
the summer we launched our new Pulze 3.0
device into Italy and Greece, with early signs
of strong consumer acceptance. This device
can be used with our existing iD tobacco sticks
and our flavoured non-tobacco iSenzia sticks.
In modern oral nicotine, we relaunched our
Zone brand in Sweden with an updated pouch
design to meet evolving consumer preferences.
New flavour variants supported the growth
of Skruf in Norway. In November we also
launched Zone in the UK.
Full year result Change
2025 2024 Actual
Constant
currency
Tobacco volume bn SE 85.4 86.6 -1.3% –
Tobacco & NGP net revenue £m 3,476 3,366 +3.3% +4.5%
Tobacco net revenue £m 3,196 3,106 +2.9% +4.2%
NGP net revenue £m 280 260 +7.7 % +8.8%
Adjusted operating profit £m 1,638 1,541 +6.3% +6.7%
AT A GLANCE
TOBACCO VOLUME
CHANGE
-1.3%
NGP NET REVENUE
CHANGE*
+8.8%
TOBACCO & NGP
NET REVENUE
CHANGE*
+4.5%
ADJUSTED
OPERATING PROFIT
CHANGE*
+6.7%
TOBACCO
NET REVENUE
CHANGE*
+4.2%
* Change at constant
currency.
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OPERATING REVIEW CONTINUED
AMERICAS:
INVESTING IN
EXPANSION
KIM REED
PRESIDENT AND CEO,
AMERICAS REGION
Financial performance reflects strong
combustible pricing and NGP growth
Tobacco & NGP net revenue grew at 4.8% on
a constant currency basis, with tobacco net
revenue driven by strong pricing offsetting
volume declines. NGP net revenue grew 69.8%
at constant currency with an acceleration into
the second half of the year as we continued
to rollout our modern oral brand, Zone.
Adjusted operating profit grew 2.8% at constant
currency. Improved combustible tobacco
performance was partially offset by increased
NGP investment behind the continued rollout
of Zone. At actual exchange rates, adjusted
operating profit declined -0.2%.
Strong pricing in combustibles
Our tobacco volumes declined by 6.1%, against
an industry volume decline of 7.7% in cigarettes.
Mass market cigar industry volumes fell by
5.3%. Industry cigarette declines improved
versus the prior year, reflecting the launch
of new discount brands and consumer
downtrading. This drove growth in the deep
discount segment. Despite the lower rate of
market volume decline, the cigarette category
continues to be impacted by macroeconomic
pressure on consumer disposable income and
sales of illicit vaping products.
On a constant currency basis, tobacco net
revenue increased by 3.8%, as strong pricing
of +9.9% offset volume declines.
During the year we continued to invest in
brand equity, supporting our focused brands
across a range of price points. We carefully
position our portfolio across a range of price
segments to meet the needs of adult consumers.
We also continued our investment in sales
excellence, enhancing coverage as we
expanded our store footprint.
Within a challenged premium segment,
our Winston brand gained share. We refined
the brand’s personality and expanded the
range with the recent launch of Winston
Select. Winston Select has gained traction
with core franchise consumers, while
effectively competing within the broader
segment. We also launched KOOL Black which
helped to offset overall KOOL performance in
the face of increased competitor discounting
in the menthol segment. Improved sales
force execution enabled an expansion of
store listings for Crowns, supporting market
share growth of the brand in the growing deep
discount segment. Our progress in combustibles
was particularly pleasing, against the
backdrop of continued pricing actions from
competitors. Overall our combustible market
share was stable year on year, down -1 basis
point, to 10.9%, which also reflected the timing
of competitor investments within the deep
discount segment.
Mass market cigar performance improved,
benefiting from product innovation and
brand loyalty
Our mass market cigar portfolio gained
+35 basis points of share with performance
driven by product innovations and new flavour
variants, together with continued brand equity
investment and our expanded sales coverage.
At the premium end of the pricing ladder, our
iconic heritage brand Backwoods continued
to grow its share of the natural leaf segment,
supported by new flavours. The launch of
Backwoods Wraps built on our brand equity
and reinforced the brand’s quality. Backwoods
performance offset weakness in Dutch due
to low-price competitors.
NGP net revenue growth driven by continued
roll-out of Zone
Our NGP net revenue grew 69.8% on a constant
currency basis, driven by the continued roll-out
of our modern oral brand, Zone. Following its
successful launch in February 2024, we have
continued to expand distribution, and Zone
is now available in over 100,000 stores,
capturing 2.8% of the modern oral category
share. We remain close to our consumers
in this competitive market and offer eleven
flavours across 6mg and 9mg product formats.
In vapour, blu remains an established brand
but we have prioritised investment in Zone,
given the weak enforcement of the illicit
vapour market.
Full year result Change
2025 2024 Actual
Constant
currency
Tobacco volume bn SE 18.0 19.1 -6.1% –
Tobacco & NGP net revenue £m 2,892 2,836 +2.0% +4.8%
Tobacco net revenue £m 2,822 2,793 +1.0% +3.8%
NGP net revenue £m 70 43 +62.8% +69.8%
Adjusted operating profit £m 1,233 1,235 -0.2% +2.8%
AT A GLANCE
TOBACCO VOLUME
CHANGE
-6.1%
NGP NET REVENUE
CHANGE*
+69.8%
TOBACCO & NGP
NET REVENUE
CHANGE*
+4.8%
ADJUSTED
OPERATING PROFIT
CHANGE*
+2.8%
TOBACCO
NET REVENUE
CHANGE*
+3.8%
* Change at constant
currency.
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OPERATING REVIEW CONTINUED
AFRICA, ASIA,
AUSTRALASIA
AND CENTRAL
& EASTERN
EUROPE
PRIYALI KAMATH
PRESIDENT, AFRICA, ASIA,
AUSTRALASIA AND CENTRAL
& EASTERN EUROPE
Solid operational and financial performance
Tobacco and NGP net revenue grew 2.2% at
constant currency reflecting continued focus
on pricing discipline across the region, with
tobacco price mix of 3.6% offsetting volume
declines of 1.0%. NGP net revenue declined
-30.8% as we refocused our portfolio in the
region due to regulatory changes in some
markets. At actual rates tobacco & NGP net
revenue declined -0.4%.
Adjusted operating profit grew 4.8% at
constant currency, driven by a strong tobacco
performance in all market clusters and a
reduction in NGP losses. At actual exchange
rates, adjusted operating profit declined -2.1%.
Market size pressures offset market share
growth in Australia
In Australia, a global priority market, we grew
our market share for the fourth consecutive
year supported by a focused approach to
revenue growth management. This was
against a backdrop of steep market volume
declines, driven by the introduction of new
regulations and continued growth of illicit
products. Strong execution and disciplined
portfolio management supported market share
growth through the regulatory transitions with
Lambert & Butler benefiting from downtrading
trends and JPS delivering moderate growth
in the mid-price segment. In fine cut tobacco,
Champion drove premium segment gains,
complemented by solid Parker & Simpson
performance and stability in Riverstone.
Our response to new packaging regulations
in Australia reflected our challenger mindset
with Imperial being the first manufacturer
with compliant product on shelf. We used
the opportunity to reinforce our strong retailer
relationships by rolling out a comprehensive
go-to-market plan to assist with a smooth
transition with our consumers. This ensured
retailers were prepared and were able to navigate
the challenging tobacco legislation successfully.
We continue to focus on efficiencies in
our supply chain and across the business
to underpin the strong profit contribution
from this market.
Strong combustible contributions from
our broader market clusters
We saw further strong growth in our Africa
businesses. As a portfolio of markets, this
cluster has attractive long-term growth
opportunities. However, in any given year, we
expect differing performances from individual
markets. In FY25, we saw particularly strong
growth in Ivory Coast and Burkina Faso, where
we have been investing in building the equity
and portfolio coverage of our key local brands.
In Morocco, we have been introducing new
products within our Gauloises range to address
gaps in our portfolio. These innovations have
led to positive consumer feedback and market
share improvements.
In our Asia, Middle East and Turkey (AMET)
cluster, pricing offset market declines to generate
net revenue growth. Brand strength and
effective price tiering supported combustible
performance in the Central & Eastern Europe
(CEE) cluster.
NGP net revenue declined over the period
NGP net revenue declined -30.8% as we took
the decision in the first half to withdraw our
blu vapour product from the Czech Republic as
regulatory changes would have led to increased
product costs. Latterly, we withdrew from the
vape category in Poland, as the introduction
of device taxes led to market size declines.
This is in line with our strategy to make
deliberate choices on where we invest, and
to focus on markets that have more significant
opportunities. Once the impact of these two
withdrawals has annualised, we expect NGP
net revenue to grow again.
Performance did stabilise in the second half of
the year as we focused on our heated technology
offering with the launch of Pulze 3.0 for use
with our tobacco iD sticks and tea-based
iSenzia sticks in the Central & Eastern Europe
cluster markets. We also launched our blu bar
kit vapour product in New Zealand, growing
market share 3.0% by the end of the period.
Full year result Change
2025 2024 Actual
Constant
currency
Tobacco volume bn SE 83.5 84.3 -1.0% –
Tobacco & NGP net revenue £m 1,948 1,955 -0.4% +2.2%
Tobacco net revenue £m 1,930 1,929 +0.1% +2.6%
NGP net revenue £m 18 26 -30.8% -30.8%
Adjusted operating profit £m 794 811 -2.1% +4.8%
AT A GLANCE
TOBACCO VOLUME
CHANGE
-1.0%
NGP NET REVENUE
CHANGE*
-30.8%
TOBACCO & NGP
NET REVENUE
CHANGE*
+2.2%
ADJUSTED
OPERATING PROFIT
CHANGE*
+4.8%
TOBACCO
NET REVENUE
CHANGE*
+2.6%
* Change at constant
currency.
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OPERATING REVIEW CONTINUED
DISTRIBUTION
Distribution consists of our 50.01% stake
in Logista
Logista is a Spanish-listed distributor
of tobacco and other convenience products
and provider of freight, parcel, courier services
and pharmaceutical logistics. It operates an
end-to-end distribution model that covers the
full value chain from collection to delivery
to more than 200,000 points of sale across
Europe. In line with Logista’s diversification
strategy, non-tobacco-related business
represents over 50% of gross profit.
Financial performance was in line
with expectations
Gross profit at £1,530 million was 2.9% higher
on a constant currency basis with good
performances in Spain and Italy offsetting
lower gross profit in France.
Gross Profit reflected strong tobacco and
pharmaceutical performance and weakness
in transportation
In Iberia, gross profit growth was driven in
part by tobacco and related products, with the
former benefiting from manufacturer price
increases in Spain for the third consecutive
year. Transport services declined year on year,
due to a decrease in long distance road transport
activity, impacting Transportes El Mosca, in
this segment. Since acquiring full ownership of
Transportes El Mosca, Logista has strengthened
its controls, implemented management
changes, initiated a cost reduction programme,
and refocused its client mix. Growth in parcel,
reflected in the performance at Nacex, the
express courier business, and Logista Parcel,
was offset by a decrease in refrigerated activity
at Carbo Collbatalle. Pharmaceutical distribution
continues to expand both its customer base
and product offering.
In Italy, gross profit was supported by a good
performance in tobacco, as manufacturer price
increases led to a higher profit on inventory
than in the prior year.
In France, gross profit reflects tobacco volume
declines, partially offset by price increases
following excise tax increases and subsequent
manufacturer price increases, although profit
on inventory for the period was lower than in
the prior year.
Adjusted operating Profit
Adjusted operating profit margin decreased
by 127 basis points at constant currency.
After eliminations, the adjusted operating
profit contribution to the Group increased 0.9%
on a constant currency basis. Results include
£5 million profit from the disposal of assets
compared to £4 million in the same period last
year. Restructuring charges of £4 million were
expensed, compared to £3 million in the prior
year. At actual exchange rates, adjusted
operating profit declined -0.3%.
Cash contribution
In line with the rest of Imperial Brands,
Logista is part of the inter-company cash
pooling arrangement, which further enhances
the Group’s liquidity. On a 12-month basis, the
daily average cash balance loaned to the Group
by Logista was c.£1.7 billion, with movements
in the cash position during the 12-month period
varying from a high of c.£2.6 billion to a low of
c.£0.5 billion, primarily due to the timing of
excise duty payments. At 30 September 2025,
the loan position was c.£2.2 billion compared
to c.£1.9 billion at 30 September 2024.
Full year result Change
2025 2024 Actual
Constant
currency
Distribution gross profit* £m 1,530 1,503 +1.8% +2.9%
Adjusted operating profit £m 316 330 -4.2% -3.0%
Adjusted operating profit margin % 20.7 22.0 -130bps -127bps
Eliminations £m 7 (6) +216.7% +216.7%
Adjusted operating profit
(inc. eliminations) £m 323 324 -0.3% +0.9%
* Distribution gross profit is Distribution revenue less the cost of distributing products.
AT A GLANCE
GROSS PROFIT
CHANGE*
+2.9%
ADJUSTED OPERATING
PROFIT CHANGE
EXCLUDING
ELIMINATIONS*,**
-3.0%
ADJUSTED
OPERATING
MARGIN CHANGE
EXCLUDING
ELIMINATIONS*,**
-127bps
ADJUSTED OPERATING
PROFIT CHANGE
INCLUDING
ELIMINATIONS*,**
+0.9%
* Change at constant currency.
** Eliminations relate to sales of tobacco and NGP product
to Logista that are still held in their inventory.
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ACCELERATING
RETURNS
SUMMARY FINANCIAL INFORMATION
VOLUME CHANGE
-1.7%
outperforming wider industry
market size declines across
our footprint
TOBACCO & NGP NET
REVENUE CHANGE
+4.1%
at constant currency, driven
by robust tobacco price mix
and NGP growth
ADJUSTED OPERATING
CASH CONVERSION
97%
2024: 100%
REPORTED OPERATING
PROFIT CHANGE
-1.8%
reflecting operating
performance, offset by 2030
Strategy charges and adverse
foreign exchange movements
GROUP ADJUSTED
OPERATING PROFIT
CHANGE
+4.6%
at constant currency, driven
by tobacco pricing, reduced
NGP losses and Distribution
FREE CASH FLOW
£2.7bn
2024: £2.4bn
REPORTED
BASIC EPS
251.1 pence
2024: 300.7 pence
ADJUSTED
EPS GROWTH
+9.1%
at constant currency
ADJUSTED NET
DEBT/EBITDA
2.0x
2024: 1.8x
MURRAY McGOWAN
CHIEF FINANCIAL OFFICER
GROUP FINANCIAL REVIEW
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GROUP FINANCIAL REVIEW CONTINUED
Fiscal year 2025 was the
fifth and final year of our
2021 strategy and our
performance provides
strong foundations for
the next phase of our
strategy out to 2030.
Summary income statement
Reported Adjusted
£ million (unless otherwise indicated) 2025 2024 2025 2024
Revenue/net revenue/gross profit*
Tobacco & NGP revenue/net revenue 20,723 21,307 8,316 8,157
Distribution revenue/gross profit 11,448 11,104 1,530 1,503
Operating profit
Tobacco & NGP 3,178 3,238 3,665 3,587
Distribution 305 322 316 330
Eliminations 7 (6) 7 (6)
Group operating profit 3,490 3,554 3,988 3,911
Net finance costs (374) (534) (413) (402)
Share of profit of investments accounted
for using the equity method 12 9 12 9
Profit before tax 3,128 3,029 3,587 3,518
Tax (908) (282) (836) (799)
Profit for the year 2,220 2,747 2,751 2,719
Minority interests (149) (134) (153) (138)
Earnings per ordinary share (pence) 251.1 300.7 315.0 297.0
Dividend per share (pence) 160.32 153.42 160.32 153.42
* Reported revenue includes duty, similar items, distribution and sale of peripheral products, which are excluded from net
revenue; net revenue comprises reported revenue less duty and similar items, excluding sale of peripheral products and
Distribution (Logista) revenue. Distribution gross profit is Distribution revenue less the cost of distributing products.
Following five years of leading Strategy &
Corporate Development at Imperial, I am excited
to have been appointed as Chief Financial Officer
on 1 October. FY25 was the fifth and final year
of our 2021 strategy and our performance
provides strong foundations for the next phase
of our strategy to 2030. I look forward to working
with Lukas and the whole executive team to
deliver on our strategy over the next five years
and want to thank Lukas and the Board for
their confidence in me. Our differentiated
challenger strategy has resulted in a stronger,
more sustainable, combustible business and
a more focused NGP business growing revenue
at double-digit percent, delivering improved
financial performance and growing returns
to shareholders.
On a constant currency basis, tobacco & NGP
net revenue grew 4.1%, reflecting strong tobacco
price mix and NGP growth. Group adjusted
operating profit rose 4.6%, on a constant
currency basis. Logista, in our Distribution
segment, contributed to our results with gross
profit up 2.9% at constant currency.
Reported revenue declined -0.7% reflecting
volume declines in our high excise markets
and adverse foreign exchange, largely offset
by growth in NGP and Distribution revenues.
Reported operating profit declined -1.8%,
reflecting strong regional performance
partly offset by adverse foreign exchange
movements and impairment costs related
to the implementation of 2030 Strategy.
Cash generation remains a key focus, and
we have delivered £2.7 billion of free cash flow,
with a 97% adjusted operating cash conversion.
The strong cash generation has enabled us
to invest in line with our strategy, returning
around £2.8 billion to shareholders in FY25 via
dividend and share buyback. Adjusted net debt
increased by £0.7 billion to £8.4 billion with
adjusted net debt/EBITDA at 2.0x in FY25.
On a reported basis, cash flow improved
year-on-year as lower cash tax offset the
higher net increase in borrowings and higher
dividend payout as we moved to four equal
dividend payments and higher share buyback.
We have announced a further £1.45 billion
share buyback for FY26, which we expect to
complete no later than 29 October 2026. This
represents approximately 5.7% of the share
capital as at 30 September 2025. During FY25
we repurchased 44,612,248 shares, or 5.3% of
our share capital as at the 30 September 2024.
As we announced earlier, we are also
increasing our dividend per share by 4.5% for
FY25. The cash dividend and share buyback
combined is broadly flat on last year, given
the re-phasing of the dividend.
The growth in adjusted operating profit
alongside the reduction in share count, as
a result of our ongoing share buyback, drove
growth in adjusted earnings per share of 9.1%
at constant currency. On a reported basis,
earnings per share declined -16.5%.
As we set out at our Capital Markets Day in
March, the next five years will be an evolution
of the last five years as we continue to invest
in sustainable growth and efficiency initiatives.
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41.8%
23.4%
34.8%
45.7%
9.6%
44.7%
19.9%
8.1%
41.1%
30.9%
GROUP FINANCIAL REVIEW CONTINUED
VOLUMES, BILLION STICK EQUIVALENT
(SE)
ADJUSTED OPERATING PROFIT
(ACTUAL FX RATE), £ MILLION
TOBACCO & NGP NET REVENUE
(ACTUAL FX RATE), £ MILLION
Alternative performance measures (APM)
When managing the performance of our business we focus on non-GAAP measures, which we refer
to as adjusted measures. We believe they provide a useful comparison of underlying performance
from one period to the next, as GAAP measures can include one-off, non-recurring items and
recurring items that relate to earlier acquisitions. These adjusted measures are supplementary to and
should not be regarded as a substitute for GAAP measures, which we refer to as reported measures.
The basis of our adjusted measures is explained in the accounting policies accompanying our
financial statements and the APM section within the Supplementary Information.
Reconciliations between reported and adjusted measures are included in the Supplementary
Information. Percentage growth figures for adjusted results are given on a constant currency
basis, where the effects of exchange rate movements on the translation of the results of our
overseas operations are removed.
While we believe that APMs provide helpful information which supplements reported measures,
we are also aware of the need to ensure that an appropriate balance is maintained between the
two sets of reporting metrics, with adjusted disclosures not being given greater prominence than
GAAP measures.
Group results – adjusted constant currency analysis
£ million
(unless otherwise indicated)
Full year
ended 30
September
2024
Foreign
exchange
Constant
currency
movement
Full year
ended 30
September
2025 Change
Constant
currency
change
Tobacco & NGP net revenue
Europe 3,366 (43) 153 3,476 3.3% 4.5%
Americas 2,836 (81) 137 2,892 2.0% 4.8%
Africa, Asia, Australasia and
Central & Eastern Europe 1,955 (50) 43 1,948 (0.4%) 2.2%
Tobacco & NGP net revenue 8,157 (174) 333 8,316 1.9% 4.1%
Tobacco & NGP adjusted
operating profit
Europe 1,541 (7) 104 1,638 6.3% 6.7%
Americas 1,235 (36) 34 1,233 (0.2%) 2.8%
Africa, Asia, Australasia and
Central & Eastern Europe 811 (56) 39 794 (2.1%) 4.8%
Tobacco & NGP adjusted
operating profit 3,587 (99) 177 3,665 2.2% 4.9%
Distribution
Gross profit 1,503 (17) 44 1,530 1.8% 2.9%
Adjusted operating profit
including eliminations 324 (4) 3 323 (0.3%) 0.9%
Group adjusted results
Adjusted operating profit 3,911 (103) 180 3,988 2.0% 4.6%
Adjusted net finance costs (402) 6 (17) (413) (2.7%) (4.2%)
Adjusted EPS (pence) 29 7.0 (9.1) 27.1 315.0 6.1% 9.1%
Europe
85.4bn SE
Americas
18.0bn SE
AAACE
83.5bn SE
Europe
£3,476m
Americas
£2,892m
AAACE
£1,948m
Europe
£1,638m
Americas
£1,233m
AAACE
£794m
Distribution
£323m
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FY24 tobacco
& NGP net
revenue
FY25 tobacco
& NGP net
revenue
Tobacco
volume
Tobacco
price mix
NGP
net revenue
FY25 constant
currency net
revenue
Translation
FX
£8,157m £(130)m
£418m
£45m
£8,490m
£8,316m
£(174)m
+4.1% -2.2% +1.9%
FY24 AOP FY25 AOPTobacco
performance
Reduced NGP
losses
Logista FY25 constant
currency AOP
Translation
FX
£3,911m
£176m
£1m
£3m
£4,091m
£3,988m
£(103)m
+4.6% -2.6% +2.0%
GROUP FINANCIAL REVIEW CONTINUED
OPERATING PROFIT
REPORTED OPERATING
PROFIT CHANGE
GROUP ADJUSTED OPERATING
PROFIT CHANGE*
(1.8)% +4.6%
•
Reported Group operating profit of £3,490m decreased by -1.8% reflecting strong regional
performance, offset by adverse foreign exchange and impairment costs related to the
implementation of our 2030 Strategy.
•
Adjusted Group operating profit increased +4.6% at constant currency, driven by strong tobacco
pricing and a reduction in NGP losses against a weaker performance in our Distribution
segment as tobacco performance offset softer transportation.
•
Tobacco adjusted operating profit increased by +4.8% at constant currency, reflecting strong
pricing offsetting volume declines.
•
NGP adjusted losses reduced by 1.3% to £76m, as continued improvement in gross margin offset
investment to support the continued rollout of Zone in the USA.
•
Translation FX on adjusted operating profit of -2.6% reflects average sterling strengthening
against the dollar and euro.
SALES PERFORMANCE
REPORTED
REVENUE CHANGE
TOBACCO & NGP NET
REVENUE CHANGE*
(0.7)% +4.1%
•
Reported revenue declined -0.7% reflecting volume declines in high excise markets and
adverse foreign exchange, largely offset by growth in NGP and Distribution revenues.
•
Tobacco & NGP net revenue grew +4.1% at constant currency, comprising +3.7% from tobacco
and +13.7% from NGP.
•
Tobacco volume was down -1.7%, reflecting wider industry market size declines across
our footprint, although more moderate than recent years.
•
Aggregate market share was stable across our five priority markets (FY24 +5bps).
•
Tobacco price mix was strong at +5.4% due to strong pricing.
•
NGP net revenue increased +13.7% at constant currency to £368m, as strong growth
in USA and Europe more than offset declines in AAACE.
•
Distribution gross profit grew +1.8%, driven by strong tobacco pricing offsetting weaker
performance in transportation.
•
Translation FX was a headwind at -2.2% due to average sterling strengthening against
the dollar and euro.
* Change at constant currency. * Change at constant currency.
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FY24
adjusted
EPS
FY25
adjusted
EPS
Adjusted
operating
profit
Interest Tax Number
of shares
Minorities
& JV
FY25
adjusted
constant
currency EPS
Translation
FX
297.0p
20.7p (2.0)p
(7.0)p
16.6p
(1.2)p
324.1p
315.0p
(9.1)p
+9.1% -3.0% +6.1%
GROUP FINANCIAL REVIEW CONTINUED
Summary cash flow statement*
Reported Adjusted
£ million 2025 2024 2025 2024
Group operating profit 3,490 3,554 3,988 3,911
Depreciation, amortisation
and impairments 781 647 311 294
EBITDA 4,271 4,201 4,299 4,205
Profit on disposal of assets (15) (13) (15) (13)
Other non-cash movements (45) (93) (23) (54)
Operating cash flows before movement
in working capital 4,211 4,095 4,261 4,138
Working capital (71) 100 (71) 100
Tax cash flow (513) (888) (513) (888)
Cash flows from operating activities 3,627 3,307 3,677 3,350
Net capital expenditure (338) (321) (338) (321)
2030 Strategy implementation costs – – (21) –
Restructuring – – (29) (43)
Cash interest (384) (416) (384) (416)
Minority interest dividends (156) (136) (156) (136)
Free cash flow 2,749 2,434 2,749 2,434
Acquisitions (77) (42) (77) (42)
Acquisition of non-controlling interests – (49) – (49)
Shareholder dividends (1,558) (1,299) (1,558) (1,299)
Contributions to share schemes 5 - 5 –
Share buyback (1,235) (1,020) (1,235) (1,020)
Net cash (outflow) / inflow (116) 24 (116) 24
Leases paid (94) (93)
Increase in borrowings 3,899 3,848
Repayment of borrowings (3,235) (3,948)
Cash flow relating to derivative
instruments (144) (34)
Net increase / (decrease) in cash
and cash equivalents 310 (203)
* See Financial Statements for full Cash Flow Statement.
EARNINGS PER SHARE
REPORTED
EPS CHANGE
ADJUSTED
EPS CHANGE*
(16.5)% +9.1%
•
Reported EPS decreased -16.5% to 251.1 pence reflecting a higher tax charge, partly offset
by the impact of lower finance costs and reduced share count.
•
Adjusted EPS was 315.0 pence, up +9.1% at constant currency with adjusted operating profit
growth enhanced by the reduced share count, offsetting higher tax, net finance and minority
interest charges.
* Change at constant currency.
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Cash flow
Cash flows from operating activities were £3,627 million (2024: £3,307 million) as the working
capital outflow versus an inflow in the prior year was more than offset by lower cash tax outflow
following tax refunds.
As anticipated, gross capital expenditure of £384 million was higher than the prior year
(2024: £371 million). Capital expenditure net of the proceeds from the sale of assets, or net
capital expenditure, was £338 million and was also higher than the prior year (2024: £321 million).
Net capital expenditure is anticipated to remain within an expected range of £300 million to
£350 million in FY26 supporting projects to drive simplified and efficient operations in line with
our strategic plan.
Adjusted operating cash conversion was 97% (2024: 100%) on a 12-month basis.
£ million (unless otherwise indicated) 2025 2024
Adjusted operating profit 3,988 3,911
Cash flow from adjusted operating activities post capital expenditure
pre interest and tax 3,852 3,917
Adjusted operating cash conversion 97% 100%
Free cash flow of £2,749 million (2024: £2,434 million) improved on the prior financial year.
Cash costs of £21 million relate to implementation of the 2030 Strategy. Restructuring cash costs
relating to Board-approved restructuring programmes totalled £29 million (2024: £43 million) and
comprised cash spend from the 2021 Strategic Review Programme of £19m (2024: £25 million),
and from other programmes £10m (2024: £18m). The remaining cash spend from older strategic
programmes is ongoing, although not expected to be in excess of the existing provisions.
The net cash outflow of £116 million (2024: £24 million inflow) deteriorated compared to the prior
year driven by a higher dividend payout as we moved to four equal dividend payments and a
higher share buyback, partly offset by lower tax cash outflow. Acquisition costs were £77 million
(2024: £42 million) relating to trademark and brand acquisitions, as well as deferred payment for
purchase of modern oral nicotine pouches. During the financial year, we completed the £0.1 billion
remaining share buyback announced in October 2023 and £1.13 billion of the £1.25 billion share
buyback announced in October 2024. The remaining £0.12 billion was completed in October 2025.
We have announced a further share buyback of up to £1.45 billion of shares during FY26.
Return on invested capital
Return on invested capital (ROIC) increased by 100 basis points, driven by a reduction in average
annual invested capital. ROIC is 20.7% (2024: 19.7%).
Adjusted operating profit increased by £77 million.
Our FY25 invested capital has increased compared to the prior year mainly due to the foreign
exchange impact on intangible assets.
£ million 2025 2024
Reported operating profit 3,490 3,554
Adjusting items (APM section within Supplementary Information) 498 357
Adjusted operating profit 3,988 3,911
Equivalent tax charge (929) (888)
Net adjusted operating profit after tax 3,059 3,023
Working capital (2,858) (2,772)
Intangible assets 16,208 15,938
Property, plant and equipment 1,524 1,561
Invested capital 14,874 14,727
Average annual invested capital 14,801 15,361
Return on invested capital 20.7% 19.7%
Adjusted net debt/EBITDA
Adjusted net debt increased by £666 million to £8,406 million (2024: £7,740 million) in the year
and continued strong cash generation supported additional return of capital to shareholders
via a share buyback. Adjusted net debt/EBITDA is 0.2x ahead of the prior year at 2.0x.
Reported net debt increased by £614 million to £8,954 million (2024: £8,340 million). Excluding
accrued interest, lease liabilities and the fair value of interest rate derivatives providing commercial
hedges of interest risk, Group adjusted net debt was £8,406 million (2024: £7,740 million).
£ million 2025 2024
Reported net debt (8,954) (8,340)
Accrued interest 123 95
Lease liabilities 402 386
Fair value of interest rate derivatives 23 119
Adjusted net debt (8,406) (7,740)
Adjusted EBITDA 4,299 4,205
Adjusted net debt/EBITDA 2.0x 1.8x
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Reconciliation between Group reported and adjusted performance measures
£ million unless otherwise indicated
Operating profit Net finance (costs)/income Earnings per share (pence)
2025 2024 2025 2024 2025 2024
Reported 3,490 3,554 (374) (534) 251.1 300.7
Amortisation and impairment of acquired intangibles 369 353 – – 42.7 40.6
2030 Strategy implementation costs 21 – – – 1.9 –
2030 Strategy non-cash costs 101 – – – 8.3 –
Charges related to legal provisions – – – – (0.1) (0.2)
Structural changes to defined benefit pension schemes 7 4 – – 0.8 0.5
Net fair value and exchange movements on financial instruments – – (13) 110 18.9 (13.1)
Post-employment benefits net financing cost – – 11 11 0.8 0.7
Tax interest (income) / cost – – (38) 10 (4.4) 1.3
Effects of discounting long-term provisions – – 1 1 0.1 0.1
Recognition of deferred tax assets – – – – 8.0 (33.7)
Provision for state aid recoverable – – – – – (11.6)
Uncertain tax positions – – – – (7.8) 18.9
Prior year adjustments – – – – (4.8) (6.6)
Adjustments above attributable to non-controlling interests – – – – (0.5) (0.6)
Adjusted 3,988 3,911 (413) (402) 315.0 2 97.0
Adjusting items
The main reconciling items of the Group’s reported to adjusted operating profit are shown above.
In the period to 30 September 2025 adjusting items relate mainly to amortisation of acquired
intangibles of £369 million (2024: £353 million) across Tobacco & NGP and Distribution. Costs
relating to our 2030 Strategy were recognised comprising £21 million cash costs associated
with 2030 Strategy implementation and non-cash impairment costs of £101 million following
the earlier announcement of our intention to cease production at our Langenhagen factory.
A £7 million charge relates to the closure and transfer of existing defined benefit schemes
in Ireland and Australia.
Finance costs
Adjusted net finance costs were higher at £413 million (2024: £402 million), due to the refinancing
of naturally maturing cheaper debt at higher rates in both FY24 and FY25. Reported net finance
costs were £374 million (2024: £534 million), incorporating the impact of net fair value and
foreign exchange gains on financial instruments of £13 million (2024: £110 million loss), post-
employment benefits net financing costs of £11 million (2024: £11 million) and net tax settlement
interest income of £38 million (2024: £10 million cost). Net fair value gains of £8 million on
financial instruments primarily reflect the impact of heightened volatility in forward interest
rates throughout the year, with longer-term rates ending higher than at the prior year-end. This
resulted in gains of £48 million on net pay-fixed interest rate swaps. These gains were partially
offset by losses of £40 million on cross-currency swaps, due to US$ fixed interest flows not
benefiting from the higher market rates. The accounting losses on the US$ cross-currency swaps
arise from the differing treatment of US$ denominated bonds under the amortised cost method.
Our all-in cost of debt modestly increased to 4.3% (2024: 4.2%) reflecting the previously
mentioned factors.
Whilst interest rates have decreased and are expected to decrease further, they remain higher
than they were prior to the start of FY23 and therefore we still anticipate refinancing naturally
maturing, lower-cost debt at higher rates. As a result, we still expect upward pressure on finance
costs going forward, although hedging is in place for approximately 83% of our expected debt
in FY26.
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Taxation
Our adjusted effective tax rate is 23.3% (2024: 22.7%) and the reported effective tax rate is 29.0%
(2024: 9.3%). The increase in the adjusted effective tax rate primarily reflects the change in profits
mix to higher taxed jurisdictions and other permanent differences. The reported tax rate is higher
than the adjusted tax rate due to the utilisation of deferred tax assets recognised in FY24 and tax
arising on fair value and foreign exchange movements.
We expect our adjusted effective tax rate for the year ended 30 September 2026 to be around 24%.
The effective tax rate is sensitive to the geographic mix of profits, reflecting a combination of
higher rates in certain markets such as the USA and Germany and lower rates in other markets.
The rate is also sensitive to future legislative changes affecting international businesses such
as changes arising from the OECD’s (Organisation for Economic Co-operation and Development)
Base Erosion and Profits Shifting (BEPS) and increased volatility in global tax law and regulation.
Whilst we seek to mitigate the impact of these changes, we anticipate there will be further
upward pressure on the adjusted and reported tax rates in the medium term.
Our Group tax strategy is publicly available and can be found in the Governance section of our
corporate website.
Exchange rates
Foreign exchange had a negative impact on Group adjusted operating profit and adjusted
earnings per share at average exchange rates (2.6% and 3.0%, respectively). Sterling strengthened
against the US dollar (3.0%) and against the euro (1.1%). Other major currencies remained broadly
flat compared to the prior year.
Dividend payments
The Group paid two interim dividends of 40.08 pence per share in June and September 2025.
The Board has approved a further interim dividend of 40.08 pence per share and will propose
a final dividend of 40.08 pence per share bringing the total dividend for the year to 160.32 pence.
This represents a 4.5% increase to the amount of 153.42 pence per share paid in the prior year and
is in line with the Group’s progressive dividend policy.
The annual dividend represents a payout ratio of 63.8% with respect to basic earnings per share.
The third interim dividend will be paid on 31 December 2025 to shareholders registered on
28 November 2025. Subject to AGM approval, the proposed final dividend will be paid on 31 March 2026
to shareholders registered on 20 February 2026.
This reflects the change to the dividend payment profile to four equal quarterly dividend
payments from FY25 onwards.
Dividend payments Amount (pence) Ex-date Record date Payment date
First interim 40.08 22-May-25 23-May-25 30-Jun-25
Second interim 40.08 21-Aug-25 22-Aug-25 30-Sep-25
Third interim 40.08 27-Nov-25 28-Nov-25 31-Dec-25
Final 40.08 19-Feb-26 20-Feb-26 31-Mar-26
Funding/liquidity
During the year, we repaid our €500 million bond which matured in January 2025 and repaid the
remaining US$950 million balance of our US$1.5 billion July 2025 bond. We also issued bonds of
€1 billion with a coupon of 3.875% maturing in February 2034 and bonds totalling US$2.2 billion:
US$850 million with a coupon of 4.5% maturing in June 2028, US$850 million with a coupon of
5.625% maturing in July 2035 and US$500 million with a coupon of 6.375% maturing in July 2055.
Simultaneously, we repurchased US$350 million of the existing US$750 million bond maturing
in July 2026 and £312 million of the existing £500 million bond maturing in September 2026,
both via capped tender offers. Overall, borrowing increased by £664 million in the year, with a
£3,899 million increase in borrowings offset by a £3,235 million repayment of borrowings. We
swapped the new US dollar bonds to euro, therefore closing adjusted net debt continues to be
materially all euro. During the year, the Group also established a new US$3 billion U.S.
Commercial Paper programme (nil outstandings as at 30 September 2025).
As at 30 September 2025, the Group had committed financing in place of around £12.8 billion,
which comprised 26% bank facilities and 74% raised from capital markets. During the year, the
Group entered into a new €3 billion syndicated multi-currency revolving credit facility provided
by 18 lenders, with an initial maturity date of 31 March 2029 and rolling, automatic, annual
extensions, replacing the previous €3.5 billion revolving credit facility. As part of this refinancing
exercise, reflecting the performance and improved credit profile of the Group, the lenders agreed
to remove the leverage and interest cover financial covenants that were a condition of the
previous facility. The Group also rolled £700 million of committed, 364-day tenor, bilateral
bank facilities, with new maturity dates in September 2026.
The Group remains fully compliant with all our banking covenants and remains committed
to retaining our investment grade ratings.
MURRAY MCGOWAN
CHIEF FINANCIAL OFFICER
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NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
The following table constitutes our Non-Financial and Sustainability Information Statement in compliance with Sections 414CA and 414CB of the Companies Act 2006.
The information listed is incorporated by cross-reference. Additional non-financial information is also available on our website.
Reporting requirement Policies Further information Page
Environmental matters* Environment Policy
Filter Policy
Sustainable Tobacco Programme
Biodiversity Statement
Environmental targets
24, 44, 46, 65
Climate and energy
44, 54
Reducing waste
46
Sustainable tobacco supply
47,4 8
Employees*
Code of Conduct
Employment Policy
Fairness at Work Policy
Speaking Up Policy
Health, Safety & Wellbeing Policy
Employee health, safety and wellbeing
50
Lost time accident rate
24, 50, 51
Diversity, equity and inclusion
52
Respect for human rights*
Human Rights Policy
Code of Conduct
Supplier Code of Conduct
Health, Safety & Wellbeing Policy
Fairness at Work Policy
Speaking Up Policy
Diversity, equity and inclusion
52
Health and safety framework
50
Human rights
49
Social matters*
International Marketing Standards
NGP Policy Positions
Policy on taxation
Community Contributions and Volunteering Policy
Information Security Policy
Human rights
49
Unintended use prevention
42, 43
Farmer livelihoods and welfare
47
Charitable and political donations
119
Anti-corruption and anti-bribery*
Code of Conduct
Fraud Risk Management Policy
Speaking Up Policy
Supplier Code of Conduct
Managing risk
66
Governance, risk management and internal control
66, 100
ESG governance
40
Description of principal risks and impact
of business activity
Principal risks and uncertainties
66, 85
Governance, risk management and internal control
66, 100
Description of the business model Business model
Unlocking the value of ‘challenger’
2
Non-financial key performance indicators Key non-financial performance indicators
24, 41, 42, 44, 45, 46,
47, 50, 51, 53
Climate-related financial disclosures Task Force on Climate-related Financial Disclosures
54
* Further information on our policies, due diligence and outcomes in these areas is contained throughout the Strategic Report.
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ESG REVIEW
OUR
CHALLENGER
APPROACH
TO ESG
At Imperial Brands, our
Environmental, Social, and
Governance (ESG) strategy
mirrors our strategic goals
as a challenger business.
This means staying close to our
consumers, focusing on what
matters most, and investing
in the capabilities that drive
agility and impact. We believe
ESG is a strategic enabler,
that underpins our ambition
to become a high-performing,
consumer-centric and
responsible business.
Knowing our consumers best
As we continue to scale our next generation
products (NGP) business, we are committed
to offering consumers potentially reduced-risk
alternatives to traditional tobacco products.
We combine our science and consumer
insights to unlock ways of encouraging
smokers to transition to NGP. We also invest
in behavioural insights to promote more
sustainable consumer choices, such as
encouraging the recharging and recycling
of vapes, and to develop reduced packaging
solutions that are both environmentally
responsible and acceptable to consumers.
Focusing on priority issues
Our Double Materiality Assessment approach
ensures we concentrate our efforts on the
ESG issues that are most material to both
our business and our stakeholders. We defined
these priorities by listening to the views of
consumers, customers, employees, regulators
and investors. As a result, our ESG commitments
are closely aligned with our strategic priorities
and commercial objectives and we allocate
resources where they can deliver the greatest
impact. For further information on this process
please read our ESG Performance Summary.
Investing to strengthen our
organisational agility
We are investing in technology, data, people
and processes to strengthen our organisational
agility. This year, we conducted two real-world
behavioural science studies to evaluate the
harm reduction potential of our blu vaping
product. These studies involved adult smokers
incorporating blu into their daily routines, with
the aim of reducing or replacing cigarette use.
Investing to improve our ESG performance
By adopting energy-efficient technologies
and practices, we have successfully reduced
our carbon footprint and generated cost
savings. This reinforces our commitment to
environmental sustainability and responsible
resource use. We have strengthened supplier
oversight by expanding third-party risk
assessments through our partnership with
Sedex (Supplier Ethical Data Exchange), a
global platform that helps companies manage
ESG risk across their supply chains. We also
promote integrity among our suppliers, asking
them to uphold the same standards as us.
This ensures ethical practices and a secure,
reliable supply chain. We work with suppliers
to support farming communities in choosing
to grow tobacco sustainably for today,
tomorrow and the future.
We conduct regular reviews of our progress
and refine our plans to remain aligned with
our ESG objectives and business strategy.
ESG is about conducting business responsibly,
ensuring integrity and efficiency without
compromising on quality or incurring
unnecessary costs.
While challenges remain, we are delivering
against our ESG commitments. Our evolving
performance culture and increased workforce
engagement have been key drivers of this
progress. Nonetheless, we recognise that
continued effort is essential to fully realise
our ESG ambitions.
ESG REPORTING FRAMEWORK
Our Reporting Criteria document provides
further information on ESG-related metrics.
We disclose ESG-related information
in alignment with the Global Reporting
Initiative (GRI) Standards – Core option,
and in accordance with the Sustainable
Accounting Standards Board (SASB)
framework for the tobacco sector.
Further details are available in our
GRI and SASB Index.
Note: Logista is a publicly-listed company
on the Bolsa de Madrid Stock Exchange and
operates with commercial independence due
to commercial sensitivities. It is responsible
for managing its own ESG-related data and,
as such, is outside the scope of Imperial’s
ESG-related KPIs. Logista has developed a
three-year ESG strategic plan (2024–2026),
outlining specific objectives and actions,
which is available on its corporate website.
OUR VISION
To build a strong challenger business
powered by responsibility, focus and choice.
OUR PURPOSE
Forging a path to a healthier future for
moments of relaxation and pleasure.
For further information on this process please read our
ESG Performance Summary
Further information and data related to each
of our material ESG issues is available in our
ESG Performance Summary
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ESG REVIEW CONTINUED
HOW WE
DELIVER ON
OUR ESG
PRIORITIES
ESG Governance
The People, Governance & Sustainability
Committee, chaired by Imperial’s Chair
and comprising all Non-Executive Directors,
has accountability for ESG performance.
The ESG Committee, comprising of the
executive leadership team (ELT), plays a key
role in overseeing, advising, and guiding the
delivery of our ESG strategy including ensuring
progress against the ESG commitments.
Our Code of Conduct is the cornerstone
of our governance framework. It defines the
standards of ethical conduct expected of
everyone who works for our organisation and
guides responsible decision-making across the
business. Other codes and policies, including
our Supplier Code of Conduct, operate under
its overarching principles.
Our Supplier Code of Conduct is embedded
into our Procurement Policy and processes,
which govern how we select and contract
with our suppliers.
Our Speaking Up platform is accessible to
employees and external stakeholders, including
suppliers and farmers. It offers multiple
reporting channels and supports anonymous
feedback. The Speaking Up Policy is available
internally and on our Group website.
We maintain a zero-tolerance approach
to bribery and corruption, as outlined in
our Code of Conduct, Supplier Code of Conduct,
and Anti-Bribery and Corruption (ABAC) Policy.
All online employees complete mandatory ABAC
training, and we assess business partners for
compliance risks, including ABAC.
The ESG Committee
plays a key role in
overseeing, advising,
and guiding the delivery
of our ESG strategy
including ensuring
progress against the
ESG commitments.
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POSITIVE CONTRIBUTION
TO SOCIETY
This pillar underpins our long-term strategy
by promoting responsible business practices
that strengthen supply chain resilience
and sustainability.
We are committed to working with our
suppliers to support farming communities,
promote sustainable agriculture, and ensure
the responsible sourcing of products and
services through continuous improvement.
SAFE & INCLUSIVE
WORKPLACE
This pillar is a core enabler of our ambition
to build a high-performance culture, where
everyone is enabled to do their best work,
every day.
We are committed to promoting human
rights, and fostering a safe, inclusive, and
diverse workplace where everyone can
thrive and belong.
HEALTHIER
FUTURES
This pillar directly supports our purpose
– of forging a path to a healthier future for
moments of relaxation and pleasure. We
prioritise consumer health by addressing
the impacts of tobacco smoking and offer
alternatives that are potentially less harmful.
We are also reducing our climate impact
by minimising product, packaging and
production waste across our value chain.
Each of our ESG priorities
is aligned with at least one
United Nations Sustainable
Development Goal (SDG) and
organised under three strategic
pillars: Healthier Futures,
Positive Contribution to Society
and Safe & Inclusive Workplace.
Our ESG priority areas in this pillar are:
CONSUMER HEALTH
83%
NGP net revenue increase since 2020
CLIMATE CHANGE
72%
reduced Scope 1 and Scope 2 market-based
emissions since 2017
PACKAGING & WASTE
36%
reduced absolute waste across our
operations since 2017
Our ESG priority areas in this pillar are:
FARMER LIVELIHOODS & WELFARE
152,000
beneficiaries supported in 12 countries
through our Leaf Partnership Programme
SUSTAINABLE & RESPONSIBLE SOURCING
6th consecutive year
recognised by CDP as a supplier
engagement leader in 2024
Our ESG priority areas in this pillar are:
HUMAN RIGHTS
4,900
employees completing the Human Rights
Digital Learning
EMPLOYEE HEALTH, SAFETY &
WELLBEING
47%
reduced lost time accidents since 2019
(absolute numbers)
DIVERSITY, EQUITY & INCLUSION
40%
female representation on the Board*
* As a UK-listed company we are reporting Board
diversity in compliance with UK Listing Rules
UKLR 6.6.6(9).
ESG REVIEW CONTINUED
HOW WE DELIVER ON OUR ESG PRIORITIES CONTINUED
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ESG REVIEW CONTINUED
THREE PILLARS SUPPORT OUR
CONSUMER HEALTH AMBITION
1. Consumer choice
Offering adult smokers and nicotine users
a variety of NGP.
2. Scientific substantiation
Providing evidence that using our NGP
may reduce harm compared to continuing
to smoke.
3. Unintended use prevention
Ensuring NGP are used only by adult
smokers and nicotine users.
HEALTHIER
FUTURES:
CONSUMER
HEALTH
We are continuing to evolve through
consumer-focused science and innovation,
with a commitment to make a meaningful
contribution to tobacco harm reduction through
our NGP portfolio. Transitioning consumers
from cigarettes to NGP presents a global public
health opportunity with the potential to
reduce the risks of smoking-related disease
for millions of adult individuals who smoke.
Our NGP are now available to more than
200 million tobacco/nicotine product users
in 20 markets, while our related revenues
have increased by 83% since 2020.
We define and measure our contribution to
Consumer Health through three core pillars
illustrated in the diagram.
Adult smoker consumer choice
Our approach is led by the consumer. We enter
markets where adult smoker consumers have
already expressed an NGP preference and where
we have existing routes to market.
Within our individual NGP markets, consumers
tend to express a preference for different
categories. For example, in western Europe
vapes are popular. In the US and the Nordics,
modern oral nicotine products are popular and
in southern and eastern Europe consumers
tend to prefer heated tobacco products.
We aim to get as close as possible to our target
adult consumers to understand their preferences
and barriers to switching from combustible
tobacco. We then build distinctive brands
which appeal to them and focus our innovation
to meet our target consumers’ key needs.
Commitment:
We are committed to
strengthening our next
generation products (NGP)
to make a more meaningful
contribution to harm
reduction by offering adult
smokers a range of potentially
less harmful products.
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NGP NET REVENUE
Baseline year (2020)
2025
£201m
£368m
FY25 PERFORMANCE
NGP net revenue has increased by 83% since 2020.
LINK TO SDGs
OUR BEHAVIOURS
For further information please read our
ESG Performance Summary
CONSUMER
HEALTH
Making a more
meaningful contribution
to harm reduction by
offering adult smokers a
range of potentially less
harmful products
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CONSUMER HEALTH CONTINUED
For example, our blu vape brand is highly
focused on providing adult consumers with
a trusted product with authentic flavours.
In heated tobacco, our Pulze/iD proposition
is focused on smokers and former smokers
who are looking for a smoke-free experience,
similar to a combustible cigarette.
Unintended use prevention
We recognise societal concerns around vaping
and remain firmly committed to preventing
unintended use of our products, particularly
among youth. Our product portfolio reflects this
commitment. As a responsible manufacturer,
we do not offer flavours associated with
confectionery, baked goods, or candy, and we
market our vape products exclusively to adult
smokers and nicotine users seeking a broader
lifestyle change.
Unintended use by non-target audiences
can significantly undermine the public health
potential of NGP. To build upon our strategies
to prevent unintended use of our products,
we actively advocate for robust and consistent
regulatory enforcement to strengthen product
compliance, reduce illicit trade, and safeguard
against misuse. For more information on our
Marketing Principles, please read our ESG
Performance Summary.
ESG REVIEW CONTINUED
In FY26, we will continue to innovate
responsibly by co-creating and collaborating
with adult consumers to ensure our NGP
align with their evolving needs. We will
advance harm reduction science to deepen
understanding of the long-term health
impacts of NGP, while also addressing public
misconceptions through clear, evidence-
based education and communication. We
will maintain transparent engagement with
public health stakeholders and regulators to
support pragmatic, evidence-led policies that
promote the responsible adoption of NGP.
Scientific substantiation
We conduct scientific studies to substantiate
the tobacco harm reduction (THR) potential of
our NGP compared to combustible cigarettes.
Our commitment goes beyond regulatory
compliance. We aim to advance the broader
THR agenda through robust, transparent science.
As adult smoker consumer behaviours, product
innovation, and the THR debate continue
to evolve, so too does our research approach.
In addition to applying our comprehensive
scientific assessment framework, we are
undertaking a series of innovative in-market
studies to evaluate the real-world effectiveness
of our NGP. These efforts are central to our
ambition to deliver meaningful, evidence-based
contributions to public health.
Behavioural studies*
This year, we conducted two new behavioural
science studies to further substantiate the harm
reduction potential of our blu vaping product.
These real-world studies involved adult smokers
using blu in their daily lives to reduce or
replace cigarette consumption.
Key findings include:
Rapid behavioural change
Within one week, many participants shifted
from smoking to vaping blu, with an average
reduction in cigarette consumption of
nearly 29%.
Daily cigarette reduction
Across both studies, participants smoked
almost 30% fewer cigarettes per day after
switching to blu.
Role of flavours
Authentic fruit and mint flavours played a vital
role in the switching journey. In one study, 29%
of users exclusively chose fruit flavours.
Sustained use
Flavours also supported continued use of blu,
with 60% of participants indicating they would
purchase blu again due to flavour satisfaction.
Long-term impact
At six-month follow-up, 33–40% of participants
had switched to vaping to a large extent,
or completely.
These findings highlight blu’s potential to
support adult smokers in reducing or quitting
cigarette use, an encouraging development for
public health. Both studies are scheduled for
submission to peer-reviewed journals later
this year.
* This content relates to scientific information about Imperial
Brands PLC’s efforts on harm reduction. The purpose of this
content is not advertising or marketing, nor is it directed at
any specific market. Products are not licensed as cessation
products and are not marketed as such.
For more information see our Science website.
For more information see our Science website
at https://imperialbrandsscience.com/
For more information on our Marketing Principles,
please read our ESG Performance Summary
We seek to offer adult
smokers and nicotine
users attractive
potentially reduced-risk
alternatives, while
preventing unintended
use, particularly
among youth.
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ESG REVIEW CONTINUED
HEALTHIER
FUTURES:
CLIMATE
CHANGE
Commitment:
We are committed to reducing
our impact on the climate
throughout our value chain,
focusing on both mitigation
and adaptation.
LINK TO SDGs
OUR BEHAVIOURS
TARGETS AND METRICS
TARGET
45% Reduction in
energy consumption
by 2030
METRIC
Absolute energy
consumption in our
operations (GWh)
1
Status:
On track
Baseline year (2017)
2025
875GWh
577GWh
A
TARGET
50% Reduction in
Scope 1 and Scope 2
GHG emissions
by 2025
METRIC
Total absolute
Scope 1 and Scope 2
market-based CO
2
e
emissions (Tonnes)
1
Status:
Achieved
Baseline year (2017)
2025
290,446
81,710
A
TARGET
100% of our
purchased grid
electricity will
come from traceable
renewable sources
by 2025.
METRIC
Percentage
of electricity
purchased from
renewable sources
(%)
1
Status:
On track
Baseline year (2017)
2025
8%
97%
A
FY25 PERFORMANCE
We reduced energy consumption by 34% and our
Scope 1 and 2 market-based emissions reduced
by 72% from the base year. This was driven by
increased use of traceable renewable electricity,
energy efficiency measures, and volume
decreases. The final 3% of non-renewable grid
electricity, from our Taiwan factory, will transition
to renewable sources by December 2025.
Climate change presents a significant
challenge to global stability and long-term
business resilience. It is a key concern for our
stakeholders and a material issue for our
organisation, with the potential to directly
impact financial performance, regulatory
compliance, and risk management. Relevant
risks and opportunities are disclosed in our
Task Force on Climate-related Financial
Disclosure (TCFD) report on page 54.
We are committed to achieving Net Zero
emissions by 2040 across our entire value
chain. To support this ambition, we have set
two interim targets for 2030:
1. Achieve Net Zero for Scope 1 and 2 emissions.
2. Reduce absolute Scope 3 emissions by 50%
from a 2017 baseline.
This journey not only addresses the climate
crisis but also drives innovation and
strengthens supply chain collaboration.
In FY25 there was a strong focus on improving
energy efficiency, data quality, target resetting,
decarbonisation planning and climate
risk management.
Energy efficiency
We rolled out 35 energy standards to all our
factory sites. To support this, we conducted
both on-site and remote audits and established
a monthly tracking process. As a result,
we saw an improvement in energy efficiency
from 2.2% in FY24 to 3.0% in FY25 across our
factory footprint.
Data quality
We introduced environmental data checklists
to improve reporting accuracy, with factory
sites now self-attesting the accuracy of their
submitted data.
Target resetting
Having achieved our original 2030 targets for
energy and water consumption, we have now
set more ambitious goals:
Energy
A revised target of 45% reduction in energy
use by 2030, compared to a 2017 baseline,
reinforcing our decarbonisation strategy.
Water
A new focus on reducing water use by 25%
in our factory sites located in water-scarce
regions, by 2030, recognising the critical
importance of water availability and quality
for business continuity.
Decarbonisation planning
We updated transition plans for 95% of our
factories and 94% of fleet emissions. This was
supported by our Environmental Framework for
factories and the Fleet Working Group to co-
ordinate regional engagement with fleet teams.
Climate risk analysis
We undertook a comprehensive update of
our climate-related risks and opportunities
assessments with a new platform, enabling
site-level action planning and early warning
systems to strengthen our overall climate
resilience.
We are committed to integrating
decarbonisation principles across our
operations, ensuring that progress is aligned
with cost-benefit considerations wherever
possible. This approach is being applied across
our two largest energy consumers, our factories
and our fleet, where decarbonisation plans are
required to include cost assessments and are
reviewed and updated at least annually.
A. Select 2025 data has been independently assured by
Ernst & Young LLP (EY) under the limited assurance
requirements of the ISAE 3000 standard. EY’s Assurance
Opinion is available on our website. Our reporting scope
and definitions are detailed in the Reporting Criteria
document published on our website.
1. Our 2025 environmental data covers the reporting period
Q4 2024 to Q3 2025. This is to allow for data collection,
validation and external assurance. We use the industry-
leading Greenhouse Gases (GHG) Protocol standard to
inform our reporting of Scope 1 and 2 emissions.
For further information please read our ESG Performance
Summary and our TCFD report on page 54
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CLIMATE CHANGE CONTINUED
CLIMATE CHANGE
3.0%
improvement in energy efficiency in FY2025
TARGET RESETTING
45%
revised target reduction in energy use by 2030
DECARBONISATION PLANNING
95%
of our factories emissions plans updated
94%
of our fleet emissions plans updated
As a UK-listed company, we are required
to report energy consumption and emissions
separately for UK and offshore operations, and
benchmark these against global totals. Each
month, entities across the business submit
data via our non-financial reporting system,
detailing volumes of petrol, LPG, diesel,
electricity, and gas consumed. The Group ESG
team is responsible for collating and reviewing
this information.
Sales and Marketing entities specifically report
the type and quantity of fuel used, which is
then converted to GWh using DEFRA’s Lower
Calorific Value for fuels and the site’s specific
lower calorific value for gas. Annual revenue
figures are sourced from Group Finance to
support comparative analysis.
ESG REVIEW CONTINUED
SCOPE 1 AND 2 EMISSIONS – UK AND GLOBAL
1, 2, 3
2025 2024*
Performance indicator Units
UK and
offshore area
Global
(Excluding UK and
offshore area)
UK and
offshore area
Global
(Excluding UK and
offshore area)
Scope 1 emissions tCO
2
e 1,550 65,096 1,545 71,892
Relative Scope 1 emissions tCO
2
e/£m net revenue 0.2 7.8 0.2 8.8
Scope 2 location-based emissions tCO
2
e 854 108,439 862 107,608
Relative Scope 2 location-based emissions tCO
2
e/£m net revenue 0.1 13.0 0.1 13.2
Scope 2 market-based emissions tCO
2
e - 15,064 0 15,683
Relative Scope 2 market-based emissions tCO
2
e/£m net revenue - 1.8 0 1.9
Total Gross Scope 1 and Scope 2 location-based emissions tCO
2
e 2,404 173,536 2,407 179,500
Relative Scope 1 and Scope 2 location-based tCO
2
e/£m net revenue 0.3 20.9 0.3 22.0
Total Gross Scope 1 and Scope 2 market-based emissions tCO
2
e 1,550 80,160 1,545 87,576
Relative Scope 1 and Scope 2 market-based tCO
2
e/£m net revenue 0.2 9.6 0.2 10.7
Energy consumption kWh 11,852,244 564,776,758 11,842,601 583,429,233
1. We have provided reporting in compliance with UK Streamlined Energy and Carbon Reporting (SECR) regulations (being the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, as amended by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and the SECR under the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.
2. For details on the methodology used for SECR calculations, please see our Reporting Criteria document available on our website.
3. Energy efficiency measures taken in FY25 are reported in our 2025 CDP Climate Change disclosures available on the CDP website.
* 2024 data has been restated to exclude Ireland.
LOGISTA 2025 COMMENTARY
Logista is managed remotely due to commercial sensitivities
and is responsible for its own data.
Logista has established 2023 as its new baseline year,
reflecting recent acquisitions and an updated methodology
for calculating intermodal transport. Energy consumptions
encompass electricity, natural gas and diesel.
Logista’s 2025 relative Scope 1 and Scope 2 emissions
market-based comprise 45 tonnes (2024: 56 tonnes) of CO
2
e
per £million of 2025 distribution fees (our non-GAAP revenue
measure for Logista).
LOGISTA EMISSIONS
Performance indicator Unit
2023
baseline year 2024 2025*
Scope 1 emissions* tCO
2
e 138,317 133,123 110,214
Scope 2 location-based
emissions* tCO
2
e 11,486 11,814 12,159
Scope 2 market-based
emissions* tCO
2
e 1,150 489 554
Total gross Scope 1 & Scope 2
emissions location-based tCO
2
e 149,803 144,937 122,373
Total gross Scope 1 & Scope 2
emissions market-based tCO
2
e 139,467 133,612 110,768
Energy consumption* kWh 498,579,101 517,795,325 446,085,758
Absolute Scope 3 emissions tCO
2
e 345,591 346,476 363,192
* 2025 data is undergoing independent assurance. All previous years’ data has been independently assured.
Further information on the scope of Logista’s GHG
reporting is available www.logista.com
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ESG REVIEW CONTINUED
HEALTHIER
FUTURES:
PACKAGING
& WASTE
TARGETS AND METRICS
TARGET
100% of our
packaging is
reusable, recyclable
or compostable in
the EU and UK by
2025
METRICS
Percentage of
packaging which is
reusable, recyclable
or compostable by
packaging format
and by weight of
packaging in sales
volumes
Status:
Requires focus
Baseline year (2022)
2025
95%
1
96%
2
99%
2,A
94%
1,A
1. Percentage by packaging formats.
2. Percentage by weight of packaging in sales volumes.
TARGET
Zero waste to
landfill in our
operations by 2025
METRIC
Absolute non-
hazardous waste
sent to landfill
(Tonnes)
Status:
Requires focus
Baseline year (2017)
2025
7,200.0
6.7
1,A
TARGET
100% of all wood fibre
in our packaging
will be sustainably
sourced by 2025
METRIC
Percentage of wood
fibre in our packaging
sustainably sourced
(%)
Status:
Achieved
Baseline year (2022)
2025
97%
100%
A
FY25 PERFORMANCE
Based on weight of packaging in sales volumes, 99%
of our packaging sold in the EU and UK is now deemed
recyclable. We remain committed to achieving zero
waste to landfill. 100% of the wood fibre used in our
packaging is now sustainably sourced.
LINK TO SDGs
OUR BEHAVIOURS
Commitment:
We are committed to
minimising waste associated
with products, packaging and
production processes.
Our strategy is consumer-led, aligning with
growing public and regulatory expectations
for sustainable manufacturing and
recyclable packaging.
In 2025, we updated the methodology to consider
the weight of packaging in sales volumes,
ensuring we target the greatest opportunities
for waste reduction and circularity. Based on
third-party certifications, 99%
A
of our packaging
in the EU and UK by weight of packaging in sales
volumes is now deemed recyclable. Formats
representing 99%
A
of weight of packaging in
sales volumes account for 94%
A
of total formats.
The average recyclability score of our packaging
is 81.6%.
In FY24, we achieved zero waste to landfill
from May onwards. In FY25, we maintained
this status, except for two isolated supplier
incidents that were swiftly resolved. These
incidents resulted in a total of 6.7
A
tonnes
of waste being sent to landfill. While such
incidents are rare, we acknowledge they
can happen. Our commitment remains strong,
and we respond swiftly to resolve issues and
maintain our high standards. Recognising that
achieving absolute zero tonnes every year is
not always realistic, we are introducing a small
tolerance to reflect this. From FY25 onwards,
we will allow up to 0.5% of our 2017 baseline to be
sent to landfill annually, enabling us to respond
rapidly without compromising our overall goal.
Cigarette butts
We recognise that tackling littering requires
collaboration with stakeholders such as
tobacco manufacturers, governments,
retailers, and communities. We support this
through participation in Extended Producer
Responsibility (EPR) schemes, both voluntary
and regulatory, like the EU Single-Use Plastics
Directive, which help fund waste management,
clean-up efforts, and public education. While a
viable alternative to traditional cigarette filters
has not yet been found due to consumer and
regulatory constraints, we remain committed
to innovation and continue exploring
sustainable filter materials.
NGP Waste
We are committed to improving the
sustainability and recyclability of materials and
packaging used in our NGP. We monitor existing
environmental regulations and communicate
responsible disposal guidance to our consumers.
Our blu kit range of pod-based vapes have been
designed to support consumers migrating from
disposable systems. They offer the same
sensory experience of a disposable with a
reusable and rechargeable device. Our new
blu bar kit offers the same satisfying sensory
experience in a pod-based format, allowing
users to retain the device and responsibly
dispose of only the used pod. As part of this
effort, we continue to operate ‘take-back’
schemes for vaping devices and pods in selected
markets, helping to reduce environmental
impact and promote circularity. Blu vaping
devices and pods can be taken directly – or
indirectly through our free take-back schemes
– to local waste collection centres, where they
are safely processed. Guidance on safe and
proper disposal is included within the in-pack
literature for all our blu products. The literature
includes a link to the blu website where there
is detailed information for our consumers.
ENVIRONMENT POLICY
As a responsible manufacturer, we are
committed to minimising our environmental
impact and promoting sustainability
throughout our value chain. This commitment
is outlined in our Group Environmental Policy
and reinforced by our Code of Conduct and
Supplier Code of Conduct. These documents
guide all employees, suppliers, and partners in
upholding high standards in carbon reduction,
resource efficiency, and biodiversity protection.
A. Select 2025 data has been independently assured by
Ernst & Young LLP (EY) under the limited assurance
requirements of the ISAE 3000 standard. EY’s Assurance
Opinion is available on our website. Our reporting scope
and definitions are detailed in the Reporting Criteria
document published on our website.
1. Three sites in the Central African Republic, Mali and
Ukraine are currently out of scope due to ongoing conflicts
in these regions.
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ESG REVIEW CONTINUED
POSITIVE
CONTRIBUTION
TO SOCIETY:
FARMER
LIVELIHOODS
& WELFARE
* The remaining 0.3% relates to a region where achieving
full traceability presents unique logistical and operational
challenges. Therefore we have adopted a phased approach
focused on continuous improvement over time.
** The volume of wood from managed planting programmes,
calculated based on the wood equivalent of hectares
planted, expressed as a proportion of the total wood used
for curing.
A. Data has been independently assured by Ernst & Young
LLP (EY) under the limited assurance requirements of the
ISAE 3000 standard. EY’s Assurance Opinion is available
on our website.
For more information, please read our
ESG Performance Summary
Commitment:
We are committed to engaging
with our suppliers to support
and develop farming
communities and promote
sustainable agriculture.
LINK TO SDGs
OUR BEHAVIOURS
TARGETS AND METRICS
KPI
100% of our tobacco
leaf suppliers
participating in the
Sustainable Tobacco
Programme (STP)
METRIC
Percentage of
total leaf suppliers
participating in
the STP
Status:
Achieved
Baseline year (2022)
2025
96%
100%
TARGET
100% Sustainable
wood used as
tobacco curing fuel
by 2025
METRICS
Percentage of
sustainably sourced
wood for use as
tobacco curing fuel
and planting
programmes to
support sustainable
wood in the future
Status:
Requires focus
Baseline year (2023)
2025
85%
85.5%
A
FY25 PERFORMANCE
All our tobacco leaf suppliers participated in the
Sustainable Tobacco Programme (STP).
We are committed to enabling wood used for
tobacco curing comes from sustainable sources.
In FY25, 85.5%* of the wood used was sourced
sustainably and was fully traceable.
For a further 14.2%**, planting programmes are
underway to support sustainable wood in the future.
This target requires focus as we are evolving it to
be aligned with our SBTi FLAG (Forests, Land and
Agriculture) target-setting ambition.
To serve our consumers long term, it’s vital that
farmers continue choosing to grow tobacco.
Tobacco farmers face growing challenges
including extreme weather events, generational
succession issues, and rising inflation.
We work closely with our leaf suppliers to secure
supply, support farming communities, and
promote sustainable agriculture. This includes
supporting a decent standard of living, enhancing
farmers’ access to basic needs and encouraging
income diversification. These initiatives are
designed to support farmers in continuing to
grow tobacco in ways that are both economically
viable and environmentally responsible.
The Sustainable Tobacco Programme (STP)
We work with suppliers to strengthen
standards and manage risks in our leaf supply
chain, primarily through the STP. The STP is
an independently managed industry initiative
that verifies annual supplier self-assessments.
It enhances supply chain due diligence and
supports positive social and environmental
outcomes in tobacco-growing communities.
STP provides visibility in two key ways:
1. Suppliers report on actions taken to address
identified risks and their impact on the ground.
2. These actions are verified remotely or in the
field, informing our strategy and support.
All our tobacco leaf suppliers are expected
to participate in the STP.
Decent standard of living
Overall farm net income, including income
from outside the farm, is measured against
the relevant Living Income Benchmark for
that location. This income needs to exceed
the benchmark to be considered a living
income, ensuring the farmer can afford a
decent standard of living. We encourage our
leaf suppliers to commit to supporting their
farmers to access a decent standard of living.
At the end of FY25, 100% of the suppliers we
purchase tobacco leaf from had expressed
this commitment.
Access to basic needs
Leaf Partnership projects are an important
part of our commitment to improving farmer
livelihoods and welfare. We collaborate
directly with our leaf suppliers to complement
and amplify their efforts by funding targeted
projects. These range from strengthening farm
businesses to improving access to essentials
such as childcare, education, clean water,
sanitation, and hygiene. In FY25, we provided
financial support for projects in 12 countries
across all basic needs, with more than 152,000
beneficiaries. In FY26, we will prioritise
projects in education, sanitation, and hygiene
to support tobacco-growing communities in
key sourcing regions.
Forestry
Many contracted farmers use wood
for curing tobacco or constructing barns.
We are committed to enabling 100% of this
wood comes from sustainable sources by
2025. In FY25, 85.5%
A*
of wood used was from
sustainable, traceable sources. For a further
14.2%**, planting programmes are underway
to support sustainable wood in the future.
Addressing child labour
As in other agricultural sectors, the highest risk
of child labour lies in the cultivation stage of our
supply chain. This is a complex, multi-stakeholder
issue that cannot be addressed in isolation.
We work collaboratively with a range of third
parties including industry partners, suppliers,
and local stakeholders to tackle this risk.
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ESG REVIEW CONTINUED
POSITIVE
CONTRIBUTION
TO SOCIETY:
SUSTAINABLE
& RESPONSIBLE
SOURCING
Sustainable and responsible sourcing is key to
securing the long-term resilience of our supply
chain, supporting local communities, and
reducing our environmental impact.
Our suppliers are vital partners. Their
commitment to quality, innovation, and ethical
practices underpins both our commercial
performance and our ESG agenda.
Supplier engagement
This year, we expanded the number of strategic
suppliers invited to disclose emissions data via
the CDP Supply Chain platform from 250 to 391.
This strengthens the transparency and accuracy
of our Scope 3 greenhouse gas reporting,
deepens supplier engagement and improves
the quality and breadth of emissions data.
To embed this data into decision-making, key
CDP scores and responses to climate-related
questions have been integrated into our Supplier
Relationship Management (SRM) Connect
programme. This enables us to assess supplier
performance and incorporate verified emissions
data directly into our Scope 3 calculations.
Since its launch in 2024, the SRM Connect
programme has been central to building
stronger, data-driven relationships. Please
read our case study ‘Inaugural SRM Connect
Conference and Awards 2025’.
Sedex
We have continued to expand the use of
third-party risk assessments through our
partnership with the Supplier Ethical Data
Exchange (Sedex). Participation with Sedex
is a key requirement within our SRM Connect
programme, enabling the integration of social,
ethical, and environmental assessments into
supplier management. This year, our primary
focus has been expanding Sedex assessments
across our NGP business.
In FY26, our key priorities will focus on
expanding Sedex membership and increasing
Sedex Members Ethical Trade Audit (SMETA)
coverage to enhance transparency and oversight
of labour practices and ethical compliance.
Inaugural SRM Connect Conference
and Awards 2025
In recognition of the strategic value of
partnerships, we brought together 30 of our key
suppliers at the SRM 2025 Connect Conference
and Awards. One of the highlights was a
panel discussion on building better supplier
partnerships to drive innovation and strengthen
our relationships for the future.
Our ESG Director led a session focusing on how
closer collaboration with suppliers supports our
sustainability goals, critical for both financial
and long-term growth.
The event served as a platform to strengthen
supplier relationships, promote best practices,
and encourage greater transparency and data
quality. It also fostered open dialogue and
closer collaboration in support of shared
sustainability goals.
Commitment:
We are committed to sourcing
products and services in a
compliant, sustainable and
socially conscious manner.
We will work with our
suppliers to ensure
continuous improvements.
LINK TO SDGs
OUR BEHAVIOURS
Our SRM Connect programme
remains a cornerstone of our supplier
engagement strategy.
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ESG REVIEW CONTINUED
SAFE &
INCLUSIVE
WORKPLACE:
HUMAN
RIGHTS
Commitment:
We are committed to raising
awareness and improving
processes in our supply chains,
and we recognise the importance,
influence and role we have in
promoting and protecting
human rights.
Human rights are the basic rights and freedoms
to which everyone is entitled, regardless of
nationality, beliefs, or lifestyle. As a responsible
business, we uphold these rights and have zero
tolerance for any form of human rights abuse.
When potential or actual violations are identified,
we act quickly and decisively to address and
resolve them.
Human rights due diligence
As part of our commitment to upholding human
rights across our operations, we conduct audits
to assess compliance with our Human Rights
Leading Indicators (HRLI) framework.
In FY25 we conducted audits in six locations
adding to the 13 audits we have conducted
since 2023. These audits included a review of
supporting documentation and validation of
monthly self-assessments to produce a report
detailing findings, identified gaps, and tailored
recommendations. These engagements help
to strengthen local teams’ understanding and
implementation of the HRLI framework.
We have expanded the scope of the HRLI to
include manufacturing sites, offices, and local
markets. As a result, we have reset our reporting
baseline to FY25 and will report progress from
FY26 onwards.
We are also seeking to better understand the
role of forced labour/human trafficking in the
illicit trade, which is growing in several of our
priority markets.
Embedding human rights awareness
in high-risk operations
We delivered targeted training and modern
slavery workshops, using a real-life case study
to engage teams on how to identify modern
slavery and broader human rights risks.
This supports informed decision-making and
reinforces our legal and ethical responsibilities.
To reach offline and non-English-speaking
teams, we also introduced ‘Human Rights
Corners’. These are visual, locally-relevant
spaces at high-priority sites identified through
risk mapping. The visuals promote consistent
messaging and help embed human rights into
everyday workplace culture. We expanded the
rollout of our human rights digital learning
programme to reach more employees across the
organisation. The training provides an overview
of human rights principles and the Company’s
responsibilities in upholding them. It also
helps employees identify potential indicators
of modern slavery and outlines the appropriate
channels for raising concerns, including
informal routes and our Speaking Up service.
In FY26, we will expand access to digital
learning and continue rolling out ‘Human
Rights Corners’ at priority sites to deepen
awareness. Additionally, we will strengthen
audit practices by integrating a new site
assessment methodology, developed with
Slave-Free Alliance, into our audit processes
for more robust evaluations.
6
audits were conducted in
additional locations in FY25
LINK TO SDGs
OUR BEHAVIOURS
NUMBER OF EMPLOYEES COMPLETING
THE HUMAN RIGHTS DIGITAL LEARNING
2024
2025
2,816
4,985
FY25 PERFORMANCE
At the end of FY25, 4,985 employees had
completed the Human Rights Digital Learning.
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ESG REVIEW CONTINUED
SAFE &
INCLUSIVE
WORKPLACE:
EMPLOYEE
HEALTH, SAFETY
& WELLBEING
Commitment:
We are committed to achieving
world-class occupational
health, safety & wellbeing
for all our employees.
LINK TO SDGs
OUR BEHAVIOURS
TARGETS AND METRICS
TARGET
75% Reduction in
lost time accident
(LTA) rate by 2030
METRIC
Lost time accidents
per 200,000 hours
worked
1,2
Status:
Requires focus
Baseline year (2019)
2025
0.40
0.29
KPI
Reduction in total
number of accidents
each year
METRIC
Absolute total
number of
accidents
1,2
Status:
Requires focus
Baseline year (2019)
2025
850
524
FY25 PERFORMANCE
We have seen a 28% decrease in the LTA rate since
the 2019 baseline year. However, the number of
LTAs remained unchanged from FY24, reinforcing
the need to step up our efforts to achieve the
2030 target.
We have seen a 38% decrease in absolute number
of accidents since the 2019 baseline year.
However, there was an increase of 65% compared
to FY24 due to improved reporting as a result of
educational campaigns.
Building a culture of care
To empower our people to make safe choices,
we must create an environment that supports
safe behaviours. This involves ensuring people
have the necessary knowledge, skills,
motivation and resources to work safely.
Our Behavioural Safety Programme focuses
on identifying and observing safe and unsafe
behaviours in the workplace, followed by
constructive feedback to reinforce safe practices
or address unsafe ones. The programme
promotes engagement, empowerment,
and shared responsibility for safety through
peer-to-peer ‘safety’ conversations and by
embedding behavioural safety into daily
operations and existing systems. At the end
of FY25, more than 31,500 safety conversations
had been conducted.
Addressing key risks
Driving-related risks are among the most
significant and complex ones we must address.
A robust road safety programme is essential
to protect our employees, associates, and
other road users. While road conditions and
vehicle types vary globally, influencing driver
behaviour remains key to reducing risk across
all our operations.
We offer driver awareness training to enhance
safe driving practices and equip employees
with the knowledge to effectively manage and
reduce road incidents. At the end of FY25, more
than 1,600 sales and marketing employees had
completed this training.
In FY26, the focus will be on strengthening the
culture of care by implementing standardised
global training aligned with our Zero Injury
Aspiration strategy. The Behavioural Safety
Programme will be expanded to include Sales
and Marketing functions, with an emphasis on
improving the quality of safety conversations and
coaching across Global Supply Chain locations.
Our integrated approach to health, safety, and
wellbeing is underpinned by our long-standing
‘I Own Safety’ campaign, designed to build
awareness, strengthen personal accountability,
and empower everyone to speak up when they
encounter unsafe conditions.
Wellbeing
Our employee wellbeing programme is locally
managed and offers a broad range of support,
including resilience training, employee
assistance services, health checks, awareness
campaigns, flexible working, family-friendly
policies and facilities, as well as workplace
celebrations and social events.
HEALTH, SAFETY AND
WELLBEING POLICY
Our Group Health, Safety and Wellbeing
Policy reflects our commitment to
providing a safe, healthy, and supportive
working environment for all individuals
involved in our business. We apply a
structured ‘Plan, Do, Check, Act’ approach
to set objectives, manage risks, and drive
continuous improvement. This includes
allocating appropriate resources,
delivering targeted training, fostering clear
communication, and ensuring compliance
with all relevant regulations. Guided
by the principles of our Code of Conduct,
the policy reinforces our dedication
to maintaining a respectful and secure
workplace across our global operations.
A. Select 2025 data has been independently assured by
Ernst & Young LLP (EY) under the limited assurance
requirements of the ISAE 3000 standard. EY’s Assurance
Opinion is available on our website. Our reporting scope
and definitions are detailed in the Reporting Criteria
document published on our website.
1. Our health and safety data is for the full 2025 financial year.
2. Accidents reported do not include commuting to or from
work, or those sustained by third parties such as distributors.
For more information please read our
ESG Performance Summary
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ESG REVIEW CONTINUED
EMPLOYEE HEALTH, SAFETY AND WELLBEING CONTINUED
HEALTH AND SAFETY PERFORMANCE
1
Performance indicator Unit
2019
(base year) 2023 2024 2025 Commentary
Employee fatalities
1
Number
2 0 0
0
There have been no work-related fatalities to employees.
Contractor fatalities
1
Number
0 1 0
0
There have been no work-related fatalities to contractors.
Members of the public fatalities involving
Imperial Brands vehicles
1
Number
1 0 0
0
Road safety remains a priority across all our operations. We are deeply saddened by
the deaths of two members of the public, which occurred outside of working hours
following road traffic collisions involving our drivers. We extend our heartfelt
condolences to the families and loved ones affected by this tragic loss.
Lost time accidents (LTAs)
1,2
Number
101 57 54
54
The absolute number of LTAs has remained unchanged compared to the previous
year, highlighting the importance of renewed efforts to drive further improvement.
LTA rate
1,2
LTAs per 200,000
hours worked
0.4 0.30 0.30
0.29
A
Since FY19, LTAs have fallen by 47%, while total hours worked declined by 26%,
mainly due to our exit from Russia, Japan and the Premium Cigars business. These
regions made up 14% of hours worked but only 2% of LTAs, so the LTA rate did not
improve in line with absolute reduction in accidents.
The number of LTAs remained unchanged from FY24, reinforcing the need to step
up our efforts to achieve the 2030 target of a 75% reduction in LTA rate.
Total number of accidents
1,2
Number
850 420 318
524
We have seen a 65% increase in total accidents reported compared to last year, this
rise being the result of educational campaigns on reporting. We have seen a 38%
reduction compared to the 2019 baseline year.
Accident rate
1,2
Total accidents
per 200,000 hours
worked
3.39 2.24 1.75
2.84
The accident rate increased by 62% compared to last year and reduced by 16%
compared to the 2019 baseline year.
Compliance with the Health and Safety
Framework (Manufacturing)
%
– 93 99
100
We achieved 100% compliance with our framework standards in 2025.
Compliance with the Health and Safety
Framework (Sales)
%
– 94 98
100
We achieved 100% compliance with our framework standards in 2025.
A. Select 2025 data has been independently assured by Ernst & Young LLP (EY) under the limited assurance requirements of the ISAE 3000 standard. EY’s Assurance Opinion is available on our website.
Our reporting scope and definitions are detailed in the Reporting Criteria document published on our website.
1. Our health and safety data is for the full 2025 financial year.
2. Accidents reported do not include commuting to or from work, or those sustained by third parties such as distributors.
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ESG REVIEW CONTINUED
SAFE &
INCLUSIVE
WORKPLACE:
DIVERSITY
EQUITY &
INCLUSION
LINK TO SDGs
OUR BEHAVIOURS
FEMALE REPRESENTATION AT EXECUTIVE
LEADERSHIP TEAM (ELT) LEVEL
Baseline year (2021)
2025
33%
45%
A
FEMALE REPRESENTATION ON
THE BOARD
Baseline year (2021)
2025
22%
40%
A
FY25 PERFORMANCE
45% of the Executive Leadership Team (ELT)
are female.
40% of the Board are female.
We are further building on our success to date
to best support the delivery of our 2030 strategy
with a continued focus on inclusion, equity,
and merit-based advancement.
We continue to enable self-identification to
better understand our employees and use this
data to identify and act on key opportunities,
foundational to building a high-performing,
innovative culture and driving commercial
success.
An inclusive culture
In 2025, we expanded our allyship programme
to all employees via self-enrolment. Designed
to identify and develop inclusive behaviours,
enabling employees to better contribute their
ideas and experience. With over 300 colleagues
trained to date, survey feedback shows
increased confidence and positive impact
on workplace culture. An interactive training
module was launched in 2024 for all colleagues,
with a 90% completion rate to date.
Embedding inclusion through policy, practice
and process
We continue to utilise external benchmarks to
measure progress in creating inclusive policies
and practices.
An Inclusion Framework was designed and
implemented in FY25, in partnership with
business leaders. Structured quarterly reviews
are conducted with each region and function,
bringing together business partners and subject
matter experts to assess inclusion data, survey
insights, feedback, and learning metrics.
Initially focused on processes and practices in
recruitment, learning, IT and communications,
the Inclusion Framework will be expanded to
include facilities, performance management,
procurement and talent in FY26.
FAIRNESS AT WORK POLICY
Our Fairness at Work Policy promotes high
standards of conduct and performance,
fosters positive working relationships,
and a workplace free from harassment
and discrimination. It promotes equal
opportunities for all employees and
applicants, regardless of gender, race,
disability, marital status, nationality,
sexual orientation, age, religious beliefs,
or other unrelated factors. The policy
supports fair performance management
and includes formal grievance procedures
to protect against harassment. Guided by
the principles of our Code of Conduct, it
reinforces our commitment to integrity,
respect, and equal treatment across all
areas of employment.
Commitment:
We are committed to creating
an inclusive organisation
renowned for celebrating
difference, enabling our people
to feel that they belong and
can be their authentic selves.
We respect, recognise and
value the diversity of our
consumers and strive to
reflect the communities
in which we operate.
A. Select 2025 data has been independently assured by
Ernst & Young LLP (EY) under the limited assurance
requirements of the ISAE 3000 standard. EY’s Assurance
Opinion is available on our website. Our reporting scope
and definitions are detailed in the Reporting Criteria
document published on our website.
For more information please read our
ESG Performance Summary
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ESG REVIEW CONTINUED
DIVERSITY EQUITY & INCLUSION CONTINUED
DIVERSITY, EQUITY AND INCLUSION PERFORMANCE
As a UK-listed company, we are providing board and executive management-level diversity and inclusion reporting in compliance with UK Listing Rules UKLR 6.6.6(9).
.
Performance indicator Unit 2021 2022 2023 2024 2025 Commentary
Female employees in the workforce
1
%
40 40 39 41
41
A
Female representation has remained broadly consistent across the last three years.
FY25: 7,758 female, 11,163 male, 133 not declared.
Female senior management
2
%
– 29 31 33
36
A
Targeted talent attraction and development plans have seen an increase
in female representation at senior management level.
FY25: 251 female, 451 male, 3 not declared.
Female Executive Leadership Team
(ELT) members
%
33 30 30 45
45
A
Female representation on the ELT has remained stable through FY25
with no changes to members.
FY25: 5 female, 6 male.
Female PLC Board Members %
22 40 40 45
40
A
Female representation on the Board at the end of FY25 was 40%
(Diane De Saint Victor stepped down during the year).
FY25: 4 female, 6 male.
Ethnic minority background on our Board %
10 20 20 18
20
A
On 30 September 2025 (end of FY25), 20% of the Board members identified
as being from an ethnic minority background.
FTSE Women Leaders Review Combined
Executive Leadership Team & Direct Reports
%
21.4 24.3 26.7 32.1
34.5
A
The FTSE Women Leaders Review is the successor to the Hampton-Alexander
Review. It is the UK’s independent, voluntary initiative aimed at increasing the
representation of women on FTSE 350 boards and leadership teams. The reporting
date is 31 October 2025.
A. Select 2025 data has been independently assured by Ernst & Young LLP (EY) under the limited assurance requirements of the ISAE 3000 standard.
EY’s Assurance Opinion is available on our website.
Our reporting scope and definitions are detailed in the Reporting Criteria document published on our website.
1. Based on employees recorded in Imperial Brands Group Human Resources Information Systems, excluding Logista, contractors and casual labour.
2. The proportion of senior management employees (Global Grades 3, 4, 5) recorded as female across Imperial Brands Group.
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TCFD
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES
The Task Force on Climate-
related Financial Disclosures
(TCFD) framework helps us
organise and report on our
climate risks and
opportunities. This section
outlines our governance,
strategy, risk management,
and metrics and targets
related to climate change.
This statement outlines Imperial Brands’
climate-related financial disclosures in
accordance with the Financial Conduct
Authority (FCA) UK Listing Rule 6.6.6R(8)
and is fully consistent with the Task Force
on Climate-Related Financial Disclosures
(TCFD) Recommendations and
Recommended Disclosures.
This year we partnered with a new third-party
service provider to enhance our climate scenario
analysis methodology, expanding the number
of inputs and broadening the scope to cover more
locations and suppliers. These improvements
enabled a more comprehensive and in-depth
assessment, resulting in more accurate financial
impact modelling and a refinement of our
climate risk profile. The results were reviewed
and approved by our TCFD Steering Group.
We believe the updated analysis accurately
represents our exposure to climate-related
risks, strengthens our understanding of our
risks and opportunities, and supports more
informed decision-making. This year’s analysis
also marks the first time Logista, our distribution
subsidiary, has been integrated into our
internal analysis, rather than being assessed
separately¹. It is included in the physical risk
analysis and in the transition risk analysis
through our Scope 3 emissions.
TCFD Index
TCFD PILLAR TCFD RECOMMENDATION REFERENCE
Governance a) Describe the Board’s oversight of climate-related
risks and opportunities.
See page 55, also
Governance at page 76
b) Describe management’s role in assessing
and managing climate-related risks
and opportunities.
See page 55
Strategy a) Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
See pages 56-63
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
See pages 57-62, also
Notes to the Financial
Statements at page 142
c) Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
or lower scenario.
See pages 57-62
Risk
Management
a) Describe the organisation’s processes for
identifying and assessing climate-related risks.
See page 64, also
Managing Risk at page 66
b) Describe the organisation’s processes
for managing climate-related risks.
See pages 58-62 and 64,
also Managing Risk at
page 66
c) Describe how processes for identifying, assessing,
and managing climate-related risks are integrated
into the organisation’s overall risk management.
See page 64
Metrics and
Targets
a) Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in
line with its strategy and risk management process
See pages 59-62 and 65,
also Climate Change at
page 44
b) Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions and
the related risks.
See pages 60-61, also
Climate Change at
page 44
c) Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets.
See page 65, also Climate
Change at page 44
1. Logista conducts its own independent climate scenario
analysis and publishes a TCFD disclosure.
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BOARD OF DIRECTORS
Ensures climate considerations are embedded in our strategic direction, risk appetite, and capital
allocation. It provides oversight through dedicated committees with relevant expertise.
INTERNAL AUDIT
Provides independent
assurance over the
effectiveness of the
design and operation
of the risk management
framework, including
climate-related risks.
AUDIT COMMITTEE
A Board-level committee
chaired by a
Non-Executive Director.
GROUP RISK COMMITTEE
Chaired by the CEO, provides
‘top-down’ insights to the
risk assessment process
and oversees the risk
management approach
and reporting.
ESG COMMITTEE
Chaired by the CEO, convenes
senior leaders to review
climate-related progress
and ensures alignment with
our ESG priorities.
GROUP RISK AND
INTERNAL CONTROL
Co-ordinates risk and control
framework improvements
and periodic assessments
to provide a consolidated
view of risk movement,
mitigation, and gaps.
PEOPLE, GOVERNANCE
& SUSTAINABILITY
COMMITTEE
A Board-level committee
chaired by a
Non-Executive Director.
ENVIRONMENTAL
COMPLIANCE
WORKING GROUP
Owns the
Environmental Policy.
Additional working groups
and forums (e.g., the Climate
Change Engineering Forum,
the ESG Fleet Working Group)
provide oversight on
climate-related matters.
PEOPLE & PLANET (ESG)
STRATEGY GROUP
Oversees all climate-related
activities across our
ESG pillars.
TCFD CONTINUED
GOVERNANCE
Board oversight
The Board’s role is to provide leadership
and direction. It is accountable for approving
Imperial’s overall strategy, overseeing
performance and enterprise risk appetite,
and monitoring risk management, including
climate-related risks and opportunities.
It provides strategic oversight of climate matters
and has endorsed all climate-related targets and
capital commitments necessary to advance our
climate strategy. Detailed oversight is delegated
to the People, Governance & Sustainability
Committee, which convenes quarterly and
is chaired by the Chair of Imperial Brands,
with all Non-Executive Directors as members.
The Committee reviews Environmental,
Social and Governance (ESG) performance,
including climate-related objectives and
targets, and will support FY26 preparations
through its review of the next iteration of the
Climate Transition Plan. The Committee also
exercises governance over the management
of ESG risks, and in collaboration with the
Audit Committee, monitors the integrity of
non-financial reporting and the associated
assurance processes.
The Board also considers climate-related
factors when reviewing and guiding our
strategy, budgets, and major plans of action.
It oversees the integration of climate risks
and opportunities into long-term planning,
performance objectives, and material
investment decisions. The Board includes
two Non-Executive Directors with relevant
climate expertise, including executive-level
experience in energy reduction practices,
leadership in advancing global sustainability
reporting standards, and working with
regulators to promote assurance of
climate-related disclosures.
Management’s role
Climate-related risks and opportunities are
managed through a multi-layered structure,
underpinned by regular ESG reporting and
engagement. The Executive Leadership Team
(ELT) is accountable for managing these risks
as part of our broader ESG strategy, with the
Global ESG Director acting as sponsor for
climate change.
The ESG Committee, comprising ELT
members, received three updates in FY25
on climate-related performance, risks, and
strategic developments from the Global ESG
team and subject matter experts. The Global
ESG Director serves as the Committee’s
secretariat. Oversight of the annual climate
risk and opportunity strategy and action
plan is provided by the TCFD Steering Group,
which includes representatives from ESG,
Finance, and Risk functions. The Director
of Corporate Financial Planning & Analysis
has the responsibility of integrating climate
considerations into long-term financial
planning. Climate risk and opportunity
reporting is also embedded in business
functions, with regular updates provided
to the ELT.
The People and Planet Strategy Group,
comprising directors and function heads from
across the business and led by the Global ESG
team, oversees all climate-related activities
across our ESG pillars. Additional working
groups and forums, such as the Environment
Compliance Working Group, the Climate Change
Engineering Forum, the ESG Fleet Working
Group and ESG Sponsor Days, enhance
oversight and enable performance monitoring,
issue escalation, and cross-functional
collaboration on climate-related matters.
OUR GOVERNANCE FRAMEWORK
For more information on Governance
please see page 76
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TCFD CONTINUED
STRATEGY
Our climate strategy sets a clear path
to achieving Net Zero emissions across
our operations and supply chain by 2040¹,
reflecting our commitment to proactively
managing climate-related impacts throughout
the business. We conduct climate scenario
analyses bi-annually to better understand
the risks, opportunities, and regulatory
developments our business must navigate.
As part of these analyses, we also consider
emerging disclosure frameworks and standards,
including the International Sustainability
Standards Board (ISSB) and the International
Financial Reporting Standards (IFRS). Led
by the Global ESG team and embedded across
business functions, this approach ensures
our strategy remains robust, responsive and
future ready²
,
³.
Insights from our climate scenario analysis
also inform our double materiality assessment,
supporting a co-ordinated and coherent approach
to our broader ESG objectives within the People
and Planet agenda³.
To support strategic planning and risk
assessment, our results are disclosed across
the following timeframes, which are consistent
with our Carbon Disclosure Project (CDP)
reporting, covering to 2050:
Short term (0–3 years): Covers immediate
operational and financial impacts, aligned
with our business planning cycles.
Medium term (4–10 years): Reflects
emerging physical and transition risks
and opportunities and aligns with our
goodwill impairment and financial risk
assessment horizon.
Long term (11–25 years): Encompasses
broader structural and systemic climate
impacts, including chronic physical risks
and Net Zero alignment.
The 2025 analysis drew on data from over 200
sites and more than 14,000 suppliers across our
operations and supply chain, providing a more
comprehensive view of our climate risk
exposure. This included factories, warehouses,
offices, farms and third-party facilities, and
our distribution subsidiary, Logista.
The physical risk analysis expanded from
44 to 120 locations, with selection based
on one or more of the following criteria:
(i) previously identified by Imperial as vulnerable
to climate-related risks, (ii) flagged as high-risk
during the initial screening process, or
(iii) deemed financially material to Imperial
based on insured value or revenue contribution.
This modelling evaluated both potential
business interruptions and asset damage across
nine climate-related hazards, using property
insurance values, site-level revenue data, and
existing resilience measures such as business
continuity and emergency response plans.
1. Our Net Zero target has been approved by the Science
Based Targets Initiative (SBTi). Refer to our Environmental
Policy for a complete definition:
https://www.imperialbrandsplc.com/people-and-planet/
governance/policies
2. Refer to our Climate Transition Plan for more information,
including the scope of our Net Zero commitment:
www.imperialbrandsplc.com/people-and-planet/our-esg-
performance
3. Refer to our 2025 ESG: People and Planet Performance
Summary for more information:
www.imperialbrandsplc.com/people-and-planet/our-esg-
performance
4. Representative Concentration Pathway.
Our approach
Introduced in 2022, our climate scenario
analysis process has been continuously
refined and in 2025 we incorporated an
increasingly rigorous methodology with
broader data inputs, expanded analytical
scope, and enhanced modelling for a more
comprehensive and detailed assessment.
Covering the period from 2025 to 2050, the 2025
analysis assessed the financial impacts of both
physical and transition risks under plausible
future climate conditions. It drew on scenarios
from the Intergovernmental Panel on Climate
Change (IPCC) and the Network for Greening
the Financial System (NGFS), focusing on two
primary pathways: a low emissions pathway
consistent with the Paris Agreement reflecting
an orderly but ambitious decarbonisation
trajectory, as well as a high emissions, ‘hot
house world’ pathway representing current
policy trajectories with limited climate
intervention and regulatory pressure.
NGFS SCENARIO
CATEGORY
TRANSITION RISK
ANALYSIS:
INTERNATIONAL ENERGY
AGENCY (IEA) WORLD
ENERGY OUTLOOK
PHYSICAL RISK
ANALYSIS:
IPCC
INDICATIVE
END-CENTURY WARMING
Orderly Transition NGFS ‘Below 2°C
Scenario’
RCP⁴ 2.6:
low-emissions, rapid
decarbonisation,
strong mitigation
1.5–2°C
Hot House World NGFS Current
Policies
‘4°C Scenario’
RCP 8.5:
fossil-fuel-intensive
growth, limited
mitigation
3–4°C+
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TCFD CONTINUED
The transition risk analysis was expanded to
capture emissions-related financial exposure
across a broader scope, including all active and
recently closed sites with emissions data, sales
fleet assets, and key suppliers. This increased
coverage from 27 to 164 locations and fully
integrated Purchased Goods and Services
(PGS), extending beyond just the non-tobacco
materials (NTM) and leaf spend categories in
our previous analysis. This modelling assessed
the financial impacts of climate-related policy,
regulatory, market, and technological shifts.
It incorporated site-level emissions, energy
consumption and mix, supplier emissions
and spend, and decarbonisation targets. The
analysis measured potential cost exposures
to carbon taxes, energy price fluctuations, and
Scope 3 market risks. It also factored in actual
carbon costs incurred in 2024 and estimated
the cost avoidance expected from meeting
Net Zero targets.
Financial impacts
Building on the foundation of our initial
assessment, our 2025 analysis provides a
more comprehensive and granular evaluation
of climate-related risks and opportunities.
This updated assessment broadens the scope
to encompass additional locations, suppliers,
asset types, subsidiaries, and sites identified
as high-risk or financially material. As a result,
we have developed a more nuanced and
operationally relevant understanding of our
value chain risk exposure. While many of the
core insights remain consistent with our
previous findings, this refined analysis
introduces clearer boundaries and has enabled
a more relevant and actionable classification of
climate-related risks and opportunities. This
updated categorisation (refer to Tables 1-6)
better aligns with our operating model,
strategic priorities, and planning processes,
supporting more informed decision-making
and targeted responses.
The 2025 results were reviewed and approved
by the TCFD Steering Group, and we are
satisfied that the revised risk profile offers a
more accurate and complete understanding of
our climate-related exposures. This evolution
reflects a natural and expected outcome of
methodological and scope improvement as
we mature in our TCFD reporting journey,
and strengthens more informed, resilient
decision-making across the business.
The estimated financial impact of our refreshed
climate-related risks and opportunities is
noted in Table 1. These are considered within
our enterprise-wide risk framework and have
been assessed using their Maximum Financial
Impact (MFI), which represents gross exposure
before mitigation or adaptation measures,
excluding inflation or future policy changes.
The MFI is cumulative over the specified
timeframes and is assessed relative to the
tobacco and next-generation products (NGP)
net revenue to determine the financial impact/
significance threshold. The higher MFIs in this
year’s analysis are attributable to the more
comprehensive and detailed assessment
methodology, including the increased
incorporation of quantified risks in the financial
modelling. Consistent with our previous
reporting approach, we have aligned our
financial impact criteria with Group Finance,
ensuring consistency in how we evaluate
materiality across the business. High-impact
risks and opportunities identified through this
alignment are systematically integrated into
our financial planning processes.
 Lower financial impact: <0.2% of tobacco & NGP net revenue
 Medium financial impact: 0.2-1% of tobacco & NGP net revenue
 High financial impact: >1% of tobacco & NGP net revenue
Table 1:
THE ESTIMATED FINANCIAL IMPACT OF CLIMATE-RELATED
RISKS AND OPPORTUNITIES
1. Represents the estimated cumulative MFI under the scenario
expected to generate the highest financial exposure.
2. Assumes no decarbonisation measures are implemented
by Imperial Brands.
3. Our climate strategy incorporates mitigation measures
aimed at minimising the financial impact of identified
risks, while facilitating the capture of related opportunities.
4. Acute weather includes flooding and tropical cyclones.
5. Energy cost represents potential cost avoidance from
reduced energy consumption.
Timeframe Cumulative MFI
£m
1
Financial Impact by Scenario
2
Forecasted
Financial Impact
following Climate
Strategy
Implementation
3
RCP 2.6 /
Below 2°C
RCP 8.5 / 4°C
Physical Risks: Acute and Chronic
Acute
weather
4
Short term 17. 1
Medium term 25.9
Long term 70.5
Transition Risks: Policy & Legal, Market, Technology and Reputation
Carbon Cost
Short term 9.6
Medium term 43.3
Long term 357.1
Market Short term 48.1
Medium term 250.4
Long term 2,277
Climate-related Opportunities: Resource Efficiency
Energy
Cost
5
Short term 4.7
Medium term 23.9
Long term 99.1
STRATEGY CONTINUED
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Although our current financial planning
horizons primarily focus on the short to
medium term, where the anticipated financial
impact of climate-related market risks
remains limited, we recognise that market
risk is assessed as having a high impact over
the longer term. Due to our expectation that
this risk will become increasingly significant
beyond our standard planning window, we
incorporate it into our strategic and financial
planning. This forward-looking approach
ensures that we remain resilient and
responsive to evolving market dynamics, even
if the immediate financial implications within
our three-year planning horizon currently
appear modest.
There are currently no climate-related
liabilities with third parties that require
provision. Nonetheless, we have also
considered the potential MFI of relevant risks
in financial statement areas extending beyond
our three-year planning cycle and the defined
climate risk horizons. As appropriate, these
MFIs are integrated into our financial models
and reflected in assessments of goodwill,
impairment (note 12), and deferred tax assets
(note 23), as well as in our going concern and
viability evaluations (note 1).
Current forecasts do not indicate a material
impact on performance or cash flows in the
short term. However, as we transition to
a lower carbon economy, goodwill and
impairments costs linked to market risk are
expected to become more significant over the
longer term. We remain proactive in managing
climate-related risks and opportunities to
support strategic resilience and long-term
value creation. Our Net Zero strategy is
central in mitigating these risks with climate
considerations embedded in our broader
business strategy. Our scenario analysis
informs our FY26–28 business and financial
plans, capital allocation, and operational
priorities, it also guides targeted action plans
for high-risk geographies and operations within
our updated climate strategy. We are committed
to continuously adapting our strategy and
financial planning as new developments arise,
including the incorporation of associated costs
into our profit and loss statement.
PHYSICAL RISKS
Our climate scenario analysis evaluated nine
key physical climate risks across our global
operations and tobacco sourcing regions:
tropical cyclone, riverine flooding, surface
water flooding, coastal inundation, wildfire,
heat stress, water stress, soil subsidence, and
freeze-thaw. Both acute and chronic hazards
were assessed for their potential to cause asset
damage and business interruption. Two acute
weather physical risks emerged as the most
likely to impact our operations: flooding and
tropical cyclones. The total predicted financial
impact is detailed in Table 1. The analysis also
assessed key leaf sourcing regions and included
targeted evaluation of our commercial farms
where no material risks have been identified.
Our sourcing strategy, supported by the
inherent resiliency of our operational flexibility
and the c.12 months of leaf stock further
protects against climate-related disruptions.
Flooding, particularly from riverine and surface
water sources, was identified as the most
significant risk, with a projected cumulative
financial impact of approximately £14.4 million
over the 0–3 year period, and almost £22 million
over the 4–10 year period under the RCP 2.6
scenario. Tropical cyclones ranked second,
with increased storm intensity under the RCP
8.5 scenario expected to largely affect sites in
east Asia and the Caribbean. A total of eleven
sites, just over 9% of those assessed, are
classified as high risk due to exposure to
one or more of the above climate hazards.
Tables 2 and 3 provide further detail on
impacts, mitigations, and associated metrics.
We are committed to
continuously adapting
our strategy and
financial planning
as new developments
arise, including the
incorporation of associated
costs into our profit and
loss statement.
STRATEGY CONTINUED
For more information on Notes to the Financial
Statements please see page 142
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1. Metrics and targets disclosed in Tables 2–6 are determined at the Imperial Group level and cascade across applicable
financial entities and operational units. Refer to our Reporting Criteria document for method, definition and scope of metrics:
www.imperialbrandsplc.com/people-and-planet/our-esg-performance
2. Imperial defines its principal risks (refer to pages 69-73 for more information); our climate-related risks fall within these
principal risk categories.
3. The corresponding previous risks and opportunity referenced in Tables 2–6 refers to those disclosed within the TCFD section
of our FY24 Annual Report that align with the current risks and opportunities.
Predicted impacts
Flooding from rivers and surface water represents our
most significant physical climate risk, with projected
Average Annual Losses (AAL) of £3.8 million in
asset damage under the RCP 2.6 scenario by 2050.
Two warehouses in Australia (Erskine Park and
Imperial Tobacco Australia Ltd Willawong) are
forecasted to incur the highest flood-related
damages under both scenarios, with a combined
AAL of almost £2 million under the RCP 2.6
scenario. In total, nine sites have been identified
as high risk, either due to the scale of potential
damage or the proportion of loss relative to
insured asset value.
Total asset damage is expected to be slightly
higher under the RCP 2.6 scenario than under
the RCP 8.5 scenario, which has drier projected
conditions at key sites such as Imperial Tobacco
Australia Ltd Willawong, which is among the
most exposed locations.
In terms of business interruption, six sites
are projected to be affected by 2050. The Skopje
factory faces the highest disruption, 30 days and
£0.13 million in AAL under both scenarios.
Mitigation opportunities
Deploying early warning systems and predictive
analytics strengthens business continuity by
minimising asset damage and securing product
supply during acute weather events. Targeted
analysis of these risks informs strategic investment
and resilience planning at vulnerable sites.
Implementing mitigation measures at high-risk
sites could prevent an estimated £3-4 million
in AAL by 2050 under the RCP 2.6 scenario.
Predicted impacts
Climate change is intensifying storms with
stronger winds, heavier rain, and greater potential
for damage. Our analysis identified East Asia
(particularly the Philippines, Taiwan, and China),
the Dominican Republic, and Puerto Rico as the
regions most exposed to tropical cyclone risk.
These areas are projected to experience both
higher maximum wind speeds and an increased
frequency of cyclone events.
Under the RCP 2.6 scenario, four sites are projected
to incur AALs ranging from £16,810 to £57,442 due
to tropical cyclones. These include: La Romana
(Dominican Republic), Taiwan Factory, Cayey
Factory (Puerto Rico) and Philippine Bobbin
Corporation. Collectively, these sites are expected
to account for almost £175,000 in AAL by 2050
under the RCP 8.5 scenario.
While the overall financial impact for Imperial
remains low, these localised risks underscore the
importance of targeted resilience planning and
infrastructure adaptation in high-risk regions.
Mitigation opportunities
Deploying early warning systems and predictive
analytics strengthens business continuity by
minimising asset damage and securing product
supply during acute weather events, while targeted
analysis of these risks informs strategic investment
and resilience planning at vulnerable sites.
Mitigation actions
We have implemented a global physical risk alert
system that uses real-time sensors and predictive
analytics to monitor environmental conditions and
issue early warnings for climate-related hazards.
Fully operational across our global sites, this
system is embedded within our broader risk
management framework, enhancing our ability
to protect critical assets and minimise disruption.
Targeted training is provided to high-risk locations,
and mitigation plans and response checklists are
being progressively developed and uploaded to
the platform.
We also require all our manufacturing sites
to maintain robust business continuity plans to
safeguard operational resilience and minimise risk
exposure, and we maintain strategic operational
flexibility to allow for efficient production shifts
between sites as circumstances require.
Although flooding is not a material issue for
our business, we recognise its impact on the
communities in which we operate and provide
targeted support.
Key performance metrics
1
22% of high-risk for flooding sites have
mitigation plans in the physical alert system
(FY24: NA – new metric)
97% of our tobacco leaf supply is not vertically
integrated
Link to ESG Strategy
Climate Change, Employee Health, Safety & Wellbeing
Link to principal risk
2
Supply Chain Resilience
Aligned risk from FY24 disclosure
3
This risk reflects and refines the following physical
risks from our previous analysis: chronic drought,
changes in tobacco yield, increased frequency
and severity of extreme weather events, and
severe hurricanes.
Mitigation actions
As outlined in Table 2, our physical risk alert
system is fully operational across our global sites
with high-risk locations having received targeted
training and the development of tailored mitigation
plans progressing. For cyclones, alerts can be issued
up to five days in advance, with the ability to track
the storm’s projected path, size, and likely impact.
The La Romana site, a strategically important location
for Imperial, has a dedicated on-site team that
monitors climate risks, responds to early warnings,
and has implemented mitigation measures such as
reinforced metal roofing and integration of storm
scenarios into its Business Continuity Plan.
As previously stated, all our manufacturing sites
maintain robust business continuity plans and
maintain operational flexibility to enable efficient
production shifts between sites.
Key performance metrics
50% of high-risk for tropical cyclone sites have
mitigation plans in the physical alert system
(FY24: NA – new metric)
97% of our tobacco leaf supply is not vertically
integrated
Link to ESG Strategy
Climate Change, Employee Health, Safety & Wellbeing
Link to principal risk
Supply Chain Resilience
Aligned risk from FY24 disclosure
This risk reflects and refines the following physical
risks from our previous analysis: changes in tobacco
yield, increased frequency and severity of extreme
weather events, and severe hurricanes.
Table 2: FLOOD RISK Table 3: TROPICAL CYCLONE RISK
Timeframe: Long Term
Financial Impact by Scenario
 RCP 2.6
 RCP 8.5
  Following climate strategy implementation
(forecast)
Timeframe: Long Term
Financial Impact by Scenario
 RCP 2.6
 RCP 8.5
  Following climate strategy implementation
(forecast)
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TRANSITION RISKS
Our climate scenario analysis evaluated key
transition risks across our global operations
and supply chain, focusing on carbon pricing,
energy use, and supplier-related emissions
(Scope 3). The total predicted financial impact
is detailed in Table 1.
Under the Below 2°C scenario, two transition
risks emerged as most material: direct carbon
costs from Scope 1 and 2 emissions and the
indirect market risks from Scope 3 emissions.
Carbon costs, particularly from Scope 1
emissions, are projected to reach approximately
£38 million annually by 2050 if our Net Zero
targets are not achieved. However, meeting
these targets could avoid up to £365 million
in cumulative costs between 2025 to 2050.
Scope 3 market risk, primarily from suppliers
passing on 100% of their carbon cost to
Imperial, represents the largest exposure, with
potential cumulative costs exceeding £2 billion
by 2050 under the Below 2°C scenario. This is
the only risk considered financially significant
at an enterprise level and is largely driven by
NTM and Leaf suppliers, especially in Europe,
where carbon pricing is expected to be highest.
Achieving Scope 3 reduction targets could
mitigate this risk.
Given their scale and strategic relevance, these
transition risks are considered more material
than physical risks and are firmly embedded
within our risk management framework. They
are actively communicated across relevant
sites and functions. Tables 4-5 provide further
detail on the impacts, mitigations, and
associated metrics and targets.
1. Refer to our Reporting Criteria document for method,
definition and scope of this metric.
2. We report both location-based and market-based
emissions but adopt the market-based approach for
target-setting and disclosures, as we cannot influence the
carbon intensity of national grids; however, our renewable
energy investments support broader grid decarbonisation.
More information on our climate metrics, and associated
performance and methodologies, can be found in the
Climate Change section of this Annual Report (page 44),
our 2025 ESG Performance Summary, our Climate
Transition Plan and our Reporting Criteria document.
Predicted impacts
Under the Below 2°C scenario, annual carbon
costs are expected to reach £5.7 million by 2030,
escalating to £38 million by 2050. These costs are
primarily driven by Scope 1 emissions, with 74% of
the total burden in 2050 originating from operations
in Europe and the United States. Scope 2 emissions,
while significantly reduced in recent years, remain
concentrated in the AAACE region (Africa, Asia,
Australia, Central and Eastern Europe), accounting
for 45% of that region’s total cost exposure with an
annual cost of £5.8 million by 2050.
In contrast, under the 4°C scenario, carbon costs
remain immaterial, peaking at just £7.7 million by
2050. This scenario assumes minimal regulatory
intervention and does not align with our Net Zero
commitments.
Mitigation opportunities
Accelerating decarbonisation across our operations
and advancing our commitment to Net Zero enables
us to reduce exposure to future carbon costs and
regulatory risks linked to Scope 1 and 2 emissions.
Mitigation actions
Our climate strategy spans a wide range of
decarbonisation initiatives and a transition to
renewable energy. Our comprehensive Climate
Transition Plan, which covers our entire Scope 1
and 2 decarbonisation, outlines the policy
frameworks, energy strategies, technological
solutions, and other pathways that are integral
to our strategy and support the delivery of our
Net Zero target.
We have already achieved a 72% reduction in
Scope 1 and 2 emissions from our 2017 baseline¹.
This progress is projected to deliver an estimated
£11.7 million in avoided carbon costs in 2030, and
£38.8 million in cumulative cost avoidance between
2025 and 2030 under the Below 2°C scenario. We
have reduced our Scope 1 and 2 emissions intensity
in the Americas, our highest-intensity region, from
0.048 kgCO
2
e/£ in 2017 to 0.017 kgCO
2
e/£ in 2024,
primarily through Scope 2 reductions.
This year, we invested £9.3 million in capital
expenditure on carbon-related projects, including
a range of mitigation initiatives. Additionally,
we spent approximately £450,000 in operational
expenditure on the procurement of renewable
energy credits (RECs).
Renewable energy now makes up 44% of Imperial’s
energy mix, up from just 4% in 2017. We continue
to monitor revenue generated from products
manufactured at renewable energy sites, which
accounted for 2.4% of net revenue in FY25. This
metric demonstrates the integration of climate-
related initiatives into our core business strategy
and highlights the financial value of our
sustainability efforts.
In addition, we have established site-specific and
regional targets across our factories, which are
monitored monthly and supported through audits
to ensure progress against site action plans.
Key performance metrics
44% renewable energy (FY24: 42%)
81,710 tCO
2
e Total Scope 1 and Scope 2
market-based emissions
2
(FY24: 89,120 tCO
2
e)
Link to ESG Strategy
Climate Change
Link to Principal Risk
Environment
Aligned risk from FY24 disclosure
This risk reflects and refines the following
transition risk from our previous analysis:
policy and legal.
Table 4: CARBON COST RISK
Our climate strategy
spans a wide range
of decarbonisation
initiatives and a transition
to renewable energy… we
have already achieved a
72% reduction in Scope 1
and 2 emissions.
STRATEGY CONTINUED
Timeframe: Long Term
Financial Impact by Scenario
 Below 2°C
 4°C
  Following climate strategy implementation
(forecast)
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Predicted impacts
Under the Below 2°C scenario, if suppliers pass
on 100% of their carbon costs to Imperial, we could
face increased costs in our supply chain of over
£33 million by the year 2030 (1% of the 2024 PGS
total spend). This increases to over £102 million by
2040 (3% of the 2024 PGS spend) and £254 million
(8% of 2024 PGS spend) by 2050, assuming current
emissions and no further decarbonisation action.
This risk is concentrated in PGS, which accounts
for 69% of Scope 3 emissions and 63% of total
emissions. Within this category, NTM and Leaf
suppliers are the largest contributors, responsible
for 56% and 23% of projected Scope 3 carbon cost
increases respectively.
The cumulative cost exposure from 2025 to 2050
could exceed £2.5 billion under the Below 2°C
scenario, with over 50% of this risk linked to
European sourcing, where carbon pricing is
expected to be highest.
Mitigation opportunities
Engaging suppliers to reduce emissions across the
value chain strengthens our Net Zero commitment
and helps mitigate carbon pass-through costs and
regulatory risks associated with Scope 3 emissions.
Mitigation actions
Our climate strategy prioritises suppliers with
whom Imperial has the highest spend and those
with the highest emissions (NTM and Leaf).
We work closely with them to identify key emission
sources and take action to reduce their climate
impact. Our comprehensive Climate Transition
Plan, covering our entire Scope 3 decarbonisation,
details this approach.
We leverage a range of tools and initiatives
that support supplier engagement including the
Supplier Code of Conduct and the Net Zero supplier
contract clause, the Carbon Disclosure Project (CDP)
Supply Chain Programme and our internal Supplier
Relationship Management (SRM) programme, SRM
Connect¹. These tools support the collection of accurate
emissions data, identification of decarbonisation
opportunities, promotion of science-based target
setting, and tracking of commitments.
In FY24 we reported that 50% of our PGS suppliers
(by spend) had committed to science-based targets.
This year we continued to drive supplier participation
in CDP, inviting 400 suppliers to take part, up from
250. Our efforts were supported by educational
webinars for suppliers, and we began engaging
our most strategic partners through SRM Connect,
which integrates CDP disclosures and includes
ESG-focused recognition.
We also participate in the industry-wide Sustainable
Tobacco Programme (STP), which supports Net Zero
alignment by engaging leaf suppliers on emissions
reduction and climate goals¹.
Key performance metrics
400 global suppliers invited to the CDP Climate
questionnaire (FY24: 250)
679,461 tCO
2
e Total Scope 3 (category 3.1)
emissions
2
(FY24: 678,527 tCO
2
e)
Link to ESG Strategy
Climate Change
Link to Principal Risk
Environment
Aligned risk from FY24 disclosure
This risk reflects and refines the following
transition risk from our previous analysis: market.
Table 5: MARKET RISK
1. For further details, see the Farmer Livelihoods & Welfare
and Sustainable & Responsible Sourcing sections
of this Annual Report (pages 47 and 48) and our 2025
ESG Performance Summary.
2. We report on categories 1–7, 9, 11, 12 and 15 Scope 3
categories. Category 3.1 of Scope 3 as set out by the
Global Greenhouse Gas Protocol is Purchased Goods
and Services. Refer to our Climate Transition Plan
for more detail.
Scope 3 market risk,
primarily from suppliers
passing on 100% of their
carbon cost to Imperial,
represents the largest
exposure… achieving
Scope 3 reduction targets
could mitigate this risk.
Timeframe: Long Term
Financial Impact by Scenario
 Below 2°C
 4°C
  Following climate strategy implementation
(forecast)
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CLIMATE-RELATED
OPPORTUNITIES
Our climate scenario analysis also considered
climate-related opportunities and identified
one key opportunity linked to the transition
to a low-carbon economy related to
resource efficiency.
Mitigating energy cost volatility, that is our
exposure to unpredictable fluctuations in
energy price, emerged as a material opportunity,
which we actively address through our climate
strategy and Net Zero targets. Our transition
to renewables and energy efficiency initiatives
have already delivered meaningful cost
avoidance. Under the Below 2°C scenario,
these efforts are projected to result in a further
cumulative cost avoidance of £99 million by
2050, with a potential to increase to £187 million
if we deliver against our energy reduction
goals. The total predicted financial impact is
detailed in Table 1, with additional detail on the
impacts, mitigations, and associated metrics
in Table 6.
Predicted impacts
Under the Below 2°C climate scenario, significant
increase in energy-related costs is anticipated,
driven by rising global energy prices and the
transition to lower-carbon energy sources. If current
consumption patterns persist, energy costs are
projected to increase by approximately 7% by 2030
and rise by approximately £99.1 million by 2050.
Through our energy reduction targets, we believe
we can increase this opportunity by further
reducing the energy we use. We already achieved
a 34% reduction in total energy consumption since
2017, surpassing our original 2024 target. In
addition, our targeted 45% reduction in energy
consumption from the 2017 baseline is expected to
deliver cumulative cost avoidance of £34.1 million
by 2030 under the Below 2°C scenario.
Mitigation opportunities
Energy saving measures, including consumption
reduction, energy efficiency, and a shift towards
renewable energy, lower costs across our operations.
Mitigating actions
Our climate strategy includes a five-step pathway
to achieving Net Zero, beginning with a strong
focus on energy efficiency. This first step includes
a range of conservation and optimisation initiatives
across our operations. The Climate Transition Plan
supports this by detailing actions to accelerate
energy efficiency gains, reduce energy consumption,
transition to renewable electricity, and decarbonise
our fleet.
To drive progress, we have energy reduction targets
across all business entities, including factories and
fleet, with annual targets linked to executive
remuneration, embedding climate accountability
at the leadership level.
We rolled out 35 fundamental energy management
standards, developed by our Global Engineering
team, to reduce energy consumption across our
manufacturing network. Sites are responsible for
evaluating the feasibility of each and implementing
them as viable, with Global Engineering tracking
progress to ensure accountability. In the US, ITG
Brands has replaced 50% of its remaining petrol
fleet with mild hybrid electric vehicles¹, achieving
approximately 50% greater fuel efficiency and
delivering our most significant energy reduction
this year.
Key performance metrics
34% energy consumption reduction (FY24: 32%)
Link to ESG Strategy
Climate Change
Link to Principal Risk
Environment
Aligned opportunity from FY24 disclosure
This opportunity reflects and refines the following
transition opportunity from our previous analysis:
energy sourcing.
Table 6: ENERGY COST
OPPORTUNITY
We recognise risks arising
from the environmental
impact of our operations
as fundamental to our
principal risk framework.
STRATEGY CONTINUED
Timeframe: Long Term
Financial Impact by Scenario
 Below 2°C
 4°C
  Following climate strategy implementation
(forecast)
1. A mild hybrid electric vehicle (MHEV) uses a small electric
motor and battery to assist the internal combustion
engine, improving fuel efficiency, but cannot drive
on electric power alone.
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Assumptions
The following key assumptions underpin
our climate scenario analysis and reflect the
methodologies, data sources, and modelling
parameters applied throughout the process.
We acknowledge the inherent limitations within
certain assumptions and remain committed
to refining our approach as climate science
and models evolve.
Climate-related policies in jurisdictions
of operation
The analysis assumes no additional
decarbonisation measures are implemented
beyond stated targets, and excludes the
effects of inflation, future government
policies, subsidies, or mitigation investments
not already embedded in the NGFS scenarios.
Market risk and opportunity is based on
PGS emissions and extrapolated out to cover
our entire Scope 3 emissions footprint and
assumes that 100% of the supplier emissions
(Scope 3) related costs is passed onto
Imperial Brands.
Future emissions reductions are based
on overall targets and applied uniformly
across future years (to achieve the target
by set date) and based on the mix and share
in the 2024 emissions data. No cost of
investment to achieve the Net Zero Strategy
has been included.
Macroeconomic trends
The projected carbon prices are based on
2010US$/ton to allow for comparison across
long time horizons without adjusting for
inflation (FX rate for 2010 used to convert
from USD to GBP).
Financial impact/significance threshold is
calculated as a % of revenue based on FY24
tobacco and NGP net revenue and then
holding this constant in future years.
National or regional-level variables
The physical risk analysis is location
sensitive, using site geolocations. Locations
were identified in the 2024 Property Damage
& Business Interruption (PDBI) Report, where
possible, verified using Google & Open Street
map data.
The assessment used asset replacement
values as reported in the 2024 PDBI Report.
Offices are assumed to be unaffected
by business interruption from physical
climate hazards.
Emission intensity for Scope 1 and 2 is
calculated using factory-level emissions
and revenue data.
Market risk is based on projected carbon
prices at the supplier origin locations.
Material costs reflect estimated financial
impacts from physical climate risks in the
supply chain, including asset damage and
business interruption.
Energy usage and mix
Energy cost avoidances are estimated using
both FY24 electricity costs (with same mix
assumed) and projected energy price
changes to FY24 baseline.
Developments in technology
Achievement of Net Zero targets is
dependent on enabling factors such as
improvements in technology affordability,
the availability of supporting infrastructure
and biofuels, and active supplier
participation. These dependencies are
outlined in Imperial’s Climate Transition
Plan and are not explicitly modelled in
the scenario analysis.
To enhance the integrity of our disclosures, we
engaged internal audit and commissioned an
independent review of this disclosure against
the relevant listing rule and TCFD framework.
This dual assurance approach reinforces the
credibility of our assessment and strategy.
STRATEGY CONTINUED
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For more information on Managing Risk
please see page 66
RISK MANAGEMENT
Climate-related risks are identified, assessed,
and managed through our enterprise risk
management (ERM) framework, which
operates under a clearly defined ‘three lines
of defence’ model. Risk owners, supported by
the Global ESG team, evaluate the materiality
of climate risks, considering their causes,
likelihood, and potential impact, and ensure
these are embedded in business planning and
decision-making. The Group Risk Committee
oversees the risk management approach and
reporting, meeting at least three times per year
to provide top-down insights into the process.
The Board receives bi-annual updates on
Imperial’s overall risk profile, including
climate-related principal risks, supporting
effective oversight and informed governance.
We recognise risks arising from the
environmental impact of our operations as
fundamental to our principal risk framework.
Where appropriate, these risks are embedded
across broader risk categories, supporting
a holistic and integrated approach to climate
risk management. We also assess how
environmental factors may impact our business
operations, supply chains, and long-term
resilience. This dual perspective strengthens
our ability to anticipate and respond to both
direct and indirect climate-related challenges.
Complementing this approach, under our
business continuity management framework,
sites are required to assess potential impacts to
buildings, technology, workforce, and suppliers.
In some cases, this is further developed into
tailored incident management plans, such as
five-day response strategies for hurricanes in
Taiwan, demonstrating our proactive approach
to site-specific climate resilience.
Our 2025 climate scenario analysis is closely
aligned with our ERM processes and forms
a key input into our climate risk management
process. While not all significant risks
identified through climate scenario analysis
meet the threshold for materiality at the ERM
level, they are nonetheless considered relevant
and are factored into our strategic planning
and decision-making. This approach ensures
that emerging risks, particularly those with
longer-term or systemic implications, are not
overlooked. Furthermore, while our transition
analysis focused on quantifying market, policy
and energy scouring risk, we acknowledge that
failure to mitigate our environmental impact
or meet climate-related commitments could
adversely affect our reputation, stakeholder
trust, and market valuation. Accordingly, we
continuously monitor climate developments
and refine our strategic response as needed.
OUR
STRATEGY
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Risk profile change (on a mitigated basis)
Risk profile increasing
Risk profile unchanged
PRINCIPAL RISK
Environment
Strategic impacts:
Simplified, efficient, data-led organisation
Risk profile:
Strategic impact:
Supply chain resilience
Strategic impacts:
Driving sustainable value in combustibles
Building scale in NGP
Risk profile:
Strategic impact:
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0
5
10
15
20
25
30
35
40
20242023 2025202220212020201920182017
Relative Scope 1+2 market-based emissions (tCO
2
e/tobacco and NGP net revenue in million £)
tCO
2
e/tobacco and NGP net revenue
Relative energy consumption (MWh/tobacco and NGP net revenue in million £)
MWh/tobacco and NGP net revenue
0
15
30
45
60
90
75
105
120
TCFD CONTINUED
METRICS AND TARGETS
Our climate targets are integral to our
environmental responsibility and present clear
business opportunities to reduce emissions
while avoiding cost, refer to Table 7.
Since 2019, we have maintained Scope 1, 2, and
3 emissions reduction targets aligned with SBTi
and consistent with limiting global warming to
2°C. In FY21, we raised our ambition by joining
the SBTi-led Business Ambition for 1.5°C and
the Race to Zero campaign. In FY24, SBTi
validated our updated targets¹, which align with
the 1.5°C-2°C trajectory of the Paris Agreement.
Our strategy prioritises absolute emissions
reductions from our 2017 baseline year over
the use of carbon credits¹, underscoring our
commitment to measurable, long-term impact.
Beyond risk-specific metrics, we monitor
broader indicators that support our climate
strategy and the management of climate-
related risks and opportunities. These include
Scope 1 and 2 emissions intensity and business
energy usage intensity, which we consistently
disclose as key performance metrics. Ongoing
monitoring occurs at various levels across the
business, including Board level, enabling us to
track progress and maintain accountability as
we work toward our emissions reduction goals.
Further details on our climate-related
performance, including emissions, energy,
waste, water, and intensity indicators, are
available in the Climate Change section of
this Annual Report, our 2025 ESG Performance
Summary and our Climate Transition Plan.
Refer to our Reporting Criteria document for
method, definition and scope of metrics.
Metric / Aim
2
Target / Action
2
Start
Year FY24 Performance FY25 Performance
Associated Climate
Risk / Opportunity
Energy intensity Track energy intensity 2017 73 GWh/£m tobacco
and NGP net revenue
69 GWh/£m tobacco
and NGP net revenue
Energy Cost
Proportion of renewables
in energy mix
Achieve 100% renewable energy
by 2030
2021 42% 44% Carbon Cost
Scope 3 categories
assured and disclosed
Assure increased coverage of
Scope 3 emissions to include our
most material categories by 2028
2024 69% of Scope 3
emissions³, category 3.1
assured and disclosed
70% of Scope 3 emissions Market Risk
Fleet energy mix Proportion of electric or hybrid
vehicles in our fleet
2023 14% 24% Carbon Cost
Energy Cost
Climate change targets
linked to executive
remuneration
Include allocation for
climate change in long-term
incentive plan
2023 10% in 3-year plan
4
10% in 3-year plan Carbon Cost
Energy Cost
Internal carbon pricing
mechanism integrated
into decision-making
framework
5
Integrate internal carbon price
into Global Supply Chain (GSC)
decision making framework
2023 Shadow price included
in draft GSC decision-
making framework
GSC decision-making
framework launched with
carbon pricing included
6
Carbon Cost
Energy Cost
Conduct water
assessments for high
and extremely high-risk
water stress areas
Pilot a water risk assessment
at a site under high or extremely
high-risk water stress
2025 Alliance for Water
Stewardship (AWS)
assessment identified
for pilot
One of our high-risk sites
has assessed the AWS
certification for onward use
Acute Weather
1. Details of our validated SBTi targets are located on our
website: https://www.imperialbrandsplc.com/content/
dam/imperialbrands/corporate/documents/healthier-
futures/sbti-targets/SBTi-targets-announcement-03-24.
pdf.downloadasset.pdf
2. Metrics and targets disclosed are determined at the Imperial
Group level and cascade across applicable financial entities
and operational units. Refer to our Reporting Criteria
document for method, definition and scope of metrics.
3. Category 3.1 of Scope 3 as set out by the Global Greenhouse
Gas Protocol is Purchased Goods and Services.
4. The Remuneration Committee is a Board-level committee
chaired by a Non-Executive Director. For more information,
please refer to our Remuneration Report (page 102).
5. For more information, please refer to our 2025
CDP submission.
6. Our internal carbon pricing is £100/tonne, for more
information refer to our Climate Transition Plan.
For more information on Climate Change
please see page 44
Table 7: METRICS AND TARGETS
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PRINCIPAL RISKS AND UNCERTAINTIES
MANAGING
RISK
The principal risks faced
by the Group and the risk
management approach
are described in the
following pages.
Risks represent the various potential outcomes
that must be managed whilst implementing
the Group’s strategy, and Imperial defines a
risk as the consequences of uncertainty. In
essence, risk is anything that could disrupt the
achievement of the Group’s strategic objectives.
RISK LANDSCAPE
The Group operates in highly competitive global
markets and faces general commercial risks
associated with a large consumer packaged
goods business, as well as risks associated
with operating in a highly regulated industry.
Imperial continuously assesses and evaluates
the risks posed by the changing environments
in which the Group operates, whether
geopolitical, socioeconomic or technological.
The consideration of potential impacts and
most likely causes ensures a timely, measured
and appropriate response.
The Board and management have reviewed
the risk landscape (current and emerging) and
impact assessments as well as risk mitigations
put in place by management.
While the Group continues to monitor its risk
landscape, there can be no guarantee that
additional risks will not arise, or that other
known risks not mentioned increase in
materiality. Many of these risks are external
and cannot be fully mitigated.
RISK CAUSES
As a Group we face a number of business issues
which we treat as contributing factors to current
risks that are already managed by the Group,
rather than as standalone risks. By adopting
this approach, we consider their impacts and
evaluate effectiveness of existing mitigations
across the wider business. This approach drives
accountability for ‘bottom-up’ risk assessment
and enhances its effectiveness, enabling new
local or Group initiatives to be developed to
optimise our responses to those risks.
The Group, along with other global companies,
has faced challenges due to inflationary
pressures which have led to higher commodity
and energy prices as well as creating economic
pressures on consumer spending. The Group is
also impacted by escalating geopolitical risks
in the global risk landscape.
Climate risk
The impacts of climate risk on the business
have been evaluated across the Group, both
in terms of the influence on existing risks and
specifically regarding the resilience of our leaf
supply and factory footprint. Key impacts have
been identified within our manufacturing
footprint and wider supply chain. These
have been considered from both short-
and long-term perspectives with a focus on
identifying additional mitigations to preserve
operational resilience.
Inflation
The impact of inflationary pressures on
both the business and consumers has been
assessed as part of our risk assessment
process. Whilst year-on-year inflation rates
have reduced, ongoing fluctuations continue
to put pressure on consumer disposable income
and on cost of goods. This market dynamic is
considered in the context of various principal
risks across the Group.
Geopolitics
The Group is also exposed to increased
geopolitical and economic volatility of the
countries and regions in which it operates.
Such risks or resulting events could impact
its largest markets and may affect continuity
of supply.
Any adverse geopolitical or economic
developments affecting the Group’s key
countries and regions, including, but not limited
to, increased international trade tensions, the
outbreak of conflict, pandemics, volatile interest
rates, recessionary conditions and changes to
tariff regimes could impact the Group, its
operations and its people.
The identification and effective mitigation of
geopolitical risks has become an increasingly
important factor within the Group’s operational
resilience planning across our internal and
extended supply chain, key customers and
service providers.
RISK MANAGEMENT FRAMEWORK
Our risk framework is designed to ensure
accountability for identification, assessment
and mitigation of risks throughout the business,
supported by appropriate capabilities.
The success of the risk management approach
relies upon the effectiveness of the control
frameworks in place to manage risks and seize
opportunities that arise. Imperial’s approach
to governance, risk management and internal
control follows the ‘three lines of defence’ model
(see illustration below). The framework is
designed to enable the business to achieve its
strategic objectives while remaining aligned
to the Board’s risk appetite.
To enhance the Group’s risk management
framework, we continuously look for ways to
improve and further standardise the application
of risk management and controls across the
Group. This year we have embedded the
Integrated Assurance Forum to oversee the
implementation of enhancements to our control
framework to align with the new requirements
of the UK Corporate Governance Code and to
oversee the assurance provision for the
material risks of the Group.
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BOTTOM UP
TOP DOWN
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISK MANAGEMENT APPROACH
THE BOARD
Oversight of the Group’s risk management and internal control systems
Provides strategic perspective on risk, ensuring these are considered in Group strategy
Sets the risk appetite for the Group’s principal risks
Keeps Group’s principal risks under regular review and considers emerging risks along with risk themes identified during risk assessment process
AUDIT COMMITTEE
Reviews scope, quality and results of assurance provided by internal and external audit
Reviews results of other internal assurance provision over key controls of the Group
GROUP INTERNAL AUDIT
Provides the Board with independent assurance over the effectiveness
of the design and operation of the risk management and internal
control systems
Performs risk-based, challenging audits and provides insights
and recommendations
Reports audit results to management, the Integrated Assurance
Forum and the Audit Committee
OTHER ASSURANCE PROVIDERS
Other assurance providers provide
independent assurance for management,
for example programme assurance providers
and technology assurance providers
THIRD LINE
Provides independent
assurance over risk
management and internal
control framework
SECOND LINE FUNCTIONS
Define and implement policies and standards aligned with the Board’s
risk appetite, and provide support to business in design and
implementation of local controls and mitigations
Review ‘bottom-up’ risk assessments performed by ‘first line’ and
evaluate against the Board’s risk appetite, driving risk remediation
where required
Complete relevant legal and regulatory disclosures (e.g. ESG-related,
TCFD, Human Rights, Group Science regulatory certifications)
Review results of assurance activities over applicable control framework
to ensure controls are designed and operating effectively to mitigate
risks that they are responsible for
Global Business Services (GBS) Compliance function perform risk-based
controls testing based on entity specific risk factors and materiality
GROUP RISK COMMITTEE
Contributes ‘top-down’ insights into risk
assessment process
Considers emerging risks and themes
identified in risk assessment process
Reviews principal and non-principal risks
and related mitigations
Meets throughout the year to oversee risk
management approach and reporting
INTEGRATED ASSURANCE FORUM
Ensures an appropriate assurance provision
is in place for key controls
Co-ordinates assurance activities to ensure
adequate coverage of relevant risks and
compliance requirements
Reviews assurance outcomes from assurance
providers to identify themes and steer control
improvement as necessary
Provides appropriate information to the Audit
Committee and Board for them to be able to
consider the effectiveness of risk
management and internal control systems
Oversees enhancements to Imperial’s control
framework to align with the new requirements
under Provision 29 of the Code
SECOND LINE
Set minimum requirements
for, and provide oversight of,
risk management activities
and guidance in line with
Group risk appetite
OPERATIONAL LEVEL
Local leadership teams own business risks and mitigations and formally review them semi-annually, with the outcomes reviewed by regional leadership teams
ELT-level risk sponsors validate assessment of their respective risk domains prior to Risk Committee review of the overall Group risk profile
Local teams regularly confirm the effectiveness of their key controls
Management semi-annually certifies on compliance with Group policies, financial controls standards and applicable laws and regulations as well as a requirement
to report fraud
FIRST LINE
Risk ownership,
implementation of
risk mitigations and
control execution
The mitigation and management of identified risks is vital to the success of the Group. The Group’s risk management
and internal control framework and related reporting are further discussed in the Audit Committee report on page 96
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISK APPETITE
The Board is responsible for setting the Group’s
risk appetite and has completed its annual
exercise to ensure this is aligned to, and
supports, delivery of the Group strategy.
In 2025 the Board initiated a review of the
Group’s risk and control framework to re-align
it with the new requirements of the UK
Corporate Governance Code and the Group’s
2030 Strategy. As part of that work, the Board
reviewed and refined the approach to defining
risk appetite for material risks. Each risk has
been assigned one of three defined appetite
levels, reflecting the Group’s strategic posture
towards that risk. These levels, together with
the appetite statement, serve as a clear signal
of the Group’s willingness to accept, manage,
or avoid specific risks.
The resultant risk management approach
supports the achievement of objectives and
the Board’s wider responsibility for risk
management through clear communication
of the expected outcomes of key controls and
related monitoring.
Consistent with our position as a Challenger
business with ambitious growth targets, the
Group must take some sensible and calculated
risks. The purpose of the risk management
framework is to ensure that risks can be taken
in a responsible manner within the parameters
of the Group’s defined risk appetite.
RISK ASSESSMENT PRINCIPLES
Risk assessment is aligned with the business
planning cycle and strategic objectives,
focusing on the identification and assessment
of new risks and on the effectiveness of the
mitigations put in place to manage existing
risks in line with the risk appetite set by
the Board.
Imperial adopts a dynamic approach which
facilitates and collates views from functional
risk owners and a broad spectrum of other
relevant stakeholders, providing end-to-end
insights from a wide collection of second-line
experts – enabling a richer, more balanced
perspective on current and emerging risks.
Current and emerging risks are considered
on an ongoing basis across the business, with
a general three-year horizon (though longer
where applicable, e.g. climate risk). This horizon
ensures appropriate focus and includes
consideration of changes in the causes of
existing risks (e.g. specific proposed regulatory
change) ensuring timely evaluation of the
effectiveness of current and future mitigations.
Specific risk topics are presented to the ELT,
Risk Committee, Audit Committee and the
Board during the year. These discussions
provide further detail from first- and
second-line management on their risk
management responsibilities.
EMERGING RISKS
As part of the risk assessment performed
by the Group Risk Committee and the Board,
emerging risk topics have been discussed
and considered.
Regulatory change
The Group navigates a rapidly evolving
regulatory landscape, actively identifying
and addressing new risks as they arise.
We anticipate regulatory changes beyond
the typical three-year horizon, enabling us
to develop timely mitigation strategies.
With increasing harmonisation of Tobacco and
NGP regulations at the European level, driven
by anticipated reforms to the EUTPD3, EUTED,
and updates to the EU Commission’s
Multiannual Financial Framework (MFF),
we remain at the forefront, adapting quickly
to shifting priorities and funding. Additionally,
global regulatory dynamics, such as outcomes
from the WHO Conference of Parties, shape the
broader landscape. The Group continually refines
its approach to actively evaluating, managing
and developing appropriate mitigation measures
for emerging risks to safeguard our operations.
Tariff and trade policy uncertainty
The Group is impacted by tariffs introduced
in the US as certain materials and goods are
imported from affected countries. Any increases
to existing tariff rates or the introduction of
additional tariffs may have further impacts on
the Group by increasing the cost of goods above
expectations. The impact of tariffs in the US and
worldwide are closely monitored by the Group
and reported to executive leadership, with
actions taken to reduce any potential impacts.
Escalating geopolitical risks
Due to the global footprint of Imperial’s
operations, the Group is exposed to geopolitical
risk. Whilst already considered as a causal
factor for a number of the principal risks,
there is also the potential for further political
polarisation and local or geopolitical unrest
in certain countries, for example in the Middle
East and China/Taiwan, which may destabilise
the Group’s supply network, cause market
volatility and regulatory uncertainty.
In response to escalation of geopolitical risks
in certain regions during the year, the Group
has assembled crisis teams as needed to
understand, assess and direct responses
to these heightened risks.
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OUR
STRATEGY
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
The following section
highlights the principal
risks the Group faces and
identifies the mitigations that
are in place to manage them,
with all risks reported on
a mitigated basis.
Not all of these principal risks are within
Imperial’s direct control, and the list cannot
be considered to be exhaustive, as other risks
and uncertainties may emerge in a changing
business environment.
The risks reported are those currently considered
by the Board to have the most likely impact
on achievement of the Group’s objectives.
As part of ongoing work to prepare for
compliance with the updated UK Corporate
Governance Code requirements relating to risk
management, a review of the Group’s principal
risks was undertaken. As a result, the previous
‘Social’ principal risk has been combined with
the ‘Legal Compliance’ principal risk to form
the new ‘Ethics & Compliance’ principal risk
included below. There have also been some
minor changes to the remaining principal risk
titles and descriptions, but the risks included
below remain broadly aligned with those
identified in the 2024 Annual Report
and Accounts.
An illustration of the primary
impact each risk might have
on relevant strategy elements and
the change in risk profile compared
to last year is included for each
principal risk using these symbols
REGULATORY CHANGE
Risks relating to the impact of future regulatory
change on our ability to produce, market and sell
our products
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
The regulatory landscape
continues to evolve, with
increasing complexity and
an increasing likelihood of
more restrictive flavour and
ingredient requirements
across NGP categories, as
well as nicotine ceilings and
further sub-category bans
being introduced
There is also continued
introduction of more
restrictive regulation
for combustible tobacco
In the US, Federal proposals
for menthol/flavour bans and
reduced nicotine levels have
been withdrawn or shelved,
but both may re-emerge
under a future administration.
Meanwhile, state-level
activity continues to increase
In Australia, the new Public
Health Bill went live in April
2025, which introduced
further product, packaging
and marketing restrictions
across both combustibles
and NGP
Further focus on
environmental regulation,
particularly in Europe, with
additional environmental
regulations also being
considered in markets
outside of Europe
Regulatory change can
restrict product specification,
such as bans on menthol or
other flavours or ingredients,
consumer interaction, and
product supply. These
restrictions can affect
consumers’ ability to enjoy our
products, potentially impacting
sales volumes and market size
and related access to products
Compliance with increasingly
complex regulatory
requirements increases the risk
of additional cost to the Group
and inadvertent non-compliance.
Non-compliance could result
in regulatory censure, financial
penalty and reputational damage
When regulations require
interpretation, the resulting
judgements can lead to disputes
or investigations by regulators.
This can incur financial costs
or cause reputational damage,
even if no fault is proven
Group policies and standards
and a reviewed set of Group public
policy positions are in place to
align with regulatory
developments
Continuous monitoring of and
engagement with regulators
to highlight risks of
disproportionate regulation;
proposal of moderate alternatives;
and development of a sustainable
regulatory framework for NGP
Subject matter experts employed
to perform regulatory horizon
scanning and assess the impacts
of proposed regulatory change
and Group-wide impacts
Project teams in place to manage
the impacts of regulatory change,
ensuring required compliance
is achieved and opportunities
identified. Product portfolio
is under continuous revision
to adapt to stricter regulations
in NGP
Risk profile change (on a mitigated basis)
Risk profile increasing
Risk profile unchanged
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
PRICING & EXCISE CHANGE
Risks relating to the impact of future excise
changes and our ability to achieve planned pricing
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
At a global level, reduction
in year-on-year inflation rates
reducing pressure on pricing
Pricing pressure remains
where there is a need to offset
accelerated excise schemes,
market size and volume
declines
Tariffs introduced in the US,
adding additional pressure
on costs
EU Tobacco Excise Directive
proposal presented in July
2025 includes substantial
increases to minimum excise
rates from 2028, and as a
result there may be above
trend increases in excise
rates by certain member
states in the interim period
to 2028
In markets where the increased
cost of living makes consumers
more price-sensitive, significant
price increases affect both
product demand and sales
volumes
Pricing pressure may be
exacerbated by excise increases
which further elevates product
prices. This could result in
downtrading to lower price
products/categories or an
increase in the attractiveness
of illicit product, impacting
sales volumes
Illicit products thrive in
high-excise environments,
reducing the size of the
legitimate tobacco market,
increasing risks to consumers
from non-compliant product,
and financing organised crime
Inferior counterfeit product
could result in damage
to brands
Introduction of tariffs by the
US increases the cost of goods,
adding additional pressure
on pricing in this region
Revenue Growth Management
Centre of Expertise facilitates
Consumer Pricing & Portfolio
workshops in key markets,
in collaboration with regional
and market teams
Monthly Regional Business
Reviews to discuss and evaluate
pricing strategies execution,
commercial performance and
progress against objectives
The Group’s Revenue Growth
Management function is
systematically supporting
market teams with assessment
of pricing and excise using
different scenario simulations
and ‘what if’ analysis and
evaluation, and proposing
optimum solutions
Focus on development of AI
enabled tools to better model
and predict impacts of excise,
inflation and other consumer
pressures
Engagement with authorities
providing informed input and
evidence about the unintended
consequences of
disproportionate changes
in product taxation, supported
by above-market engagement,
argumentation, and data
CONSUMER AND MARKET TRENDS
Risks relating to the impact of changing consumer
behaviour and market trends on commercial
objectives
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
Continued rise in illicit trade
due to widening gap between
duty paid and non-duty paid
prices as a result of excise
impacts, notably in Europe,
and in Australia where excise
levels are very high, leading
to declines in legitimate
market size
Wider industry market
size declines across global
footprint, notably in Australia
US illicit trade remains a
persistent threat, particularly
in the disposable vape
segment, with a growing
trend observed in OND,
undermining the market
for products following the
required FDA regulatory
processes, which can be
lengthy and expensive
Continuation of downtrading
trend as consumers become
increasingly value-driven due
to inflationary pressures on
disposable income and
increasing excise taxes
Slight easing in
macroeconomic pressures,
however, real consumer
disposable income remains
under pressure due to
inflationary pressures and
tariff-driven price increases
in the US
Economic pressure on
consumers could result in
reduced spend on tobacco
products and alternatives,
reducing market size
Increases in illicit trade impact
the size of the legitimate market,
impacting sales volumes
Failure to obtain or effectively
respond to commercial insights
and learnings, would result in
loss of market share or inability
to capitalise on commercial
opportunities
Failure to respond to changes
in market environment could
result in the Group’s portfolio
being less attractive to
consumers, resulting in
reduced sales
Market Intelligence collection
and analysis
Cigarette and vape Empty Pack
Survey collection reporting
provides trend analysis of illicit
impacts enabling more targeted
and effective interventions
Consumer behaviour monitoring,
including consumer trackers
Engagement with political
stakeholders, key government
departments, law enforcement
bodies and other stakeholders
to combat illicit trade
Enhanced consumer insights
operating model with continued
increase in capabilities and tools,
including a separate Business
Intelligence vertical that includes
Competitor Analysis
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
PRODUCT DEVELOPMENT
Risks relating to effective product development,
aligned to consumer preferences and regulatory
requirements
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
Continued competitor activity
in the NGP market with
growth in category size
through new product
technology developments,
product launches and
marketing initiatives, as well
as challenges to compete
with non-compliant products
being launched in market
Increasing evolution of
NGP product regulation
driving need for continued
product development and
redevelopment of existing
products
An additional marketing
denial order (MDO) has
been issued from the FDA
in connection with some
disposable vape products.
This MDO has been
challenged and is subject to
ongoing litigation proceedings
If the Group’s product portfolio
does not align with consumer
preferences, it could lead to
reduced preference for our
products, lower sales volumes
and diminished brand equity
Failure to act upon consumer
trends and insights, and
innovate in line with
competition, could result in lost
opportunities, notably in NGP
where innovations are more
prevalent and faster to market
Failure to ensure effective
implementation of market
or retail initiatives could result
in lost opportunities, wasted
investments and potential loss
of market share
Failure to identify intellectual
property (IP) constraints in the
innovation of new products
could impact development and/
or launch, limiting the ability to
respond to competitor offerings
and potential litigation
Failure to develop NGP
categories with a sustainable
commercial model could
impact achievement of key ESG
priorities or failure to achieve
NGP ambition
Failure to obtain the appropriate
regulatory approvals in certain
markets could result in loss of
commercial opportunities
Integrated Brand Building Model
including enhanced innovation
project process, governance
principles and establishing
technical stage gates
NGP Innovation Masterplan
aligned to 2030 Strategy, with
supporting end-to-end project
management processes to
ensure timely delivery
Regulatory strategies, marketing
guidelines and product standards
developed to support our
consumers and our business
Legal expertise to manage
specific risk areas, such as
intellectual property
TECHNOLOGY & CYBER RESILIENCE
Risks relating to the ability of IT infrastructure
to support business and regulatory requirements
and protect against cyber attack
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
The Group continues
to operate in an external
environment with heightened
geopolitical risks, which
highlight the continued risk
of, and increasing exposure
to, corporate cyber attacks
External cyber threats remain
pervasive, as demonstrated
by the targeted attacks
against UK retail and multiple
US sectors during 2025
The continued proliferation
and rapid innovation of
Artificial Intelligence (AI)
technologies presents new
challenges and opportunities
alike. We expect and prepare
for increasing trends in the
sophistication and complexity
of technology attacks, and
additional information
governance and legislation
demands associated with
the use of AI
Loss of critical systems could
impact production and/or
product supply to distributors
or retailers resulting in revenue
loss and reputation damage
with customers and other
stakeholders
Failure to protect personal or
sensitive corporate data from
loss could result in inability
to achieve strategic goals,
regulatory breach and related
censure, significant financial
costs or penalty, reputational
damage or lost competitive
advantage
Failure to implement key
security and data handling
requirements could result
in data integrity issues
Global IT Policy and Standards
supported by technology control
and governance frameworks
Technical testing and monitoring
including vulnerability scanning
and penetration testing
Regular employee training and
awareness activities to maintain
a cyber-aware workforce
Ongoing investment in security
tools and capabilities
Robust IT Change and Incident
Management procedures,
including crisis management
and disaster recovery planning
for critical systems
High risk suppliers vetted and
periodically reviewed
AI governance structures
established to support
identification, assessment and
management of AI-related risks
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
ENVIRONMENT
Risks relating to our ability to deliver our
commitments to minimise the environmental
impact of Imperial and align with evolving
environmental regulations
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
Introduction of EU Corporate
Sustainability Reporting
Directive and Corporate
Due Diligence Directive are
pending the proposed EU
Omnibus simplification
package; however other
upcoming regulatory
requirements will apply
to the Group within the
next three years
Disposable vape bans
introduced in the UK and
France during 2025
The Group continues to face
increasing climatic impacts
across its global footprint
Continued focus on
ESG-related matters from
investors and external
stakeholders, with increased
focus on energy resilience
and water consumption
Failure to effectively mitigate
the environmental impacts of
our products and processes on
the external environment could
lead to reputational damage or
financial impacts for Imperial
Failure to meet stakeholder
expectations, or maintain parity
with industry peers, may impact
the Group’s reputation as a
sustainable business, potentially
adversely affecting stakeholder
sentiment or share price
Suboptimal ESG ratings could
result in reduced access to
capital or increased financing
costs
Failure to sufficiently reduce
carbon emissions in direct
operations and the supply
chain could result in increased
carbon taxes
Failure to comply with key
ESG-related regulation, including
environmental legislation, could
result in a material impact to
the Group, including, but not
limited to, financial penalties
Failure to comply with
regulatory reporting
requirements for non-financial
data could result in legal,
operational, and reputational
consequences for Imperial
ESG agenda and communications,
including ongoing performance
and materiality assessment,
aligned to Group strategic
goals and targets
Work ongoing to meet ESG
recyclables target in Europe
ESG Committee with executive-
level representation in place to
provide strategic oversight.
Non-Financial Reporting Steering
Committee and Environmental
Compliance Working Group
support this by contributing to
mandatory disclosures (e.g. TCFD),
managing compliance and
monitoring performance
Sustainable Tobacco
Programme (STP), alongside
reforestation initiatives,
supports efforts to minimise
the environmental footprint of
leaf cultivation and contributes
to emissions reduction
Dedicated teams within
Marketing and Procurement
focusing on sustainability
ESG KPIs and contractual clauses
in place with relevant suppliers,
as well as inclusion of ESG topics
in the Supplier Code of Conduct
and Supplier Relationship
Management Programme
TRANSFORMATION
Risks relating to the design, implementation
and benefit realisation of organisational
change initiatives
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
Increasing size and scale
of strategic transformation
portfolio across the Group
to support the 2030 Strategy
High volume of change and
resource demand required
to support transformation
programmes across
the business
Continued increase
in scale and complexity
of cross-functional
integration requiring careful
management of project
interdependencies
Increasing complexity
in ensuring organisation
design capabilities are
aligned with business needs
and strategic objectives
Successful first deployment
of new ERP system in
priority market
Ineffective business
transformation could result in
disruption to delivery of business
objectives, non-achievement of
intended benefits or higher cost
of implementation than forecast
High demand for local resources
to support transformation may
impact business plan delivery,
employee relations, transition
of critical processes or
employee wellbeing
Transformation Board and
Integration Working Group
provide visibility and assurance
on strategic portfolio delivery
and oversight of portfolio
risk management
Transformation risk governance
structure and Transformation
Governance Policy
Project intake process captures
new project initiatives to manage
impact on strategic portfolio
Transformation Centre of
Expertise working in conjunction
with Independent Quality
Assurance and Internal Audit to
support successful delivery and
oversight of key risk aspects
Specialist Organisation
Effectiveness Centre of Expertise
safeguards design and
development of organisational
capabilities in line with
strategic objectives
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
SUPPLY CHAIN RESILIENCE
Risks relating to the supply of materials or our
ability to produce and distribute finished goods
in line with plan, quality and cost targets
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
Tariffs introduced in the
US have had limited impacts
on cost of goods to date, with
increased impacts expected
if tariff policies remain
unchanged and potential
impacts above these
expectations if there are
further changes to tariff
policies
Geopolitical tensions have
continued to increase,
particularly in the Middle
East, however so far there
have not been any material
impacts in the Group’s key
countries and regions
Climate change is potentially
increasing the frequency and
intensity of adverse weather
events such as hurricanes
and flooding, impacting
supply chains, notably cigar
operations in our Caribbean
factories and the Philippines
Loss of a key manufacturing
site/capacity could impact
the Group’s ability to meet
production demands
Failure to supply markets could
lead to a loss of short-term sales
volume and potentially erode
consumer loyalty, which may
impact longer-term sales
volumes and brand value
Failure to manage cost inflation
could result in increased cost
of goods
Severe weather episodes could
impact raw material supply,
manufacturing sites and
warehousing, potentially
affecting short-term supply
to markets
A lack of availability of raw
materials, or raw materials
of poor quality, could impact
short-term supply to markets
Loss of critical systems could
impact production and/or
product supply to distributors
or retailers resulting in revenue
loss and reputation damage
with customers and other
stakeholders
Business Continuity
Management Framework,
including Operational Resilience
Committee and requirements
for Disaster Recovery Plans
Monitoring and assessment
of global geopolitical situation,
with crisis teams assembled
and actions taken as required
Global Physical & Asset
Security Programme
Material stocks (leaf and
non-tobacco) maintained in line
with assessed supply continuity
plans, and aligned to sales
forecast requirements
Production capacity planning
includes agreed business
continuity measures in the event
of machine failure or site issue
Supplier agreements,
standards and practices include
requirement to comply with
Group policies, including quality
requirements for goods and
services supplied
Ongoing risk assessments and
supplier reviews including quality,
ESG, and business continuity and
contingency plans
ETHICS & COMPLIANCE
Risks relating to responsible and ethical
behaviour, and compliance with certain specified
laws and regulations by our organisation and
employees, as well as requiring compliance
by our business partners
RISK
PROFILE
CHANGE
STRATEGIC
IMPACTS
CHANGE IN YEAR IMPACT MITIGATION
Continued external trend
of ESG-related litigation
risks with external focus
on human rights issues in
international supply chains
and greenwashing claims
‘Failure to Prevent Fraud’
offence under the Economic
Crime and Corporate
Transparency Act 2023 came
into effect in September 2025
Introduction of EU Corporate
Due Diligence Directive, which
would introduce further
requirements to conduct
due diligence throughout our
global value chain, is pending
the proposed EU Omnibus
simplification package
As with other corporates,
litigation and other claims
are pending against the Group.
The interpretation of the law
and the related judgments can
lead to disputes or investigation
and possible financial costs
or reputational damage
Failure to comply with
regulations, or other legal or
financial violations by the Group,
its employees, subsidiaries or
business partners, could result
in investigation and financial
penalties, regulatory censure
or reputational damage
Investigations or allegations
of wrongdoing can demand
significant management time,
and can result in substantial
costs which may not be fully
recoverable in addition to
significant reputational
damage with stakeholders
If any claim against the Group
was to be successful, it might
result in a significant liability
for damages and could lead
to further claims
Failure to comply with
key ESG-related regulation,
including human rights
legislation, could result in a
material impact to the Group,
including, but not limited to,
financial penalties
Legal Matters Management,
including Legal Matters to
be Notified
Code of Conduct, Supplier Code of
Conduct, and other Group policies
and standards covering ethics
and compliance related topics,
supported by staff training and
Speak Up channels for reporting
of concerns of wrongdoing, and
Gifts and Entertainment Register
ESG agenda and ESG Committee
with executive-level
representation covering Ethics
& Compliance related topics
Human Rights Policy and
risk management framework,
including governance processes
and audits
Sustainable Tobacco Programme,
Leaf Partnership Projects, Leaf
due diligence verifications
and audits
SEDEX (Supplier Ethical Data
Exchange) used for supplier
ethical trading risk assessments
Leaf Compliance working group
and Sustainable & Responsible
Sourcing working group
Ethics and compliance related
due diligence on business
partners, including screening of
suppliers and business partners
against sanctions lists and
adverse media
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
LIQUIDITY AND GOING CONCERN STATEMENT
The Group’s policy is to ensure that we always
have sufficient capital markets funding and
committed bank facilities in place to meet
foreseeable peak borrowing requirements.
The Group recognises there can be uncertainty
in the external environment. However, during
past periods of disruption, the Group effectively
managed operations across the world and has
proved it has an established mechanism to
operate efficiently despite this uncertainty.
The Directors consider that a one-off discrete
event with immediate cash outflow is of
greatest impact to the short-term liquidity
of the Group.
The Directors have assessed the emerging and
principal risks of the business, including stress
testing a range of different scenarios that may
affect the business. These included scenarios
which examined the implications of:
•
A one-off discrete event resulting in
immediate cash outflow of c. £500 million,
e.g. due to unexpected duty and tax
payments; and/or other legal and regulatory
risks materialising.
•
A rapid and lasting deterioration to the
Group’s profitability because markets
become closed to tobacco products or
there are sustained failures to our tobacco
manufacturing and supply chains. These
assumed a permanent reduction in
profitability of 10% from 1 October 2025.
The scenario planning also considered
mitigation actions including reductions to
capital expenditure, dividend payments and
the share buyback programme. There are
additional actions that were not modelled but
could be taken including other cost mitigations
such as staff redundancies, working capital
management, retrenchment of leases and
discussions with lenders about capital structure.
Under the reverse stress test scenario, after
considering mitigation actions including
reductions of capital expenditure, dividend
payments and the share buyback programme,
we have modelled that a 59% EBITDA reduction
would lead the Group to have sufficient
headroom until 30 November 2026. The Group
believes this reverse stress test scenario to be
remote given the relatively small impact on
our trading performance and bad debt levels
during the COVID-19 pandemic and political
uncertainty with regard to Ukraine and Russia.
Based on its review of future cash flows
covering the period through to 30 November
2026, and having assessed the principal risks
facing the Group, the Board is of the opinion
that the Group as a whole and Imperial Brands
PLC have adequate resources to meet their
operational needs for a period of twelve months
from the date of approval of the financial
statements, and concludes that it is appropriate
to prepare the financial statements on a going
concern basis.
VIABILITY STATEMENT
The Board has reviewed the long-term
prospects of the Group to assess its viability.
This review, which is based on the business
plan which was completed in July 2025,
incorporated the activities and key risks of the
Group together with the factors likely to affect
the Group’s future development, performance,
financial position, cash flows, liquidity position
and borrowing facilities as described in the
‘Managing risk’ section of this report on
pages 66 to 68.
In addition, we describe in notes 21 to 22 on
pages 167 to 176 the Group’s objectives, policies
and processes for managing its capital, its
financial risk management objectives, details
of its financial instruments and hedging
activities and its exposures to market,
credit and liquidity risk.
Assessment
To report on the long-term viability of the
Group, the Board reviewed the overall funding
capacity and headroom available to withstand
severe events and conducted a robust
assessment of the emerging and principal
risks facing the Group, including those that
would threaten its business model, future
performance, solvency or liquidity. The
assessment assumes that any bank debt
maturing in the next three years can be
refinanced at commercially acceptable terms
or via our current standby facility. The Board
believes that three years is an appropriate time
horizon given the current business portfolio
and limited visibility beyond three years.
This assessment also included reviewing
and understanding both the impact and the
mitigation factors in respect of each of those
risks. The viability assessment has two parts:
First, the Board considered the period over
which it has a reasonable expectation that
the Group will continue to operate and meet
its liabilities, considering current debt
facilities and debt headroom; and
Second, it considered the potential impact
of severe but plausible scenarios over this
period, including:
– assessing scenarios for each individual
principal risk, for example commercial
issues and the impact of regulatory
challenges; and
– assessing scenarios that involve
more than one principal risk including
multi-risk scenarios.
Findings
Viability review period
Whilst the Board has no reason to believe the
Group will not be viable over a longer period,
the period over which the Board considers
it possible to form a reasonable expectation
as to the Group’s longer-term viability, based
on the risk and sensitivity analysis undertaken,
is the three-year period to September 2028.
This reflects the period used for the Group’s
business plans and has been selected because,
together with the planning process set out
above, it gives management and the Board
sufficient, realistic visibility on the future
in the context of the industry environment.
The Group’s annual corporate planning
processes include completion of a strategic
review, preparation of a three-year business
plan and a periodic re-forecast of current-year
business performance and likely landing.
The plans and projections prepared as part of
these corporate planning processes consider
the Group’s cash flows, committed funding,
forecast future funding requirements, banking
covenants and other key financial ratios,
including those relevant to maintaining our
investment grade ratings. These projections
represent the Directors’ best estimate of the
expected future financial prospects of the
business, based on all currently available
information.
The use of the strategic plan enables a high
level of confidence in assessing viability, even
in extreme adverse events, due to a number
of mitigating factors such as:
Flexibility of cash outflow with respect
to the ability to manage dividend returns
to investors, capital expenditure projects
planned to take place within the three-year
horizon, return of surplus capital to investors
via share buyback, plus promotional
marketing programmes
The Group has mature business
relationships and operates globally within
well-established markets
The Group’s operations are highly cash
generative, and the Group has access to the
external debt markets to raise further funding
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISK IMPACT REVIEW
For each of our principal risks, plausible risk
impact scenarios have been assessed together
with a multiple risk scenario. The following
table summarises the key scenarios that were
considered, both individually and in aggregate:
None of the scenarios reviewed, either
individually or in aggregate would cause
Imperial Brands to cease to be viable.
Climate-related risks have been assessed
as causes of a number of our underlying risks
which are included within the scenario
modelling, including, but not limited to, the
failure to supply product due to weather-related
impacts on individual factories, the cost of
complying with environmental legislation
such as carbon pricing, and the impact that
climate change has upon the supply of raw
materials (notably tobacco leaf).
In 2025, we updated our quantified climate
scenario analysis with RCP 2.6 / Below 2°C
and RCP 8.5 / 4°C pathways aligned with the
recommendations of the TCFD (Task Force
on Climate-related Financial Disclosures) and
Paris Agreement. The scenario analysis takes
into consideration climate-related physical
and transition risk to 2050, which we disclose
in detail to 2050. The Group does not consider
climate change to be a risk from a viability
perspective. The Group holds c.12 months
of leaf stock protecting against any shortage
or incremental cost caused by a natural event;
hence it would not materially impact the
period under review. Any incremental cost
would have an EBITDA impact lower than that
modelled as part of the scenario testing.
CONCLUSION
On the basis of this robust assessment of the
emerging and principal risks facing the Group,
and on the assumption that they are managed
or mitigated in the ways disclosed, the Board’s
review of the business plan and other matters
considered and reviewed during the year, and
the results of the sensitivity analysis
undertaken and described above, the Board
has a reasonable expectation that the Group
will be able to continue in operation and meet
its liabilities as they fall due over the period
to 30 September 2028.
The Strategic Report, including the Company’s
Section 172 Statement on page 84 incorporated
by reference, was approved by the Board and
signed on its behalf.
By order of the Board.
EMILY CAREY
COMPANY SECRETARY
RISK SCENARIOS
MODELLED
LEVEL OF SEVERITY
REVIEWED
LINK TO
PRINCIPAL RISK
The consequences of adverse
operating and commercial
pressures, involving volume
reduction and/or falls in margin,
driven by unforeseen reductions
in the size of the legitimate
tobacco market or other changes
in the level of consumer demand
for our products.
The maximum quantifiable
impact of all envisaged business
risks, including the impact of
a loss of market size and share
and lack of pricing.
The value of these combined
risks totals £0.6 billion over the
three-year period under review.
A further worst-case scenario has
also been considered, modelling
a 10% reduction on remaining
EBITDA after consideration of the
isolated business risks. The value
of this EBITDA modelled totals
£1.4 billion over the three-year
period under review.
Pricing and excise change
Regulatory change
Supply chain resilience
Technology & cyber resilience
Product development
Consumer and market trends
Environment
Ethics & Compliance
Transformation
The possible costs associated
with legal and other regulatory
challenges, including competition
enquiries and tax audits.
Failure to successfully defend
existing and reasonably
foreseeable future legal and
regulatory challenges, at the
expected financial exposure.
The value of these combined
risks is c.£0.7 billion.
Ethics & Compliance
Environment
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GOVERNANCE
CONTENTS
Board Activities 77
Board of Directors 78
Governance framework 82
S172 Statement 84
Stakeholder engagement 86
Creating a high performance culture 90
PGS Committee Report 92
Audit Committee Report 96
Remuneration Committee Report 102
Directors’ Report 119
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OCTOBER 2024
VIRTUAL MEETING
– Approval of Trading Update, including
share buyback programme
NOVEMBER 2024
LONDON
– Strategy workshop, covering:
– Combustibles and NGP
– Manufacturing
– Regulation outlook
– Futureproofing our organisation –
including data and AI
VIRTUAL MEETING
– Approval of Imperial Brands plc full-year
results and Annual Report & Accounts
JANUARY 2025
BRISTOL
– Annual General Meeting
– Strategy workshop, covering:
– Consumers
– Operational efficiency
– Organisational design
– Investor proposition
– Europe regional review
– UK business immersion showcase
– Employee engagement: Audit Committee
break-out with the Finance function and
Board lunch with Bristol-based colleagues
MARCH 2025
LONDON
– Strategy: final review
– NGP review
– Combustibles and brands
– AAACE regional review
– Technology review
– Deep dive: Cyber security
– Deep dive: Modern Oral Nicotine
LONDON/VIRTUAL
– Capital Markets Day: Strategy launch
BOARD ACTIVITIES 2024/25
A summary of topics covered by the
Board of Directors in its meetings during
the financial year is provided below.
APRIL 2025
LONDON
– Logista business review
– Deep dive: Developments in global
markets and economic outlook
– Review of stakeholder feedback
on strategy launch
– Corporate Affairs review
MAY 2025
VIRTUAL MEETING
– Approval of Imperial Brands plc
interim results
– Appointment of Lukas Paravicini
as CEO and Murray McGowan as CFO
JULY 2025
SITE VISIT: GREENSBORO, USA
– Briefing from US team on market overview,
brands and corporate affairs
– Visit to US retail outlets with sales force
– External speaker: US regulatory landscape
– Employee engagement: Remuneration
Committee event on Reward and Board
lunch with US colleagues
SEPTEMBER 2025
LONDON
– Transformation programme update
– Business Plan 2026
– Capital allocation
– Board and Committee effectiveness reviews
BOARD HIGHLIGHTS
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BOARD OF DIRECTORS AS AT 1 OCTOBER 2025
A SKILLED
AND
EXPERIENCED
BOARD
TENURE:
Appointed to the Board in July 2016 and
became Senior Independent Director in
May 2019 before being appointed Chair
in January 2020.
NATIONALITY:
American
BIOGRAPHY
Thérèse has significant international
investment banking experience having
held a number of roles at JP Morgan
including global chair of JP Morgan’s
Financial Institutions Group, co-head
of Asia-Pacific Corporate & Investment
Banking, global head of Debt Capital
Markets, and head of US Debt Capital
Markets. She began her career at Lehman
Brothers and joined Chase Securities in
1997 prior to the firm’s merger with JP
Morgan in 2000. Thérèse was previously
senior independent director of National
Grid plc.
SKILLS AND EXPERIENCE
Thérèse possesses deep experience of
business, regulation and governance from
her distinguished history of leadership
within the banking sector and as a
non-executive director across regulated
sectors. She uses these skills to effectively
engage, challenge and collaborate with the
Board and senior management, enabling
effective oversight of Imperial’s strategy
and performance.
OUTSIDE INTERESTS
Non-executive director of Moody’s
Corporation, where she chairs the
compensation & human resources
committee.
TENURE:
Appointed CFO in May 2021 and CEO
on 1 October 2025.
NATIONALITY:
Swiss
BIOGRAPHY
Lukas has a proven track record in
multinational consumer goods companies
around the world. He joined Imperial as
Chief Financial Officer in 2021 from
agricultural commodities and brokerage
group ED&F Man Holdings, where he was
chief financial officer. He has also held
senior positions at Fonterra, a New Zealand
and Australian listed co-operative and
the world’s largest dairy exporter, with
sales in 130 countries, including chief
financial officer from 2013-2017 and chief
operating officer, Global Consumer and
Foodservice Business from 2017-2018.
Prior to that, he spent 22 years with Nestlé
in various senior finance and general
management roles.
SKILLS AND EXPERIENCE
Lukas has enjoyed a successful career
across a range of commercial and financial
roles in consumer-focused, international
companies. These roles have given him
a deep knowledge of technology and its
opportunities to enable change. Lukas’s
extensive business expertise, focus on
performance and proven delivery of
strategic and commercial transformation
programmes makes him ideally suited to
lead the Company in delivery of its strategy.
OUTSIDE INTERESTS
None.
TENURE:
Appointed 1 October 2025.
NATIONALITY:
British
BIOGRAPHY
Murray joined Imperial Brands in 2020 as
Chief Strategy & Development Officer, a role
he retains following his appointment as
Chief Financial Officer. Prior to Imperial,
he worked in strategic, financial and
operational leadership roles for high-profile
consumer businesses, including Costa
Coffee, Yum! Brands and Cadbury, having
begun his career in the consumer and
retail practice of McKinsey & Company.
SKILLS AND EXPERIENCE
As Chief Strategy & Development Officer,
Murray led the development of Imperial’s
strategy, including the refreshed 2030
plan unveiled in March 2025. His strong
leadership background from strategic,
financial and operational roles in
consumer businesses makes him well
placed to drive Imperial’s focus on delivery
and execution as CFO.
OUTSIDE INTERESTS
Member of ‘The 100 Group’ of FTSE 100
finance directors.
TENURE:
Appointed July 2020; will retire from
the Board on 31 December 2025.
NATIONALITY:
German
BIOGRAPHY
Stefan was CEO of Imperial from 2020
to 30 September 2025, and will stay on
the Board as an Executive Director until
31 December 2025.
He joined Imperial as CEO in 2020 from
Inchcape plc, where he delivered successful
transformational change during a five-year
tenure as chief executive.
Prior to Inchcape, Stefan was president
of Bacardi Limited’s European region.
Previous roles have included chief
commercial officer of Cadbury plc and chief
operating officer of Unilever Food Solutions
Europe. This followed senior positions at
Diageo (Burger King) and Procter & Gamble.
SKILLS AND EXPERIENCE
Stefan has brought experience managing
strategic change and brand leadership
from retail and consumer companies.
His deep and wide-ranging career in
FMCG and challenger businesses has
given insight and direction to Imperial’s
performance and formation of the new
strategy launched in March 2025.
OUTSIDE INTERESTS
Non-executive director of Compass Group
plc (due to retire in January 2026), Flutter
Entertainment plc (from 1 October 2025)
and The Magnum Ice Cream Company
(Netherlands).
A
AUDIT COMMITTEE
P
PEOPLE, GOVERNANCE &
SUSTAINABILITY COMMITTEE
R
REMUNERATION COMMITTEE
COMMITTEE CHAIR
MURRAY
McGOWAN
CHIEF FINANCIAL
OFFICER
STEFAN
BOMHARD
EXECUTIVE
DIRECTOR
LUKAS
PARAVICINI
CHIEF EXECUTIVE
OFFICER
THÉRÈSE
ESPERDY
CHAIR
P
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BOARD OF DIRECTORS AS AT 1 OCTOBER 2025 CONTINUED
TENURE:
Appointed Non-Executive Director in
December 2018, Chair of the Remuneration
Committee in February 2019 and Senior
Independent Director in January 2020.
NATIONALITY:
British
BIOGRAPHY
Sue has strong international business
credentials with over 20 years’ executive
committee and board-level experience in
the FMCG, regulated transport and utility
sectors. Sue was managing director of
SABMiller Europe and an executive
committee member of SABMiller plc, with
P&L responsibility for a $7bn business. Sue
was previously a non-executive director
at Akzo Nobel NV and Bakkavor plc
(where she was a remuneration committee
member) and Britvic plc (where she
chaired the remuneration committee).
SKILLS AND EXPERIENCE
Sue brings wide-ranging corporate
governance and commercial experience
across a number of industries, notably
those with a consumer focus. Her
expertise in corporate transactions, IR,
regulation and FMCG businesses has been
invaluable to the Board and her extensive
non-executive career has enabled her to
share deep insight in her roles as Senior
Independent Director and Remuneration
Committee Chair.
OUTSIDE INTERESTS
Non-executive director, senior
independent director and remuneration
committee chair of both Mondi plc and
easyJet plc.
TENURE:
Appointed November 2021.
NATIONALITY:
American and Nigerian
BIOGRAPHY
Ngozi has over 35 years’ experience
in finance/private equity, general
management and strategy/business
development functions with multinational
companies in Europe, the US and Africa.
She has held roles in McKinsey &
Company, Pfizer Inc., Actis LLP and JP
Morgan. Previous non-executive director
positions include Guinness Nigeria PLC, PZ
Cussons PLC, Barloworld Limited, Stanbic
IBTC Holdings PLC and Vlisco Group.
SKILLS AND EXPERIENCE
Ngozi brings a wealth of FMCG and
regulated industry experience from
a career in management consulting,
banking/finance and the pharmaceutical
industry. Her reflections on consumer
sectors, the challenges of regulated
businesses and interplay with corporate/
public affairs and emerging markets has
been insightful during the Board’s
consideration of strategy, sustainability
and transformation topics.
OUTSIDE INTERESTS
Non-executive director of Bank of Africa/
BMCE Group, Unilever Nigeria PLC and
Ikeja Hotels PLC. Additionally, she is a
private equity adviser to Verod Capital.
TENURE:
Appointed March 2023.
NATIONALITY:
American
BIOGRAPHY
Andrew has a proven track record of
business development, strategic planning
and business integration following two
decades of operational and financial
experience in the tobacco sector. He was
Chief Financial Officer of Reynolds
American Inc. until its acquisition by
British American Tobacco (BAT) in 2017.
Prior to this, Andrew held a range of
leadership positions at Reynolds,
including Chief Information Officer,
Chief Commercial Officer and Business
Development Director. Earlier in his
career, he worked for BAT in marketing
and planning roles.
SKILLS AND EXPERIENCE
Andrew brings exceptional experience
and deep knowledge of the tobacco sector
and its continuing transformation. His
skillset enhances the Board’s oversight of
the delivery of Imperial’s new strategy, as
well as financial and performance issues.
OUTSIDE INTERESTS
None.
TENURE:
Appointed January 2024.
NATIONALITY:
American
BIOGRAPHY
Julie, who was Chief Commercial and
Global Sales Officer at Diageo until August
2023, 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.
SKILLS AND EXPERIENCE
Julie brings broad knowledge of
marketing and brands following a career
in customer-focused, multinational
corporates. Her deep experience of digital
transformation has benefited the Board
in its discussions on strategy and
organisational change.
OUTSIDE INTERESTS
Non-executive director of Ontex Group
NV, where she is a member of the
remuneration and nomination
committees.
NGOZI EDOZIEN
NON-EXECUTIVE
DIRECTOR
ANDREW
GILCHRIST
NON-EXECUTIVE
DIRECTOR
A P
JULIE
HAMILTON
NON-EXECUTIVE
DIRECTOR
RP
SUE CLARK
SENIOR
INDEPENDENT
DIRECTOR
RA P RP
ALAN JOHNSON
CMG
NON-EXECUTIVE
DIRECTOR
RA P
TENURE:
Appointed January 2021.
NATIONALITY:
British and Italian
BIOGRAPHY
Alan had a 30+ year financial career in
Unilever, including chief audit executive
and chief financial officer of the Global
Foods Division. He was CFO and then
non-executive director of Jerónimo
Martins SGPS, S.A. until 2016, and
remains the independent chairman of the
company’s internal control committee.
He was non-executive director at DFID,
president and chair of the board of the
International Federation of Accountants and
Board member and audit committee chair
of the International Valuation Standards
Council. Alan was a non-executive
director at DS Smith plc until its
acquisition by International Paper.
SKILLS AND EXPERIENCE
Alan has wide-ranging insight into
investor relations, audit and strategy
in both executive and non-executive
capacities, following a lengthy career in
global FMCG. His deep understanding of
finance and performance gives a valuable
perspective to the Board as Imperial
implements its new strategy.
OUTSIDE INTERESTS
Non-executive director and audit committee
chair of William Grant & Sons Ltd, chair of
both the Stakeholder Advisory Council to the
Audit & Ethics Standards Setting Boards
and the Good Governance Academy.
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BOARD OF DIRECTORS AS AT 1 OCTOBER 2025 CONTINUED
TENURE:
Appointed November 2020.
NATIONALITY:
Austrian
BIOGRAPHY
Bob is an experienced marketing
professional and has held a number of
senior roles at leading FMCG companies.
In April 2024 he retired after 17 years as
chief executive officer of Campari Group, a
major player in the global spirits industry.
Bob previously held positions of increasing
responsibility and global reach at Procter
& Gamble, including global prestige
products corporate marketing director.
He was previously a fellow at the Elis Institute
in Rome and vice chairman of Altagamma,
the Italian luxury goods association.
SKILLS AND EXPERIENCE
Bob brings exceptional knowledge of
brand management and customer-focused
FMCG businesses following a distinguished
career in global companies. As former
CEO of the Campari Group, his experience
in leadership, consumer brands and
creating long-term value for stakeholders
is invaluable for Board discussions on
strategy and performance.
OUTSIDE INTERESTS
Non-executive director and member of
the audit and remuneration committees
of the supervisory board of Carlsberg A/S,
non-executive director of Campari Group
and Luigi Lavazza S.p.A (where he is
Chair and a member of the Remuneration
and Audit Committees, respectively).
TENURE:
Appointed May 2019.
NATIONALITY:
British
BIOGRAPHY
Jon has a wide range of international
leadership experience, encompassing
transformation, M&A and all aspects
of finance, principally in the B2B sector.
In 2016 he was appointed chief executive
of The Weir Group plc, one of the world’s
leading engineering businesses, having
previously been CFO from 2010. Prior to
that he spent 22 years at Ernst & Young,
LLP, the last nine years of which were as
a partner in its London office, where he
led global board-level relationships. Jon
is a Chartered Accountant and a member
of the Institute of Chartered Accountants
in England and Wales.
SKILLS AND EXPERIENCE
Jon has wide ranging business, financial
and board experience from a lengthy,
distinguished career in multinational
companies and accountancy. His
executive role as CEO of a global FTSE 100
business gives invaluable perspective to
the Board’s consideration of strategy,
performance and stakeholder issues.
OUTSIDE INTERESTS
Chief Executive of The Weir Group plc.
TENURE:
Appointed May 2023.
NATIONALITY:
British
BIOGRAPHY
Emily, a chartered accountant and Fellow
of the Chartered Governance Institute,
has enjoyed a 25-year career in finance,
regulatory affairs, compliance, governance
and company secretarial matters, with
significant experience in the oil and gas
and sports betting and gaming industries.
Prior to joining Imperial, Emily held a
number of roles of increasing seniority
including 14 years at BP plc and three
years at Entain plc where she was Group
Company Secretary.
JON STANTON
NON-EXECUTIVE
DIRECTOR
BOB KUNZE-
CONCEWITZ
NON-EXECUTIVE
DIRECTOR
EMILY CAREY
COMPANY
SECRE TARY
RP RA P
Our refreshed challenger strategy
creates further opportunities, and
the Board’s strength and depth
of experience ensure that sound
and effective decision-making
and stakeholder interests are
managed within an appropriate
risk and control framework.
THÉRÈSE ESPERDY
CHAIR
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BOARD LEADERSHIP
1. FMCG and consumer insights
2. Science and innovation
3. Global business leadership
and governance
4. Finance and risk management
5. People leadership and
organisational transformation
6. Corporate and regulatory affairs
7. Consumer health
8. Environment and sustainability
9. Technology and digital
Thérèse Esperdy
Sue Clark
Ngozi Edozien
Andrew Gilchrist
Julie Hamilton
Alan Johnson
Bob Kunze-Concewitz
Jon Stanton
WITH THE RIGHT SKILLS
AND EXPERIENCE
DRIVING EFFECTIVE
DECISION-MAKING
THE RIGHT
TEAM TO DELIVER
GROWTH
NON-EXECUTIVE DIRECTOR SKILLS, EXPERIENCE AND KNOWLEDGE
COMMITTEES
EFFECTIVE GOVERNANCE
The Board operates within a resilient and
sustainable governance structure, enabling
sound and effective decision-making in
the interests of both the Company and
its stakeholders.
EXPERIENCED AND ENGAGED
The strength and depth of experience of
the Company’s Board facilitate the effective
delivery of strategic and operational priorities
within an appropriate risk framework.
<1 year
1–2 years
2–3 years
3–4 years
4–5 years
5–6 years
6–7 years
7–8 years
8–9 years
9+ years
NON-EXECUTIVE
DIRECTOR TENURE
TENURE
BOARD GENDER AS AT
30 SEPTEMBER 2025
Male 60%
Female 40%
BOARD ETHNICITY AS AT
30 SEPTEMBER 2025
White 80%
Black, Black British,
Caribbean or African 10%
Mixed or Multiple
Ethnic Groups 10%
BOARD NATIONALITY
British* 3
American* 4
German 1
Italian* 1
Swiss 1
Nigerian* 1
Austrian 1
* Indicates dual nationality.
AUDIT
COMMITTEE
REMUNERATION
COMMITTEE
Read more on page 92 Read more on page 96 Read more on page 102
PEOPLE, GOVERNANCE
& SUSTAINABILITY
COMMITTEE
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ROLE AND PURPOSE OF THE BOARD AND ITS COMMITTEES
GOVERNANCE FRAMEWORK
The Board is responsible for the governance
of the Company, undertaking its duties within
a framework of clear authorities and
governance structures.
The Board sets the tone for the Group from
the top and delegates specific tasks to its
Committees. Each of these Committees has
specific written terms of reference issued by
the Board, adopted by the respective Committee
and published on our website. All Committee
chairs report on the proceedings of their
Committee at the next meeting of the Board,
and make recommendations to the Board
where appropriate. Minutes of Committee
meetings are circulated to all Board members.
To ensure Directors are kept up to date on
developments and to enhance the overall
effectiveness of the Board, the Board Chair
and Committee chairs communicate regularly
with the Chief Executive Officer and the Chief
Financial Officer. Where appropriate, the Board
convenes virtually outside of scheduled
meetings to consider time-sensitive matters.
The Board has adopted a schedule of matters
on which it must take the final decision.
These include approving the Group’s strategy,
business plans, dividend, major financial
announcements, and acquisitions and
disposals exceeding defined thresholds.
See more on our People, Governance
& Sustainability Committee on pages 92-95
See more on our Audit Committee
on pages 96-101
See more on our Remuneration Committee
on pages 102-118
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EXECUTIVE LEADERSHIP TEAM
The ELT is responsible for overseeing the operational execution and delivery of our strategic
and financial plans, as approved by the Board. This includes: business performance management;
transformation and cultural change initiatives; talent, capability and succession; major investments,
divestment and capital expenditure proposals; business development considerations;
ESG initiatives; and risk assessment and management.
CHIEF EXECUTIVE OFFICER
Delegated responsibility for overall
performance and day-to-day management
of the Group, together with implementation
of the Group’s strategy.
CHIEF FINANCIAL OFFICER
Provides financial leadership and supports
the development and implementation of
the Group’s strategy.
BOARD OF DIRECTORS
The Board is responsible to shareholders and stakeholders for approving the strategy of the Group,
for overseeing the performance of the Group and evaluating and monitoring the management of risk
in a manner that is most likely to promote the Company’s long-term success.
CHAIR
Leads the Board and is
responsible for its effectiveness
and promoting the highest
standards of corporate
governance. Oversees stakeholder
engagement and ensuring the
Board as a whole determines the
Group’s strategy and objectives.
SENIOR INDEPENDENT
DIRECTOR
Supports the Chair on governance
issues and acts as an
intermediary for other Directors,
and, when required, with
shareholders. Leads Non-Executive
Directors in evaluating the
performance of the Chair.
NON-EXECUTIVE DIRECTORS
Provide constructive challenge
and monitor performance. Assess
the delivery of the strategy within
the risk and governance
framework agreed by the Board.
Review the integrity of the Group’s
financial information, ESG issues
and succession planning of
executive management and set
Directors’ remuneration.
DELEGATION
MONITORING
DELEGATION
MONITORING
AUDIT
COMMITTEE
PEOPLE, GOVERNANCE &
SUSTAINABILITY COMMITTEE
GROUP RISK
COMMITTEE
Management Committees
Management working groups, including treasury,
pensions and other functional and operational forums
REMUNERATION
COMMITTEE
GROUP ESG
COMMITTEE
ROLE AND PURPOSE OF THE BOARD AND ITS COMMITTEES CONTINUED
Board members have access, collectively and individually, to the Company Secretary and are also
entitled to obtain independent professional advice at the Company’s expense, should they decide
it is necessary in order to fulfil their responsibilities as Directors.
Board roles and composition
While the Board shares collective responsibility for its activities, some roles have been defined
in greater depth in the graphic on page 82. Standing committees are shown; ad hoc committees
may be established to review and approve specific matters or projects.
Executive Leadership Team
The Board delegates responsibility for developing and implementing strategy, and for the
day-to-day running of the business, to Lukas Paravicini, Chief Executive Officer, who is assisted
in his role by the Executive Leadership Team (ELT) comprising the members listed on page 21.
Company Secretary
Advises the Board on corporate governance matters and compliance with Board procedures
and corporate governance requirements.
BOARD AND COMMITTEE MEMBERSHIP AND ATTENDANCE
AS AT 30 SEPTEMBER 2025
Board
Audit
Committee
Remuneration
Committee
People,
Governance &
Sustainability
Committee
Non-Executive Directors
Thérèse Esperdy
1
7/7 4/4
1
Sue Clark
2
7/7 5/5 6/6
1
5/5
Diane de Saint Victor
3
1/1 1/1 1/1
Ngozi Edozien
4
7/7 5/6 5/5
Andrew Gilchrist 7/7 5/5 5/5
Julie Hamilton 7/7 6/6 5/5
Alan Johnson
5
7/7 5/5
1
4/4 5/5
Bob Kunze-Concewitz 7/7 6/6 5/5
Jon Stanton 7/7 5/5 6/6 5/5
Executive Directors
Stefan Bomhard 7/7
Lukas Paravicini 7/7
1. Denotes Board/Committee Chair.
2. Senior Independent Director.
3 Retired from the Board at the 2025 AGM in January.
4. Missed a virtual Remuneration Committee meeting due to technical difficulties.
5. Joined the Remuneration Committee on 1 February 2025.
As at 30 September 2025, the Company meets all three Board diversity targets specified by the
UK Listing Rules, namely that: (a) at least 40% of the Board are women; (b) at least one senior
Board position is held by a woman; and (c) at least one person on the Board is from a minority
ethnic background. As at the date of this Report, fulfilment of these targets has not changed.
GENDER DIVERSITY
Number of
Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 6 60 2 6 50
Women 4 40 2 6 50
ETHNIC DIVERSITY
Number of
Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other
White (including
minority-white groups) 8 80 4 7 60
Mixed/Multiple
Ethnic Groups 1 10 0 0 0
Asian/Asian British 0 0 0 0 0
Black/African/
Caribbean/Black British 1 10 0 1 8
Other ethnic group,
including Arab 0 0 0 0 0
Not specified/prefer
not to say 0 0 0 4 32
The data collected is based upon the guidance published by the FCA in Policy Statement 22/3.
The Company Secretary collated data on behalf of the Chair and Non-Executive Directors and
executive management provide their data via Workday. All data is provided with consent and
anonymity is protected.
SENIOR MANAGEMENT AND
DIRECT REPORTS
1
GENDER
AS AT 30 SEPTEMBER 2025
Male 61%
Female 39%
1. Senior Management as defined by the Code.
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SECTION 172
STATEMENT ON
SECTION 172 OF
THE COMPANIES
ACT 2006
Effective engagement with
a wide range of stakeholders,
including consumers,
colleagues, governments
and regulators, our customers,
suppliers and investors, is key
to the successful delivery of
our strategy and vision in
the long term.
Across our business we have a regular and
ongoing dialogue with stakeholders and their
views are taken into account, not only in
matters put to the Board for a decision, but in
the day-to-day management of our operations.
In taking into account the various interests
of all relevant stakeholders when making
decisions, the Board recognises it is not
always possible to achieve each stakeholder’s
preferred outcome. Which stakeholder group’s
interests are considered depends on the
decision at hand. The Board endeavours to
balance the different priorities and interests
of our stakeholders in a way compatible with
the long-term, sustainable success of the
business and which aligns with our purpose,
vision and behaviours.
How the Board considers stakeholder views
and inputs, as well as Section 172(1) factors,
in its decision-making is illustrated below
and on pages 86 to 89.
During the year, the Directors acted in the way
they considered, in good faith, most likely to
promote the Company’s long-term success for
the benefit of its members as a whole, paying
due regard to the matters set out in Section
172(1) of the Companies Act 2006. Those factors
are as follows:
The likely consequences of any decision
in the long term
The interests of the Company’s employees
The need to foster business relationships
with suppliers, customers and others
The impact of the Company’s operations
on the community and the environment
The desirability of the Company
maintaining a reputation for high standards
of business conduct
The need to act fairly as between members
of the Company
HOW THE BOARD CONSIDERS
STAKEHOLDER VIEWS AND INPUTS
The broad skillset and knowledge
base of Board members promotes and
enhances the diversity of thinking
during Board discussions.
The Board meeting calendar is planned
by the Chair, Company Secretary
and Chief Executive, with input from
other key parties, such as the CFO,
as required.
The Board receives detailed papers in
good time ahead of meetings to enable
the time in meetings to be devoted to
discussion, debate and challenge
following any presentation that may
also take place. As part of this process,
relevant stakeholder interests are
identified in the Board papers.
The Board is responsible for setting
the strategic direction of the Company,
as outlined on page 82, and ensuring
stakeholders are treated fairly as part
of this is firmly embedded in the culture
of the Company. Decisions are properly
recorded in meeting minutes.
Decisions are cascaded as appropriate
and stakeholders engaged where
necessary. Updates are provided to the
Board to allow it to review and monitor
impact, effectiveness and the fulfilment
of its duties.
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Section 172 of the Companies Act 2006
Our formal statement is disclosed on page 84.
Viability statement
On the basis of a robust assessment of the
emerging and principal risks facing the
Group, and the assumption that they are
managed or mitigated in the ways disclosed
on pages 66 to 75, the Board’s review of the
business plan and other matters considered
and reviewed during the year, and the results
of the sensitivity analysis undertaken, the
Board has a reasonable expectation that the
Group will be able to continue in operation
and meet its liabilities as they fall due over
the period to 30 September 2028.
Read more on page 74
Going concern basis
Having assessed the principal risks facing
the Group, the Board is of the opinion that the
Group as a whole and Imperial Brands PLC
have adequate resources to meet operational
needs for a period of 12 months from the date
of approval of the financial statements and,
therefore, concludes that it is appropriate to
prepare the financial statements on a going
concern basis.
Read more on page 74
Principal risks and uncertainties
The processes and related reporting described
in the Principal Risks and Uncertainties
section on pages 66 to 75 enable the Audit
Committee to review and monitor the
effectiveness of our risk management
and internal control systems and provide
assurance to the Board, in accordance
with the recommendations of the Code.
Read more on pages 66-75
Fair, balanced and understandable
The Directors confirm that they consider,
taken as a whole, this Annual Report and
Financial Statements are fair, balanced and
understandable and provide the information
necessary for shareholders to assess the
Company’s position, performance, business
model and strategy.
Read more on page 99
Modern slavery statement
In compliance with the UK Modern Slavery
Act, every year since 2016, Imperial Brands
submits its Modern Slavery Statement,
where we outline our commitments for
the upcoming year. You can read our 2025
Modern Slavery Statement on our website.
In 2025, Imperial Brands strengthened its
modern slavery and human rights
commitments through targeted audits,
supplier engagement, and awareness
initiatives, including the introduction
of ‘Human Rights Corners’ for improved
accessibility. All tobacco leaf suppliers
participated in the Sustainable Tobacco
Programme, supported by independent
assessments and the Leaf Partnership
Programme to address root causes of human
rights risks. Ethical sourcing was reinforced
through expanded Sedex and SMETA audit
coverage, integration into procurement, and
collaboration with Group Internal Audit to
enhance internal oversight tools.
Read more on page 49
SECTION 172 CONTINUED
BOARD GOVERNANCE
STATEMENTS
COMPLIANCE WITH THE UK
CORPORATE GOVERNANCE CODE
The Board confirms that the Group complied
with the principles and all relevant provisions
of the UK Corporate Governance Code 2018
(the “Code”) for the period under review,
with the exception of Provision 19; further
information on Chair tenure is provided on
page 93. The Code is publicly available at
www.frc.org.uk.
1. Board leadership and Company purpose
The Company is led by an effective and
determined Board, focused on the long-term
sustainable success of the Company,
generating value for shareholders and other
stakeholders, and contributing to wider society.
Read more on pages 77–83
2. Division of responsibilities
The Chair and the Chief Executive Officer
have clearly defined and separate
responsibilities, and there is an appropriate
combination of Executive and independent
Non-Executive Directors.
Read more on page 82
3. Composition, succession and evaluation
Appointments are subject to a formal,
rigorous and transparent procedure.
Succession plans, designed to promote
diversity, including gender, social and ethnic
backgrounds and cognitive and personal
strengths, are in place for the Board and
senior management. An evaluation of the
Board and its Committees is undertaken
annually, in line with the Code.
Read more on pages 92–95
4. Audit, risk management and
internal control
Formal, transparent policies and procedures
are in place to ensure the independence and
effectiveness of the internal and external
audit functions and the integrity of financial
and narrative statements, and to manage and
mitigate risks.
Read more on pages 96–101
5. Remuneration
The Company has remuneration policies
and practices designed to support its strategy
and promote long-term sustainable success.
Executive remuneration is aligned to the
Company’s purpose and vision, and is clearly
linked to the delivery of the Company’s
long-term strategy.
Read more on pages 102–118
The Board endeavours
to balance the different
priorities and interests
of our stakeholders
in a way compatible
with the long-term,
sustainable success
of the business.
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Shareholder
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Building and maintaining trust with our
stakeholders underpins the success and
reputation of Imperial Brands. Through
stakeholder collaboration we aim to develop
the Company, minimise our environmental
impact, make a positive social contribution
and uphold high standards of governance.
This section of the Annual Report provides
insight into how stakeholder engagement
is taken into consideration by the Board and
the Executive Leadership Team (ELT) in their
decision-making processes. It goes on to
describe how we monitor the effectiveness
of our engagement.
(i) Further information on how the Board has considered
stakeholders when making key decisions is given on the
following pages.
(ii) The Board’s decision-making process is illustrated in our
Section 172(1) statement on page 84 which is incorporated
into the Strategic Report by reference.
BUILDING TRUST
WITH OUR
STAKEHOLDERS
STAKEHOLDER ENGAGEMENT
STAKEHOLDER
GROUP
HOW THE BOARD CONSIDERS
THIS STAKEHOLDER
HOW WE ENGAGE WITH THIS STAKEHOLDER
& HOW WE MONITOR ITS EFFECTIVENESS
WHAT MATTERS TO THIS STAKEHOLDER /
HOW IS VALUE CREATED FOR THIS STAKEHOLDER
CONSUMERS
Our strategy starts with
our consumers. Millions of
adults worldwide choose to
enjoy our tobacco and next
generation products. The
better we understand the
preferences of our
consumers, the better we
are able to serve them. This
helps us grow our business,
and it helps us identify and
capitalise on opportunities
as a challenger business.
The Board participated in a UK business immersion
event in Bristol. This afforded Board members the
opportunity to get closer to the consumer by hearing
directly from our sales teams about consumer
behaviours, likes and dislikes. Board members were
briefed on the product development, with a particular
focus on nicotine and NGP product innovation
Our CEO and CFO met separately with consumers
in the UK, Germany and Australia during the year
Regular data-led updates from the Global Consumer
Organisation provide the Executive with evidence and
an opportunity to challenge assumptions when making
decisions related to our product portfolio
Consumer roundtables and focus groups are held to
understand consumers’ specific requirements and
preferences. Feedback from these focus groups is used in
our decision-making for investments in brand refreshes and
marketing and to assess the impact of our brand refreshes
and marketing campaigns on consumers
The Global Consumer Organisation, headed by the Chief
Consumer Officer, leads consumer-listening initiatives
across the Group
We believe market share changes across products, channels
and geographies reflect the effectiveness of our engagement
with consumers
Our focus groups informed us that adult consumers
want a choice of brands and quality products at the right
price points
Consumer preferences such as cigarette pack formats,
flavours and filters, as well as the choice of potentially
less harmful NGP, evolve over time
Fully understanding consumer needs allows us to remain
relevant and underpins consumer loyalty to brands
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STAKEHOLDER ENGAGEMENT CONTINUED
STAKEHOLDER
GROUP
HOW THE BOARD CONSIDERS
THIS STAKEHOLDER
HOW WE ENGAGE WITH THIS STAKEHOLDER
& HOW WE MONITOR ITS EFFECTIVENESS
WHAT MATTERS TO THIS STAKEHOLDER /
HOW IS VALUE CREATED FOR THIS STAKEHOLDER
COLLEAGUES
Our colleagues are
Imperial’s most important
asset and are critical to the
success of the business.
It is essential we create
a supportive, safe and
rewarding work environment
to enable them to deliver
our goals and develop their
careers. We believe that
a diverse and engaged
workforce is imperative
for business success.
Collective responsibility for workforce engagement
has been embedded into the Board’s governance
framework in the remit of the People, Governance
& Sustainability Committee, of which every
Non-Executive Director is a member
The Board held ‘Meet the Board’ events with groups of
colleagues in Bristol and Greensboro during the year,
giving the Board the opportunity to hear colleagues’
perspectives, allowing the Board to incorporate
colleagues’ views into its decision-making
The Board also engages with a broad cross-section
of employees by way of dinners, informal drinks
and site visits
CEO and leadership town hall meetings, in person
and virtually, providing direct feedback opportunities
‘Connections’, our purpose, vision and behaviours
development programme, continued, ensuring all
colleagues experience training to enhance their
understanding of these behaviours, and what they
mean for them in their role
Over 1,200 senior leaders are now equipped with skills in
performance coaching through the Connected Leadership
Programme: asking powerful questions, recognising and
valuing difference and actively listening to engage and
empower employee performance. These skills are now
embedded within the Connected Performance framework,
reinforcing a consistent approach to leadership and
performance enablement across Imperial Brands
We review the results of our annual workforce engagement
in the Employee Experience survey, and ask people leaders
to create action plans as a result of the survey and we
review completion and progress of these plans. In 2024,
we achieved a response rate of 83% with an engagement
score of 74% which is 1% above the global benchmark.
Continued progress on diversity & inclusion are taken
seriously
Responsibility and accountability, underpinned by a fair
assessment of contribution, with senior managers leading
by example
Health, safety and wellbeing continue to be a priority
CUSTOMERS
Engaging with retailers
provides useful insights into
our consumers’ behaviour
and preferences. This helps
us grow our business, even
where there are regulatory
headwinds, and identify
opportunities to be a
successful challenger.
We work closely with
distributors, wholesalers
and retailers to ensure our
products are available to
adult consumers in a diverse
range of outlets. These
stakeholders play a crucial
role in our business model.
The Board has participated in US store and retail
channel visits during the year. These visits provided
the opportunity to talk directly to retailers and observe
customers interacting with product information and
sales staff
Our CEO meets with customers throughout the year
Our market cluster leadership teams engage with our
customers to understand how to improve the effectiveness
of their sales forces
We work closely with our distributors to understand how
we can best manage our relationships, and have a dedicated
team to support distributor sales and build best practice in
distributor management across the Company
We use key account management practices to engage with
our largest customers to better understand their needs and
to create strong commercial partnerships to help our
businesses create value together
We monitor our performance relative to other FMCG
companies through benchmarking surveys such as
The Advantage Survey, run by an independent feedback
specialist that works with the 25 biggest retailers and
suppliers in the UK and globally; Imperial Brands was
ranked Number 1 in the 2025 Advantage Survey
We hold management roundtable events with regional
customers to hear first-hand how Imperial is performing
relative to peers
We have KPIs to monitor progress against operational
initiatives
A diverse portfolio of quality products that appeal to
consumers, with consistent communication on the launch
pipeline and investment behind relevant brands
Ease of ordering and a strong supply chain to maintain high
levels of on-shelf availability
Support to protect against illicit trade and underage sales
and guidance through industry changes, such as display
bans or plain packaging
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STAKEHOLDER ENGAGEMENT CONTINUED
STAKEHOLDER
GROUP
HOW THE BOARD CONSIDERS
THIS STAKEHOLDER
HOW WE ENGAGE WITH THIS STAKEHOLDER
& HOW WE MONITOR ITS EFFECTIVENESS
WHAT MATTERS TO THIS STAKEHOLDER /
HOW IS VALUE CREATED FOR THIS STAKEHOLDER
GOVERNMENTS
AND REGULATORS
The regulation of tobacco
and nicotine varies
significantly across our
global markets. We believe
that reasonable and
balanced regulation
of tobacco and nicotine
products is essential to
support consumers on their
harm reduction journey,
and we seek constructive
engagement with policy
makers and regulators
to achieve this.
Our corporate strategy includes building a portfolio
of next generation products (NGP) with potentially
reduced harm
During the year our Chief Corporate Affairs Officer
presented the Corporate Affairs strategy to the Board.
The Board also considers the Group’s regulatory risks
as part of its periodic review of Principal Risks and
Uncertainties
The Board received a briefing on the US regulatory
landscape from an external speaker who was formerly
a regulator
Management provides updates to the Board as part
of the regional business reviews, including, where
relevant, any updates on regulatory changes
The Board welcomes constructive engagement
with regulators, with management being primarily
responsible for understanding and ensuring
compliance with applicable laws and regulations
Management regularly drafts responses to government
consultation exercises, highlighting the potential impact
of any regulatory changes under consideration on our
business, our consumers, customers, suppliers, workforce,
and other stakeholders and, where relevant, sharing our
scientific evidence and consumer research with
government, and to explore policy alternatives
We also assess regulatory impact on product design and
marketing support around brand launches
This monitoring allows the Board to take relevant legislation
and regulation into account when making its decisions
We track regulatory approval of products that we submit
for listing in markets where this is required
We review proposed new legislation and the Company’s
ability to be involved in the development of regulation
effectively supporting public health objectives
We monitor both direct and indirect feedback from
regulators
The Board would like to engage more with this stakeholder
group
Tobacco excise revenues
Public health spending on smoking-related health issues
Assessment of reduced harm from NGP
Confidence that our business is operating in compliance
with local laws and regulations in each government’s
or regulator’s region
Collaboration with law enforcement agencies countering
illicit trade and preventing youth access to tobacco and
nicotine products
INVESTORS
Our investors provide capital
to the business with a view
to receiving a return on that
investment through capital
growth and dividend returns.
Our CEO, CFO and Chair have regular meetings
with our major investors to update them on our
performance, hear their views directly and consult
with them
The Board receives a report at every meeting on stock
market performance, investor engagement, and
investor/analyst feedback following all investor events
Our AGM provides an opportunity for the Board to meet
with investors
Our Annual and Interim results presentations inform
investors how the business is performing
We maintain a programme of active dialogue with our key
financial stakeholders, including institutional shareholders,
potential investors, holders of our bonds and sell-side
research analysts
Our CEO, CFO and senior management present at various
conferences throughout the year, including the Deutsche
Bank Consumer Conference in Paris in June and the
Barclays Global Consumer Staples Conference in Boston
in September 2025
In March 2025, our Chair, CEO, CFO and Executive
Leadership Team presented the next phase of our strategy
at our Capital Markets Day
Our Chair met with our major shareholders following our
CEO succession announcement
Confidence in the Board that it has appropriate oversight
of the management team
Trust in the management team to have a strategy and
operational plan to optimise value creation and ensure
the long-term sustainability of returns, and to deliver
on that strategy
The setting of realistic expectations combined with
transparent reporting of performance against KPIs, both
financial and non-financial, including ESG metrics
Disciplined capital allocation
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STAKEHOLDER
GROUP
HOW THE BOARD CONSIDERS
THIS STAKEHOLDER
HOW WE ENGAGE WITH THIS STAKEHOLDER
& HOW WE MONITOR ITS EFFECTIVENESS
WHAT MATTERS TO THIS STAKEHOLDER /
HOW IS VALUE CREATED FOR THIS STAKEHOLDER
SUPPLIERS
Suppliers are essential
partners in our business
operations – and their
commitment to quality,
innovation, and ethical
practices supports both our
commercial success and our
People and Planet agenda.
The Board reviews and approves our Modern Slavery
Statement annually
Suppliers within our supply chain are included as part
of the Board’s ESG considerations (focus on sustainable
& responsible sourcing and farmer’s livelihood as part
of our People and Planet strategy)
Factory and site visits help the Board understand the
complexities of our global supply chain
Our Supplier Code of Conduct helps ensure we engage
suppliers that meet our minimum standards
Our Supplier Relationship Management ‘SRM Connect’
Programme creates further opportunities to align with
suppliers on our strategic goals, strive for mutual growth
and communicate to suppliers the importance of our People
and Planet agenda and align with them on our broader
company objectives
All our suppliers undergo trading and financial screening
checks and ongoing legal and trading compliance screening
All new suppliers for Leaf, NTM (Non-Tobacco Materials) and
NGP (Next Generation Products) must undergo a Supplier
Qualification Programme, starting with a self-assessment
covering business conduct, environmental management
and labour practices (e.g. discrimination, child/forced
labour, freedom of association, remuneration, working
hours, health & safety)
Critical NTM and NGP suppliers are required to undertake
on-site quality assurance audits as part of onboarding and
further risk-based audits after that
Partner suppliers complete a self-assessment questionnaire
on the Sedex platform (ethical trading risk assessment
platform) covering the following categories at factory, office
and facility level: Labour, Health & Safety, Environment, and
Business Ethics. Those who contain high-risk findings are
required to undertake an onsite detailed audit performed
by certified auditors
Our CEO met with and presented to suppliers at the SRM
Connect conference in Warsaw in June where we discussed
the supplier community’s role in supporting the delivery
of the 2030 strategy
Sourcing products and services in a compliant, sustainable
and socially conscious manner
Fair and ethical treatment, openness and transparency. If
they have a concern, suppliers can use the Speak Up process
Supporting and developing farming communities and
promoting sustainable agriculture through STP and our
People and Planet farmer livelihood and welfare ambition
We make a positive impact within our suppliers’ tobacco-
growing communities through our Leaf Partnership
programme that addresses a lack of access to basic needs
Further information on the Board’s decision-making process and how it considers stakeholders is illustrated
in our Section 172(1) statement on page 84, which is incorporated into the Strategic Report by reference
STAKEHOLDER ENGAGEMENT CONTINUED
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HOW THE BOARD MONITORS CULTURE
Our journey to a high-
performance culture has
already delivered results.
We introduced five core
behaviours, developed our
people and have plans to
build on this success and
to become an even stronger
challenger business.
CREATING
A HIGH-
PERFORMANCE
CULTURE
Share our knowledge and experience
with others
Listen to and respect the expertise
of our colleagues
Influence not dictate
Trust others – we don’t need to control
everything
Balance local agendas with central needs
(keep the bigger picture in mind)
Compete outside, not inside
Underpinning mindset
It’s part of my job to help others
to be successful
I don’t have to control everything
Working collaboratively with others will
deliver better outcomes for all of us
Be accountable and hold others to account
Deliver what you promise
Stay relentlessly focused on agreed priorities
Let go of things that aren’t important anymore
Challenge constructively and be open
to being questioned yourself
Don’t blame others
Underpinning mindset
A commitment is a commitment
It’s okay to speak up
When I do the right thing, my contribution
will be judged fairly
Make time to welcome people
Acknowledge and appreciate what
others bring
Take care of each other – no exceptions
Celebrate differences as a strength
Show our authentic selves
Bring honesty, openness and humility
to tough conversations
Underpinning mindset
I am welcome
I am valued
The more diverse we are, the stronger
our business will be
Anticipate future opportunities
and challenges
Stay one step ahead, always
Balance long-term performance and
short-term delivery
Work to make things better
Embrace change and welcome innovation
– be willing to try new things and ready
to learn from setbacks
Underpinning mindset
I believe in our success
It’s important to try new things
Learning from our failures and setbacks
is how we learn to be successful
Our behaviours
Acting with the highest standards of behaviour
is both the right thing to do and the way in
which we will deliver sustainable growth over
the long term.
We have developed the skills, tools and ways
of working to deliver strong operational and
financial performance. We introduced core
behaviours, developed colleagues through
training and put our leaders through intensive
coaching to help them nurture high-performing
teams. Our culture became more collaborative,
accountable and inclusive.
Everything we do starts with the consumer
in mind
We make it our business to understand
consumers
We bring rigour to the choices we make
– we’re curious, ask questions, use facts
and data, seek alternative views to test
our thinking
Combine data and insight, as well as our
instinct and experience to make decisions
Deliver quality in the work we do
Underpinning mindset
Everything we do starts with the consumer
– we’re here because of them
Knowing our consumers is the key to
unlocking our future success
Good decisions are made by combining data,
insight and experience
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HOW THE BOARD MONITORS CULTURE CONTINUED
CULTIVATING
A HIGH-
PERFORMANCE
CULTURE
Our goal is to foster an
environment that inspires,
engages, and helps all
colleagues reach their full
potential, becoming a stronger
challenger business.
Monitoring and evaluating our
culture and behaviours plays
a vital role in this effort.
Culture is assessed through regular reporting
to the Board and Executive Leadership Team,
using data from activities such as engagement
and pulse surveys, town halls and a multi-
channel communications programme, along
with other indicators, including safety trends
and whistleblowing reports.
The People, Governance & Sustainability
Committee assists the Board in examining
diversity, inclusion, and talent management,
while the Remuneration Committee helps the
Board evaluate executive performance and
ensure our pay and reward strategies align
with our core behaviours, culture and purpose.
Regular site visits are scheduled as part
of the Board’s annual programme so that
Directors can gain further insight into
Imperial’s culture by meeting colleagues,
observing the Group’s activities, and seeing
how our systems and processes support the
workforce in delivering performance.
Every Non-Executive Director, individually
and working together as the People,
Governance & Sustainability Committee,
has responsibility for workforce
engagement; this is considered to be
effective as it allows every Board member
to participate rather than channelling
engagement through a single Director.
Directors receive updates on key People
topics. The Board further monitors the work
of the Group’s business employee resource
groups (BERGs) which helps the Board
better understand concerns of diverse
groups within the workforce.
The Board monitors wider workforce
policies and practices to ensure they meet
Imperial’s values and support the long-term
sustainable success of the Company.
The Board reviews the results of the annual
employee engagement survey, along with data
on how engaged our workforce is compared
to peer companies. Actions resulting from
the engagement survey are monitored by
the Board until completion. Directors also
take part in an employee engagement
programme aimed at providing the Board
with employees’ views on Imperial’s culture
to better guide Board decisions.
Members of the Remuneration Committee
participate in a focus group session with
a cross-section of employees to discuss
executive remuneration and wider
workforce pay practices.
Directors regularly review the findings of
the Group’s whistleblowing and employee
concerns processes, including trends data
and investigation closure.
The Code of Conduct sets out what Imperial
stands for and how it operates. The Board
approves the Code and reviews its
engagement programme, including training
and communication.
SITE VISITS
WORKFORCE POLICIES
AND PRACTICES
EMPLOYEE CONCERNS
PROGRAMME
ENGAGEMENT SURVEY
CODE OF CONDUCT
PEOPLE TOPIC UPDATES
REWARD ENGAGEMENT
EMPLOYEE ENGAGEMENT
PROGRAMME
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PEOPLE, GOVERNANCE & SUSTAINABILITY COMMITTEE
REPORT OF THE
PEOPLE, GOVERNANCE
& SUSTAINABILITY
COMMITTEE
Dear shareholder,
I am pleased to introduce this year’s report for the
People, Governance & Sustainability Committee.
It has been a busy year for the Committee,
with a strong focus on leadership succession
and development, as well as continuing to
strengthen the skills and experience Imperial
Brands will need across the organisation to
implement the new strategy.
During the year our executive succession
planning supported a smooth CEO transition,
as Stefan Bomhard retired as CEO and
Lukas Paravicini and Murray McGowan
were appointed as CEO and CFO respectively.
Using input from external search consultants
Spencer Stuart
1
, the Committee considered
internal and external candidates for each role,
mindful of the skillsets required as the Group
embarks on the next phase of its strategy.
The Committee concluded that both Lukas
and Murray were the best candidates to lead
Imperial in the next phase of the strategy and
recommended their appointment to the Board.
Non-Executive Director succession remained
a focus on our agenda in 2025. Our candidate
search looked for global transformation
experience in large, multinational companies
as a helpful addition to the Board as we
oversee the next phase of the strategy.
Given this profile, we were pleased to appoint
Abbe Luersman as a Non-Executive Director,
effective January 2026.
Outside succession and development, the
Committee continued to oversee all aspects
of Imperial’s governance and sustainability
agenda, reviewing the non-financial reporting
programme and welcoming the newly
appointed Ethics & Compliance Director.
Looking ahead to 2026, the Committee’s focus
will remain on talent and development, views
of the workforce as Imperial implements the
new strategy and oversight of the Group’s
ESG and Ethics & Compliance programmes.
THÉRÈSE ESPERDY
CHAIR OF THE PEOPLE, GOVERNANCE
& SUSTAINABILITY COMMITTEE
KEY RESPONSIBILITIES
Oversight of the Company’s people
and culture policies and practices
to ensure they align with the Group’s
values, strategy, performance and
risk management framework
Ongoing review of Board and Executive
Leadership Team succession planning
Management and mitigation of key ESG
and ethics and compliance (E&C) risks
Management and oversight of the
Group’s ESG and E&C performance
QUICK LINKS
Committee Chair introduction 92
Committee activities in 2024/25 93
Succession planning 93
Sustainability 94
Employee engagement 94
AGM and reappointment
of Directors 94
Board evaluation 95
1. Spencer Stuart is a signatory to the Executive Search
Firms’ Voluntary Code of Conduct and had no other
connection with the Company or its Directors during
the year.
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Role of the People, Governance
& Sustainability Committee
The People, Governance & Sustainability
Committee provides oversight of the Company’s
people and culture policies and practices to
ensure they align with the Group’s values,
strategy, performance and risk management
framework. It keeps succession plans for the
Board and the Executive Leadership Team
under review. The Committee monitors the
management and mitigation of key
environmental, social & governance (ESG) and
ethics and compliance (E&C) risks as well as
the Group’s ESG and E&C performance.
Activities during the year
Succession planning
Executive
The Committee routinely reviews succession
plans for the Board and Executive Leadership
Team over the long, medium and short term,
taking into account the skills and capabilities
needed to implement the Group’s evolving
strategy. Executive succession planning is
underpinned by a comprehensive talent review
process, including talent mapping of external
candidates and identified areas of focus and
coaching for internal candidates as part of
the succession pathway.
As recognised succession candidates for
the roles of CEO and CFO, Lukas Paravicini
and Murray McGowan underwent rigorous
evaluations, including an external third-party
assessment, to identify the skills and qualities
both could bring to these roles. The Committee
supplemented this assessment with
benchmarking of external candidates.
Following Stefan Bomhard’s retirement,
the Committee utilised this work to confirm
the suitability of Lukas and Murray for the
roles of CEO and CFO (and in Murray’s case,
as an Executive Director of the Board).
In addition, the Committee reviewed
the Group’s broader talent model, which
considered the pipeline for potential leaders
across different management grades and
programmes to identify and develop future
leaders within the organisation.
Non-Executive
The Committee remained active in its
consideration of NED succession, reviewing
the tenure, skills, experience and diversity of
existing Board members and succession plans
for the chairs and membership of the
Committees. Following these reviews, criteria
for an additional NED were agreed to bolster
the skills and experience of the Board in the
areas of transformation and organisational
design. An external search consultancy, Lygon
Group
1
, was appointed to undertake the search,
with the Committee and Executive Directors
interviewing short-listed candidates.
The Committee concluded that Abbe
Luersman would be a strong addition as
a Non-Executive Director given her deep
experience as an HR leader in global, listed
businesses and wide-ranging experience in
transformation programmes. Abbe will join
the Board in January 2026.
Chair succession
The Committee undertakes succession
planning for the Chair as part of its regular
work programme. Imperial’s Chair, Thérèse
Esperdy, joined as a Non-Executive Director
in July 2016 and was appointed Chair in 2020
– thereby reaching her nine-year tenure in
July 2025. With the succession of Lukas and
Murray to the roles of CEO and CFO, the Board
considered that the needs of the Group would
be best met by Thérèse remaining as Chair
to provide continuity during the Executive
transition and maintaining oversight of
management’s delivery of the new strategy.
In reaching this decision, the Board reviewed
feedback from investors and advice from
its brokers.
The succession process for the role of Chair is
led by Sue Clark, Imperial’s Senior Independent
Director, with support from the wider Committee.
PEOPLE, GOVERNANCE & SUSTAINABILITY COMMITTEE CONTINUED
1. Lygon Group is a signatory to the Executive Search Firms’
Voluntary Code of Conduct and had no other connection
with the Company or its Directors during the year.
NOVEMBER 2024
Results of the Employee Experience survey
Talent programme review
Diversity & Inclusion review – including
Parker Review targets and progress
FY24 Health and Safety performance
review
FY24 whistleblowing tool cases
2024 ESG report, including assurance
update from the external auditors
JANUARY 2025
ESG remuneration targets
Ethics & Compliance report
Board Committee composition, rotation
and succession planning
APRIL 2025
Executive succession
Group ESG Committee Terms of Reference
Ethics & Compliance report
ESG report
Non-financial reporting assurance
and approach for 2025 Annual Report
and Accounts
Proposal for 2025 evaluation of the Board
and its Committees
JULY 2025
NED search update
Chair succession
SEPTEMBER 2025
NED search update
Chair succession
Executive Leadership Team portfolio
changes and performance review
TCFD reporting overview
Annual review of Code of Conduct
programme
Ethics & Compliance Director: first 100
days’ reflections
Review of Non-Executive Directors’
skills, tenure, time commitment and
independence in proposing for re-election
PEOPLE, GOVERNANCE &
SUSTAINABILITY COMMITTEE’S
ACTIVITIES 2024/25
A summary of topics covered by the People,
Governance & Sustainability Committee
in its meetings during the financial year
is provided below.
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Sustainability
During the year, the Committee received
updates on the Group’s ESG and E&C
programmes, including periodic reports using
the Group’s sustainability strategy pillars and
Code of Conduct categories. The Committee
held deep-dive updates on TCFD reporting
and the Group and Supplier Codes of Conduct,
hearing directly from the new E&C Director
on her initial observations of Imperial’s
E&C programme.
The Committee made recommendations
to the Remuneration Committee regarding
ESG-linked remuneration targets and
outcomes, including analysing methodology
to ensure targets were appropriately achievable
whilst remaining stretching.
Non-financial reporting assurance
The Committee reviewed non-financial
materials intended for disclosure or publication
and their associated assurance, including the
Modern Slavery Act statement, ESG section
of the Annual Report and ESG Performance
Summary. The Committee met with the
Group’s auditors to review the assurance
processes around non-financial reporting and
assess the impact of delays to the Corporate
Sustainability Reporting Directive (CSRD)
rules on Imperial’s reporting framework.
Employee engagement
As part of the Board’s employee engagement
programme, every Non-Executive Director,
individually and working together as the
People, Governance & Sustainability
Committee, has responsibility for workforce
engagement. This is considered to be effective
as it allows every Board member to participate
rather than channelling engagement through
a single Director and insights are heard
collectively. The Committee reviews the
mechanism for employee engagement and
its effectiveness on an annual basis as part
of the Committee evaluation.
During the year, the Committee monitored
progress against Imperial’s diversity, equity
and inclusion ambition and the Parker Review
objectives on ethnic minority representation.
The Committee considered employee data to
inform policy and practice. Information on
Board and executive management diversity
is on page 83.
Independence
The independence of NEDs is reviewed
and confirmed annually by the Committee.
In accordance with the provisions of the
UK Corporate Governance Code, the Chair
was considered independent at the time
of appointment to the Board and role,
and the Board considers all other NEDs
to be independent.
Conflicts of interest
The Company’s Articles of Association allow
the Board to authorise potential conflicts of
interest as they arise and to impose such
limits as appropriate. In addition, the Board
Conflicts of Interest policy sets out guidance
and process for the identification and approval
of conflicts of interest. This and the register
of Directors’ commitments maintained by the
Company Secretary informs the Committee’s
assessment of a Non-Executive Director’s
independence when proposing a Director
for election or re-election to the Board.
Time commitment and outside appointments
Each NED is expected to commit sufficient
time to the Board and the Company. Time
commitments for Directors are reviewed by the
Committee on a regular basis, including ahead
of recommendation for appointment to the
Board, on changes in role (joining additional
Committees or taking on further responsibility)
and prior to approving external appointments.
In 2025, employee engagement sessions were
aligned with the themes of the Board’s agenda
for the year – intended to better inform the
Board’s discussions and decision-making.
Directors met with a broad cross-section of
our workforce, including colleagues from our
Finance function, our Bristol office and ITG
Brands in the US. Members of the
Remuneration Committee met colleagues from
ITG Brands in Greensboro to understand views
on reward. Feedback and themes from each
session were discussed by the Board at its
subsequent meetings.
As part of its annual evaluation, the
Committee concluded that the employee
engagement programme remained effective
and was appropriate for Imperial, given its
structure and business model. The evaluation
asked that further opportunities for
engagement be found when the Board visits
overseas operations in 2026.
Diversity
The Committee continued to appraise
appointments to the Board from the
perspective of its commitment to diversity
in its composition and succession plans.
The proportion of women on the Board
at 30 September 2025 was 40%, with a
45% proportion of women in our Executive
Leadership Team. Female representation
on the Board meets the UK Listing Rules and
the FTSE Women Leaders Review diversity
benchmark target of 40%, and the UK Listing
Rules and FTSE Women Leaders Review target
for at least one senior Board position to be held
by a woman: in our case both the Chair and the
Senior Independent Director.
The Board has two Directors who identify
as being from an ethnic minority background,
meeting the Parker Review’s current
recommendation of at least one Director.
One member of our Executive Leadership
Team identifies as being from an ethnic
minority background.
If any Director wishes to take on an additional
external appointment, they are required to
seek permission from the Board. During the
year, the Board approved the appointments
of Julie Hamilton as a non-executive director
of Ontex Group NV and Stefan Bomhard
as a non-executive director of Flutter
Entertainment plc and the Magnum Ice Cream
Company, having concluded that both would
continue to have sufficient time to dedicate
to their role at Imperial.
AGM and reappointment of Directors
All Directors, with the exception of Stefan
Bomhard, are being submitted by the
Company for re-election at the 2026 Annual
General Meeting, with Abbe Luersman and
Murray McGowan to be proposed for election.
In its recommendations to the Board for
election/re-election, the Committee undertook
an assessment of each Director, including
performance and, for each NED, their continued
independence and time commitment.
Director induction
Upon appointment, all Directors receive a
comprehensive induction, tailored to their
individual skills and experience and the
Committees they will join.
Ahead of his appointment as an Executive
Director (and Chief Financial Officer), Murray
McGowan received an induction programme
covering the duties of a UK-listed company
director and Board governance, including
briefings from the General Counsel, external
legal counsel and Company Secretary.
Feedback is sought from Directors
undertaking their induction programme
and in the Committee’s evaluation to ensure
the programme remains effective.
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Board training
Beyond initial induction, Directors receive
ongoing training and development during
the year. This includes sessions during Board
visits, such as the Board’s visit to ITG Brands
in Greensboro where members visited our
sales channels and observed our AI-enabled
sales programmes in action. Training is also
delivered through targeted ‘NEDucation’ sessions
with external and internal subject matter
experts. During 2025, NEDucation sessions were
held on Modern Oral Nicotine, developments in
global markets, the impact of tariffs on trade
policy and the macro-economic outlook.
Review of the People, Governance
& Sustainability Committee
For its 2025 evaluation, the Committee
undertook an internally facilitated review
using an anonymised online questionnaire.
The evaluation confirmed that the Committee
was operating effectively, with positive
feedback on the CEO and CFO succession
process. The evaluation examined how the
Committee had managed its expanded remit
during the year, with consensus that this had
been done effectively and that the Committee
was the right place for oversight of ESG and
E&C issues. It was agreed that ELT succession
planning, the Employee Engagement survey
and assurance of ESG reporting would remain
areas of focus for 2026.
2025 Board review
An internally facilitated Board review was
held in 2025, led by the Chair and Company
Secretary. The Chair’s performance review
was led by the Senior Independent Director
and a review of the CEO’s performance was
led by the Chair. In addition, the Chair held
one-to-one meetings with each NED which
covered their individual performance.
Feedback from the review was consolidated
and presented to the Board. The review
concluded that the Board and its Committees
continued to operate effectively, with the right
balance of skills, experience and diversity to
oversee the Group’s strategy.
Highlighted actions to further enhance the
Board’s effectiveness during 2026 included:
Monitoring the implementation of the
strategy and keeping a watching brief on
whether fast-paced changes to the sector,
markets or regulation need a strategic
response.
Keeping the development of the risk
management and controls programme
under review as it continues to mature.
Ensuring regular coverage of progress
and impact of the Group’s transformation
programme on the Board’s agenda.
Board evaluation
An evaluation of the Board, its Committees, the Chair and individual Directors is undertaken
on an annual basis.
Actions from the 2024 Board review
The Board undertook an internally facilitated review, with the outcomes and agreed actions
being focused on by the Board throughout the year. Progress against these actions include:
2024 Action Actions taken during the year
Board meeting logistics
Further refinement of meeting and agenda
logistics to create more space for reflection.
The Chair, CEO, Committee Chairs and
Company Secretary reviewed the forward
agendas for each forum for FY25 to ensure
key topics were covered but any overlap
removed and the cadence of agenda items
remained appropriate.
Focus on pre-meetings, more effective
use of Board breakfasts and dinners and
targeted briefing papers.
Risk management and controls programme
Continued oversight of the ongoing
development of the risk management
and controls programme.
The Board received regular updates on
the development of the risk management
and controls programme, with the Audit
Committee focusing on Internal Audit and
reporting progress to the Board.
Changes to risk reporting tested and
discussed with the Board to enable greater
insight by Directors.
Briefing sessions on Provision 29
requirements and progress on
implementation.
Strategy
Concluding the comprehensive evaluation
of components of the next five-year strategy.
Workshop sessions held to review and
test component strategy elements before
aggregating into a proposal for 2030.
Review of the assumptions underpinning
the proposed strategy and how these would
be monitored going forward.
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AUDIT COMMITTEE
AUDIT
COMMITTEE
REPORT
The key relationships between the Committee
and Internal Audit and with the Company’s
external auditor, were maintained across the
year, with regular private meetings taking place
in addition to time during Committee meetings.
Ensuring the independence and objectivity of
the external auditor is critical for the Committee.
The Committee maintained its ongoing
programme of engagement with regional
finance directors, central function heads and
finance specialists across the year, enabling
Committee members to get into greater detail
on specific matters and the varying challenges
faced across the business. Time was also spent
on a more informal basis with members of the
Finance and IT teams, again providing
Committee members with valuable insights on
aspirations, opinions and ambitions, as well as
providing an opportunity to engage with these
employees, including hearing about working
for Imperial Brands.
The following pages provide an insight into the
range of activities and deliberations of the Audit
Committee during the financial year, supported
by a fuller list of key matters considered by the
Audit Committee set out on pages 98 to 99.
ALAN JOHNSON
CHAIR OF THE
AUDIT COMMITTEE
Dear shareholder,
I am pleased to present the Audit Committee
Report for the year ended 30 September 2025,
a year in which I took over as Committee Chair
from Jon Stanton. I would like to thank Jon
for his excellent leadership of the Committee
during his tenure as Chair, and for his
assistance during my transition to the role.
My succession as Committee Chair was not
the only change of note this year. We welcomed
a new external audit partner, Kath Barrow,
who took over as the Lead Audit Partner
as part of mandatory rotation requirements.
I look forward to working with Kath and to
a meaningful, constructive and appropriately
challenging engagement. I would like to
express the Committee’s thanks to Marcus
Butler, whom Kath replaced, for his service.
The Committee has spent time during the
year looking at risk and controls, not only
as part of its routine responsibility supporting
the Board, but also as the Company prepares
for the implementation of Provision 29 of the
UK Corporate Governance Code 2024, which
requires a review of the effectiveness of the
internal control framework.
The Committee has continued to provide
assurance over the integrity of the
Group’s financial statements and related
announcements, supported the Board at
the year-end with the assessment of the
Company’s Annual Report as being fair,
balanced and understandable, as well as
providing a high level of scrutiny over
judgements made by management in key
accounting matters.
KEY ACHIEVEMENTS
AND OUTCOMES
Transition of Committee Chair
Analysis and understanding of ECCTA
requirements and Company’s preparedness
Regional and functional deep dives,
including Tax, Treasury and Insurance
Transformation programme update
QUICK LINKS
Audit Committee Chair introduction 96
Role of the Audit Committee 97
About the Audit Committee 97
Audit Committee’s activities 97
Significant financial reporting
matters 98
Governance, risk management
and internal control 100
Internal audit 100
External audit 100
LOOKING AHEAD
Continuation of the Company’s preparations
for the implementation of Provision 29 of
the Corporate Governance Code
Transformation programme accounting
Review and Approval of Auditor
Independence Policy
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Role of the Audit Committee
The Audit Committee assists the Board
in fulfilling its corporate governance
responsibilities relating to financial and
narrative reporting, and controls. This includes
oversight of the Group’s internal control systems,
risk management process and framework,
the Group Internal Audit department and
the external auditor.
It also involves ensuring the integrity of
the Group’s financial statements and related
announcements.
This report sets out how the Audit Committee
has discharged its duties in accordance with
the UK Corporate Governance Code 2018 (the
Code) for the year ended 30 September 2025,
and details the key matters considered and
findings during the year.
Key responsibilities
In line with the authority delegated by the Board,
the Audit Committee:
Reviews and challenges the critical
management judgements and estimates
which underpin the financial statements,
drawing on the views of the external
auditor in making an informed assessment,
particularly in relation to each of the key
matters detailed on pages 98 to 99
Maintains appropriate oversight over the
work and effectiveness of Group Internal
Audit, including confirming it is appropriately
resourced, reviewing its audit findings and
monitoring management’s responses
In addition to the members of the Committee,
other regular attendees during the year were
as follows: Board Chair, Chief Executive, Chief
Financial Officer, General Counsel, Company
Secretary, Global Finance Director, Director of
Internal Audit, Deputy Company Secretary (as
Secretary to the Committee), Group Financial
Controller, Global Tax Director and EY.
Governance
The Audit Committee consists entirely of
independent Non-Executive Directors as defined
by the Code. The Audit Committee chair, and
both Jon Stanton and Andrew Gilchrist meet
the Code’s standard of having recent and
relevant financial experience and also have
competence in accounting and/or auditing.
The Board is satisfied that the Committee as
a whole has the required competence relevant
to the sector in which the Company operates,
supported by the FMCG experience of Sue
Clark, Andrew Gilchrist and Alan Johnson.
The Audit Committee’s terms of reference
state it must meet at least three times a year.
The quorum for meetings is two.
At each meeting, both the Director of Group
Internal Audit and EY had the opportunity
to meet with the Audit Committee without
management present.
The Audit Committee is authorised to seek
external legal advice and other independent
professional advice as it sees fit.
Monitors and evaluates the effectiveness
of Imperial’s risk management and internal
control systems, including obtaining
assurance that controls are operating
effectively and are evidenced as such through,
for example, the internal self-certification
exercise and subsequent internal audit testing
Reviews the adequacy and security of
the Company’s procedures for detecting
fraud, and its systems and controls for
preventing bribery
Scrutinises the independence, approach,
objectivity, effectiveness, compliance and
remuneration of the external auditor
Assesses the going concern status and
medium-term viability of the Group
Assists the Board in confirming that,
taken as a whole, the Annual Report is fair,
balanced and understandable, and provides
the information necessary for shareholders to
assess the Company’s position, performance,
business model and strategy (see page 99)
About the Audit Committee
Membership
Membership and attendance of the Committee
can be found on page 83.
Biographical details of the current members
of the Audit Committee are set out on pages
78 to 80. Members of the Audit Committee
are appointed by the Board following
recommendation by the People, Governance
& Sustainability Committee. Alan Johnson
assumed the role of Audit Committee Chair
during the year, succeeding Jon Stanton who
remained a member of the Committee.
Audit Committee evaluation
An internal evaluation of the Board and
Committees was undertaken in 2025. Further
information on the process undertaken can
be found within the People, Governance &
Sustainability Committee report, on page 95.
The evaluation confirmed the Audit
Committee continues to function well,
maintaining a constructive and healthy
relationship with the external auditor.
Risk is a focus area for the Board and Audit
Committee, with internal control and
assurance around risk, and the attestation of
the Group’s material internal controls, being
critical areas for the Committee, particularly
with the implementation of Provision 29 of the
UK Corporate Governance Code 2024 and the
Committee’s role supporting the Board. A
change to the Audit Committee Chair during
the year, a new EY Lead Audit Partner, and the
change of Chief Financial Officer on 1 October
2025 were all noted, with an acknowledgement
that strong relationships would need to be
maintained across that matrix.
Audit Committee’s activities 2024/25
A summary of the topics covered by the Audit
Committee in its meetings during the financial
year is provided below. In addition to the
matters listed, the Committee also held private
review meetings, separately, with internal and
external audit, as well as engaged with
members of management as required for deep
dives where issues required greater scrutiny.
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Significant financial reporting matters
The Audit Committee considered the appropriateness of the following areas of significant judgement, complexity or estimation in connection with the FY25 financial statements:
Matter considered How the Committee addressed this
Taxation
(See notes 8 and 23 to the financial statements for further information)
The Group is subject to taxation in a number of international jurisdictions, requiring
significant management judgement in relation to effective tax rates, tax compliance
and the reasonableness of tax provisions, which could materially affect the Group’s
reported results.
The Group is subject to periodic challenges by local tax authorities on a range of
matters and there are uncertain tax positions in relation mainly to the following
principal matters: German branch capital structure; German transfer pricing;
German CFC review; UK Enquiries for Transfer Pricing and Financing.
The French tax authority challenge in respect of an intra-Group disposal was
finalised successfully in favour of the Group.
The Audit Committee received a detailed update from management at each Committee meeting on the
status of ongoing enquiries and tax audits with local authorities; the Group’s effective tax rate for the current
year; recognition of material assets, including deferred tax assets; and the level of provision for known and
potential liabilities. In addition, the Audit Committee discussed material positions with the external auditor
in support of developing an independent perspective on the positions presented.
The Audit Committee received specific progress reports in connection with the positive outcome of the
French tax litigation; German tax authority audits into debt and equity allocation to branches; transfer pricing
on financing and CFC review; UK tax authority enquiries into financing and transfer pricing. Ongoing mutual
agreement procedures impacting provisions and reporting disclosures were further discussed.
The Audit Committee reviewed the status of each material tax judgement, including a range of possible
outcomes, noted that independent third-party support had been obtained for each judgement, and agreed
that the level of tax provisions and disclosures was appropriate.
The Audit Committee continued to consider the appropriateness of items treated as adjusting and concluded
that the items satisfied tax adjusting item criteria on the basis of materiality and nature.
Litigation matters and competition investigations
The Group is exposed to litigation matters arising from claimants seeking remedies
from the Company or its subsidiary companies. A small number of claims alleging
smoking-related health effects, NGP-related product litigation (in the US only) and
a claim arising from specific US legislation (Helms Burton) remain ongoing. One
element of the US States’ settlement agreements remains unresolved (Delaware),
employment related claims arising from a number of legacy disputes are ongoing, and
the Group faces one ESG related claim (see notes 25 and 30). Decisions by two national
Competition Authorities in the EU are under appeal and proceedings continue.
The Audit Committee reviewed all material litigation matters. During the year it considered reports from
the Group’s lawyers which confirmed that the Group continues to have meritorious defences to a number of
actual and threatened legal proceedings. The Committee further discussed the Group’s position in respect of
the unresolved Delaware US States’ settlement agreements, including consideration of reports from external
counsel, and the Group’s basis for appeal.
The Audit Committee concluded that risks in respect of these actual and threatened legal proceedings and
litigation matters otherwise covered in this report, along with any proceedings appealing competition
authority decisions, are appropriately disclosed or provided for in the Group’s Annual Report and Accounts.
Going concern and viability statement
The Directors are required to consider whether it is appropriate to prepare the
financial statements on a going concern basis and explain how they have assessed
the prospects of the Company over a longer period, particularly in the context of
uncertainty in the external environment.
Management performed a comprehensive series of stress tests to confirm that
the going concern basis and viability statement remain appropriate. These tests are
described in the going concern statement on page 74. The tests involved the stress
testing of the resilience of the Group to certain changes in trading conditions that
may come about as a result of the global economic environment, as well as realisation
of other key risks, including climate change and the impact of the share buyback
programme.
The Audit Committee reviewed the tests on operating cash flows, the ongoing resilience of demand and
supply, and disruption to global supply chains. The Audit Committee noted the Group’s ability to raise funds,
with significant oversubscription to the Group’s debt financing offers even in challenging markets.
These allowed the Audit Committee to form an opinion as to the ability of the Group to remain a going
concern for a period of 12 months from the date of approval of the financial statements and make its
recommendation to the Board. The Audit Committee determined this was appropriate given the Group’s cash
flow resilience and strong access to funding when required, and also noted that the going concern period
was in line with statutory requirements.
The Audit Committee also considered management’s view of the Group’s ability to remain viable, for the agreed
three-year period, following the forecast realisation of a number of key risks, including climate related, together
with potential mitigating actions, and concluded that it is appropriate to sign off the Group’s viability statement.
Revenue recognition
There is a risk that revenue could be overstated through the inclusion of sales which
are not in compliance with the Group’s revenue recognition policy.
Discussions were held with management and the external auditor which satisfied the Audit Committee that
the Group’s criteria for revenue recognition continued to be appropriate. The Audit Committee is satisfied that
the Group’s policy was operating effectively. No breaches were found during the year.
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Matter considered How the Committee addressed this
Goodwill and intangible asset impairment reviews
(See note 12 to the financial statements for further information)
Goodwill and intangible assets form a major part of the Group’s balance sheet, and
their current valuations must be supported by future prospects. Additional internal
validation was prepared in respect of long-term market prospects, facilitating
three-year modelling and taking account of updates to the near and medium-term
business planning process.
The Audit Committee also considered detailed reporting from, and held discussions
with, the external auditor.
Following these reviews the Audit Committee concluded that there is significant headroom above the
carrying value of goodwill.
The Audit Committee concluded that there was no requirement to impair goodwill and intangibles, and that
the disclosure of sensitivities was appropriate, and on this basis the Committee approved the disclosures in
the financial statements.
Fair, balanced and understandable
The Board is required to state that the Group’s external reporting is fair, balanced and
understandable. The Audit Committee is requested by the Board to provide advice to
support the assertion.
The Audit Committee received a report from management summarising the processes that had been
undertaken to ensure that the Group’s external reporting is fair, balanced and understandable. This included,
but was not limited to, the following: (i) a full document review by the Disclosure Committee, including
ensuring no undue reporting of good news and material information is given due prominence;
(ii) engagement of a cross-functional group of subject matter experts and content owners in the preparation
and review of materials, including the Executive Leadership Team, Group Corporate Communications, Group
Finance, Group Internal Audit, Group Legal, Investor Relations, ESG team and Company Secretariat; (iii) input
and advice from appropriate external advisers, including the Company’s brokers, legal advisers, and external
audit challenge and scrutiny; (iv) emerging practice and guidance from relevant regulatory bodies; and
(v) regular meetings involving the key contributors to the document, during which specific consideration
was given to the fair, balanced and understandable assertion.
During the year the Audit Committee has continued its review of the use of Adjusted Performance Measures
(APMs), including ensuring the appropriate balance of reported and adjusted measures in the Annual Report.
The Committee concluded that the APMs used would be consistent with those used in FY24, with no new
measures or changes proposed or adopted.
After consideration of the Annual Report against these criteria the Audit Committee recommended to the
Board, which accepted the recommendation, that taken as a whole the Annual Report is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Company’s position,
performance, business model and strategy.
Property, plant and equipment impairment reviews
(See notes 2 and 13 to the financial statements for further information)
On 1 October 2025 the Group announced its intention to cease production at its
Langenhagen factory in Germany. This factory site holds approximately £225 million
property, plant and equipment and the value of these assets is dependent upon future
cash flows.
An impairment review and associated valuation of the recoverable value of the
factory assets was conducted. This valuation, prepared on a fair value less costs of
disposal basis, determined that the recoverable value was lower than the carrying
amount of the factory assets. An impairment charge of £101 million was recognised
against the carrying value of these assets.
Following this review the Audit Committee concluded that there was a significant reduction in the carrying
value of these assets and it was correct to recognise the impairment.
The Audit Committee also concluded that there was appropriate disclosure of this matter, and on this basis
the Committee approved the notes in the financial statements.
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Governance, risk management
and internal control
Assessing and managing the risks faced
by the Group is fundamental to achieving
our strategic objectives, safeguarding our
stakeholders’ interests and protecting the
Group from reputational or legal challenges.
This is reflected in our risk management
framework, which ensures significant risks
are identified, managed and monitored.
The Board has responsibility for the oversight
of the Group’s internal control systems, risk
management process and framework. The
Board delegates to the Audit Committee the
review of the effectiveness of the system of
risk management.
The Group’s risk management approach
is described in the Principal Risks and
Uncertainties section on pages 66 to 73 and
is designed to manage, rather than eliminate,
the significant risks the Group may face.
Consequently, our internal controls can only
provide reasonable, and not absolute,
assurance over our principal risks.
During the year the Board considered the
Group’s ‘bottom-up’ risk assessment, which
included consideration of both current and
emerging risks and issues as discussed in the
Principal Risks and Uncertainties section on
pages 66 to 73.
Monitoring the effectiveness
of risk management
The Audit Committee is responsible for
oversight of the ongoing effectiveness of the
Company’s approach to risk management
as approved by the Board.
FRC Corporate Reporting Review
During the year the Company was notified
that the FRC had carried out a review of the
Company’s annual report and accounts for the
year ended 30 September 2024 in accordance
with Part 2 of the FRC Corporate Reporting
Review Operating Procedures. The Committee
discussed the review, noting that there were
no questions or queries which the FRC wished
to raise, but minor enhancements to the
Company’s Streamlined Energy and Carbon
Reporting (SECR) and Financial Instruments
disclosure could be made to improve reporting
for users of the accounts. The Committee
noted the inherent limitations of the FRC’s
review, that it is based solely on the annual
report and accounts and does not benefit from
detailed knowledge of the Company’s business
or an understanding of the underlying
transactions entered into, but is conducted by
staff of the FRC who have an understanding of
the relevant legal and accounting framework.
The Committee further noted that the FRC’s
letter provides no assurance that the annual
report and accounts are correct in all material
respects and that the FRC’s role is not to verify
the information provided to it but to consider
compliance with reporting requirements.
Internal audit
Group Internal Audit (GIA) is responsible for
providing objective assurance on the adequacy
and effectiveness of the risk management and
internal controls framework.
During the year GIA performed a risk-based
audit programme aligned to the Group’s
strategic priorities, resulting in relevant
recommendations and insights to further
strengthen the Group’s control framework.
The Audit Committee reviewed key reports
from GIA at each Audit Committee meeting
to monitor the effectiveness of the control
framework and considered the effectiveness
and results of the audits undertaken by GIA,
and monitored management responses to the
audit matters raised.
The Board and Audit Committee received
regular updates throughout the year on the
continued development of the Group’s internal
control systems, risk management process
and framework, as well as on the results of risk
assessments and internal control effectiveness
assessments. During this financial year, the
Committee received updates on the approach
to compliance with the new Code Provision 29,
effective for the Company from FY27 onwards.
The Board and Audit Committee have been
informed of, and reviewed, all significant
whistleblowing reports and reported frauds
in the year, including financial, and are
comfortable that none of these gave rise to
evidence of systemic non-compliance with
relevant laws and regulations, and in aggregate
were not material.
The Audit Committee receives presentations
from the Executive on their respective
functions. This direct dialogue with the Audit
Committee provides further assurance to the
Audit Committee regarding the effective
management of significant risks to the Group.
Reporting provided to the Audit Committee
enables the review and monitoring of the
effectiveness of our risk management and
internal control systems. The Audit Committee
has considered and confirmed to the Board
that this is in accordance with the
recommendations of the Code and the FRC
Guidance on Risk Management, Internal
Control and Related Financial and Business
Reporting, and that such systems were in
place throughout the year and up to the date
of the approval of the financial statements.
The Audit Committee also met independently
with the Director of Internal Audit.
The Audit Committee reviewed the
effectiveness of GIA through post-audit
surveys and KPI reporting, and monitors
progress on GIA’s own strategic priorities
through updates provided.
The Audit Committee also reviewed and
approved the FY26 GIA plan, including the scope,
risk coverage and resources to deliver it.
External audit
The Audit Committee is responsible for
oversight of EY as the Group’s external auditor,
agreeing its audit strategy and related work
plan, as well as approving its fees. At the
Committee’s January 2025 meeting EY set
out its external audit plan for the year, which
continued to build on its previous experience,
EY’s continued focus on audit quality and the
feedback it received from management, the
Board and the Audit Committee.
EY provided the Audit Committee with an
overview of its evolving audit strategy, tailored
to the Group, including its audit risk assessment,
Group audit materiality and scope, and the key
areas of its proposed audit approach.
The Audit Committee considered the external
auditor’s feedback, management letter and
half year review. EY also provided feedback
to relevant Group and local management
in a number of debrief sessions and audit
close meetings.
The Audit Engagement Letter detailing the
provision of statutory audit and half year
review services in respect of FY25 was
considered and approved in a prior year.
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AUDIT COMMITTEE CONTINUED
The Audit Committee has held regular private
meetings with EY and is satisfied that EY has
been given full access and complete
transparency by management throughout
the year.
Independence of our external auditor
As part of the continual requirement to ensure
the independence and objectivity of EY as our
external auditor, the Audit Committee
maintains and regularly reviews our Auditor
Independence Policy (AIP). This policy, which
provides clear definitions of services that the
external auditor may and may not provide as
determined by the FRC’s Revised Ethical
Standard published in December 2019,
can be found on our website at
www.imperialbrandsplc.com.
Our AIP requires that the Group Audit Partner
rotates after a maximum of five years. Kath
Barrow was appointed as our Group Audit
Partner in respect of our FY25 Annual Report
and Accounts and the coming years (subject to
the reappointment of EY by shareholders at our
AGM), replacing Marcus Butler, who completed
five years as our Group Audit Partner at the
conclusion of FY24.
Our AIP states that EY may only provide
non-audit services where those services
do not conflict with its independence. It also
establishes a formal authorisation process,
including tendering for individual non-audit
services expected to generate fees in excess
of £100,000, and prior approval by the Audit
Committee for allowable non-audit work that
EY may perform. Non-audit services are also
documented as part of EY’s pre-concurrence
processes under the International Ethics
Standards Board for Accountants (IESBA)
Code. Guidelines for the recruitment of
employees or former employees of EY, and
for the recruitment of our employees by EY,
are contained in the AIP.
Audit quality
The Board and Audit Committee place great
importance on ensuring that the Group
receives a high-standard and effective
external audit and any recommendation to
reappoint the auditor is based on continuing
satisfactory performance. The key tool in
assessing the performance of our external
auditor is an audit effectiveness questionnaire.
The questionnaire covers audit scope,
planning, quality and delivery, challenge and
communication, and independence, and is
completed by members of the Audit
Committee, and senior managers and finance
executives from across the Group. The
outcome of the effectiveness review suggested
that EY had delivered a high-quality and
effective audit, demonstrating strong technical
expertise and relationships and improved
project management. Based on its
consideration of the responses, together with
its own ongoing assessment, for example
through the quality of EY’s reports to the Audit
Committee and the Committee’s interaction
with the Lead Audit Partner, the Audit
Committee remains satisfied with the
efficiency and effectiveness of the audit.
The results of the FRC’s Audit Quality
Inspection for 2024/25 were published during
the year (while no review of the audit of the
Company’s consolidated financial statements
was undertaken as part of that process).
The Audit Committee noted the findings
and acknowledged that the FRC graded the
majority of audits carried out by EY as good
or requiring only limited improvements and,
for a fifth consecutive year, none requiring
significant improvement.
During the year EY undertook limited
non-audit work, all of which was required
by law for the auditor to undertake and/or
assurance or attestation-related. This
non-audit work was awarded to EY due to its
knowledge of the Group and it being deemed
best placed to provide effectively the services
required. In the current year, non-audit fees
were 7% (2024: 11%) of total audit-related fees
(see note 4). EY did not undertake any advisory
or consultancy work for the Group. Following
the auditor independence reviews during the
year, the Audit Committee concluded that the
level of non-audit fees is appropriate in the
light of the above activities, and the Audit
Committee does not believe that the objectivity
or independence of the external audit has been
impaired as a result of this non-audit work.
To ensure compliance with the AIP, during
the year the Audit Committee carried out four
auditor independence reviews, including
consideration of the remuneration received by
EY for audit services, audit-related services
and non-audit work. The Audit Committee also
considered reports by both management and
EY, which did not raise any concerns in respect
of EY’s independence, and confirmed that EY
maintains appropriate internal safeguards
to ensure its independence and objectivity.
The outcome of these reviews was that
performance of the relevant non-audit work by
EY was in compliance with the policy and was
the most cost-effective way of conducting our
business. No conflicts of interest were found to
exist between such audit and non-audit work.
The Audit Committee therefore confirmed that
the Company and Group continue to receive
an independent audit service provided by EY.
Audit fees
In the current year audit fees were £10.7
million (2024: £10.5 million) (see note 4).
Audit tender
The external audit was last tendered in 2019.
EY was awarded the audit in February 2019,
with a 1 October 2019 start date. The next time
the audit will be tendered will likely be in 2029,
as required by regulation. The Audit Committee
will continue to review the independence and
the quality of the external audit to assess
whether a tender should be undertaken in
advance of the regulatory requirement.
The Committee’s view is that the current
proposed timing is in the best interests of
shareholders, as the Group will receive fresh
challenge from the new Lead Audit Partner
appointed in FY25, while continuing to benefit
from an effective and efficient audit. The
Company is in compliance with the
requirements of the Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014.
The Audit Committee recommended to the
Board that EY be reappointed as external
auditor at the next AGM.
Statement of auditors’ responsibilities
EY is responsible for forming an independent
opinion on the financial statements of the
Group as a whole and on the financial
statements of Imperial Brands PLC as
presented by the Directors. In addition, it also
reports on other elements of the Annual Report
as required by legislation or regulation and
reports its opinion to members. Further details
of EY’s opinions start on page 126.
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REMUNERATION REPORT
ANNUAL STATEMENT
FROM THE REMUNERATION
COMMITTEE CHAIR
Rewarding our leaders for performance.
During the FY25 financial year, we delivered
consistent growth despite a more uncertain
global economic environment. Resilient pricing
over a broad base of markets led to growth in
tobacco net revenue of 3.7%. In next generation
products, strong growth in the US and Europe
led to constant currency net revenue growth of
13.7%. This supported adjusted operating profit
growth and cash generation in line with the
Group’s guidance. The Company’s ongoing
disciplined approach to capital allocation has
underpinned investment in the business and
a strong and efficient balance sheet. Taking
dividends and share buybacks together, total
capital returns were £2.8bn in FY25. Over the
past five years from FY21 to FY25, we have
delivered a cumulative c. £10 billion of capital
returns to shareholders.
Dear shareholder,
On behalf of the Board, I am pleased to present
the Directors’ Remuneration Report for the
financial year ended 30 September 2025.
Strategic context
2025 marked the final year of the Company’s
five-year strategy launched in 2021. Over that
period Imperial Brands has transformed its
combustible tobacco business, built a
strengthened platform in next generation
products (NGP) and delivered outstanding
returns to shareholders. Total shareholder
return over the five-year strategy period
to 30 September 2025 was 241%, significantly
outperforming the FTSE 100 market.
In March 2025 we set out our 2030 strategy,
which will build on the firm foundations
in place to drive sustainable value in our
combustibles and NGP businesses and
generate another five years of sustainable
growth and shareholder value. We will
continue to adopt our distinctive challenger
approach, developing a deep understanding
of our consumers and equipping our people
to perform with agility in a high-performance
culture, as we become a more efficient
organisation led by data.
YEAR HIGHLIGHTS
Committee focus in 2025
Reinforcing remuneration structures that
support the successful delivery of the
Group’s existing five-year strategy while
laying the groundwork for the next
strategic phase.
Remuneration decisions to support Board
succession including appointment terms
for new CEO and CFO.
Reviewing the wider workforce reward
framework to ensure it reflects the
strategic ambitions, behaviours, and
evolving people priorities.
Preparing for the EU Pay Transparency
Directive with a focus on compliance
and clarity.
Looking ahead to 2026
Undertaking a triennial review of the
Directors’ Remuneration Policy ensuring
it supports our 2030 strategy, including
a robust shareholder engagement
programme.
Continuing to prioritise the attraction and
retention of international high-performing
individuals.
Consideration of global pay practices in
relevant talent markets, to inform review
of Directors’ Remuneration Policy as well
as wider workforce reward.
Aligning the wider workforce reward
strategy with the Group’s next strategic
phase, ensuring it supports performance,
engagement, and long-term value creation.
QUICK LINKS
Annual Statement 102
Remuneration at a glance 105
Summary of Directors’ Remuneration
Policy and implementation in FY26 106
Annual Report on Remuneration 107
Remuneration earned for FY25 107
Determination of FY25 Annual
Bonus and LTIP 108
Executive share ownership
and Directors’ interests 111
Comparison with employees’
remuneration 113
CEO pay ratio 115
Remuneration Committee
membership and duties 116
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Remuneration outcomes for FY25
Annual Bonus Plan
The FY25 Annual Bonus was based on
stretching financial measures with 40% based
on adjusted operating profit, 15% on adjusted
operating cash conversion, 15% on market
share, and 10% on NGP/consumer health (NGP
net revenue). Strategic objectives formed the
remaining 20% of the bonus.
Adjusted operating profit grew 4.6%, driven
primarily by an improved profitability in
combustible tobacco and strong pricing.
Focused working capital management drove
strong adjusted operating cash conversion
of 97%, which continues to support targeted
investment and shareholder returns. Market
share remained stable.
In NGP, we achieved overall net revenue
growth of 13.7% in a highly competitive market.
We will continue to retain our disciplined
investments in NGP while building scale in
our existing footprint, balancing our objective
to build a sustainable and profitable business.
rather than 50%, of their bonus will be deferred
into Imperial Brands shares for three years.
The Committee considered the outcomes in
relation to the performance of the business
and wider stakeholder experience, and it was
determined that no discretion was warranted.
Long-Term Incentive Plan
The LTIP awards made in February 2023 were
subject to TSR (40%), EPS (40%) and ROIC (20%)
performance conditions and the Committee
considered the performance out-turns against
the targets set.
Under the TSR element, Imperial was ranked
4/24 against the FMCG peer group, therefore
this element vested in full.
The EPS element vested at 18.3% out of
40% weighting. In line with the Committee’s
approach since the announcement of the share
buyback programme and best practice
guidelines, the Committee excluded the benefit
of the share buyback on vesting of the EPS
element. This methodology resulted in a
reduction in EPS used for the LTIP calculation
versus our reported actual EPS. Further
adjustments were made relating to acquisitions
and disposals in line with the Committee’s
agreed principles, and certain material
non-recurring items, consistent with the
approach taken last year. Further details
are provided on page 109.
Three-year average ROIC was 19.6% based on
average FX rates, consistent with the approach
taken last year. ROIC was just below the
stretching threshold level set at the start of the
performance period and consequently there
was no vesting under this element.
The Committee considered the outcomes
in relation to the performance of the business
and wider stakeholder experience over the
three-year performance period. The Committee
confirmed that 58.3% of the overall maximum
award will vest.
Adjusted operating profit and market share
measures were achieved at target, with cash
conversion delivering above target level and
NGP out-turn achieving between the cut-in
and target range.
The Executive Directors performed well
against their strategic objectives. For Stefan
Bomhard, achievements included the
successful development and launch of our new
five-year 2030 strategy, with a new operating
model agreed and continued progress of key
activities in building a sustainable NGP
business including OND rollout in the US.
Lukas Paravicini’s achievements against
objectives included driving working capital
improvements, improved NGP profitability
growth in Europe and AAACE, and progress
in our objective to transform the Company’s
technology and data capabilities with
strengthened data foundations.
In aggregate, as a percentage of maximum,
Stefan received a bonus of 64.4% and Lukas
received a bonus of 62.9%. Further details on
performance measures and achievements
against targets are shown on page 108. Both
Stefan Bomhard and Lukas Paravicini have
met their shareholding guidelines in full and
therefore the Committee determined that 25%,
Supporting our colleagues
Despite ongoing macroeconomic volatility
around the world, FY25 saw some steadying of
the inflationary environment. The Committee
recognises that inflation has remained very
challenging for our workforce in certain
locations and has continued to monitor its
impact, taking action where necessary.
Annual salary budgets for FY26 have been
set with consideration for both wage and price
inflation. Across the countries we operate in,
this year salary increases will typically range
from 3% to 10% (excluding higher increases
made in countries experiencing hyperinflation),
with average increases in the UK workforce
at 3.9% for FY26.
Board succession
As announced on 14 May 2025, Stefan Bomhard
stepped down as CEO on 30 September 2025
after five years, during which time he led the
turnaround in our combustible tobacco
business, a strengthened platform in next
generation products and delivered outstanding
returns to shareholders. Stefan will continue
to serve as an Executive Director on the Board
until 31 December 2025 to support the
Management transition.
Following a rigorous selection process,
the Board was delighted to appoint Lukas
Paravicini as CEO from 1 October 2025. Lukas
joined Imperial Brands in May 2021 as CFO
and a core member of the refreshed executive
team – he has been instrumental in driving
consistent growth over the past four years
and was an important architect of our 2030
strategy. With an outstanding leadership track
record, the Board looks forward to the continued
delivery of value for our stakeholders under
Lukas’ leadership.
REMUNERATION REPORT CONTINUED
Total shareholder return performance over five-year strategy to 30 September 2025
20242023
241%
166%
91%
54%
202520222020 2021
400
300
200
100
0
Imperial Brands
Tobacco Peers
FTSE 100
FTSE 100
Consumer Goods
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On appointment, Lukas’ annual salary
was set at £1,400,000, a reduction versus his
predecessor’s salary (£1,447,637 from 1 October
2024). The Committee believes this salary
reflects Lukas’ exceptional track record and
experience, as well as the highly competitive
sector and market landscape. Assuming that
a 3.9% workforce-aligned increase would have
been applied to his predecessor’s salary for
1 October 2025, the new salary represents
a c.7% decrease on his predecessor.
Effective from 1 October 2025, Murray
McGowan (Chief Strategy and Development
Officer since 2021) succeeded Lukas as CFO
and became a member of the Board. Murray’s
base salary on appointment was set at
£775,000, a reduction versus his predecessor’s
salary (£816,413 from 1 October 2024).
All other remuneration arrangements
for Lukas and Murray are in line with our
approved Remuneration Policy, as set out
on page 106.
As outlined above, Stefan will continue
as an Executive Director of the Board until
31 December 2025, supporting a successful
Management transition and will remain
available until his departure date on 14 May
2026. He will not receive an FY26 LTIP award
but will remain eligible for a pro-rated annual
bonus, subject to performance, for the three
months of FY26 in which he remains in active
service as an Executive Director.
Stefan’s departure arrangements will be in
line with our approved Remuneration Policy.
His outstanding deferred shares will be
retained and will vest on the normal dates.
Outstanding LTIP awards will be pro-rated for
time and subject to performance, with vesting
on the normal dates. Further details are
provided on page 109.
Chair fees
The Committee reviewed and approved a 3.9%
fee increase for the Company Chair, in line
with the average UK workforce rate. Thérèse
Esperdy’s fee therefore will be £713,654 pa
from 1 October 2025.
Workforce engagement during the year
The Committee played an active role in the
Board’s employee engagement programme,
further detailed on pages 91 and 94. These
sessions continue to serve as a meaningful
platform for open dialogue around key themes
on the Board’s agenda for the year, including
Imperial’s organisational transformation, our
strategy, market challenges, and evolving
regulatory landscapes. As in previous years,
we dedicated one of our listening sessions
to the area of reward.
This year marked the fifth consecutive year we
have hosted a dedicated reward session, and
engagement levels remained exceptionally high.
Held at our US office, the reward discussion
explored several important themes including:
Strengthening the link between
performance and reward, reflecting our
transformation over the past five years to a
more inclusive, performance-driven culture
Supporting the next phase of our strategic
journey and incentivising a high-
performance culture
Leveraging reward to attract, retain,
and motivate the very best talent over
the long term
Our commitment to ESG, including how
we encourage and reward ethical and
responsible behaviours
I’m grateful for the ongoing openness, active
participation, and genuine interest our
colleagues bring to these sessions. Their
thoughtful contributions are deeply valued,
and I want to extend my sincere thanks for
their continued engagement.
FY26 Annual bonus and LTIP
The Committee carefully considered the
measures and targets for FY26 across both
the Annual Bonus and LTIP and has sought
to ensure a set of metrics that balance the
goals of our 2030 strategy across key financial
measures, continued growth in NGP and
commitment to our long-term sustainability
goals, recognising that we continue to operate
in an uncertain and challenging
macroeconomic and geopolitical environment.
The Annual Bonus performance metrics
for FY26 will remain unchanged: organic
adjusted operating profit at constant currency
(40% weighting), market share growth (15%
weighting), cash conversion (15% weighting),
ESG/NGP consumer health (10% weighting)
and strategic scorecard (20% weighting).
During the year the Committee considered the
operation of the strategic element of the Annual
Bonus, with a focus on how the structure can
promote and further embed an enterprise
mindset and collective accountability across
our high performing Executive Leadership
Team (ELT). For FY26, the scorecard will be
based on a single ELT scorecard, replacing
individual objectives, directly aligned to key
objectives in our 2030 strategy.
The FY26 LTIP will be granted in February
2026. The measures for the award will remain
unchanged and are: organic adjusted EPS
growth at constant currency (weighting 40%),
relative TSR (weighting 20%), return on
invested capital (weighting 15%), cumulative
free cash flow measure (weighting 15%), and
ESG climate change (weighting 10%). The
targets are detailed on page 106.
As part of the triennial review of the Directors’
Remuneration Policy, the Committee will
undertake a fuller evaluation of the performance
metrics underpinning both the Annual Bonus
and LTIP to ensure they continue to support
our strategic objectives and drive long-term
sustainable value creation.
Conclusion
The Board is proud of the progress we have
made, and the value created for our stakeholders,
over the last five-years. As we move into our
next strategic phase, the Committee will carry
out a comprehensive review of the Directors’
Remuneration Policy to be put to a shareholder
vote at the 2027 AGM. Our review will focus on
ensuring that the Policy continues to support
our ambitious 2030 strategy and enables us
to retain, attract and incentivise a world-class
Executive Leadership Team in a highly
competitive and evolving external landscape.
Should you have any questions or
feedback, please get in touch with me at
RemcoChair@impbrands.com. We hope that
you will support the Annual Report on
Remuneration at our AGM.
SUE CLARK
CHAIR OF THE REMUNERATION COMMITTEE
REMUNERATION REPORT CONTINUED
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REMUNERATION AT A GLANCE
REMUNERATION REPORT CONTINUED
OUR EXECUTIVE PAY PRINCIPLES
To attract and retain the very best global talent
To reward executives well for maximising shareholder returns sustainably and delivering
long-term quality growth that benefits all our stakeholders
To motivate executives to consistently perform to the best of their ability
To reinforce the behaviours that support our values
To align executive reward with the experience of our shareholders through encouraging
share ownership and an ‘ownership’ mindset
To balance restraint with fair reward for contribution, in the way we reward executives,
as we do for the wider workforce
EXECUTIVE DIRECTORS’ VARIABLE REMUNERATION OUTCOMES FOR 2025
Annual Bonus Maximum %
Out-turn as a %
of maximum % of weighting achieved
Adjusted operating profit growth at constant
currency
40% 24.0%
Adjusted operating cash conversion
15% 12.4%
Weighted market share growth
15% 9.0%
ESG – Consumer health NGP Net Revenue
10% 1.5%
Strategic/individual – Stefan Bomhard
20% 17.5%
Strategic/individual – Lukas Paravicini
20% 16.0%
Total Stefan Bomhard
100% 64.4%
Total Lukas Paravicini
100% 62.9%
Long-Term Incentive Plan Maximum %
Out-turn as a %
of maximum % of weighting achieved
Adjusted EPS growth at constant currency
40% 18.3%
Return on invested capital (ROIC)
20% 0.0%
Relative TSR
40% 40.0%
Total
100% 58.3%
REMUNERATION STRUCTURE
Short term Long term
VariableFixed
LTIP TOTALBONUS
CASH
BONUS
DEFERRED
INTO
SHARES
BENEFITS
AND
PENSION
BASE
SALARY
64.4%
0.0%
62.9%
100.0%
58.3%
80.0%
87.5 %
45.8%
14.5%
60.0%
82.9%
60.0%
+50.6%
Total Shareholder
Return
£1.25bn
Share buyback in
2025
+13.7%
NGP Net revenue
+4.6%
Adjusted operating
profit growth
2025 PERFORMANCE HIGHLIGHTS
TOTAL REMUNERATION IN 2025 (£,000)
Stefan Bomhard
L
ukas Paravicini
20%
22%
58%
24% 26% 50%
Fixed pay Annual Bonus
LTIP
Stefan Bomhard Lukas Paravicini
Base salary £1,448 £816
Benefits and pension £219 £125
Total fixed pay £1,667 £941
Annual Bonus £1,865 £1,027
LTIP £4,968 £1,934
Total remuneration £8,500 £3,902
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REMUNERATION REPORT CONTINUED
Summary of Directors’ Remuneration Policy and implementation in FY26
Our Directors’ Remuneration Policy was approved by shareholders at our AGM held on 31 January 2024 with a vote of 95.51%. The below summarises the Policy and how we intend to implement pay
arrangements for FY26. A full version of the Policy can be found on pages 147 to 153 of our Annual Report and Accounts 2023 available on the Company website.
Element Implementation for FY26 Base salary as at Oct 25
Salary
Set considering Company and individual performance, role and responsibility changes,
peer market data and general increases for wider workforce.
Increases generally effective 1 October.
Lukas Paravicini £1,400,000
Murray McGowan
£775,000
Pension & Benefits
Provision aligned with the wider workforce (max 14%).
Benefits include Car (or cash allowance in lieu), health insurance, life insurance and income
protection insurance. Other benefits may be provided where appropriate (workforce related
or to be competitive in local markets). Reasonable business-related expenses may be provided.
Where appropriate, benefits may include tax thereon.
Deliver in line with Policy.
Annual Bonus
Maximum opportunity 200% of base salary.
Subject to performance measures to reflect Group KPIs.
50% deferred into an award of shares for three years, up until the minimum shareholding guideline
of 300% of gross base salary has been met. Once met, the Committee may determine that a lower
portion is deferred into shares (subject to a minimum deferral of 25%).
Malus and clawback provisions are in place.
Measures and weightings
Adjusted operating profit growth at constant currency
40%
Adjusted operating cash conversion
15%
Weighted market share growth
15%
ESG – Consumer health/NGP net revenue
10%
Strategic scorecard
20%
Underlying targets are commercially sensitive and will be fully disclosed in next year’s Annual Report
Long-Term Incentive Plan
Maximum opportunity: CEO: 350% of base salary, CFO: 250% of base salary.
Performance period of three financial years, plus a retention of net-of-tax number of vested
LTIP award shares for two years post vesting.
Malus and clawback provisions are in place.
Measures, weightings and targets Cut-in Targ et Max
Adjusted EPS growth at constant currency¹
40% 2.0% 4.2% 5.8%
Return on invested capital (ROIC)
15% 18.7% 21.4% 22.2%
Cumulative free cash flow (CFCF)
15% £5.7bn £6.6bn £7.3bn
Relative TSR
20% Median N/A UQ
ESG – Climate / Carbon reduction
5% 76.2% 78.3% 79.1%
ESG – Climate / Energy reduction
5% 5.5% 10.7% 11.6%
1. EPS targets shown above exclude the benefit of the Company’s share buyback programme. This methodology aligns
with the Investment Association guidance.
Shareholding requirement
Expected to build a shareholding in the Company’s shares to a minimum value of 300% of base salary.
Requirement to hold shares after cessation of employments to the value of the shareholding guideline
(or existing shareholding if lower at the time) for a period of one year, with the requirement reducing
to half the shareholding guideline for the second year.
Shareholding as
% of base salary
Lukas Paravicini
386%
Murray McGowan
333%
Shareholding based on salary as at 1 October 2025
Time horizons for remuneration
Year 1 Year 2 Year 3 Year 4 Year 5
Fixed pay
Annual Bonus plan
Long-Term Incentive Plan
Portion deferred into shares for three years
Three-year performance period Two-year holding period
Performance Year
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REMUNERATION REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION
The Annual Report on Remuneration has been split into the following sections:
The remuneration earned by our Directors for the financial year ended 30 September 2025
Details of share awards granted, share interests held and historical CEO total single figure versus shareholder returns
How Directors’ remuneration compares with employee pay including the CEO pay ratio, our relative spend on pay and current dilution
Remuneration Committee membership and work undertaken during the year, details of advice received and consideration of shareholders’ views
1. REMUNERATION EARNED BY OUR DIRECTORS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025
Single Total Figure of Remuneration for each Director (Audited)
Executive Directors Year
Salary
£’000
Benefits
£’000
1
Pension
£’000
2
Total
fixed pay
Annual Bonus
£’000
3
LTIP
£’000
4
Other
£’000
Total
variable pay
Total
pay
Stefan Bomhard 2025 1,447 17 203 1,667 1,865 4,968 – 6,833 8,500
2024 1,400 17 196 1,613 2,346 6,606 6 8,958 10,571
Lukas Paravicini 2025 816 11 114 941 1,027 1,934 – 2,961 3,902
2024 790 2 111 903 1,323 2,648 – 3,971 4,874
Total 2025 2,263 28 317 2,608 2,892 6,902 – 9,794 12,402
Total 2024 2,190 19 307 2,516 3,669 9,254 6 12,929 15,445
1. Stefan Bomhard benefits include an annual car allowance of £15,000 and private medical insurance. Lukas Paravicini benefits include a company car, a health cash plan and security costs (including tax gross-up).
2. Each individual received a cash supplement of 14% of salary in lieu of membership of the pension fund.
3. Annual Bonus for the year ended 30 September 2025. As both Stefan Bomhard and Lukas Paravicini have met their shareholding guideline, the Committee determined that 25% of the bonus earned for FY25 will be deferred into shares for three years.
4. LTIP represents the value of the FY23-25 LTIP awards with a performance period ended on 30 September 2025. As these awards do not vest until February 2026 they are based on a share price of £31.19, being the three-month average to 30 September 2025,
and an estimate of dividend roll-up based on announced dividend payable on 31 December 2025. Of the FY23-25 LTIP value shown, £1,641k and £639k relates to share price appreciation for Stefan Bomhard and Lukas Paravicini respectively. The LTIP value
for FY24 has been restated to reflect the actual vesting value as at 15 February 2025.
Fees
£’000
Taxable
benefits
1
Total
Non-Executive Directors 2025 2024 2025 2024 2025 2024
Thérèse Esperdy 687 664 31 61 718 725
Sue Clark
2
178 150 – 2 178 152
Diane de Saint Victor (departed 29 January 2025) 37 93 – 2 37 95
Ngozi Edozien
3
122 105 13 13 135 118
Andrew Gilchrist
3
122 105 19 20 141 125
Alan Johnson
2
135 93 3 6 138 99
Bob Kunze-Concewitz 110 93 4 3 114 96
Julie Hamilton
3
122 67 19 19 141 86
Jon Stanton
2
129 121 3 1 132 122
Total 1,642 1,491 92 127 1,734 1,618
1. Benefits in kind for Non-Executive Directors relate to the reimbursement of travelling expenses to meetings held at the Company’s registered office, and assistance towards tax advisory services for non-UK based Non-Executive Directors.
2. Sue Clark’s fees include payments in respect of Senior Independent Director of £30,000 and Chair of the Remuneration Committee fees of £37,500 pa respectively. Alan Johnson’s fees include payment in respect of chair of the Audit Committee fees of £37,500 pa
for period 1 February 2025 to 30 September 2025. Jon Stanton’s fees include payment in respect of chair of the Audit Committee fees of £37,500 pa for the period 1 October 2024 to 31 January 2025.
3. Ngozi Edozien, Andrew Gilchrist and Julie Hamilton’s amounts include a payment of £12,000 in respect of a non-European travel allowance in recognition of the extra time commitment required for travel.
The aggregate remuneration of all Executive and Non-Executive Directors under salary, fees, benefits, cash supplements in lieu of pensions, Annual Bonus and LTIP was £14,136k (2024 restated: £17,063k).
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Determination of 2025 Annual Bonus (Audited)
The 2025 Annual Bonus was based on a scorecard of measures. Details of the measures, their weightings, targets and extent of achievement are set out in the table below.
Measure Weighting Cut-in Targe t Max Achievement Payout
Adjusted operating profit at constant currency 40% 1.0% 4.6% 6.0% 4.6% 24.0%
Adjusted operating cash conversion 15% 90% 93% 100% 97.0 % 12.4%
Weighted market share 15% -3bps 0bps +5bps 0bps 9.0%
Consumer health – NGP net revenue (£m)
1
10% 370m 406m 456m 379m 1.5%
Strategic/individual – Stefan Bomhard 20% – – – 87.5% 17.5%
Strategic/individual – Lukas Paravicini 20% – – – 80.0% 16.0%
Total bonus Stefan Bomhard 100% 64.4% of max
Total bonus Lukas Paravicini 100% 62.9% of max
1. At internal rates.
The Committee set the following strategic goals for the Executive Directors:
Stefan Bomhard
Strategic/individual measures and targets Performance assessment highlighting key achievements
Successful development and
launch of new five-year strategic
plan (15%)
New strategy fully developed with clear KPIs and approved by the Board
in January 2025.
Successful launch of the strategy at Capital Markets Day well received
by stakeholders and reflected in positive investor survey results with
feedback survey scores above benchmark. Clear medium term guidance
provided to the market.
Transformation activities related to the evolved strategy operationalised
and mapped out for deployment.
Build a sustainable NGP
business (5%)
Continued NGP profitability growth achieved in Europe and AAACE.
Positive OND revenue growth achieved.
Exceeded Zone US market share target.
Significant increase in Heated Tobacco net revenue growth,
exceeding target.
Heated Tobacco market share growth targets achieved across
Italy and Poland.
Strategic/individual payout as a % of maximum bonus: 17.5%
Total payout as a % of maximum bonus: 64.4%
Individual Annual Bonus payments:
Total Annual Bonus
£’000
Executive Directors Maximum Actual
1
Stefan Bomhard £2,895 £1,865
1. As Stefan Bomhard and Lukas Paravicini have met their shareholding guideline, the Committee determined that only 25%
of bonus earned for FY25 will be deferred into shares for three years.
Lukas Paravicini
Strategic/individual measures and targets Performance assessment highlighting key achievements
Drive shareholder value (10%) Continued delivery of NGP profitability growth, with Europe and AAACE
regions exceeding target.
Improved cash flow with average working capital reduction exceeding
target over FY24.
Operating expenditure control for Global IT and Unify delivered with
final figures ahead of targets for both OPEX and CAPEX.
Effective, risk adjusted funding to support our operations achieved
with all in cost of debt ahead of target.
Continue company
transformation and new
five-year strategic plan
readiness (10%)
Successful Unify roll out continued, planned go-lives achieved in line
with programme plans.
Ambition of data led organisation on track with significant progress
achieved in the areas of Data Foundation, Platform and Organisation.
Roll out of Integrated Business Planning achieved in Europe, with
preparations for US and AAACE launch on track for FY26.
Business Resilience improvement targets on track with net revenue
at risk reduced significantly ahead of target.
Strategic/individual payout as a % of maximum bonus: 16.0%
Total payout as a % of maximum bonus: 62.9%
Individual Annual Bonus payments:
Total Annual Bonus
£’000
Executive Directors Maximum Actual
1
Lukas Paravicini £1,633 £1,027
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Long-Term Incentive Plan awards vesting (Audited)
Performance awards vesting in February 2026 are based on performance measured over the
three-year period ended 30 September 2025.
In line with best practice, the methodology excludes the benefit of share buybacks on vesting of
the EPS element. Consistent with the treatment last year, further adjustments were made in line
with our existing principles around case-by-case consideration of acquisitions and disposals,
and the treatment of cash flows was aligned to our Alternative Performance Measures (APM)
policy in relation to certain material, non-recurring items. The treatment of ROIC was aligned
to the adjustment made last year, although there was no vesting under this element.
Measure Weighting
Cut-in
(25% vesting)
Targ et
(60% vesting)
Maximum
(100% vesting)
Actual
performance
Percentage of
award vesting
Adjusted EPS growth
at constant currency
(average annual growth) 40% 4.4% 5.3% 6.3% 4.9% 18.3%
Return on invested
capital (ROIC)
(average annual) 20% 20.2% 20.6% 21.0% 19.6% 0.0%
Relative TSR
(return over three
financial years) 40% Median n/a
Upper
quartile 4/24 40.0%
Achievement 58.3%
Adjusted EPS excludes the impact of share buybacks and associated financing costs.
In respect of acquisitions and disposals made during the period, the Committee applied its
agreed principles of consideration on a case-by-case basis. The methodology applied adjusted
out the impact of the disposal of the Russian operations and the US OND and Logista acquisitions
from the EPS metrics.
An adjustment was made in respect of a cash outflow relating to inherited, historic tax litigations
carried on the balance sheet. This was to align it to the treatment under our Alternative
Performance Measures (APM) policy in relation to distorting non-recurring items.
The TSR measure compared the Company’s performance against the following companies:
Altria Group, Anheuser-Busch InBev, British American Tobacco, Brown-Forman, Carlsberg,
Carnival, Clorox, Constellation Brands, Diageo, Heineken, Henkel, Japan Tobacco, Kimberly-Clark,
Kirin Holdings, L’Oréal, Monster Beverage, Pernod Ricard, PepsiCo, Philip Morris International,
Procter & Gamble, Reckitt Benckiser Group, Unicharm and Unilever.
Vested awards are subject to a two-year holding period.
CEO retirement
As announced on 14 May 2025, Stefan Bomhard will retire from the Board on 31 December 2025
and will remain available to support transition until his departure date on 14 May 2026. Stefan’s
departure arrangements will be in line with our approved Remuneration Policy.
No increase was made to his salary at 1 October 2025 and his salary at the time of departure
will be £1,446,637. He will not receive an FY26 LTIP award. He will remain eligible for a pro-rated
annual bonus, subject to performance, for the three months in which he remains in active service
as an Executive Director. This will be subject to share deferral in the normal way.
His outstanding deferred shares will be retained and will vest on the normal dates. Outstanding
LTIP awards will be pro-rated for time and subject to performance, with vesting on the normal
dates. Stefan will also be subject to post-cessation shareholding requirements.
Full details will be provided in a s430(2b) statement shortly after stepping down and in the
2026 DRR.
Chair and Non-Executive Director fees
Effective 1 October 2025 the following increases will apply:
Chair’s fee will increase from £686,866 to £713,654 pa.
NED base fee will increase from £90,000 to £93,510 pa.
Senior Independent Director fee will increase from £30,000 to £31,170
Chairs of the Remuneration and Audit Committees’ fees will increase from
£37,500 to £38,963 pa.
Committee membership fees will increase from £10,000 to £10,390 pa.
Payments for loss of office and payments to former Directors (Audited)
No payments to report
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2. DETAILS OF SHARE AWARDS GRANTED, SHARE INTERESTS HELD AND HISTORICAL CEO TOTAL SINGLE FIGURE VERSUS SHAREHOLDER RETURNS
Performance awards granted during the year (Audited)
When determining the Directors’ awards, the Committee took into account the prevailing share price performance over the year and the number of shares awarded as a result.
Date of grant Share price
1
Number of
nil-cost options Face value
Amount of
base salary End of performance period
Stefan Bomhard 15 February 2025 £27.80 181,473 £5,044,949 350% 30 September 2027
Lukas Paravicini 15 February 2025 £27.80 73,102 £2,032,236 250% 30 September 2027
1. Valued using the closing share price the trading day prior to grant.
The targets for the above performance awards are as follows:
Measure Weight
Minimum performance (25% vesting) Target performance (60% vesting) Maximum performance (100% vesting)
Cut-in Target Max
Adjusted EPS growth at constant currency 40% 3.3% 4.5% 5.5% or higher
Return on invested capital (ROIC) (average annual) 15% 18.9% 20.9% 21.7% or higher
Cumulative free cash flow (CFCF) (£bn) 15% £5.5bn £6.4bn £7.1bn or higher
Relative TSR 20% Median N/A Upper quartile
ESG – Scope 1 & 2 emissions reduction 5% 73.0% 75.0% 76.0%
ESG – Energy reduction 5% 5.0% 7.0 % 8.0%
Adjusted EPS excludes the impact of share buybacks and associated financing costs.
The TSR comparator group comprises the following companies: Altria Group, Anheuser Busch InBev, British American Tobacco, Carlsberg B, Coca-Cola Company, Constellation Brands, Diageo,
Heineken, Japan Tobacco, Kimberly-Clark, Kirin Holdings, L’Oréal, Monster Beverage, Pernod Ricard, PepsiCo, Philip Morris International, Procter & Gamble, Reckitt, Unicharm, and Unilever.
Each measure operates independently and is capable of vesting regardless of the Company’s performance in respect of the other metrics. The Committee retains discretion to adjust up or down
including to zero the number of shares that vest taking into account a number of factors including personal or corporate performance and circumstances that were unforeseen at the date of grant.
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Share interests and incentives (audited)
Shares held at
30 September 2024
Shares held at earlier of 30 September 2025
and leaving date
Dividends reinvested
post-year-end Conditional awards and options held at earlier of 30 September 2025 and leaving date
Options exercised
during the yearOwned outright
1
Subject to a
holding period Owned outright
Awards unvested and
subject to performance
conditions
Awards unvested and
subject to continued
employment
Options unvested and
subject to continued
employment
Vested but
not exercised
Executive Directors
Stefan Bomhard 244,772 408,668 282,208 – 672,368 129,016 581 – 237,614
Lukas Paravicini 64,887 128,741 114,466 1,673 267,688 84,162 – – 95,253
Non-Executive Directors
Thérèse Esperdy
2
61,861 61,881 – – – – – – –
Sue Clark 8,628 8,767 – 29 – – – – –
Diane de Saint Victor³ 6,737 6,945 – – – – – – –
Ngozi Edozien
4
644 1,563 – 4 – – – – –
Andrew Gilchrist
2
6,239 6,239 – – – – – – –
Alan Johnson 1,061 3,058 – – – – – – –
Bob Kunze-Concewitz 50,974 50,974 – – – – – – –
Julie Hamilton
2
500 500 – – – – – – –
Jon Stanton 3,402 3,527 – 26 – – – – –
1. The number of shares owned outright includes those shares subject to a holding period.
2. Thérèse Esperdy, Andrew Gilchrist and Julie Hamilton’s shares are in the form of American Depositary Receipts.
3. Diane De Saint Victor stepped down from the Board on 29 January 2025.
4. Ngozi Edozien’s share amount of 1,563 includes 1,253 American Depositary Receipts.
5. There have been no changes in Director share figures reported in the table above, between 30 September 2025 and the date this report was signed, other than the dividend reinvestment post-year-end figures included in the table.
Our middle market share price at the close of business on 30 September 2025, being the last trading day of the financial year, was £31.58 and the range of the middle market price during the year was
£21.42 to £31.90.
Full details of the Directors’ share interests are available for inspection in the Register of Directors’ Interests at our registered office.
Executive shareholdings (audited)
Shares held at
start of year
1
Shares held at end
of year
1
Increase in shares
held during year
Value of
shares held at
start of year
2
£’000
Value of
shares held at
end of year
3
£’000
Difference
in value
£’000
Shareholding
required
(% salar y)
Current
shareholding
(% salary/fees)
4
Requirement
met – in full
5
Stefan Bomhard 328,786 477,046 148,260 7,145 15,065 7,9 20 300 1,041% Yes
Lukas Paravicini 102,067 173,347 71,280 2,218 5,474 3,256 300 671% Ye s
1. Shares held is inclusive of shares owned outright, those vested but subject to a holding period awarded, including shares awarded under the Deferred Share Bonus Plan being the deferred element of the Annual Bonus.
2. Based on a share price of £21.73, being the closing price on 30 September 2024.
3. Based on a share price of £31.58, being the closing price on 30 September 2025.
4. Current shareholding percentages are calculated based on salary as at 30 September 2025.
5. Stefan Bomhard and Lukas Paravicini joined the Board on 1 July 2020 and 1 May 2021, respectively, and both have satisfied their obligation to build their shareholding to 300% of salary within five years.
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Review of past performance
The chart below shows the value of £100 invested in the Company on 1 October 2015 compared with the value of £100 invested in the FTSE 100 Index for each of our financial year-ends to
30 September 2025. We have chosen the FTSE 100 Index as it provides the most appropriate and widely recognised index for benchmarking our corporate performance over a 10-year period.
TOTAL SHAREHOLDER RETURN PERFORMANCE
30-Sep-2530-Sep-2430-Sep-2330-Sep-2230-Sep-2130-Sep-2030-Sep-1930-Sep-1830-Sep-1730-Sep-1630-Sep-15
Imperial Brands FTSE 100 Return Index
Index value
60
40
80
100
120
140
160
200
180
240
220
Change in Chief Executive Officer remuneration
2025
Stefan
Bomhard
2024
Stefan
Bomhard
2023
Stefan
Bomhard
2022
Stefan
Bomhard
2021
Stefan
Bomhard
2020
Stefan
Bomhard
2020
Joerg
Biebernick
2020
Dominic
Brisby
2020
Alison
Cooper
2019
Alison
Cooper
2018
Alison
Cooper
2017
Alison
Cooper
2016
Alison
Cooper
Total remuneration £’000 8,500 10,571 8,900 5,432 3,421 1,104 963 943 448 2,137 3,935 4,657 5,404
Annual Bonus as a percentage of maximum 64.4 83.8 71.6 84 64.1 40¹ 40¹ 40¹ 40¹ 31² 87 60 72
Shares vesting as a percentage of maximum 58.3 74.5 85 19.8³ 30.8
4
nil nil nil nil nil 20 44.4 45.7
1. 48.4% was the formulaic out-turn; however, the Remuneration Committee accepted the CEO’s recommendation and used its discretion to reduce this to 40%.
2. 51% was the formulaic out-turn; however, the Remuneration Committee used its discretion and reduced this to 31%.
3. Relates to vesting of Long-Term Incentive Plan (excluding Recruitment Award).
4. Relates to vesting of Recruitment Award based on performance criteria of former employer.
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3. HOW DIRECTORS’ REMUNERATION COMPARES WITH EMPLOYEES’ REMUNERATION
There is a strong alignment between how we approach pay for our Executive Directors and the wider workforce, with a focus on performance-related pay and similar performance metrics
in our Annual Bonus and LTIP. Our reward packages are designed to attract, incentivise and retain the best talent, driven by market practice, skills and experience.
Executive Directors UK employees
Increase in line with or below wider workforce Salary Average increase of 3.9% for FY26
Mix of financial/strategic measures, with a portion
of bonus deferred into award over shares
Annual Bonus Mix of financial/strategic measures 100% paid in cash
Performance metrics measured over three years,
with two-year holding period after vesting
LTIP Performance metrics measured over three years. No holding period
14% cash or contribution into Company’s pension fund Pension The majority of UK employees receive a contribution of 14% of salary
£250 per month and three-year savings period Sharesave £250 per month and three-year savings period
Consideration of colleagues’ views
Our colleagues remain at the centre of our business. Throughout the year, the Board continued its programme of employee engagement sessions, providing valuable opportunities to hear directly
from our people on a wide range of topics — including organisational transformation, strategy, market dynamics, and regulatory developments. A key focus of this year’s dialogue was reward,
which we explored in a session held in our US office. Participants engaged in thoughtful discussions around how the Committee aligns executive remuneration with broader pay practices across
the organisation, and shared their perspectives on reward at Imperial Brands. Now in its fifth year, this dedicated reward session continues to attract high levels of engagement, underscoring its
relevance and impact. This year the session explored:
The alignment of performance and reward, reflecting our journey over the past five years toward a more inclusive, performance-driven culture
The next phase of our strategic evolution and how we incentivise a high-performance mindset
The role of reward in attracting, retaining, and motivating top talent for long-term success
Our commitment to ESG, including how we encourage and recognise ethical and responsible behaviours
The Board remains deeply committed to listening to colleagues and values the insights this forum provides into what matters most to our people. These perspectives inform our decisions
and actions throughout the year. We look forward to continuing the conversation in FY26, ensuring we remain closely attuned to the evolving priorities of our diverse global workforce.
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Percentage change in Board remuneration
The table below shows the percentage change in the salary, benefits and Annual Bonus for the Directors, between 2025 and 2024, as well as the disclosures for financials years 2024 through to 2020.
Year-on-year change in pay for Directors compared with UK employees
2025 2024 2023 2022 2021 2020
Salary
(%)
Benefits
(%)
Annual
Bonus
(%)
Salary
(%)
Benefits
(%)
Annual
Bonus
(%)
Salary
(%)
Benefits
(%)
Annual
Bonus
(%)
Salary
(%)
Benefits
(%)
Annual
Bonus
(%)
Salary
(%)
Benefits
(%)
Annual
Bonus
(%)
Salary
(%)
Benefits
(%)
Annual
Bonus
(%)
Executive Director
Stefan Bomhard
(from 1 July 20) 3.4 0.0 (20.5) 4.5 6.3 22.3 3.0 (5.9) (12.2) 2.5 0.0 34.3 58.6² 183.3² 540.6² – – –
Lukas Paravicini
(from 1 May 21) 3.3 450.0¹ (22.4) 5.1 (50.0) 24.6 3.0 (73.3) (11.9) 140.1² 150.0² 241.4² – – – – – –
Non-Executive Directors
Thérèse Esperdy 3.5 (49.2) – 3.9 22.0 – 3.1 22.0 – 2.5 0.0 – 24.7 (100) – 353.3² (41.3) –
Sue Clark 18.7 (100.0) – 4.2 0.0 – 2.1 (50.0) – 2.2 0.0 – 7. 0 (100) – 55.4 (50.0) –
Alan Johnson
(from 1 January 21) 45.2³ (50.0) – 4.5 100.0 – 2.3 (40.0) – – – – – – – – – –
Andrew Gilchrist
(from 1 March 23) 16.2 (5.0) – 78.0² 0.0 – – – – – – – – – – – – –
Bob Kunze-Concewitz
(from 1
November 20)
18.3 33.3 – 4.5 0.0 – 2.3 (40.0) – 11.5² 0.0 – – – – – – –
Jon Stanton 6.6 200.0 – 3.4 0.0 – 2.6 (50.0) – 1.8 0.0 – 17.9 (100) – 187.9² 0.0 –
Ngozi Edozien
(from 15 November 21) 16.2 0.0 – 4.0 0.0 – 16.1² (100.0) – – – – – – – – – –
Diane de Saint Victor
(from 15
November 21)⁴
(60.2) (100.0) – 4.5 (33.3) – 15.6² (40.0) – – – – – – – – – –
Julie Hamilton
(from 31 January 24) 82.1² 0.0 – – – – – – – – – – – – – – – –
All UK employees 5.2 14.7 6.3 4.8 12.0 3.1 6.6 5.9 4.1 2.7 7. 3 2.9 0.0 2.4 7.9 6.69 (5.72) 32.44
1. Increase is due to one-off security costs incurred in the year related to move to Chief Executive role from 1 October 2025.
2. Increase reflects first full year.
3. Increase is due to becoming Chair of the Audit Committee and joining the Remuneration Committee during the year.
4. Diane de Saint Victor departed the Board on 29 January 2025.
5. A year-on-year comparison is not possible in the year that a Director joins the Board.
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CEO pay ratio
The table below shows the multiple of our CEO’s pay ratio to median, lower quartile and upper
quartile pay in the UK. The calculations are based on methodology Option A as defined by the
regulations and by calculating the pay and benefits of all UK employees on a full-time equivalent
basis. Option A was chosen as it is the most robust approach. The CEO pay ratio is based on
comparing the CEO’s pay to that of Imperial Brands’ UK-based employee population, a large
proportion of whom are in sales roles. The Committee anticipates that the ratios are likely to
be volatile over time, largely driven by the CEO’s incentive outcomes which are dependent on
Group-wide results.
The pay levels shown for the percentiles reflect remuneration for the 12 months to
30 September 2025.
Financial year Calculation methodology P25 (lower quartile) x:1 P50 (median) x:1 P75 (upper quartile) x:1
2025 A 142.1 112.2 67.7
2024¹ A 179.9 119.1 78.6
2023 A 156.6 116.0 72.0
2022 A 98.0 75.8 49.6
2021 A 60.7 48.4 31.1
2020 A 50.2 38.7 24.4
2019 A 53.0 36.5 22.0
Stefan Bomhard P25 (lower quartile) P50 (median) P75 (upper quartile)
Total remuneration £8,499,609 142.1 112.2 67.7
Base salary £1,447,637 31.0 23.5 15.5
1. 2024 CEO pay ratios have been updated to reflect the value of the updated 2024 CEO single figure which incorporates
long-term incentives based on actual vesting, rather than the estimate used for the 2024 disclosure.
The CEO total remuneration pay ratio has decreased across all percentiles, due to a decrease
in CEO total remuneration driven by lower incentive out-turns. The CEO base salary ratio
has remained broadly static, confirming that the variance is driven by performance-related
variable pay.
The salary component for FY25 at each quartile is £46,636 (P25), £61,473 (P50) and £93,116 (P75).
The equivalent total pay numbers are £59,801 (P25), £75,737 (P50) and £125,553 (P75).
The Committee is satisfied that the overall picture presented by the 2025 pay ratios is consistent
with the reward policies for our UK employees. The Committee takes into account these ratios
when making decisions around the Executive Director pay packages, and Imperial Brands takes
seriously the need to ensure competitive pay packages across the organisation.
Relative importance of spend on pay
The table below shows the expenditure and percentage change in overall spend on employee
remuneration, dividends and share buybacks.
£ million unless otherwise stated 2025 2024
Percentage
change
Executive Directors’ total remuneration
1, 2
12 15 (20.0)
Overall expenditure on pay
2
967 923 4.8
Dividend paid in the year 1,558 1,299 19.9
Share buybacks in the year
3
1,235 1,020 21.1
1. Executive Directors’ total remuneration is based on the total single figure for all Executive Directors and is included to provide
a comparison between Executive Director and overall employee pay.
2. Excludes employer’s social security costs.
3. In FY25, expenditure includes £1,227 million of share buybacks and £8 million of fees and stamp duty.
Share plan flow rates
The rules of each of the Company’s share plans contain provisions limiting the grant of options
and awards to shares representing no more than 10% of the issued share capital of the Company
over a period of 10 years (or, in the case of options and awards granted under the LTIP and Deferred
Share Bonus Plan, 5% of issued share capital over the same 10-year period). As at 30 September
2025, an aggregate total of 1% of the Company’s issued share capital (including shares held in
treasury) is subject to options and awards under our executive and all-employee share plans.
Summary of options and awards granted
Limit on awards
Cumulative options and awards granted
as a percentage of issued share capital
(including those held in treasury)
Options and awards granted during the year
as a percentage of issued share capital
(including those held in treasury)
10% in 10 years 3.7 0.4
5% in 10 years (executive plans) 3.1 0.3
External board directorships
The Committee recognises that external non-executive directorships are beneficial for both the
Executive Director concerned and the Company. Each serving Executive Director is restricted to
one external non-executive directorship in a listed company and may not serve as the chair of a
FTSE 100 company. At the discretion of the Board, Executive Directors are permitted to retain fees
received in respect of any such non-executive directorship.
During the financial year, Stefan Bomhard served as a non-executive director of Compass Group
PLC and was permitted to retain the £103,500 fee received from this position.
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REMUNERATION REPORT CONTINUED
Executive Directors’ service agreements
Executive Director Date of contract Expiry date
Compensation on termination
following a change of control
Stefan Bomhard 31 January 2020¹ Terminable on
12 months’ notice
No provisions
Lukas Paravicini 11 April 2021² Terminable on
12 months’ notice
No provisions
1. Service agreement dated 31 January 2020 with a start date of 1 July 2020.
2. Service agreement dated 11 April 2021 with a start date of 1 May 2021.
Copies of Executive Directors’ service agreements are available to view at the Company’s
registered office.
4. REMUNERATION COMMITTEE MEMBERSHIP AND DUTIES
The Board is ultimately accountable for executive remuneration, but has delegated this
responsibility to the Committee, at least three of whose members are independent Non-Executive
Directors. The Chair, who is a member of the Committee, was independent on appointment.
We consider this independence fundamental in ensuring that Executive Directors’ and senior
management’s remuneration is set by those who have no personal financial interest, other than
as shareholders, in the matters discussed. To reinforce this independence, a standing item at
each Committee meeting allows the members to meet without any Executive Director or other
manager being present.
Biographical details of the current members of the Remuneration Committee are set out at pages
78 to 80. Members of the Committee are appointed by the Board following recommendation by
the People, Governance & Sustainability Committee.
The Committee considers its key responsibility as being to support the Company’s strategy and
its short and long-term sustainable success. This is ensured by the adherence to our executive
pay principles set out on page 105 and to the Directors’ Remuneration Policy which together
set the right conditions for high-calibre executives to deliver and, further, to provide long-term
benefits to all stakeholders. It also determines the specific remuneration package, including
service agreements and pension arrangements, for the Chair, each Executive Director and
our Executive Leadership Team. When setting the policy for Executive Director remuneration,
the Committee reviews workforce remuneration and related policies to ensure the alignment
of incentives and rewards across the Group.
The Committee’s other responsibilities include:
Maintaining a competitive Remuneration Policy appropriate to the business environment
of the countries in which we operate, thereby ensuring we can attract, retain and motivate
high-calibre individuals throughout the business;
Aligning Executive Directors’ and senior management’s remuneration with the interests of
long-term shareholders and other stakeholders whilst ensuring that remuneration is fair but
not excessive and reflects the contribution made;
Setting measures and targets for the performance-related elements of variable pay;
Oversight of our overall policy for employee remuneration, employment conditions and our
employee share plans; and
Ensuring appropriate independent advisers are appointed to provide advice and guidance
to the Committee.
The Committee’s terms of reference are available on our website www.imperialbrandsplc.com
When carrying out its duties the Committee considers the Remuneration Policy and practices
in the context of provision 40 of the UK Corporate Governance Code, as follows:
Clarity – The Remuneration Policy sets out clearly each element of remuneration limits in terms
of quantum and the discretions the Committee can apply. The DRR sets out the arrangements
clearly and transparently. Questions on the remuneration arrangements can be raised at the
AGM and through our employee engagement programme.
Simplicity – The remuneration structure for our Executive Directors consists of fixed pay (base
salary, pension and benefits), Annual Bonus and a Long-Term Incentive Plan. Our remuneration
structures throughout the organisation are simple in nature and understood by employees.
Risk – A number of features within the Remuneration Policy exist to manage different kinds
of risks; these include:
Malus and clawback provisions operating across all discretionary incentive plans;
Deferral of remuneration and holding periods;
Remuneration Committee discretion to override formulaic out-turns to ensure incentive
payouts reflect underlying business performance and shareholder experience;
Limits on awards specified within the policy and plan rules; and
Regular interaction with the Audit Committee and PGS Committee.
Predictability – The Committee regularly reviews the performance of in-flight awards
so it understands the likely outcomes.
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Proportionality – The Committee is against rewarding poor performance and, therefore, a
significant portion of remuneration is performance-based and dependent on delivering the
Company’s strategy. Performance targets are based on a combination of measures to ensure
there is no undue focus on a single measure.
Alignment – There is a clear progression of remuneration throughout the workforce with
performance measures supporting the key performance indicators and the long-term
sustainability of the business. The Committee reviews the Remuneration Policy, taking into
account the feedback received from shareholders and the impact on the wider workforce.
Remuneration Committee meetings 2024/25
The Remuneration Committee met for five scheduled meetings during the year. Details of the
main activities covered in the meetings are set out below.
Nov-24 Jan-25 Mar-25 May-25 Jun-25 Sep-25
Approval of Bonus (FY24) and LTIP
(2022-2024) out-turns
Review of Executive Directors’
remuneration dashboard
Review of CEO pay ratio and approval of DRR
(FY24)
Approval of Bonus (FY25) and LTIP
(2025-2027) targets and weightings
Discussion on workforce remuneration
Review of forecasts for in-flight Bonus
and LTIP out-turns
Approval of CEO departure terms,
and new CEO and CFO appointment
Review of EUPTD readiness
Discussion of Bonus (FY26) and LTIP
(2026-2028)
Approval of base salaries for Executive
Leadership Team and Chair’s fee
Review of the Committee’s terms
of reference
The Remuneration Committee members as at the November 2024 and January 2025 meeting
were Sue Clark (Chair), Bob Kunze-Concewitz, Diane de Saint Victor, Ngozi Edozien, Jon Stanton
and Julie Hamilton with all in attendance at the November and January meetings. Diane de Saint
Victor stepped down as a Director of the Company, and ceased to be a member of the Committee,
on 29 January 2025, and Alan Johnson joined the Committee on 1 February 2025. All Committee
members attended the March, May, June and September 2025 meetings, with the exception of
Ngozi Edozien who was unable to attend the May meeting. Other regular attendees include the
Chief Executive Officer, Chief Finance Officer, Company Secretary, Chief People and Culture
Officer, Global Reward Director and the Committee’s principal adviser. None of the individuals
were present for any decisions relating to their own remuneration
Remuneration Committee evaluation 2024/25
The Board and its Committees undertook an internally facilitated review of its effectiveness
during FY25. The evaluation concluded that the Committee was performing effectively, with
a good balance achieved between motivating the Executive and ensuring that shareholder
interests were met. Areas of focus for FY25 included the format of meetings and deep dives
on the forthcoming EU regulations on pay and gender pay comparisons across the Group.
Further information on the Board evaluation is on page 95
Advice provided to the Remuneration Committee
Deloitte LLP was the independent adviser to the Committee throughout FY25 and were paid
fees of £234,700 for their services during the year.
Deloitte is a member of the Remuneration Consultants Group and complies with its Code of
Conduct which sets out guidelines to ensure that its advice is independent and free of undue
influence. Deloitte LLP provided other advisory including corporate tax and technology
consulting services in the year.
Other companies which provided advice to the Remuneration Committee are as follows:
Alithos Limited undertook total shareholder return (TSR) calculations up to December 2024 and
they were paid £3,250 for these services. From January 2025 the Committee approved for Deloitte
to provide all TSR-related advice and data, with the cost of these services is included in the
figure above.
Willis Towers Watson provided market pay data and was paid £42,800 for these services. Willis
Towers Watson also provided actuarial and wider reward-related services to the Company. The
Committee remains satisfied that the provision of those other services in no way compromises
their independence.
All advisers are paid on the basis of actual work performed rather than on a fixed fee basis.
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VOTING ON THE REMUNERATION REPORT AT THE 2025 AGM
At the 2025 AGM there was a vote to approve the Directors’ Remuneration Report. We received a strong vote of support in favour of our Directors’ Remuneration Policy at our 2024 AGM.
Resolution
Votes for including
discretionary votes Percentage for Votes against
Percentage
against
Total votes
cast excluding
votes withheld
Votes
withheld
1
Total votes
cast including
votes withheld
Directors’ Remuneration Report 500,019,614 97.36 13,584,442 2.64 513,604,056 425,122 514,029,178
Directors’ Remuneration Policy 673,024,462 95.51 31,631,996 4.49 704,656,458 696,086 705,352,544
1. Votes withheld are not included in the final figures as they are not recognised as a vote in law.
At the 2026 AGM, shareholders will be invited to vote on the 2025 Directors’ Remuneration Report (advisory vote).
SUE CLARK
CHAIR OF THE REMUNERATION COMMITTEE
REMUNERATION REPORT CONTINUED
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DIRECTORS’ REPORT
The Directors present their
report and audited financial
statements for the year ended
30 September 2025.
DIRECTORS’
REPORT
One of the Group’s US legal entities,
ITG Brands LLC (‘ITG Brands’), reported political
contributions totalling £21,505 (US$28,000)
(2024: £57,960 (US$72,450)) for the financial
year 2025 to US political organisations and
to non-federal-level political party and
candidate committees in accordance with
their contributions programme. No corporate
contributions were made to federal candidates
or party committees and all contributions
were made in accordance with applicable laws.
All ITG Brands contributions are assessed and
approved in accordance with ITG Brands’
policies and procedures and to ensure
appropriate oversight and compliance with
applicable laws. No other political contributions
were reported during the year. Therefore,
the Group’s total amount of contributions
to non-UK political parties during the year
was £21,505 (2024: £57,960).
Powers of Directors and share capital
The business of Imperial is managed by the
Board which may exercise all the powers of
the Company, subject to the provisions of the
Articles of Association and the Companies Act
2006. Authority is sought from shareholders
at each Annual General Meeting to grant the
Directors powers, in line with institutional
shareholder guidelines and relevant legislation,
in relation to the issue and buyback by the
Company of its shares.
Details of our share capital are shown in
note 26 to the financial statements. All shares
other than those held in treasury are freely
transferable and rank pari passu for voting
and dividend rights.
As at 30 September 2025 we held 62,589,137
shares in treasury, which represented
approximately 7.19% of the Company’s issued
share capital and had an aggregate nominal
value of £6,258,914.
This Directors’ Report, together with our
Strategic Report, forms the management
report required under the Disclosure Guidance
and Transparency Rules (DGTR). The Company
has chosen, in accordance with Section 414
C(11) of the Companies Act 2006, to include
certain matters in the Strategic Report that
would otherwise be required to be disclosed
in the Directors’ Report. The Strategic Report
can be found on pages 1 to 75 and includes
an indication of future likely developments of
the Company, details of important Company
events and the Company’s business model
and strategy. The Corporate Governance
information on pages 76 to 101 and the Directors’
Responsibilities Statement on page 124 are
incorporated into the Directors’ Report by
reference. The Directors’ Report, including the
information incorporated by reference, fulfils
the requirements of the Corporate Governance
Statement for the purposes of the DGTR.
Specifically, the following disclosures and
those referred to under ‘Other information’ on
page 123 have been included elsewhere in the
Annual Report and are incorporated into the
Directors’ Report by reference:
Disclosure Page
Future developments
in the business 14
Going concern statement 74
Viability statement 74
Disclosure of greenhouse gas
emissions, energy consumption
and energy efficiency action 45
Statement of Directors’
responsibilities 124
Disclosure of information
to the auditor 124
Financial risk management 167
Shareholder information 216
Equal opportunities
We regard equality and fairness as a
fundamental right of all our people. We aim
to create a work environment that allows equal
opportunities so people are employed fairly,
safely and in compliance with applicable
employment laws and regulation. We respect
each person for who they are and what they
can contribute and provide the same
opportunity for career development and
promotion regardless of disability, physical or
mental health, age, race, origin, gender, sexual
orientation, political views, religion, marital
status or any other legally protected status.
Charitable and political donations
As part of our responsible approach, we
continued to support a number of communities
in which we operate by allocating a central
budget. This budget largely funds our support
of the Eliminating Child Labour in Tobacco
Growing (ECLT) Foundation and our support
of Hope for Justice. In addition, a number
of our subsidiaries donate to charitable and
community endeavours from local budgets.
All charitable donations and partnership
investments are subject to the requirements
of our Code of Conduct.
No political donations were made to UK political
parties, organisations or candidates during the
year (2024: nil). This approach is aligned with
our Group policy and Code of Conduct.
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We have not cancelled these shares but hold
them in a treasury shares reserve within our
profit and loss account reserve, and they
represent a deduction from equity
shareholders’ funds.
Repurchases of own shares
On 6 October 2022, we announced a
commitment to return surplus capital to
shareholders through regular annual share
buybacks if circumstances were right and
in line with our five-year strategy to deliver
sustainable growth and enhanced shareholder
returns. The first buyback programme
amounting to £1 billion completed on
11 September 2023. The second buyback
programme amounting to £1.1 billion, announced
on 5 October 2023, completed on 29 October 2024.
The third buyback programme amounting to
£1.25 billion buyback programme completed
on 29 October 2025.
On 7 October 2025, we announced a further
£1.45 billion buyback programme, to be
completed no later than 28 October 2026.
At its AGM on 29 January 2025, the Company
obtained shareholder authorisation for the
buyback of up to 83,850,000 shares (the ‘2025
Buyback Authority’), renewing and replacing
a similar authority granted at the AGM held
on 31 January 2024. 44,612,248 ordinary shares
with a nominal value of 10 pence each were
purchased in FY25 (representing 5.13% of the
called up share capital of the Company as at
30 September 2025), of which 29,272,448 were
purchased under the 2025 Buyback Authority.
The aggregate amount of consideration paid
by Imperial in FY25 was £1.22 billion. The 2025
Buyback Authority will expire at the earlier
of the close of business on 31 March 2026 and
the end of the AGM of the Company to be held
in 2026.
Interest in voting rights
As at 30 September 2025 and the date of
this report, the Company has been notified in
accordance with Chapter 5 of the DGTR of the
following interests in its shares. The Company
has not been notified of any changes to these
interests as at the date of this report.
Disclosure
Number of
ordinary shares
at the date of
notification
(millions)
Percentage
of issued share
capital at the date
of notification
Capital Group
Companies Inc 105 12.99
1
Spring Mountain
Investments Ltd 48 5.86
2
BlackRock 53 5.25
1
1. Direct holding.
2. Indirect holding.
Information provided to the Company under
the DGTRs is publicly available via the regulatory
information services, and on our website at
https://www.imperialbrandsplc.com/investor-
hub/stock-exchange-announcements.
Results and dividends
We include a review of our operational and
financial performance on pages 26 to 37.
The profit attributable to equity holders
of the Company for the financial year was
£2,071 million, as shown in our consolidated
income statement. Note 3 to the financial
statements gives an analysis of revenue
and operating profit.
As at close of business on 7 November 2025,
a total of 50,093,216 million further shares
could still be repurchased under the 2025
Buyback Authority before it expires.
The Board continues to regard the ability
to repurchase issued shares in suitable
circumstances as an important part of
Imperial’s financial management. The
Directors will continue to exercise this power
only when, in the light of market conditions
prevailing at the time, they believe that the
effect of such purchases will be to increase
earnings per share and will be likely to
promote the success of the Company for the
benefit of its members as a whole, representing
an appropriate mechanism to return capital
to investors alongside a progressive dividend.
Other investment opportunities, appropriate
gearing levels and the overall position of the
Company are taken into account when
exercising this authority. A resolution will
be proposed at the 2026 AGM to renew the
authority for the Company to purchase its own
shares, up to specified limits and in line with
institutional shareholder guidelines, for a
further year. The proposal will be described in
more detail in the 2026 Notice of AGM. For all
recent share buyback programmes, Imperial
has entered into irrevocable, non-discretionary
arrangements with a broker in order to reduce
the issued share capital of the Company.
Insurance and indemnities
Imperial maintains directors’ and officers’
liability insurance which provides appropriate
cover for legal action brought against its
Directors and Officers. The Company has also
granted indemnities to each of its Directors to the
extent permitted by law. Qualifying third-party
indemnity arrangements for the benefit of
Directors, in a form and scope which comply
with the requirements of the UK Companies
Act 2006, were in force throughout the year
and up to the date of this Annual Report.
An analysis of net assets is provided in the
consolidated balance sheet and the related
notes to the financial statements.
We pay quarterly dividends. The first and
second dividends for financial year 2025 were
paid on 30 June 2025 and 30 September 2025
respectively. The third dividend will be paid
on 31 December 2025 and, subject to AGM
approval, the final dividend will be paid on
31 March 2026 to our shareholders on the
Register of Members at the close of business
on 20 February 2026. The associated ex-
dividend date will be 19 February 2026.
Following a review by the Audit Committee
at its meeting in November 2025, which
confirmed the accounts showed distributable
reserves sufficient to support the third interim
and final dividends and the expected interim
dividends in financial year 2026, the Directors
have declared and propose dividends in
respect of FY25 as follows:
Ordinary shares
2025
£ million
2024
£ million
Interim paid
– June 2025
40.08p per share 328 193
Interim paid
– September 2025
40.08p per share 324 192
Declared interim
– December 2025
40.08p per share 322 459
Proposed final
– March 2026
40.08p per share 322 459
Total ordinary
dividends
160.32p per share
(2024: 153.42p) 1,314 1,303
DIRECTORS’ REPORT CONTINUED
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DIRECTORS’ REPORT CONTINUED
2. Three insurance companies (the Sureties)
have each made available to Imperial
Tobacco Pension Trustees Limited a surety
bond, in each case issued on a standalone
basis but in aggregate forming an amount
of £120 million, until December 2028.
These surety bonds are subject to deeds
of counter-indemnity each dated April 2023
and made on substantially the same terms
provided by the Company, Imperial Brands
Finance PLC and Imperial Tobacco Limited.
If any person or group of associated persons
(as defined within each agreement) acquires
the right to exercise more than 50% of the
votes exercisable at a general meeting of
the Company, the Sureties may demand that
Imperial Tobacco Limited, amongst other
things, pay a sum to a cash collateral account
equal to but not exceeding the aggregate
amount outstanding under each guarantee.
3. In addition, three insurance companies
(the US Sureties) have made available to
ITG Brands a Supersedeas bond, in the
amount of $405,684,291.52, with no expiry
date. This bond is subject to three deeds of
indemnity each dated April 2025 and made
on substantially the same terms provided
by the Company, ITG Brands LLC and ITG
Holdings USA, Inc. (the Indemnitors).
If any person or group of associated persons
(as defined within each agreement) acquires
the right to cast, or control the casting of,
more than one half of the maximum number
of votes that might be cast at a general
meeting of the Company, the Sureties may
demand that the Indemnitors pay a sum
to a cash collateral account equal to but not
exceeding the amount outstanding under
the bond.
4. Imperial Brands Finance PLC has issued
bonds under a Global Medium Term
Notes (GMTN) Debt Issuance Programme.
The Company acts as guarantor.
The final terms of these series of notes
contain change of control provisions under
which the holder of each note will, subject
to any earlier exercise by the Issuer, have
the option to require the Issuer to redeem or,
at the Issuer’s option, purchase that note at
its nominal value if: (a) any person, or
persons acting in concert or on behalf
of any such person(s), becomes interested
in: (i) more than 50% of the issued or allotted
ordinary share capital of the Company; or
(ii) such number of shares in the capital
of the Company carrying more than 50%
of the voting rights normally exercisable
at a general meeting of the Company; and
(b) as a result of the change of control, there
is either: (i) a reduction to a non-investment
grade rating or withdrawal of the investment
grade rating of the notes which is not raised
again, reinstated to or replaced by an
investment grade rating during the change
of control period specified in the final terms;
or (ii) to the extent that the notes are not
rated at the time of the change of control,
the Issuer fails to obtain an investment
grade credit rating of the notes within the
change of control period as a result of the
change of control.
Pension fund
The Global Pensions Committee provides
global oversight on both risk and reward
elements of the Group’s pension arrangements.
The Committee’s objectives include tackling
the risks inherent in the Group’s defined benefit
pension schemes as well as reward matters.
The Group has three main pension
arrangements, the largest being the Imperial
Tobacco Pension Fund, which is not controlled
by the Board but by a trustee company. Its board
consists of five Directors nominated by the
Company, one Director nominated by employee
members and two Directors nominated by
current and deferred pensioners. This trustee
company is responsible for the assets of the
pension fund, which are held separately from
those of the Group and are managed by
independent fund managers. The pension
fund assets can only be used in accordance
with the fund’s rules and for no other purpose.
The Company maintains Pension Trustee
Liability insurance, for action resulting from
a pension-related claim.
Articles
The Company’s Articles of Association
do not contain any entrenchment provisions
and, therefore, may be altered or added to,
or completely new Articles may be adopted,
by special resolution, subject to the provisions
of the Companies Act 2006.
Significant agreements
The agreements summarised below are those
which we consider to be significant to the
Group as a whole and which contain provisions
that take effect or give the other party or
parties a specific right to alter or terminate
them if we are subject to a change of control
following a takeover bid.
1. The Group has seven credit facility
agreements that provide that, unless the
lenders (as defined within each agreement)
otherwise agree, if any person or group of
associated persons and/or any connected
persons acquires the right to exercise more
than 50% of the votes exercisable at a general
meeting of the Company, the respective
borrowers (as defined within each agreement)
must repay any outstanding utilisation owed
by them under the facility agreement and
the total commitments under that facility
agreement will be cancelled.
The seven credit agreements are:
– a facility agreement dated September 2025
under which certain banks and/or financial
institutions make available to Imperial
Brands Finance PLC a committed credit
facility of €3,000 million until March 2029,
with annual one-year auto-extensions;
– a credit facility agreement dated
September 2025 under which a certain
bank makes available to Imperial Brands
Finance PLC committed credit facilities
of £200 million until September 2026; and
– five credit facility agreements dated
September 2025 under each of which
a certain bank makes available to
Imperial Brands Finance PLC committed
credit facilities of £100 million until
September 2026.
The Company acts as guarantor for the above
credit facility.
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DIRECTORS’ REPORT CONTINUED
The bonds Imperial Brands Finance PLC
issued in such manner and which are still
outstanding as of 30 September 2025 are
as follows:
– 1 July 2024 US$1,250m 5.500% guaranteed
notes due 2030;
– 1 July 2024 US$750m 5.875% guaranteed
notes due 2034;
– 12 February 2025 €800m 3.875% guaranteed
notes due 2034 and 4 September 2025
€200m 3.875% guaranteed notes due 2034*;
– 1 July 2025 US$850m 4.500% guaranteed
notes due 2028;
– 1 July 2025 US$850m 5.625% guaranteed
notes due 2035; and
– 1 July 2025 US$500m 6.375% guaranteed
notes due 2055.
* On or around 14 October 2025, these notes became
fungible with the original €800m issue to create a single,
consolidated series of €1,000m 3.875% guaranteed notes
due 2034.
5. Imperial Brands Finance PLC and Imperial
Brands Finance Netherlands B.V. have also
issued bonds under Euro Medium Term
Notes (EMTN) Debt Issuance Programmes.
The Company acts as guarantor.
The final terms of these series of notes
contain change of control provisions under
which the holder of each note will, subject
to any earlier exercise by the Issuer, have the
option to require the Issuer to redeem or, at
the Issuer’s option, purchase that note at its
nominal value if: (a) any person, or persons
acting in concert or on behalf of any such
person(s), becomes interested in: (i) more
than 50% of the issued or allotted ordinary
share capital of the Company; or (ii) such
number of shares in the capital of the
6. Imperial Brands Finance PLC has also
issued bonds in the US under the provisions
of Section 144a and Regulation S
respectively of the US Securities Act (1933).
The Company acts as guarantor.
The final terms of this series of notes
contain change of control provisions under
which the holder of each note will, subject
to any earlier exercise by the Issuer, have
the option to require the Issuer to redeem or,
at the Issuer’s option, purchase that note at
101% of its nominal value if: (a) (i) any person
(as such term is used in the US Securities
Exchange Act of 1934 (the Exchange Act))
becomes the beneficial owner of more
than 50% of the Company’s voting stock;
or (ii) there is a transfer (other than by
merger, consolidation, amalgamation or
other combination) of all or substantially
all of the Company’s assets and those of its
subsidiaries to any person (as such term is
used in the Exchange Act); or (iii) a majority
of the members of the Company’s Board of
Directors is not continuing in such capacity;
and (b) as a result of the change of control,
there is a reduction to a non-investment
grade rating or withdrawal of the investment
grade rating of the notes which is not raised
again, reinstated to or replaced by an
investment grade rating during the change
of control period specified in the final terms.
The bonds issued in such manner and
which are still outstanding as of
30 September 2025 are as follows:
– 26 July 2019 US$400 million 3.500%
guaranteed notes due 2026;
– 26 July 2019 US$1,000 million 3.875%
guaranteed notes due 2029; and
– 27 July 2022 US$1,000 million 6.125%
guaranteed notes due 2027.
Company carrying more than 50% of
the voting rights normally exercisable
at a general meeting of the Company; and
(b) as a result of the change of control, there
is either: (i) a reduction to a non-investment
grade rating or withdrawal of the investment
grade rating of the notes which is not raised
again, reinstated to or replaced by an
investment grade rating during the change
of control period specified in the final terms;
or (ii) to the extent that the notes are not
rated at the time of the change of control,
the Issuer fails to obtain an investment
grade credit rating of the notes within the
change of control period as a result of the
change of control.
a) The bonds Imperial Brands Finance PLC
issued in such manner and which are still
outstanding as of 30 September 2025 are
as follows:
– 26 September 2011 £188 million 5.500%
guaranteed notes due 2026;
– 28 February 2014 €650 million 3.375%
guaranteed notes due 2026;
– 28 February 2014 £500 million 4.875%
guaranteed notes due 2032; and
– 12 February 2019 €750 million 2.125%
guaranteed notes due 2027.
b) The bonds Imperial Brands Finance
Netherlands B.V. issued in such manner
and which are still outstanding as of
30 September 2025 are as follows:
– 18 March 2021 €1,000 million 1.750%
guaranteed notes due 2033; and
– 15 February 2023 €1,050 million 5.250%
guaranteed notes due 2031.
Waiver of dividends
In respect of UKLR 6.6.1R (11) and (12) the
trustee of the Imperial Tobacco Group PLC
Employee and Executive Benefit Trust and the
Imperial Tobacco Group PLC 2001 Employee
Benefit Trust agrees to waive dividends
payable on the Group’s shares it holds for
satisfying awards under various Imperial
Brands PLC share plans.
2025 Annual General Meeting vote
At the Annual General Meeting in 2025,
the Company received strong support
for all its resolutions.
Post-year-end events
Share buybacks
As noted above, on 7 October 2025 the
Company announced a further share buyback
programme of up to £1.45 billion of shares in
the period to 28 October 2026.
2026 Annual General Meeting
This year’s AGM will be held at the Bristol
Marriott Royal Hotel on 28 January 2026
at 9.30am.
Details of the resolutions to be put to the
meeting can be found in the Notice of Annual
General Meeting sent to shareholders and
made available on the Company’s website.
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DIRECTORS’ REPORT CONTINUED
the Directors of the Company are listed
on pages 78 to 80;
the Company, through various subsidiaries,
has established branches in a number of
different countries in which the Group
operates; and
our report under the Streamlined Energy
and Carbon Reporting requirements can
be found on page 45.
The Strategic Report and this Directors’ Report
were approved and signed by order of the Board.
EMILY CAREY
COMPANY SECRETARY
17 November 2025
Imperial Brands PLC
Incorporated and domiciled in England
and Wales No: 3236483
UK Listing Rules 6.6.1
For the purposes of the UK Listing Rules, the
information required to be disclosed by UKLR
6.6.1R can be found on the pages set out below:
Section Information Page
(1) Interest capitalised
n/a
(2) Publication of
unaudited financial
information
n/a
(3) Details of long-term
incentive schemes
n/a
(4) Waiver of emoluments
by a Director
n/a
(5) Waiver of future
emoluments by a
Director
n/a
(6) Non pre-emptive issues
of equity for cash
n/a
(7) Non pre-emptive issue
by major subsidiary
undertakings
n/a
(8) Listed subsidiary
n/a
(9) Contracts of
significance
121/122
(10) Provision of services by
a controlling
shareholder
n/a
(11) Shareholder waivers of
dividends
122
(12) Shareholder waivers of
future dividends
122
(13) Compliance with
controlling shareholder
rules
n/a
Other information
In accordance with the Companies Act 2006,
the following items have been included in
other sections of this Annual Report:
a fair review of the business, as required by
the Companies Act 2006, is included in the
Strategic Report;
the information in our Governance Report,
including information on our Directors and
rules around their appointment and
replacement, is included in this Directors’
Report by reference;
future developments in the business are
included in the investment case
commencing on page 14;
information relating to our people, including
colleague engagement, is included in the
Stakeholder Engagement section on page 86,
Safe and Inclusive workplace on pages 49 to
53 and on pages 84 and 90 to 91 in our
Governance Report;
our principal risks are detailed on pages 69
to 73;
information relating to our sustainability
approach that supports our environmental,
social and governance agenda is included
on pages 39 to 53;
responsibilities to a broader stakeholder
group, including suppliers, consumers and
customers, are included on pages 47 to 48
and 86 to 89;
information on our greenhouse gas
emissions is included on page 45;
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DIRECTORS’ REPORT CONTINUED
Statement of Directors’ responsibilities
The Directors are responsible for preparing the
Annual Report and Group and Parent Company
financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year.
Under that law, the Directors are required to
prepare the Group financial statements in
accordance with UK-adopted International
Accounting Standards. In addition, the
Directors have elected to prepare the Parent
Company financial statements in accordance
with United Kingdom Generally Accepted
Accounting Practice (United Kingdom
Accounting Standards and applicable law),
including FRS 101 ‘Reduced Disclosure
Framework’. Under company law the Directors
must not approve the financial statements
unless they are satisfied that they give a true
and fair view of the state of affairs of the Group
and Parent Company and of the profit or loss of
the Group and Parent Company for that period.
In preparing the Group financial statements,
International Accounting Standard 1 requires
that Directors:
properly select and consistently apply
suitable accounting policies;
present information, including accounting
policies, in a manner that provides relevant,
reliable, comparable and understandable
information;
provide additional disclosures when
compliance with the specific requirements
in IFRS accounting standards are
insufficient to enable users to understand
the impact of particular transactions, other
events and conditions on the entity’s
financial position and financial performance;
Under applicable law and regulations, the
Directors are also responsible for preparing a
Strategic Report, Directors’ Report, Remuneration
Report and Corporate Governance Statement
that comply with the law and those regulations.
The Directors are responsible for the
maintenance and integrity of the Parent
Company’s website. Legislation in the United
Kingdom governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
Each of the Directors in office as at the date
of this report, whose names and functions are
listed on pages 78 to 80, confirms that, to the
best of their knowledge:
the Group and Parent Company financial
statements, which have been prepared in
accordance with UK-adopted International
Accounting Standards and UK GAAP FRS
101 respectively, give a true and fair view of
the assets, liabilities, financial position and
profit of the Group and Parent Company
on a consolidated and individual basis;
the Strategic Report and the Directors’ Report
contained in the Annual Report and Accounts
include a fair review of the development and
performance of the business and position
of the Group and Parent Company, together
with a description of the principal risks and
uncertainties that they face;
there is no relevant audit information (that
is, information needed by EY in connection
with preparing its report) of which EY is
unaware; and
each has taken all the steps that they ought
to have taken as a Director in order to make
themselves aware of any relevant audit
information and to establish EY is aware
of that information.
state whether the Group financial
statements have been prepared in
accordance with UK-adopted International
Accounting Standards, subject to any
material departures disclosed and explained
in the financial statements; and
prepare the Group financial statements
on the going concern basis unless it is
inappropriate to presume that the Group
will continue in business.
In preparing the Parent Company financial
statements, the Directors are required to:
select suitable accounting policies and then
apply them consistently;
make judgements and accounting estimates
that are reasonable and prudent;
state whether applicable United Kingdom
Accounting Standards have been followed,
subject to any material departures disclosed
and explained in the financial statements; and
prepare the financial statements on the
going concern basis unless it is
inappropriate to presume that the Parent
Company will continue in business.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Group and Parent
Company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the Group and Parent Company on
a consolidated and individual basis, and to
enable them to ensure that the Group financial
statements comply with the Companies Act
2006. They are also responsible for safeguarding
the assets of the Parent Company and its
subsidiaries and hence for taking reasonable
steps for the prevention and detection of fraud
and other irregularities.
The Directors consider that the Annual
Report and Accounts, taken as a whole, are fair,
balanced and understandable and provide the
information necessary for shareholders to
assess the Group and the Parent Company’s
position and performance, business model
and strategy.
This Statement of Directors’ Responsibilities
was approved by the Board and signed on
its behalf.
The Strategic Report and the Directors’ Report
were approved by the Board and signed on
its behalf.
By order of the Board.
EMILY CAREY
COMPANY SECRETARY
17 November 2025
Imperial Brands PLC
Incorporated and domiciled in England
and Wales No. 3236483
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FINANCIALS
CONTENTS
Independent Auditor’s Report 126
Consolidated Income Statement 137
Consolidated Statement
of Comprehensive Income 137
Consolidated Balance Sheet 138
Consolidated Statement
of Changes in Equity 139
Consolidated Cash Flow Statement 141
Notes to the Consolidated
Financial Statements 142
125
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INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS
OF IMPERIAL BRANDS PLC
Group Parent company
Consolidated balance sheet as at
30 September 2025
Balance sheet as at 30 September 2025
Consolidated income statement for the year
then ended
Statement of changes in equity for the year
then ended
Consolidated statement of comprehensive
income for the year then ended
Related notes I to X to the financial statements
including material accounting policy
information
Consolidated statement of changes in equity
for the year then ended
Consolidated statement of cash flows for the
year then ended
Related notes 1 to 35 to the financial
statements, including: material accounting
policy information and the supplementary
information on pages 193 to 201.
The financial reporting framework that has been applied in the preparation of the group financial
statements is applicable law and UK adopted international accounting standards. The financial
reporting framework that has been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
INDEPENDENCE
We are independent of the group and parent in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the
group or the parent company and we remain independent of the group and the parent company
in conducting the audit.
OPINION
In our opinion:
Imperial Brands PLC’s group financial statements and parent company financial statements
(the “financial statements”) give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 30 September 2025 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with UK adopted
international accounting standards;
the parent company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of Imperial Brands PLC (the ‘parent company’)
and its subsidiaries (the ‘group’) for the year ended 30 September 2025 which comprise:
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group and parent company’s ability to continue
to adopt the going concern basis of accounting included:
confirming our understanding of the directors’ going concern assessment process, including
the controls over the review and approval of the business plan and cash flow forecasts covering
the period of twelve months from date of approval of the financial statements;
assessing the appropriateness of the duration of the going concern assessment period of
twelve months from date of approval of the financial statements and considering the existence
of any significant events or conditions beyond this period based on our procedures on the
group’s business plan, cash flow forecasts and from knowledge arising from other areas
of the audit;
verifying inputs against the board-approved business plan, cash flow forecasts and debt
facility terms, and reconciling the opening liquidity position to the year end position as
at 30 September 2025;
Agreeing borrowing facilities to agreements to confirm both their availability to the group and
the forecast debt repayments through the going concern assessment period and to validate
that there are no financial covenants in relation to the borrowing facilities;
evaluating management’s historical forecasting accuracy and the consistency of the going
concern assessment with information obtained from other areas of the audit, such as our audit
procedures on the business plan and cash flow forecasts which underpin management’s
goodwill impairment assessments;
testing the assessment, including forecast liquidity under base and downside scenarios,
for clerical accuracy;
assessing whether assumptions made, including those relating to current economic
challenges, were reasonable and in the case of downside scenarios, appropriately severe,
in light of the group’s relevant principal risks and uncertainties and our own independent
assessment of those risks;
assessing management’s considerations related to material climate change impacts in the
going concern period;
evaluating the amount and timing of identified mitigating actions available to respond to
a severe but plausible downside scenario, and whether those actions are feasible and within
the group’s control;
performing independent stress testing on management’s assumptions including applying
incremental adverse cash flow sensitivities. Our sensitivities included the impact of certain
severe but plausible scenarios identified in other areas of our audit, including litigation and tax,
materialising within the going concern period; and,
performing reverse stress testing on management’s base case scenario to understand how
severe conditions would have to be to breach liquidity and whether the reduction in EBITDA
that result in breaches to liquidity has no more than a remote possibility of occurring;
assessing the appropriateness of the going concern disclosure on page 142.
OUR KEY OBSERVATIONS:
The directors’ assessment forecasts that the group will maintain sufficient liquidity throughout
the going concern assessment period in the base case scenario. Management also assessed:
– a severe but plausible downside scenario corresponding to a 10% permanent reduction
in EBITDA, which would result in a minimum level of headroom of £1.0bn in March 2026.
– a reverse stress test scenario corresponding to a permanent reduction in EBITDA of
59% which would result in liquidity being eroded in March 2026. This scenario is not
considered plausible.
We have not identified any climate-related risks that could materially impact the group’s
forecasts to the end of the going concern period.
Controllable mitigating actions available to management over the going concern assessment
period, including reductions to non-declared dividend payments and uncommitted share
buybacks, are sufficient to ensure liquidity in both management’s plausible downside scenario
and the audit team’s additional downside sensitivities.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group
and parent company’s ability to continue as a going concern for a period of 12 months from when
the financial statements are authorised for issue.
In relation to the group and parent company’s reporting on how they have applied the UK
Corporate Governance Code, we have nothing material to add or draw attention to in relation
to the directors’ statement in the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern
are described in the relevant sections of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee as to the group’s ability to continue
as a going concern.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
OVERVIEW OF OUR AUDIT APPROACH
Audit scope We performed an audit of the complete financial information of
5 components and audit procedures on specific balances for a further
11 components. We performed central procedures on financial statement
line items as detailed in the “Tailoring the scope” section below.
Key audit matters
Revenue recognition, including management override of controls
Management override of controls or errors related to KPIs
Uncertain tax positions
Litigations
Materiality
Overall group materiality of £159m which represents 5% of Profit
before tax.
AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS SCOPING
Tailoring the scope
In the current year our audit scoping has been updated to reflect the new requirements of ISA
(UK) 600 (Revised). We have followed a risk-based approach when developing our audit approach
to obtain sufficient appropriate audit evidence on which to base our audit opinion. We performed
risk assessment procedures, with input from our component auditors, to identify and assess risks
of material misstatement of the Group financial statements and identified significant accounts
and disclosures. When identifying components at which audit work needed to be performed
to respond to the identified risks of material misstatement of the Group financial statements,
we considered our understanding of the Group and its business environment, the applicable
financial framework, the group’s system of internal control at the entity level, the existence
of centralised processes, applications and any relevant internal audit results.
We determined that centralised audit procedures can be performed on the group as a whole in
the following financial statement lines: Investments, Finance costs, Intercompany eliminations,
Intangibles (brands and goodwill), derivatives and borrowings.
Additionally, we determined that centralised audit procedures can be performed on specific
components by our shared service centre team, which forms part of the integrated primary team,
in the following audit areas:
Key audit area on which procedures were performed centrally Countries with components subject to central procedures
Revenue UK, Germany, USA, Australia, Poland
Distribution, advertising and selling costs UK, Germany, Australia, Poland
Administrative and other operating expenses UK, Germany, Australia, Poland
Trade receivables UK, Germany, Australia
Procedures in relation to cash were performed centrally for the group with the exception
of components in Morocco, Poland and Logista.
We identified 5 components as individually relevant to the Group due to financial size of the
component relative to the group. We then identified a further 9 components as individually
relevant to the Group based on the materiality of specific accounts relative to the Group.
For those individually relevant components, we identified the significant accounts where audit
work needed to be performed at these components by applying professional judgement, having
considered the group significant accounts on which centralised procedures will be performed,
the reasons for identifying the financial reporting component as an individually relevant
component and the size of the component’s account balance relative to the group significant
financial statement account balance.
We then considered whether the remaining group significant account balances not yet subject
to audit procedures, in aggregate, could give rise to a risk of material misstatement of the group
financial statements. We selected 2 components of the group to include in our audit scope to
address these risks.
Having identified the components for which work will be performed, we determined the scope
to assign to each component.
Of the 16 components selected, we designed and performed audit procedures on the entire
financial information of 5 components (“full scope components”). For 9 components, we designed
and performed audit procedures on specific significant financial statement account balances or
disclosures of the financial information of the component (“specific scope components”). For the
remaining 2 components, we performed specified audit procedures to obtain evidence for one
or more relevant assertions.
Our scoping to address the risk of material misstatement for each key audit matter is set out
in the Key audit matters section of our report
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
INVOLVEMENT WITH COMPONENT TEAMS
In establishing our overall approach to the Group audit, we determined the type of work that
needed to be undertaken at each of the components by us, as the Group audit engagement team,
or by component auditors operating under our instruction.
The Group audit team continued to follow a programme of planned visits that has been designed
to ensure that the Senior Statutory Auditor visits full scope components with other senior
members of the audit team visiting selected specific scope locations. During the current year’s
audit cycle, visits were undertaken by the primary audit team to the component teams in USA,
Germany, Spain, Morocco and Poland, as well as the shared service centre in Poland and in the
Philippines. These visits involved discussing the audit approach with the component team and
any issues arising from their work, meeting with local management and reviewing relevant audit
working papers on risk areas. The Group audit team interacted regularly with the component
teams where appropriate during various stages of the audit, reviewed relevant working papers
and were responsible for the scope and direction of the audit process. Where relevant, the section
on key audit matters details the level of involvement we had with component auditors to enable
us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the
Group as a whole.
This, together with the additional procedures performed at Group level, gave us appropriate
evidence for our opinion on the Group financial statements.
CLIMATE CHANGE
Stakeholders are increasingly interested in how climate change will impact Imperial Brands.
The group has determined that the most significant future impacts from climate change on their
operations will be from:
An increase in material costs due to increases in operating costs of suppliers and raw
materials;
Increased costs from emerging regulation such as carbon taxation;
Changes in the tobacco crop yield that may lead to agricultural supply chain disruption; and,
Other impacts that may cause supply chain disruption or affect production capacity, namely:
– Increased frequency and severity of extreme weather events;
– Physical hazards such as flooding;
– Chronic drought risk; and,
– More severe hurricane risk.
These are explained on pages 54 to 65 in the Task Force On Climate Related Financial
Disclosures. They have also explained their climate commitments on pages 44 to 45. All of these
disclosures form part of the “Other information,” rather than the audited financial statements.
Our procedures on these unaudited disclosures therefore consisted solely of considering whether
they are materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit or otherwise appear to be materially misstated, in line with our
responsibilities on “Other information”.
In planning and performing our audit we assessed the potential impacts of climate change
on the group’s business and any consequential material impact on its financial statements.
The group has explained in note 2, Accounting estimates and judgements, how they have
reflected the impact of climate change in their financial statements. Significant judgements and
estimates relating to climate change are included in note 2. These disclosures also explain where
governmental and societal responses to climate change risks are still developing, and where the
degree of certainty of these changes means that they cannot be taken into account when
determining asset and liability valuations under the requirements of UK adopted international
accounting standards.
Our audit effort in considering the impact of climate change on the financial statements was
focused on evaluating management’s assessment of the impact of climate risk, physical and
transition, their climate commitments, the effects of material climate risks disclosed on pages
54 to 65 and the significant judgements and estimates disclosed in note 2 and whether these have
been appropriately reflected in asset values where values are determined through modelling
future cash flows, being goodwill and intangible assets impairment assessment (note 12) and the
recoverability of deferred tax assets (note 23) to determine the risks of material misstatement in
the financial statements from climate change which needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of
going concern and viability and associated disclosures. Where considerations of climate change
were relevant to our assessment of going concern, these are described above.
Based on our work we have not identified the impact of climate change on the financial
statements to be a key audit matter or to impact a key audit matter.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these matters.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
Risk Our response to the risk
Revenue recognition including management
override of controls (2025: £32,171m,
2024: £32,411m)
Refer to the audit committee report (page 96);
accounting policies (note 1); accounting
estimates and judgements (note 2); and
segmental information (note 3) of the
consolidated financial statements. Tobacco
revenue is an area of focus for stakeholders
interested in the performance of the company
against an industry backdrop of declining
global sales volumes.
Most of the group’s sales arrangements require
little judgement to be exercised, with revenue
being recognised on the delivery of goods.
However, there is a risk that management may
override controls to intentionally misstate
revenue transactions by recording fictitious
manual journals to revenue (e.g. inappropriate
rebate accounting).
We have reviewed Imperial’s Code of Conduct, Speaking-up, and Fraud risk management policies in order to evaluate the ‘tone at the top’.
We obtained an understanding of the revenue process and understood how Imperial’s revenue recognition policies are applied. We also assessed
the processes and key controls over rebate accounting, by walking through the process from identification to recording.
We reviewed the group revenue recognition policies, as documented in the group Accounting Manual, for compliance with IFRS 15 ‘Revenue from
contracts with customers’.
We reviewed and discussed key contractual arrangements with management and obtained relevant documentation, including those in respect
of rebate arrangements.
We used data analytics techniques, as part of our overall revenue recognition testing, for all components with revenue in scope. This includes
testing the occurrence of revenue by analysing the correlation of 100% of journal entries posted to revenue with journals posted to accounts
receivables and then subsequently as cash receipts. We validated cash receipt postings by tracing to bank statements on a sample basis. This
provided us with a high level of assurance over £25.1 billion (78%) of revenue recognised by the group, of which £14.8 billion (69%) in relation to
Tobacco & NGP and £10.2 billion (96%) in relation to the Distribution component.
We made inquires outside of the finance team, for example with Sales, to identify any unusual arrangements or performance in the business.
We performed cut-off testing for a sample of revenue transactions near the period end to ensure they were recognised in the appropriate period.
We assessed disclosures against the requirements of IFRS 15.
To respond to the risk over manual adjustments to revenue, we:
Conducted targeted transaction testing to respond to the risk of fraud, in particular focused on manual journal entries.
Focused our journal entry audit procedures on addressing the risk of management override of controls at all full and specific scope components,
as well as additional components to add unpredictability to the testing. Our procedures also covered post-closing year-end journal entries.
To assess adjustments relating to rebates:
inspecting contracts and completing independent recalculations of estimated rebates
Obtaining and reviewing, on a sample basis, direct customer confirmations of trade terms.
agreeing the inputs of a sample of management’s rebate calculations to supporting documentation
testing a sample of rebate liabilities to post year-end settlement and investigating variances
Key observations communicated to the Audit Committee
Based on the procedures performed, including those in respect of manual adjustments to revenue, we did not identify any evidence of material misstatement in the revenue recognised during
the year.
How we scoped our audit to respond to the risk and involvement with component teams
We performed centralised procedures and full and specific scope audit procedures over this risk in all locations with revenue in scope, which covered 78% of the risk amount.
All audit work performed to address this risk was undertaken by the group audit team with the exception of the Logista and Morocco components, and the procedures in relation to rebates which
were performed in line with group instructions by component teams when applicable and reviewed by the group team.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
Risk Our response to the risk
Management override of controls or errors
related to KPIs impacting executive
remuneration
Refer to the audit committee report (page 96);
accounting policies (note 1); accounting
estimates and judgements (note 2) of the
consolidated financial statements; and the
supplementary information.
There is a risk that management could
override controls in order to influence KPIs
which have a bearing on remuneration. In the
current year we have identified the following
items as areas of focus:
Adjustment of reported margins to overstate
operating profits;
Incorrect classification of items as adjusting
costs in order to inflate the adjusted
operating profit metric
Errors relating to working capital metrics,
through movements in inventory, trade
receivables and trade creditors, and
therefore the adjusted operating cash
conversion metric;
Overstatement of NGP revenue in order
to meet the consumer health bonus
measure as well as strategic/individual
bonus measures.
In respect of our focus on reported margins, we have:
Inquired of divisional finance leadership to identify any unusual and/or new arrangements/projects entered into during the current financial year
that would be expected to have an impact upon operating profit margins.
Used data analytical techniques to identify and investigate unusual trends in margins in order to identify any unusual movements throughout
the year and in comparison to prior year.
In respect of our focus on the classification of adjusting items, we have:
Challenged the timing of recognition of one-off costs and whether the classification of any costs as adjusting is in line with group policy and
disclosed appropriately.
Evaluated the classification of one-off adjustments for indicators of management bias, in particular whether both income and expense items are
treated consistently.
In respect of our focus on working capital metrics, we have:
Performed cut-off testing at year end on working capital balances to a lower testing threshold. Namely, on trade receivables, inventory and trade
payables to ensure that working capital metrics are not recorded pre year end and then reversed post year end to manipulate the adjusted
operating cash conversion metric.
Performed detailed, disaggregated analytical review to identify unusual trends and positions in key significant accounts such as cash, trade
receivables, trade payables and inventory to identify potential manipulation of these balances that would influence working capital balances.
Made inquires outside of the finance team, for example with Sales, to identify any unusual and new arrangements entered into during the last
quarter of Imperial’s financial year to assess if these are being manipulated to flatter working capital.
In respect of our focus on NGP revenue we have:
Inquired outside of the finance team to identify any unusual arrangements or performance of NGP products
Obtained an understanding of the process for identifying, recording and classifying revenue as NGP revenue.
Performed analytical review procedures to understand the appropriateness of the data and movements within recorded NGP sales.
Performed testing, on a sample basis, of sales classified as relating to NGP to verify these sales did relate to products correctly classified as being NGP
The audit procedures were designed and led by the group audit team, with support from component teams whose work was reviewed by the group
audit team.
Key observations communicated to the Audit Committee
We did not identify any unusual trends in reported margin that would indicate manipulation.
We consider that items identified as being adjusted are appropriate and in line with the group accounting policy.
Following our procedures performed over working capital metrics, we consider these balances are materially correct.
We did not identify any issues in relation to the occurrence and correct classification of NGP revenue.
How we scoped our audit to respond to the risk and involvement with component teams
We performed centralised procedures as well as full and specific scope audit procedures over this risk in all in scope locations, which covered 70% of the risk amount.
The audit procedures were designed and led by the group audit team, with support from component teams whose work was reviewed by the group audit team.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
Risk Our response to the risk
Uncertain tax positions (Provision for
uncertain tax positions – 2025: £288m,
2024: £180m, or excluding corresponding
assets 2025: £387m, 2024: £365m)
Refer to the audit committee report (page 96);
accounting policies (note 1); accounting
estimates and judgements (note 2); and tax
disclosure (note 8) of the consolidated financial
statements.
The global nature of the group’s operations
results in complexities in the payment of,
and accounting for, tax.
Management applies judgement in assessing
tax exposures in each jurisdiction, many of
which require interpretation of local tax laws.
Given this judgement, there is a risk that tax
provisions are misstated.
We walked-through and understood:
the group’s process for determining the completeness and measurement of provisions for tax
the methodology for the calculation of the tax charge
management’s controls over tax reporting.
We challenged management’s judgements using tax specialists, both domestic and overseas, to provide technical support regarding developments
in the period and to consider whether the amounts provided reflected an appropriate best estimate of the expected economic outflow.
The group audit team, including tax specialists, evaluated the tax consequences of the Group’s activities in the period. We confirmed that the
tax figures appropriately reflect the transactions and there are no additional material risks for which an uncertain tax position (UTP) should
be recorded.
We challenged whether the tax exposures identified were complete and whether the quantum of the provisions recorded was supportable. Our work
included inquiring with management regarding the current status of discussions with tax authorities, the impact of legislative developments and
the review of transfer pricing policies.
We assessed whether the group’s disclosures, detailing the year end status of material open tax inquiries, adequately disclose relevant facts and
circumstances and potential liabilities of the group.
Key observations communicated to the Audit Committee
Based on our assessment of tax risks and the latest status of tax audits, we conclude that the group’s approach to judgements for uncertain tax positions is balanced and that the amounts provided
are reasonable. We consider the group’s tax disclosures are also appropriate.
How we scoped our audit to respond to the risk and involvement with component teams
We performed full and specific scope audit procedures over this risk in 4 locations, which covered 94% of the risk amount.
The audit procedures were designed and led by the group audit team, with support from component teams in UK, USA, Germany and Spain whose work was reviewed by the group audit team.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
Risk Our response to the risk
Litigations
Refer to the audit committee report (page 96);
accounting policies (note 1); accounting
estimates and judgements (note 2), and
contingent liabilities (note 30) of the
consolidated financial statements.
There are a number of ongoing legal cases in
different jurisdictions relating to competition,
product liability, intellectual property and
commercial litigation. Significant judgements
are involved in determining the likelihood of
a probable outflow occurring from legal cases,
together with the estimate of the likely
financial cost.
Given the judgements and the significance of
the amounts involved, there is a risk that legal
provisions are misstated or that contingent
liabilities are inadequately disclosed.
Specifically, our audit risk relates to legal cases
for which the financial cost to the business
could be material if the potential exposures
were to be realised, and any cases which could
indicate non-compliance with the legal and
regulatory frameworks with which the group
is required to comply.
We evaluated the processes and controls over litigation operated by management at group, by walking through the process from identification
of potential litigation to the evaluation of probability of outcome and the quantification and recording of a provision or disclosure of a
contingent liability.
We inspected Imperial’s litigation log and communications to the Executive Leadership Team and meet with Group Finance, Group General Legal
Counsel and the Group’s external legal counsel to discuss the developments in significant cases.
We requested, received and read letters received directly from management’s external legal counsel that evaluated the current status of legal
proceedings and independently quantified the estimate of any economic outflow arising from settlement of the litigation.
We evaluated whether any of the fines levied, ongoing litigation cases, whistleblower reports or reported frauds in the year gave rise to evidence
that there had been instances of non-compliance with the relevant laws and regulations.
We assessed whether the group’s disclosures detailing contingent liabilities and financial commitments adequately disclose relevant facts
and circumstances and potential liabilities of the group.
Key observations communicated to the Audit Committee
Having met with internal Legal Counsel and received responses from external lawyers, we consider that where an economic outflow is probable management have appropriately recorded a
provision. For those cases which we consider meet the criteria of a contingent liability we concluded that sufficient disclosure exists in the annual report to allow users to understand the range
of exposures facing the company, where that is possible.
How we scoped our audit to respond to the risk and involvement with component teams
We performed centralised procedures and full and specific scope audit procedures over this risk in all locations, which covered all disclosed contingent liabilities and.
The audit procedures were designed and led by the group audit team, with support from all component teams whose work was reviewed by the group audit team.
Both in the current year and prior year, our auditor’s report includes key audit matters in relation to revenue recognition including management override, Management override of controls or errors
related to KPIs impacting executive remuneration, uncertain tax positions and litigation. The risk associated with these matters remained consistent with the prior year.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing the audit, in evaluating the effect
of identified misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could
reasonably be expected to influence the economic decisions of the users of the financial
statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Group to be £159 million (2024: £156 million), which is 5%
(2024: 5%) of Profit before tax. We believe that Profit before tax provides the most relevant
performance measure to the stakeholders of the group.
We determined materiality for the Parent Company to be £209 million (2024: £194 million), which
is 2% (2024: 2%) of net assets. In performing our procedures, materiality was capped at the group
allocated materiality of £35 million (2024: £35 million).
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount
to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments together with our assessment of the Group’s overall control
environment, our judgement was that performance materiality was 75% (2024: 75%) of our
planning materiality, namely £119m (2024: £117m). We have set performance materiality at this
percentage due to our expectation of misstatements, having considered the prior experience with
the audit, changes and other events during the year and the control environment.
Audit work was undertaken at component locations for the purpose of responding to the assessed
risks of material misstatement of the group financial statements. The performance materiality
set for each component is based on the relative scale and risk of the component to the Group as a
whole and our assessment of the risk of misstatement at that component. In the current year, the
range of performance materiality allocated to components was £24m to £35m (2024: £23m to £35m).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit
differences in excess of £8m (2024: £8m), which is set at 5% of planning materiality, as well as
differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of
materiality discussed above and in light of other relevant qualitative considerations in forming
our opinion.
Other information
The other information comprises the information included in the annual report set out on
pages 1 to 124, other than the financial statements and our auditor’s report thereon. The directors
are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to
the extent otherwise explicitly stated in this report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained
in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves.
If, based on the work we have performed, we conclude that there is a material misstatement
of the other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate
for our audit have not been received from branches not visited by us; or
the parent company financial statements and the part of the Directors’ Remuneration Report
to be audited are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit
CORPORATE GOVERNANCE STATEMENT
We have reviewed the directors’ statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the group and company’s compliance
with the provisions of the UK Corporate Governance Code specified for our review by the UK
Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
Directors’ statement with regards to the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified set out on page 85;
Directors’ explanation as to its assessment of the company’s prospects, the period this
assessment covers and why the period is appropriate set out on page 74;
Directors’ statement on whether it has a reasonable expectation that the group will be able
to continue in operation and meets its liabilities set out on page 74;
Directors’ statement on fair, balanced and understandable set out on page 85;
Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 85;
The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on pages 66 to 75; and
The section describing the work of the audit committee set out on page 96 to 101.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out on page 124, the
directors are responsible for the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group and
parent company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect irregularities,
including fraud. The risk of not detecting a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both
those charged with governance of the company and management.
We obtained an understanding of the legal and regulatory frameworks that are applicable to
the group and determined that the most significant are frameworks which are directly relevant
to specific assertions in the financial statements and are those that relate to the reporting
framework (UK adopted international accounting standards, the Companies Act 2006 and the
UK Corporate Governance Code) and the relevant tax laws and regulations in the jurisdictions
in which the group operates. In addition, we concluded that there are certain significant laws
and regulations which may have an effect on the determination of the amounts and
disclosures in the financial statements being the UK Listing Rules of the UK Listing Authority,
and those laws and regulations relating to health and safety, employee matters and country-
specific regulations on tobacco and nicotine alternatives control.
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We understood how Imperial Brands PLC is complying with those frameworks by making
inquiries of management, internal audit, those responsible for legal and compliance
procedures and the company secretary. We corroborated our inquiries through our review
of board minutes, papers provided to the Audit Committee and attendance at meetings of
the Audit Committee, as well as consideration of the results of our audit procedures across
the group.
We assessed the susceptibility of the group’s financial statements to material misstatement,
including how fraud might occur by meeting with management from various parts of the
business to understand where it considered there was susceptibility to fraud and assessing
whistleblowing incidences for those with a potential financial reporting impact. Where
necessary, our procedures included our forensic investigation specialists. We also considered
performance targets and their influence on efforts made by management to manage earnings
or influence the perceptions of analysts. We considered the programmes and controls that the
group has established to address risks identified, or that otherwise prevent, deter and detect
fraud; and how senior management monitors those programs and controls. Where the risk was
considered to be higher, we performed audit procedures to address each identified fraud risk.
These procedures included testing manual journals and were designed to provide reasonable
assurance that the financial statements were free from fraud or error.
Based on this understanding we designed our audit procedures to identify non-compliance
with such laws and regulations. Our procedures involved inquiries of group management,
those charged with governance and legal counsel, as well as journal entry testing, with a focus
on manual consolidation journals and journals indicating significant or unusual transactions
based on our understanding of the business. Through our testing we challenged the
assumptions and judgements made by management in respect of significant one-off
transactions in the financial year and significant accounting estimates as referred to in the
key audit matters section above. At a component level, our full and specific scope component
audit team’s procedures included inquiries of component management; journal entry testing;
and focused testing, including in respect of the key audit matter of revenue recognition. We
also leveraged our data analytics platform in performing our work on the order to cash and
purchase to pay and inventory processes to assist in identifying higher risk transactions for
testing.
Where we identified potential non-compliance with laws and regulations, we developed
an appropriate audit response and communicated directly with components impacted.
Our procedures involved: understanding the process and controls to identify non-compliance,
inquiring of internal and external legal counsel, performing an analysis of press reporting on
these matters, understanding the fact patterns in each case and documenting the positions
taken by management, and using specialists to support us in concluding on the matters identified.
A further description of our responsibilities for the audit of the financial statements is located
on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
Following the recommendation from the audit committee, we were appointed by the AGM
on 5 February 2020 to audit the financial statements for the year ending 30 September 2020
and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and
reappointments is six years, covering the years ending 2020 to 2025.
The audit opinion is consistent with the additional report to the audit committee.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state
to the company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
KATHRYN BARROW (SENIOR STATUTORY AUDITOR)
FOR AND ON BEHALF OF ERNST & YOUNG LLP, STATUTORY AUDITOR
London
17 November 2025
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC CONTINUED
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£ million unless otherwise indicated
Notes
2025
2024
Revenue
3
32, 171
32,411
Duty and similar items
(13, 187)
(13, 925)
Other cost of sales
(11,982)
(11,70 7)
Cost of sales
(25, 169)
(25,632)
Gross profit
7 ,002
6, 779
Distribution, advertising and selling costs
(2,46 9)
(2,383)
Administrative and other expenses
(1,043)
(842)
Operating profit
4
3 ,49 0
3,554
Investment income
5
302
560
Finance costs
5
(676)
(1,094)
Net finance costs
(374)
(534)
Share of profit of investments accounted for using
the equity method
15
12
9
Profit before tax
3, 128
3,029
Tax
8
(908)
(282)
Profit for the year
2,220
2 ,747
Attributable to:
Owners of the parent
2,071
2,613
Non-controlling interests
149
134
Earnings per ordinary share (pence)
• Basic
10
251. 1
300.7
• Diluted
10
249.3
29 9.0
£ million
Notes
2025
2024
Profit for the year
2,220
2 ,747
Other comprehensive income
Exchange movements
(20)
(602)
Hyperinflation adjustment in the year
1
5
6
Current tax on hedge of net investments
and quasi-equity loans
156
(197)
Items that may be reclassified to profit and loss
141
(793)
Net actuarial losses on retirement benefits
24
(27)
(99)
Deferred tax relating to net actuarial losses
on retirement benefits
(5)
37
Items that will not be reclassified to profit and loss
(32)
(6 2)
Other comprehensive income/(expense)
for the year, net of tax
109
(855)
Total comprehensive income for the year
2,329
1, 892
Attributable to:
Owners of the parent
2, 152
1 ,7 8 3
Non-controlling interests
177
109
Total comprehensive income for the year
2,329
1, 892
CONSOLIDATED INCOME STATEMENT
for the year ended 30 September 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2025
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
at 30 September 2025
£ million
Notes
2025
2024
Non-current assets
Intangible assets
12
16,208
15,938
Property, plant and equipment
13
1,524
1,561
Right of use assets
14
373
362
Investments accounted for using the equity method
15
66
56
Retirement benefit assets
24
314
376
Trade and other receivables
17
1 33
118
Derivative financial instruments
21/22
3 92
330
Deferred tax assets
23
893
889
19,9 03
19,630
Current assets
Inventories
16
4,466
4,080
Trade and other receivables
17
2,716
2,645
Current tax assets
8
146
249
Cash and cash equivalents
18
1,4 39
1 ,078
Derivative financial instruments
21/22
45
144
8,812
8, 196
Total assets
28, 715
27 ,826
Current liabilities
Borrowings
20
(1,07 0)
(1, 191)
Derivative financial instruments
21/22
(28)
(187)
Lease liabilities
14
(8 9)
(86)
Trade and other payables
19
(10,040)
(9 ,497)
Current tax liabilities
8
(5 72)
(4 12)
Provisions
25
(55)
(89)
(11,854)
(11,462)
£ million
Notes
2025
2024
Non-current liabilities
Borrowings
20
(8,524)
(7 ,506)
Derivative financial instruments
21/22
(806)
(622)
Lease liabilities
14
(313)
(300)
Trade and other payables
19
(4 1)
(86)
Deferred tax liabilities
23
(74 7)
(780)
Retirement benefit liabilities
24
(801)
(819)
Provisions
25
(197)
(222)
(11,4 29)
(10,335)
Total liabilities
(23,283)
(21, 797)
Net assets
5,4 3 2
6,029
Equity
Share capital
26
87
91
Share premium and capital redemption
26
5,853
5,849
Retained earnings
(1,205)
(47 9)
Exchange translation reserve
89
(19)
Equity attributable to owners of the parent
4,824
5,442
Non-controlling interests
608
5 87
Total equity
5,4 3 2
6,029
The financial statements on pages 137 to 215 were approved by the Board of Directors
on 18 November 2025 and signed on its behalf by:
MURRAY MCGOWAN
DIRECTOR
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2025
Equity
Share premium Exchange attributable
and capital Retained translation to owners of Non- controlling
£ million
Share capital
redemptionearningsreservethe parent
interests
Total equity
At 1 October 2024
91
5,849
(47 9)
(19)
5, 442
5 87
6 ,029
Profit for the year
-
-
2,071
-
2,0 71
1 49
2,220
Exchange movements on retranslation of net assets
-
-
-
429
429
28
457
Exchange movements on net investment hedges
-
-
-
(3 77)
(377)
-
(377)
Exchange movements on quasi-equity loans
-
-
-
(100)
(100)
-
(100)
Hyperinflation adjustment in the year
-
-
5
-
5
-
5
Current tax on hedge of net investments and quasi-equity loans
-
-
-
156
156
-
156
Net actuarial losses on retirement benefits
-
-
(27)
-
(27)
-
(27)
Deferred tax relating to net actuarial losses on retirement benefits
-
-
(5)
-
(5)
-
(5)
Other comprehensive income/(expense)
-
-
(27)
108
81
28
109
Total comprehensive income
-
-
2,044
108
2, 152
177
2,329
Transactions with owners
Costs of employees’ services compensated by share schemes
-
-
34
-
34
-
34
Contributions relating to share schemes
-
-
5
-
5
-
5
Repurchase of shares
(4)
4
(1,259)
-
(1,259)
-
(1,259)
Changes in non-controlling interests
-
-
4
-
4
-
4
Deferred tax on share-based payments
-
-
4
-
4
-
4
Dividends paid
-
-
(1,558)
-
(1,558)
(156)
(1, 714)
At 30 September 2025
87
5,853
(1,205)
89
4,824
608
5 ,43 2
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Equity
Share premium Exchange attributable
and capital Retained translation to owners of Non- controlling
£ million
Share capital
redemptionearningsreservethe parent
interests
Total equity
At 1 October 2023
97
5,84 3
(674)
755
6,021
621
6,642
Profit for the year
-
-
2,613
-
2,613
134
2,747
Exchange movements on retranslation of net assets
-
-
-
(1,235)
(1,235)
(25)
(1,260)
Exchange movements on net investment hedges
-
-
-
540
540
-
540
Exchange movements on quasi-equity loans
-
-
-
118
118
-
118
Hyperinflation adjustment in the year
-
-
6
-
6
-
6
Current tax on hedge of net investments and quasi-equity loans
-
-
-
(197)
(197)
-
(197)
Net actuarial losses on retirement benefits
-
-
(99)
-
(99)
-
(99)
Deferred tax relating to net actuarial losses on retirement benefits
-
-
37
-
37
-
37
Other comprehensive expense
-
-
(56)
(774)
(830)
(25)
(855)
Total comprehensive income/(expense)
-
-
2,557
(774)
1 ,7 83
109
1,892
Transactions with owners
Costs of employees’ services compensated by share schemes
-
-
45
-
45
-
45
Current tax on share-based payments
-
-
4
-
4
-
4
Repurchase of shares
(6)
6
(1, 115)
-
(1, 115)
-
(1, 115)
Changes in non-controlling interests
-
-
(4)
-
(4)
(7)
(11)
Deferred tax on share-based payments
-
-
2
-
2
-
2
Remeasurement of put/call option
-
-
5
-
5
-
5
Dividends paid
-
-
(1,299)
-
(1,299)
(136)
(1,4 35)
At 30 September 2024
91
5,849
(47 9)
(19)
5,442
587
6,029
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONTINUED
for the year ended 30 September 2025
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
£ million
2025
2024
Cash flows from operating activities
Operating profit
3 ,49 0
3,554
Dividends received from investments accounted for using
the equity method
7
9
Depreciation, amortisation and impairment
781
64 7
Profit on disposal of non-current assets
(15)
(13)
Post-employment benefits
(2 4)
(4 5)
Share-based payments
35
46
Other non-cash items
(5)
(1)
Movement in provisions
(58)
(102)
Operating cash flows before movement in working capital
4,211
4,095
(Increase)/decrease in inventories
(300)
205
Decrease/(increase) in trade and other receivables
10
(318)
Increase in trade and other payables
219
213
Movement in working capital
(71)
100
Tax paid
(513)
(888)
Net cash generated from operating activities
3,627
3,30 7
Cash flows from investing activities
Interest received
73
15
Proceeds from the sale of non-current assets
46
50
Purchase of property, plant and equipment
(198)
(166)
Purchase of intangibles
(186)
(205)
Purchase of brands and operations
(77)
(42)
Net cash used in investing activities
(342)
(348)
£ million
2025
2024
Cash flows from financing activities
Acquisition of non-controlling interests
-
(49)
Interest paid
(45 7)
(4 31)
Lease liabilities paid
(94)
(93)
Contributions relating to share schemes
5
-
Increase in borrowings
3,899
3,848
Repayment of borrowings
(3,235)
(3, 948)
Cash flows relating to derivative financial instruments
(144)
(34)
Repurchase of shares
(1,235)
(1,020)
Dividends paid to non-controlling interests
(156)
(136)
Dividends paid to owners of the parent
(1,558)
(1,299)
Net cash used in financing activities
(2,9 75)
(3, 162)
Net increase/(decrease) in cash and cash equivalents
310
(203)
Cash and cash equivalents at start of year
1,078
1,345
Effect of foreign exchange rates on cash and cash equivalents
51
(6 4)
Cash and cash equivalents at end of year
1,4 39
1 ,078
Cash flows relating to purchases of non-current assets
Cash flows totalling £3 8 4 million (2024: £37 1 million) relating to purchases of non-current assets
have been disaggregated to £19 8 million (2024: £16 6 million) relating to purchases of property
plant and equipment and £18 6 million (2024: £20 5 million) relating to purchase of intangibles.
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 September 2025
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1. ACCOUNTING POLICIES
Basis of preparation
The consolidated financial statements comprise the results of the Company, a public company
limited by shares, incorporated in England and Wales, and its subsidiary undertakings, together
with the Group’s share of the results of its associates and joint arrangements. The Company’s
registered number is 3236483 and its registered address is 121 Winterstoke Road, Bristol, BS3 2LL.
The consolidated financial statements have been prepared in accordance with UK-adopted
International Accounting Standards (“UK-adopted IAS”).
The financial statements have been prepared under the historical cost convention except where
fair value measurement is required under IFRS Accounting Standards (“IFRS”) as described below
in the accounting policies on financial instruments, and on a going concern basis.
The consolidated financial statements are presented in pounds sterling, the presentation
currency of the Group, and the functional currency of the Company. All values are rounded
to the nearest one million (£1 million) except where otherwise indicated.
Alternative performance measures
Information on Alternative Performance Measures (APMs) is presented within the
Supplementary Information section of this document.
Basis for going concern
The Group’s policy is to ensure that we always have sufficient capital markets funding
and committed bank facilities in place to meet foreseeable peak borrowing requirements.
The Group recognises there can be uncertainty in the external environment. However, during
past periods of disruption, the Group effectively managed operations across the world and
has proved it has an established mechanism to operate efficiently despite this uncertainty.
The Directors consider that a one-off discrete event with immediate cash outflow is of greatest
impact to the short-term liquidity of the Group.
The Directors have assessed the emerging and principal risks of the business, including stress
testing a range of different scenarios that may affect the business. These included scenarios
which examined the implications of:
• A one-off discrete event resulting in immediate cash outflow of c. £500 million, e.g. due to
unexpected duty and tax payments; and/or other legal and regulatory risks materialising
• A rapid and lasting deterioration to the Group’s profitability because markets become closed
to tobacco products or there are sustained failures to our tobacco manufacturing and supply
chains. These assumed a permanent reduction in profitability of 10% from 1 October 2025.
The scenario planning also considered mitigation actions including reductions to capital
expenditure, dividend payments and the share buyback programme. There are additional actions
that were not modelled but could be taken including other cost mitigations such as staff
redundancies, working capital management, retrenchment of leases, and discussions with
lenders about capital structure.
Under the reverse stress test scenario, after considering mitigation actions including reductions
of capital expenditure, dividend payments and the share buyback programme, we have modelled
that a 59% EBITDA reduction would lead the Group to have sufficient headroom until 30 November
2026. The Group believes this reverse stress test scenario to be remote given the relatively small
impact on our trading performance and bad debt levels during the COVID-19 pandemic and
political uncertainty with regard to Ukraine and Russia.
Based on its review of future cash flows covering the period through to 30 November 2026, and
having assessed the principal risks facing the Group, the Board is of the opinion that the Group
as a whole and Imperial Brands PLC have adequate resources to meet their operational needs for
a period of twelve months from the date of approval of the financial statements, and concludes
that it is appropriate to prepare the financial statements on a going concern basis.
Imperial Brands PLC (the Company) provides guarantees to a number of subsidiaries under
section 479A of the Companies Act 2006, whereby the subsidiaries, incorporated in the UK and
Ireland, are exempt from the requirements of the Act relating to the audit of individual accounts
for the financial year ending 30 September 2025. See note VIII Guarantees of the Imperial Brands
PLC financial statements for further details.
IAS 1 Presentation of Financial Statements requires the disclosure of material accounting policy
information as part of the notes to the accounts and these are set out below. Accounting policy
information is material if, when considered together with other information included in an entity’s
financial statements, it can reasonably be expected to influence a decision that the primary users
of general purpose financial statements make on the basis of those financial statements.
Material accounting policies, have been applied consistently other than where new policies have
been adopted.
NOTES TO THE FINANCIAL STATEMENTS
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Basis of consolidation
Subsidiaries are those entities controlled by the Group. Control exists when the Group is exposed
to, or has the rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that control commences until
the date that control ceases. Where necessary, accounting policies of subsidiaries are changed
to ensure consistency with the policies adopted by the Group.
The acquisition method of accounting is used to account for the purchase of subsidiaries. The
excess of the value transferred to the seller in return for control of the acquired business together
with the fair value of any previously held equity interest in that business over the Group’s share
of the fair value of the identifiable net assets is recorded as goodwill.
Intragroup transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated unless costs cannot be recovered.
Material accounting policies
Foreign currency
Items included in the financial statements of each Group company are measured using
the currency of the primary economic environment in which the company operates
(the functional currency).
The income and cash flow statements of Group companies using non-sterling functional
currencies are translated to sterling (the Group’s presentational currency) at average rates of
exchange in each period. Assets and liabilities of these companies are translated at rates of
exchange ruling at the balance sheet date. The differences between retained profits and losses
translated at average and closing rates are taken to reserves, as are differences arising on the
retranslation of the net assets at the beginning of the year.
Transactions in currencies other than a company’s functional currency are initially recorded
at the exchange rate ruling at the date of the transaction. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at exchange rates
ruling at the balance sheet date of monetary assets and liabilities denominated in foreign
currencies are recognised in the consolidated income statement with exchange differences
arising on trading transactions being reported in operating profit, and those arising on financing
transactions being reported in net finance costs unless as a result of net investment hedging they
are reported in other comprehensive income.
The Group designates as net investment hedges certain external borrowings and derivatives
up to the value of the net assets of Group companies that use non-sterling functional currencies
after deducting permanent intercompany loans. Gains or losses on these hedges that are
regarded as highly effective are transferred to other comprehensive income, where they offset
gains or losses on translation of the net investments that are recorded in equity, in the exchange
translation reserve.
The Group’s financial results are principally exposed to euro and US dollar exchange rates, which
are detailed in the table below:
2025
2024
Closing rate
Average rate
Closing rate
Average rate
Euro
1.1459
1.1824
1.1985
1.1694
US dollar
1.3439
1.3064
1.3384
1.2681
Revenue recognition
For the Tobacco & Next Generation Products (Tobacco & NGP) business, revenue comprises the
invoiced value for the sale of goods net of sales taxes, rebates and discounts. Revenue is based
on the completion of performance obligations that constitute the delivery of goods. The
performance obligation is recognised as complete at the point in time when a Group company
has delivered products to the customer, the customer has accepted the products and collectability
of the related receivables is reasonably assured.
The Group recognises income arising from the licensing of intellectual property, occurring in the
ordinary course of business, which is treated as revenue. Licensing revenue will be recognised
over the period of the licence. The licences granted are distinct from other promises in the contract.
For the Distribution business, revenue comprises the invoiced value for the sale of goods and
services net of sales taxes, rebates and discounts when goods have been delivered or distribution
services have been provided. The Distribution business only recognises commission revenue
on purchase and sale transactions in which it acts as a commission agent. Distribution and
marketing commissions are included in revenue. Revenue is recognised on products on
consignment when these are sold by the consignee. The performance obligations associated with
distribution services, which include fees for distributing certain third-party products, are linked
to the successful distribution of products for customers.
Payments are made to both direct and indirect customers for rebates, discounts and other
promotional activities. Direct customers are those to which the Group supplies goods or services.
Indirect customers are other entities within the supply chain to the end consumer. Rebates and
discounts are deducted from revenue. Where the contract with customers has an entitlement to
variable consideration due to the existence of retrospective rebates and discounts, revenue is
estimated based on the amount of consideration expected to be received. This estimation is a
determination of the most likely amount to be received using all known factors including historic
experience. As the provision of distribution services typically involves product delivery tasks
undertaken in a short period of time, revenue and any associated rebates and discounts relating
to these services do not normally span an accounting year end.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Payments for promotional activities will also be deducted from revenue where the payments
relate to goods or service that are closely related to or indistinct from associated sales of goods
or services to that customer. The calculated costs are accrued and accounted for as incurred and
matched as a deduction from the associated revenues (i.e. excluded from revenues reported in
the Group’s consolidated income statement).
Duty and similar items
Duty and similar items includes duty and levies having the characteristics of duty. In countries
where duty is a production tax, duty is included in revenue and in cost of sales in the consolidated
income statement. Duty is regarded as a sales tax and excluded from revenue where:
• duty becomes payable to the tax authority when the goods are sold;
• there is an obligation to change the sales price when a change in the rate of duty is imposed; and
• there is a requirement to identify the duty separately on sales information such as invoices.
Payments made in the USA under the Master Settlement Agreement (MSA) are recognised in
other cost of sales. See note 30 for information relating to contingent liabilities associated with
the MSA.
Taxes
Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the balance sheet date, and any adjustments to tax payable in
respect of previous years. Current tax assets and liabilities are offset to the extent the entity has a
legally enforceable right to set off the recognised amounts, and it intends to either settle on a net
basis or realise the asset and settle the liability simultaneously.
Uncertain tax positions are assessed and measured on an issue by issue basis within the
jurisdictions where we operate using management’s estimate of the most likely outcome. Where
management determines that a greater than 50% probability exists that the tax authorities would
accept the position taken in the tax return, amounts are recognised in the consolidated financial
statements on that basis. Where the amount of tax payable or recoverable is uncertain, the Group
recognises a liability or asset based on either: management’s judgement of the most likely
outcome; or, when there is a wide range of possible outcomes, a probability weighted average
approach. The Group recognises interest on late paid taxes as part of financing costs. The Group
recognises penalties, if applicable, as part of administrative and other expenses when the
charges are considered to be arbitrary and not directly part of the applicable tax code. Where this
is not the case they are recorded with the tax charge.
Deferred tax is provided in full on temporary differences between the carrying amount of assets
and liabilities in the financial statements and the tax base, except if it arises from the initial
recognition of an asset or liability in a transaction, other than a business combination, that at the
time of the transaction affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences. Deferred tax is provided on temporary
differences arising on investments in subsidiaries, except where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred tax assets are recognised only to the extent
that it is probable that future taxable profits will be available against which the assets can be
realised. Deferred tax is determined using the tax rates that have been enacted or substantively
enacted at the balance sheet date, and are expected to apply when the deferred tax liability is
settled or the deferred tax asset is realised.
Deferred tax assets and deferred tax liabilities are offset to the extent the entity has a legally
enforceable right to set off current tax assets against current tax liabilities and the deferred tax
assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority
on either: the same taxable entity or different taxable entities which intend either to settle current
tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax liabilities
or assets are expected to be settled or recovered.
Dividends
Final dividends are recognised as a liability in the period in which the dividends are approved
by shareholders, whereas interim dividends as approved by the Board of Directors are recognised
in the period in which the dividends are paid.
Intangible assets – goodwill
Goodwill represents the excess of value transferred to the seller in return for control of the
acquired business together with the fair value of any previously held equity interest in that
business over the Group’s share of the fair value of the identifiable net assets.
Goodwill is tested at least annually for impairment and carried at cost less accumulated
impairment losses. Any impairment is recognised immediately in the consolidated income
statement and cannot be subsequently reversed. If any negative goodwill arises this is
recognised immediately in the consolidated income statement. For the purpose of impairment
testing, goodwill is allocated to groups of cash-generating units that are expected to benefit from
the business combination in which the goodwill arose.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Intangible assets – other
Other intangible assets are initially recognised in the consolidated balance sheet at historical
cost unless they are acquired as part of a business combination, in which case they are initially
recognised at fair value. They are shown in the balance sheet at historical cost less accumulated
amortisation and impairment. The Group does not operate a revaluation model and therefore
assets are not subject to ongoing revaluations.
These assets consist mainly of acquired trademarks, intellectual property, product development,
acquired customer relationships and computer software. The Davidoff cigarette trademark is
considered by the Directors to have an indefinite life based on the fact that it is an established
international brand with global potential. Trademarks with indefinite lives are not amortised
but are reviewed annually for impairment. The carrying value of Davidoff is subject to an annual
impairment review under the requirements of IAS 36 as the Group does not currently foresee a
limit to the period over which the asset is expected to generate net cash inflows. The most recent
assessment indicates that the carrying value is not impaired.
Intellectual property (including trademarks), product development, supply agreements (including
customer relationships) and computer software are amortised over their estimated useful lives
as follows:
Intellectual property 5 - 30 years straight line
Supply agreements 3 - 15 years straight line
Software 3 - 15 years straight line
Product development 3 - 10 years straight line
Property, plant and equipment
Property, plant and equipment are recognised in the consolidated balance sheet at historical
cost or at their initial fair value where they are acquired as part of an acquisition, subject to
depreciation or impairment. The Group does not operate a revaluation model and therefore
assets are not subject to ongoing revaluations.
Land is not depreciated and depreciation on assets under construction does not commence until
they are complete and available for use. Depreciation is provided on other property, plant and
equipment so as to write down the initial cost of each asset to its residual value over its estimated
useful life as follows:
Property up to 50 years straight line
Plant and equipment 2 - 20 years straight line/reducing balance
Fixtures and motor vehicles 2 - 15 years straight line
The assets’ residual values and useful lives are reviewed and, if appropriate, adjusted at each
balance sheet date.
Financial instruments and hedging
Financial assets and financial liabilities, in respect of financial instruments, are recognised
on the Group’s consolidated balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
Receivables held under a hold to collect business model are stated at amortised cost. Receivables
held under a hold to sell business model, which are expected to be sold via a non-recourse
factoring arrangement, are separately classified as fair value through profit or loss, within trade
and other receivables.
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.
Cash and cash equivalents include cash in hand and deposits held on call, together with other
short-term highly liquid investments.
Non-derivative financial liabilities, including borrowings and trade payables, are stated at
amortised cost. For borrowings, their carrying value includes accrued interest payable, as well as
unamortised issue costs. Current liabilities include amounts where the entity does not have the
right at the end of the reporting period to defer settlement of the liability for at least 12 months
after the reporting period.
The Group transacts derivative financial instruments to manage the underlying exposure
to foreign exchange and interest rate risks. The Group does not transact derivative financial
instruments for trading purposes. Derivative financial instruments are initially recorded at fair
value. Derivative financial assets and liabilities are included in the consolidated balance sheet
at fair value, and include accrued interest receivable and payable where relevant. However, as the
Group has decided (as permitted under IFRS 9) not to cash flow or fair value hedge account for
its derivative financial instruments, changes in fair values are recognised in the consolidated
income statement in the period in which they arise unless the derivative qualifies and has been
designated as a net investment hedging instrument in which case the changes in fair values,
attributable to foreign exchange, are recognised in other comprehensive income .
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Right of use assets
The Group has lease contracts relating to property and other assets (which predominantly relates
to motor vehicles).
The Group recognises right of use assets, at the commencement date of the lease (i.e. the date
the underlying asset is available for use). Right of use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the commencement date less any
lease incentives received. Unless the Group is reasonably certain to obtain ownership of the
leased asset at the end of the lease term, the recognised right of use asset is depreciated on a
straight-line basis over the shorter of its estimated useful life and the lease term. Right of use
assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include
fixed payments less any lease incentives receivable, variable lease payments which depend
on an index or a rate, and amounts expected to be paid under residual value guarantees. Lease
payments include the exercise of purchase options if determined reasonably certain to be
exercised and termination payments if the lease term reflects the exercise of an option to
terminate.
In calculating the present value of lease payments, the Group uses the incremental borrowing
rate, defined as the rate of interest that a lessee would have to pay to borrow over a similar term,
and with a similar security, the funds necessary to obtain an asset of a similar value to the right
of use asset in a similar economic environment, at the lease commencement date if the interest
rate implicit in the lease is not readily determinable. After the commencement date, the amount
of lease liabilities is increased to reflect the accumulation of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is
a modification, a change in the lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
Lease payments on short-term leases and leases of low value assets are recognised as expense
on a straight line basis over the lease term in cost of sales or distribution, advertising and
selling costs.
Short-term leases, leases of low value assets and practical expedients applied
The Group has applied a number of practical expedients permitted by IFRS 16 Leases.
These include:
• the exclusion of leases where the lease term ends within 12 months of the commencement
of the lease or date of initial application; and
• the exclusion of leases of low value assets, defined as those of less than US$ 5,000.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
first in first out (FIFO) method. The cost of finished goods and work in progress comprises raw
materials, direct labour, other direct costs and related production overheads (based on normal
operating capacity). Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses. Inventory is considered for
obsolescence or other impairment issues and an associated provision is booked where necessary.
Leaf tobacco inventory which has an operating cycle that exceeds 12 months is classified
as a current asset, consistent with recognised industry practice.
Provisions
A provision is recognised in the consolidated balance sheet when the Group has a legal or
constructive obligation as a result of a past event, it is more likely than not that an outflow of
resources will be required to settle that obligation, and a reliable estimate of the amount can be
made.
A provision for restructuring is recognised when the Group has approved a detailed formal
restructuring plan, and the restructuring has either commenced or has been publicly announced,
and it is more likely than not that the plan will be implemented, and the amount required to settle
any obligations arising can be reliably estimated. Future operating losses are not provided for.
Where there are a number of similar obligations, the likelihood that an outflow will be required
in settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small.
Contingent liabilities
Contingent liabilities are possible obligations that arise from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events, not wholly within the control of the Group. Contingent liabilities are not recognised, only
disclosed, unless the possibility of a future outflow of resources is considered remote, in which
case disclosure is not given. A disclosure that would seriously prejudice the position of the Group
is also not disclosed.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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Retirement benefit schemes
For defined benefit schemes, the amount recognised in the consolidated balance sheet is the
difference between the present value of the defined benefit obligation at the balance sheet date
and the fair value of the scheme assets to the extent that they are demonstrably recoverable
either by refund or a reduction in future contributions. The defined benefit obligation is calculated
annually by independent actuaries using the projected unit credit method. The present value of
the defined benefit obligation is determined by discounting the estimated future cash flows using
interest rates of high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid, and that have terms to maturity approximating to the terms of the related
pension obligation.
The service cost of providing retirement benefits to employees during the year is charged to
operating profit. Past service costs are recognised immediately in operating profit, unless the
changes to the pension plan are conditional on the employees remaining in service for a
specified period of time.
All actuarial gains and losses, including differences between actual and expected returns on
assets and differences that arise as a result of changes in actuarial assumptions, are recognised
immediately in full in the statement of comprehensive income for the period in which they arise.
An interest charge is made in the consolidated income statement by applying the rate used to
discount the defined benefit obligations to the net defined benefit liability of the schemes. Interest
income and costs arising on defined benefit assets and liabilities are presented net in the
consolidated income statement.
For defined contribution schemes, contributions are recognised as an employee benefit expense
when they are due.
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 on
consolidation from equity attributable to owners of the parent 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 equity attributable to owners of the parent. When such shares are cancelled they are
transferred to the capital redemption reserve.
Where the Group enters into a contract with a third party that contains an obligation to
repurchase its own shares for cash or another financial asset, a financial liability is recognised
for the present value of the redemption amount. One example is an obligation under a forward
contract to repurchase shares in Imperial Brands PLC for cash. The financial liability is
recognised initially at the present value of the redemption amount, and is reclassified from
equity. Subsequently, the financial liability is measured in accordance with IFRS 9, and is
revalued at subsequent reporting points as appropriate. If the contract expires without delivery,
the carrying amount of the financial liability is reclassified to equity.
OTHER ACCOUNTING POLICIES
Joint ventures
The Group applies IFRS 11 Joint Arrangements to all joint arrangements. Under IFRS 11
investments in joint arrangements are classified as either joint operations or joint ventures
depending on the contractual rights and obligations of each investor. The Group has assessed
the nature of its joint arrangements and determined them to be joint ventures. The financial
statements of joint ventures are included in the Group financial statements using the equity
accounting method, with the Group’s share of net assets included as a single line item entitled
“Investments accounted for using the equity method”. In the same way, the Group’s share of
earnings is presented in the consolidated income statement below operating profit entitled “Share
of profit of investments accounted for using the equity method” .
Share-based payments
The Group applies the requirements of IFRS 2 Share-based Payment to both equity-settled and
cash-settled share-based employee compensation schemes. The majority of the Group’s schemes
are equity-settled.
Equity-settled share-based payments are measured at fair value at the date of grant and are
expensed over the vesting period, based on the number of instruments that are expected to vest.
For plans where vesting conditions are based on total shareholder returns, the fair value at the
date of grant reflects these conditions. Earnings per share and net revenue vesting conditions
are reflected in the estimate of awards that will eventually vest. For cash-settled share-based
payments, a liability equal to the portion of the services received is recognised at its current fair
value at each balance sheet date. Where applicable the Group recognises the impact of revisions
to original estimates in the consolidated income statement, with a corresponding adjustment to
equity for equity-settled schemes and current liabilities for cash-settled schemes. Fair values are
measured using appropriate valuation models, taking into account the terms and conditions of
the awards.
The Group funds the purchase of shares to satisfy rights to shares arising under share-based
employee compensation schemes. Shares acquired to satisfy those rights are held in Employee
Share Ownership Trusts. The Employee Share Ownership Trust is a separate entity which is
consolidated within the Group. On consolidation, these shares are accounted for as a deduction
from equity attributable to owners of the parent. When the rights are exercised, equity is
increased by the amount of any proceeds received by the Employee Share Ownership Trusts.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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Hyperinflation
The Turkish economy was designated hyperinflationary from April 2022. The Group has applied
IAS 29 Financial Reporting in Hyperinflationary Economies to its Turkish operations with effect
from 1 October 2021. The adjustments required by IAS 29 are set out below:
• Adjustment of historical cost non-monetary assets and liabilities from their date of initial
recognition to the balance sheet date at the date of adoption of the standard (1 October 2021) to
reflect the changes in purchasing power of the currency caused by inflation, as measured by
the official Consumer Price Index (CPI) published by the Turkish Statistical Institute (TurkStat).
• Adjustment of the components of the income statement and cash flow statement for the
inflation index since their generation, with a balancing entry in the income statement and
a reconciling item in the cash flow statement, respectively.
• Adjustment of the income statement to reflect the impact of inflation on holding monetary
assets and liabilities in local currency, where necessary.
• The financial statements of the Group’s Turkish operations have been translated into sterling
at the closing exchange rate at 30 September 2025.
• The impact of adjustments to non-monetary assets recognising inflation from the adoption
date to the closing balance sheet date, on translation into sterling at the closing balance sheet
rate has been recognised within other comprehensive income.
The TurkStat CPI index was 3,367.22 at 30 September 2025 (2,526.16 at 30 September 2024 and
1,691.04 at 30 September 2023). The inflation index for the year is therefore 1.3329 (2024: 1.4939).
The impact on the Group’s results remains immaterial.
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 2025.
New accounting standards that are effective after the year ended 30 September 2025
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 Group’s consolidated 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 Group is presently reviewing
the impact of this standard which is expected to fundamentally change the structure of the
presentation of the Income statement. The Group already complies with the requirements related
to Alternative Performance Measures through the voluntary disclosures that are included within
the Supplementary Information section of this report. Therefore, there is expected to be minimal
impact related to APM disclosures.
2. ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes estimates and judgements associated with accounting entries which will be
affected by future events. Estimates and judgements are continually evaluated based on historical
experience, and other factors, including current information that helps form a forward-looking
view of expected future outcomes.
Estimates involve the determination of the quantum of accounting balances to be recognised.
Judgements typically involve decisions such as whether to recognise an asset or liability.
The actual amounts recognised in the future may deviate from these estimates and judgements.
Estimates
Significant estimates
Companies are required to state whether estimates have a significant risk of a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.
We have reviewed the items below where estimation uncertainty exists. While a number of these
areas do involve estimation of the carrying value of assets or liabilities that are potentially
significant within the context of the financial statements, the Group considers the probability of a
significant risk of material adjustment to be low. None of these estimates are expected to present
a material adjustment to the carrying amount of assets and liabilities in the next financial year.
Other estimates
Other estimates involve other uncertainties, such as those carrying lower risk, which have a
smaller potential impact or would be expected to crystallise over a longer time frame than a
significant estimate. These items, listed below, are only disclosed where this provides material
relevant information.
Langenhagen factory
On 1 October 2025 the Group announced its intention to cease production at its Langenhagen factory
in Germany. The future of the site is currently subject to a consultation with the works councils which
will involve a review of available options. The outcome of the consultation will either be a sale of the
site to a third party or the closure of the factory. The decision to cease production at the factory was a
consequence of the conditions that existed at the factory at 30 September 2025 that arose as a result
of declining production activity and considered as part of the 2030 Strategy Review Programme. As at
30 September 2025, a review of the recoverable value of the factory assets was conducted. The review
estimated what the recoverable value would be if assets were scrapped, redeployed or sold. The
valuation was conducted in line with IAS 36. The valuation, which was calculated on fair value less
costs of disposal basis, determined that the recoverable value was lower than the carrying amount
of the factory assets. The valuation is classified as Level 3 using observable data for similar assets as
defined under IFRS 13. As a result of this, an impairment to the carrying value of property, plant and
equipment of £101 million was recognised as at 30 September 2025, split between property of
£12 million and plant and equipment of £54 million, fixtures and motor vehicles of £12 million, assets
under construction of £22 million and software of £1 million. The residual value of the impaired
assets at 30 September 2025 was £20 million all of which is recognised within the property category.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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Determination of useful economic life of intangible assets
For non-goodwill intangible assets, there is a need to estimate the useful economic life of each
asset. This includes determining whether the asset has an indefinite useful economic life, or not.
The Davidoff trademark has a significant market share and positive cash flow growth expectations.
There are no regulatory or contractual restrictions on the use of this trademark, and there are no
plans to significantly redirect resources elsewhere which would reduce the value of this asset.
Consequently, in the view of management, the Davidoff trademark does not have a foreseeable
and definite end to its ability to generate future cash flows and hence it is not amortised. The
carrying value of Davidoff is subject to an annual impairment review under the requirements
of IAS 36. The most recent assessment indicates that the carrying value is not impaired.
Amortisation and impairment of intangible assets
For non-indefinite life assets, which are amortised, the useful economic life and recoverable
amounts are estimated based upon the expectation of the time period during which an intangible
asset will support future cash flows, and the quantum of those cash flows. Due to estimation
uncertainties the useful economic lives and associated amortisation rates have to be reviewed
and revised where necessary. In addition, where there are indications that the current carrying
value of an intangible asset is greater than its recoverable amount, an impairment to the carrying
value of the asset may be required. Factors considered important that could trigger an
impairment review of intangible assets include the following:
• significant underperformance relative to historical or projected future operating results;
• significant changes in the manner of the use of the acquired assets or the strategy for the
overall business; and
• significant negative industry or economic trends.
The complexity of the estimation process and issues related to the assumptions, risks and
uncertainties inherent in the application of the Group’s accounting estimates in relation to
intangible assets can affect the amounts reported in the financial statements, especially the
estimates of the expected useful economic lives and the carrying values of those assets. If
business conditions significantly change it is possible that materially different amounts could
be reported in the Group’s financial statements in future periods. Indefinite life intangible assets,
including goodwill, are subject to annual impairment testing where an assessment of the
carrying value of the asset against its recoverable amount is undertaken. There are long-term
uncertainties associated with estimating the value of the recoverable amount, particularly with
regard to long-term cash flow growth rates which are influenced by the future size and shape
of the tobacco sector. While long-term growth rates currently used in impairment assessments
are based on current best estimates of future performance, there may be changes in these
assumptions when conducting impairment tests in subsequent years. Details of goodwill and
intangible asset impairment assessments are included in note 12.
Corporate income taxes
Where tax liabilities have been judged to exist, estimation is often required to determine
the potential future tax payments. The Group is subject to tax in numerous jurisdictions
and significant estimation is required in determining the provision for tax. There are many
transactions and calculations for which the ultimate tax determination is uncertain. The Group
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. Consideration of the valuation estimates related to tax provisions is
given in note 8 to these financial statements.
Other legal proceedings and disputes
Where a liability is determined there can be a degree of estimation of the potential level of
damages expected. Key areas of estimation uncertainty include consideration as to the expected
future amount to be paid out in the event the claim succeeds. In some situations where a
probability risk calculation is required to determine the amount of an associated provision, both
the quantum of future payments and the probability of those payments crystallising needs to be
considered, both factors having a degree of uncertainty. More detail as to the considered position
of these claims is given in note 25 and note 30 of the financial statements. To the extent that the
Group’s assessments at any time do not reflect subsequent developments or the eventual
outcome of any claim, its future financial statements may be materially affected, with a
favourable or adverse impact upon the Group’s operating profit, financial position and liquidity.
Climate change
The Group has a designated programme to manage and mitigate climate-related risks. The effect
of climate change is not considered to have a material effect on the estimates in the financial
statements. Governmental and societal responses to climate change risks are still developing
and consequently financial statements cannot capture all possible future outcomes as these are
not yet known or don’t have sufficient certainty to be taken into account when determining asset
and liability valuations and the timing of future cash flows under the requirements of UK-adopted
IAS. Please refer to the following sections for further discussion on the impact of climate change
relating to going concern assumptions in note 1, intangible assets impairment assumptions in
note 12 and recoverability of deferred tax assets in note 23.
Judgements
Paragraph 122 of IAS 1 requires disclosure of judgements made by management in applying an
entity’s accounting policies, other than those relating to estimation uncertainty. Paragraph 125
of IAS 1 requires more wide-ranging disclosures of judgements that depend on management
assumptions about the future, and other major sources of estimation uncertainty
(“significant judgements”).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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Corporate income taxes
Judgement is involved in determining whether the Group is subject to a tax liability or not in
line with tax law. The Group is subject to income tax in numerous jurisdictions and significant
judgement is required in determining whether there is a liability requiring a provision for tax.
Recognition of tax liabilities in situations where there is uncertainty is based on precedent in
similar tax cases and external advice as to whether challenges by tax authorities are likely to
result in future tax payments being made. The recognition of a tax liability involves consideration
of the probability of tax authorities accepting the position taken in the tax return and there is
therefore some uncertainty.
Deferred tax assets
Deferred tax assets are recognised for deductible temporary differences, unused tax losses and
unused tax credits to the extent that it is probable that taxable profit will be available against
which the temporary differences, losses and credits can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognised,
based upon the likely timing and the level of future taxable profits, together with future tax
planning strategies. The Group has determined that it cannot recognise deferred tax assets
on the temporary differences, tax losses and tax credits carried forward for certain subsidiaries.
Further details of the estimates related to deferred taxes are given in note 23 to these financial
statements.
Legal proceedings and disputes
The Group reviews outstanding legal cases following developments in the legal proceedings at
each balance sheet date, considering the nature of the litigation, claim or assessment; the legal
processes and potential level of damages in the jurisdiction in which the litigation, claim or
assessment has been brought; the progress of the case (including progress after the date of
the financial statements but before those statements are issued); the opinions or views of legal
counsel and other advisers; experience of similar cases; and any decision of the Group’s
management as to how it will respond to the litigation, claim or assessment. Judgement is
required as to whether a liability exists. A provision will only be recognised where it is probable
that the Group will be required to settle a claim.
Control of Logista
A key judgement relates to whether the Group has effective control of Logista sufficient that
the Group can consolidate this entity within its Group accounts in line with the requirements
of IFRS 10 Consolidated Financial Statements. The Group holds 50.01% of the voting shares.
The Group has reviewed its control of Logista and that it is appropriate to consolidate this entity
in line with the requirements of IFRS 10 Consolidated Financial Statements. The Group continues
to have Director presence on the Board of Logista, representing 5 out of 12 Directors. The Group
has powers to control as set out in the Relationship Framework Agreement which specifies
certain areas of operation reserved for shareholder approval and through these measures the
Group is able to exercise control of Logista. The Group has therefore concluded that it continues
to be appropriate to recognise Logista as a fully consolidated subsidiary.
3. SEGMENT INFORMATION
Imperial Brands comprises two distinct businesses – Tobacco & NGP and Distribution.
The Tobacco & NGP business comprises the manufacture, marketing and sale of Tobacco & NGP
and Tobacco & NGP-related products, including sales to (but not by) the Distribution business.
The Distribution business comprises the distribution of Tobacco & NGP products for associated
manufacturers, including Imperial Brands, as well as a wide range of products and services. The
Distribution business is run on an operationally neutral basis ensuring all customers are treated
equally, and consequently transactions between the Tobacco & NGP and Distribution businesses
are undertaken on an arm’s length basis reflecting market prices for comparable goods and services.
The function of the Chief Operating Decision Maker (defined in IFRS 8), which is to review
performance and allocate resources, is performed by the Board and the Chief Executive, who are
regularly provided with information on the Group’s segments. This information is used as the
basis of the segment revenue and profit disclosures provided below. The main profit measure
used by the Board and the Chief Executive is adjusted operating profit. Segment balance sheet
information is not provided to the Board or the Chief Executive.
The Group’s reportable segments are Europe, Americas, Africa, Asia, Australasia and Central &
Eastern Europe (AAACE) and Distribution. Operating segments are comprised of geographical
groupings of business markets. The main Tobacco & NGP business markets within the Europe,
Americas and AAACE reportable segments are:
Europe – United Kingdom, Germany, Spain, France, Italy, Greece, Sweden, Norway, Belgium
and Netherlands
Americas – United States.
AAACE – Australia, Saudi Arabia, Taiwan, Poland, Czech Republic, Ukraine, Slovakia, Hungary,
Slovenia and our African markets including Algeria, Ivory Coast and Morocco.
Tobacco & NGP
2025
2024
Tobacco & Tob acco &
£ million unless otherwise indicated
Tobacco
NGP
NGP
Tobacco
NGP
NGP
Revenue
21,071
432
21,503
21,708
376
22,084
Net revenue
7,948
368
8,316
7,828
329
8,157
Operating profit/(loss)
3,299
(121)
3,178
3,321
(83)
3,238
Adjusted operating profit
3,665
3,587
Adjusted operating margin %
44.1
44.0
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Distribution
£ million unless otherwise indicated
2025
2024
Revenue
11,448
11,104
Distribution gross profit
1,530
1,503
Operating profit
305
322
Adjusted operating profit
316
330
Adjusted operating margin %
20.7
22.0
Revenue
2025
2024
Total External Total External
£ million revenue revenue revenue revenue
Tobacco & NGP
Europe
11,960
11,180
12,037
11,260
Americas
3,652
3,652
3,657
3,657
AAACE
5,891
5,891
6,390
6,390
Total Tobacco & NGP
21,503
20,723
22,084
21,307
Distribution
11,448
11,448
11,104
11,104
Eliminations
(780)
-
(777)
-
Total Group
32,171
32,171
32,411
32,411
The eliminations all relate to Tobacco & NGP sales to Distribution.
Tobacco & NGP net revenue
2025
2024
£ million
Tobacco
NGP
Total
Tobacco
NGP
Total
Europe
3,196
280
3,476
3,106
260
3,366
Americas
2,822
70
2,892
2,793
43
2,836
AAACE
1,930
18
1,948
1,929
26
1,955
Total Tobacco
& NGP
7,948
368
8,316
7,828
329
8,157
Adjusted operating profit and reconciliation to profit before tax
£ million
2025
2024
Tobacco & NGP
Europe
1,638
1,541
Americas
1,233
1,235
AAACE
794
811
Total Tobacco & NGP
3,665
3,587
Distribution
316
330
Eliminations
7
(6)
Adjusted operating profit
3,988
3,911
Amortisation and impairment of acquired intangibles - Tobacco & NGP
(358)
(345)
Amortisation of acquired intangibles - Distribution
(11)
(8)
2030
Strategy implementation costs
(21)
-
2030
Strategy non-cash costs
(101)
-
Structural changes to defined benefit pension schemes - Tobacco & NGP
(7)
(4)
Operating profit
3,490
3,554
Net finance costs
(374)
(534)
Share of profit of investments accounted for using the equity method
12
9
Profit before tax
3,128
3,029
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Other information
2025
Depreciation,
Additions to Additions to impairment and Other
property, plant intangible software intangible asset Inventory
£ million and equipment assets amortisation amortisation impairments
Tobacco & NGP
Europe
52
30
185
7
28
Americas
24
199
31
1
10
AAACE
68
14
44
-
11
Total Tobacco & NGP
144
243
260
8
49
Distribution
43
8
38
-
-
Total Group
187
251
298
8
49
Included in depreciation, impairment and software amortisation is £101 million relating to the
Langenhagen factory (see note 2).
2024
Depreciation,
Additions to Additions to impairment and Other
property, plant intangible software intangible asset Inventory
£ million and equipment assets amortisation amortisation impairments
Tobacco & NGP
Europe
60
17
88
7
16
Americas
30
228
27
1
4
AAACE
51
3
40
-
11
Total Tobacco & NGP
141
248
155
8
31
Distribution
38
12
37
-
-
Total Group
179
260
192
8
31
The above tables include items that have been recognised within segment. Materiality has been
assessed on both a qualitative and quantitative basis.
Additional geographic analysis
External revenue and non-current assets are presented for individually significant countries.
The geographical analysis is based on country of origin. The Group’s products are sold in over
120 countries.
2025
2024
External Non-current External Non-current
£ million revenue assets revenue assets
UK
3,261
165
3,781
161
Germany
4,903
2,808
4,501
3,156
France
3,232
2,360
3,374
2,282
USA
3,632
4,826
3,648
4,968
Other
17,143
8,012
17,1 07
7,350
Total Group
32,171
18,171
32,411
17,917
Non-current assets comprise intangible assets, property, plant and equipment, right of use assets
and investments accounted for using the equity method.
4. OPERATING PROFIT
Operating profit is stated after charging/(crediting):
£ million
2025
2024
Raw materials and consumables used
1,230
950
Changes in inventories of finished goods - Tobacco & NGP
2,466
2,516
Changes in inventories of finished goods - Distribution
8,288
8,243
Depreciation and impairment of fixed assets
255
153
Amortisation and impairment of intangible assets and investments
accounted for using the equity method
425
399
Expenses relating to short-term leases
6
10
Expenses relating to low value asset leases
1
2
Depreciation and impairment of right of use assets
101
95
Net foreign exchange losses and (gains)
2
(3)
Write down of inventories
49
28
Profit on disposal of non-current assets
15
13
Write down/(back) of trade receivables
10
(3)
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Analysis of fees payable to Ernst & Young LLP and its associates
£ million
2025
2024
Parent Company and consolidated financial statements
3.2
3.2
The Company’s subsidiaries
7.1
6.8
Total audit fees
10.3
10.0
Audit-related assurance services
0.5
0.5
Total audit-related fees
10.8
10.5
Other assurance services
0.8
1.2
Total non-audit fees
0.8
1.2
Total auditor’s remuneration
11.6
11.7
Audit fees for the year ended 30 September 2024 reflect the final amounts paid.
5. INVESTMENT INCOME AND FINANCE COSTS
£ million
2025
2024
Investment income
Fair value gains on derivative financial instruments
227
513
Net exchange gains on financing activities
5
9
Interest income on net defined benefit assets
18
22
Interest income on bank deposits
14
16
Tax settlement interest income
38
-
Total investment income
302
560
Finance costs
Fair value losses on derivative financial instruments
(219)
(632)
Interest cost on net defined benefit liabilities
(29)
(33)
Tax interest cost
-
(10)
Interest cost on lease liabilities
(15)
(14)
Interest cost on bank and other loans
(412)
(404)
Effect of discounting on long-term provisions
(1)
(1)
Total finance costs
(676)
(1,094)
Net finance costs
(374)
(534)
6. RESTRUCTURING COSTS
2025
2024
£ million
Costs
Cash spend
Costs
Cash spend
2030
Strategy Review Programme
122
21
-
-
2021
Strategic Review Programme
-
19
-
25
Other
-
10
-
18
122
50
-
43
Restructuring projects involve costs outside the standard course of business that are incurred
in integrating acquired businesses and in major rationalisation and optimisation initiatives
together with their related tax effects.
As these projects are not part of business as usual, any costs incurred are classified as
restructuring costs and are included within administrative and other expenses in the
consolidated income statement and treated as adjusting items.
2030 Strategy Review Programme
In March 2025, the Group announced the 2030 Strategy Review Programme which is a multi-year
programme expecting to run to the end of 2030 that will incur restructuring costs. The total costs
of this programme is expected to be c.£740 million of which c.£600 million are anticipated to be
cash costs. The majority of the cash spend, c.£500 million is expected to be split between FY27
and FY28. During the period to 30 September 2025, the total costs recognised for this programme
were £122 million and cash spend was £21 million.
2021 Strategic Review Programme
The total restructuring costs in respect of the programme were expected to be in the range
of £375 million - £425 million. Cumulative costs recognised for the 2021 Strategic Review
Programme are £423 million as at 30 September 2025. The cumulative cash spend for this
programme is £209 million including £19 million cash spend in 2025. No further costs are
expected to be recognised in relation to this programme. There is expected to be ongoing
cash spend in relation to this programme but it is not expected to exceed current provisions.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
7. DIRECTORS AND EMPLOYEES
Employment costs
£ million
2025
2024
Wages and salaries
967
923
Social security costs
219
202
Other pension costs (note 24)
50
29
1,236
1,154
Share-based payments (note 27)
36
32
1,272
1,186
Operating executive (excluding executive directors)
£ million
2025
2024
Base salary
5.4
4.6
Benefits
0.8
0.7
Pension salary supplement
0.6
0.6
Bonus
4.7
4.9
Termination payments
-
0.2
LTIP annual vesting
1
8.0
7. 2
19.5
18.2
1. Share plans vesting represent the value of LTIP awards (inclusive of Recruitment Awards) where the performance periods
ends in the year.
Note: aggregate remuneration paid to or receivable by Executive Directors, Non-Executive Directors and members of the
Executive Leadership Team for qualifying services in accordance with IAS 24, which includes National Insurance and similar
charges, was £37,349,477 (2024: £37,049,852).
Key management compensation
1
£ million
2025
2024
Short-term employee benefits
17.8
17.7
Termination payments
-
0.2
Share-based payments (in accordance with IAS 24)
14.9
14.4
32.7
32.3
1. Key management includes Directors, members of the Executive Committee and the Company Secretary.
Details of Directors’ emoluments and interests, which represent related-party transactions requiring disclosure under IAS 24,
are provided within the “Remuneration earned by our Directors for the financial year ended 30 September 2025” section of the
Directors’ Remuneration Report. This includes details on salary, benefits, pension and share plans.
Number of people employed by the Group during the year
At 30
2025
At 30
2024
September
Average
September
Average
Tobacco & NGP
18,700
18,800
18,900
18,400
Distribution
6,400
7,000
6,700
6,500
25,100
25,800
25,600
24,900
Number of people employed by the Group by location during the year
At 30
2025
At 30
2024
September
Average
September
Average
UK and European Union
12,000
12,600
12,400
12,100
Americas
4,700
4,900
4,900
4,700
Rest of the World
8,400
8,300
8,300
8,100
25,100
25,800
25,600
24,900
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8. TAX
The major components of income tax expense for the years ended 30 September 2025 and 2024:
£ million
2025
2024
UK current tax
Current year charged/(credited) to the consolidated income statement
275
(95)
Current year (credited)/charged to consolidated other
comprehensive income
(156)
197
Total current year UK current tax
119
102
Adjustments in respect of prior years charged/(credited)
to the consolidated income statement
5
(80)
Total UK current tax
124
22
Overseas current tax
Current year charged to the consolidated income statement
708
704
Total current year overseas current tax
708
704
Adjustments in respect of prior years (credited)/charged
to the consolidated income statement
(67)
40
641
744
Total current tax charged to the consolidated statement
of comprehensive income
765
766
£ million
2025
2024
UK current tax
Current year
275
(95)
Adjustments in respect of prior years
5
(80)
Overseas current tax
Current year
708
704
Adjustments in respect of prior years
(67)
40
Total current tax
921
569
Deferred tax
Relating to origination and reversal of temporary differences
(13)
(287)
Total tax charged to the consolidated income statement
908
282
£ million
2025
2024
Tax related to items recognised in consolidated
other comprehensive income during the year:
Current tax (credited)/charged on hedge of net investment
and quasi-equity loans
(156)
197
Total current tax
(156)
197
Deferred tax on actuarial gains and losses
5
(37)
Deferred tax on hyperinflation adjustment
(1)
2
Total deferred tax
4
(35)
Total tax (credited)/charged to consolidated other
comprehensive income
(152)
162
£ million
2025
2024
Tax related to items recognised in equity during the year:
Current tax on share-based payments
-
(4)
Deferred tax on share-based payments
(4)
(2)
Total tax credited to equity
(4)
(6)
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Factors affecting the tax charge for the year
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using
the average UK corporation tax rate of 25.0% (2024: 25.0%) as follows:
£ million
2025
2024
Profit before tax
3,128
3,029
Tax at the UK corporation tax rate of 25.0% (2024: 25.0%)
782
757
Tax effects of:
Differences in effective tax rates on overseas earnings
(2)
(56)
Movement in provision for uncertain tax positions
(62)
170
Remeasurement of deferred tax balances arising
from changes in tax rates
(3)
5
Recognition of deferred tax assets for tax credits
-
(293)
Remeasurement of previously recognised deferred tax assets
(3)
(2)
Deferred tax on unremitted earnings
19
12
Share of profit of investments accounted for using the equity method
(3)
(2)
Non-deductible expenses
38
24
Non-taxable gains on net foreign exchange on financial instruments
165
(198)
Provision for state aid tax recoverable
-
(101)
Adjustments in respect of prior years
(23)
(34)
Total tax charged to the consolidated income statement
908
282
Differences in effective tax rates on overseas earnings represent the impact of worldwide profits
being taxed at rates different from 25.0%.
The remeasurement of deferred tax balances arising from changes in tax rates for the year
is £3 million (2024: £5 million).
During the year the Group has increased the provision for deferred tax on unremitted earnings
by £16 million (2024: £7 million increase) with the corresponding income tax charge of £19 million
and FX differences. The tax will arise on the distribution of profits through the Group and on
planned Group simplification.
Movement on the current tax account
£ million
2025
2024
At 1 October
(163)
(306)
Charged to the consolidated income statement
(921)
(569)
Credited/(Charged) to other comprehensive income
156
(197)
Credited to equity
-
4
Cash paid
513
888
Exchange movements
(11)
17
At 30 September
(426)
(163)
The cash tax paid in the year is £408 million lower than the current tax charge (2024: £319
million higher). This arises as a result of timing differences between the accrual of income taxes
and the actual payment of cash and the movement in the provision for uncertain tax positions.
Analysis of current tax account
£ million
2025
2024
State aid tax recoverable
-
101
Current tax assets
146
148
Current tax liabilities
(572)
(412)
(426)
(163)
Uncertain tax positions
As an international business the Group is exposed to uncertain tax positions and changes
in legislation in the jurisdictions in which it operates. The Group’s uncertain tax positions
principally include cross border transfer pricing, interpretation of new or complex tax legislation
and tax arising on the valuation of assets.
Provisions arising from uncertain tax positions taken in the calculation of tax assets and
liabilities are included within current and deferred tax liabilities. At 30 September 2025 the total
value of these provisions excluding offsetting assets under mutual agreement procedure was
£387 million (2024: £365 million excluding offsetting assets). The assessment of uncertain tax
positions is subjective and significant management judgement is required. This judgement is
based on current interpretation of legislation, management experience and professional advice.
Until matters are finally concluded it is possible that amounts ultimately paid will be different
from the amounts provided.
Management have assessed the Group’s provision for uncertain tax positions and have concluded
that apart from the matters referred to below the provisions in place are not material individually
or in aggregate, and that a reasonably possible change in the next financial year would not have
a material impact on the results of the Group.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
French tax litigation
The Group has successfully prevailed in an ongoing litigation with the French tax authorities,
a matter which had the potential to result in total liabilities amounting to £254 million, inclusive
of tax, interest, and penalties. The challenge concerned the valuation placed on the shares of
Altadis Distribution France (now known as Logista France) following an intragroup transfer of
shares in October 2012 and the tax consequences flowing from a potentially higher value that
was argued for by the tax authorities. In May 2023 the Administrative Tribunal of Montreuil
issued its decision, ruling in favour of the French tax authorities. As a result, all associated
liabilities including tax, interest and penalties were paid by 28 February 2025. In March 2025,
the Group was then successful in its appeal to the Administrative Court of Appeal of Paris.
In light of the binding nature of the Court’s decision, the French Tax Authorities proceeded with
a full reimbursement of the amounts previously paid of £261 million. Subsequently, in May 2025,
the French Tax Authorities lodged an appeal with the French Administrative Supreme Court
(“Conseil d’État”). A public hearing was held in June 2025 to assess the admissibility of the appeal.
Ultimately, the Supreme Court rejected the appeal, thereby confirming the favourable ruling of
the Administrative Court of Appeal as final and conclusively resolving the litigation. As a
consequence, the tax provision of £170 million was released.
State aid UK CFC
In April 2019, the EU Commission’s final decision regarding its investigation into the UK’s
Controlled Foreign Company regime was published. It concluded that the legislation up until
December 2018 partially represented state aid. The UK Government (along with a number of UK
corporates, that made a similar application) appealed to the European Court seeking annulment
of the EU Commission’s decision. Based, however, on the Commission’s decision and despite the
appeals, the UK Government was obliged to recover the purported state aid received. In June 2022
the European General Court rejected the appeals, resulting in a subsequent appeal to the CJEU
in January 2024. The CJEU handed down its decision on 19th September 2024, annulling the
EU Commission decision and setting aside the judgment of the General Court, ruling that the
taxation of controlled foreign companies (CFCs) regime did not constitute State Aid. During the
30 September 2025 period the group received a refund of c.£101 million state aid and c.£9 million
of interest previously paid for which a receivable was recognised in the 30 September 2024
period. Additional interest was also received of c.£9 million.
Transfer pricing
The Group has been subject to tax audits relating to transfer pricing matters in several
jurisdictions, principally UK, France and Germany. The Group holds a provision of £381 million
excluding offsetting assets (30 September 2024: £245 million excluding offsetting assets) in
respect of these items. In December 2021 the Group concluded a transfer pricing audit with the
French tax authorities. In September 2022 the Group concluded transfer pricing audits with the
UK and German tax authorities. Settlements of the French and UK audits were made during 2022.
Settlement of the German audit was made during 2023. Mutual Agreement Procedure (MAP)
proceedings are currently ongoing in relation to these audits to resolve potential double taxation
issues arising from the settlements. In September 2023 an additional separate transfer pricing
audit was opened by the German tax authorities. Due to regulations introduced in Germany
within 30 September 2024 period which could be considered to be merely of a clarifying nature
rather than any new principle, the Group maintained a provision of £156 million considering the
range of potential outcomes and the balance of probabilities associated with each potential
outcome, the maximum potential exposure being £404 million. Following correspondence with
the tax authorities in the current financial year. The Group believes that an additional provision
of £21 million (€24 million) on top of the £156 million already recorded is required to reflect the
more likely outcome.
Transfer Pricing/ Controlled Foreign Company (“CFC”)
Imperial Brands Enterprise Finance Limited (IBEFL) is a corporation which is tax resident in
the UK. Reemtsma Cigarettenfabriken GmbH (Reemtsma) holds approx. 83.95% of the shares in
IBEFL. As part of the tax audit, the German tax authorities are challenging the application of the
German CFC regulations on IBEFL and have also requested further details on IBEFL’s intercompany
transactions. As a result of these challenges the Group believes that a provision for a total amount
of £79 million (€96 million) is required.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9. DIVIDENDS
Distributions to ordinary equity holders
Pence per share
£ million
2025
2024
2023
2025
2024
2023
Cash:
December
54.26
51.82
49.31
455
461
464
March
54.26
51.82
49.32
451
453
457
June
40.08
22.45
21.59
328
193
196
September
40.08
22.45
21.59
324
192
195
Total
188.68
148.54
141.81
1,558
1,299
1,312
The declared third interim dividend for the year ended 30 September 2025 of 40.08 pence per
share amounts to a proposed dividend of £322 million, which will be paid in December 2025. The
proposed final dividend for the year ended 30 September 2025 of 40.0 8 pence per share amounts
to a proposed dividend payment of £322 million in March 2026 based on the number of shares
ranking for dividend at 30 September 2025, and is subject to shareholder approval. If approved,
the total dividend paid in respect of 2025 will be £1,314 million (2024: £1,303 million). The dividend
paid during 2025 is £1,558 million (2024: £1,299 million).
10. EARNINGS PER ORDINARY SHARE
Basic earnings per share is based on the profit for the period attributable to the owners of the
parent and the weighted average number of ordinary shares in issue during the period excluding
shares held to satisfy the Group’s employee share schemes and shares purchased by the
Company and held as treasury shares. Diluted earnings per share have been calculated by taking
into account the weighted average number of shares that would be issued if rights held under the
employee share schemes were exercised. No instruments have been excluded from the
calculation for any period on the grounds that they are anti-dilutive.
£ million
2025
2024
Earnings: basic and diluted - attributable to owners
of the Parent Company
2,071
2,613
Millions of shares
Weighted average number of shares:
Shares for basic earnings per share
824.8
869.0
Potentially dilutive share options
5.8
4.9
Shares for diluted earnings per share
830.6
873.9
Pence
Basic earnings per share
251.1
300.7
Diluted earnings per share
249.3
299.0
11. ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES
Logista
Acquisition of Transportes Moncayo, S.L.
In October 2024, the Group’s subsidiary Logista acquired 100% of the equity shares of Spanish
company Transportes Moncayo, S.L., a company specialised in parcel services and transport.
The total purchase price of these shares amounted to €2.5 million (£2.2 million), paid in cash
at the time of purchase.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12. INTANGIBLE ASSETS
2025
Intellectual
property and
product Supply
£ million
Goodwill
development
agreements
Software
Total
Cost
At 1 October 2024
13,184
12,343
1,407
722
27,656
Additions
-
81
29
141
251
Disposals
-
-
-
(3)
(3)
Other movements
-
(48)
-
-
(48)
Reclassifications
-
-
-
5
5
Exchange movements
489
238
68
18
813
At 30 September 2025
13,673
12,614
1,504
883
28,674
Amortisation and
impairment
At 1 October 2024
1,500
8,479
1,346
393
11,718
Amortisation charge
for the year
-
370
7
42
419
Impairment
-
-
5
1
6
Disposals
-
-
-
(3)
(3)
Reclassifications
-
-
-
3
3
Exchange movements
67
176
66
14
323
Accumulated amortisation
-
8,486
1,419
450
10,355
Accumulated impairment
1,567
539
5
-
2,111
At 30 September 2025
1,567
9,025
1,424
450
12,466
Net book value
At 30 September 2025
12,106
3,589
80
433
16,208
2024
Intellectual
property and
product Supply
£ million
Goodwill
development
agreements
Software
Total
Cost
At 1 October 2023
13,785
13,042
1,457
630
28,914
Additions
-
115
2
143
260
Acquisitions
2
1
2
-
5
Disposals
-
(1)
(2)
(4)
(7)
Reclassifications
29
-
1
(30)
-
Exchange movements
(632)
(814)
(53)
(17)
(1,516)
At 30 September 2024
13,184
12,343
1,407
722
27,656
Amortisation and
impairment
At 1 October 2023
1,556
8,650
1,389
375
11,970
Amortisation charge
for the year
-
354
7
38
399
Disposals
-
-
-
(3)
(3)
Exchange movements
(56)
(525)
(50)
(17)
(648)
Accumulated amortisation
-
7,940
1,346
392
9,678
Accumulated impairment
1,500
539
-
1
2,040
At 30 September 2024
1,500
8,479
1,346
393
11,718
Net book value
At 30 September 2024
11,684
3,864
61
329
15,938
Assets under construction
included above:
At 30 September 2025
352
At 30 September 2024
261
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Amortisation and impairment of acquired intangibles excluded from adjusted operating profit
amounted to £369 million (2024: £353 million); this comprises amortisation on intellectual
property of £362 million (2024: £346 million) and amortisation on supply agreements of
£7 million (2024: £7 million).
Intellectual property mainly comprises brands acquired in the USA in 2015 and through
the purchases of Altadis in 2008 and Commonwealth Brands in 2007.
Supply agreements include Distribution customer relationships acquired as part of the purchases
of Altadis, Carbó Collbatallé S.L. and Herinvemol S.L. (Transportes El Mosca) in prior financial years.
Intangible amortisation and impairment are included within cost of sales, distribution, advertising
and selling costs, and administrative and other expenses in the consolidated income statement.
Amortisation and impairment in respect of intangible assets other than software and internally
generated intellectual property are treated as reconciling items between reported operating profit
and adjusted operating profit, except to the extent these have been treated as restructuring costs.
During the period ended 30 September 2023, the Group purchased intellectual property relating to
tobacco pouches to be marketed within the United States. The purchase consideration comprised
£41 million which was paid in cash on completion, deferred consideration of £25 million paid in
December 2023 and sales volume related contingent consideration initially estimated at £40 million
payable over a five-year period up until 2028.
During the year a decrease to the contingent consideration liability of £37 million (2024: increase
of £41 million) was recognised to reflect the latest sales forecast. All contingent consideration has
been discounted at a rate of 13%.
At 30 September 2025 the contingent consideration liability was £40 million (2024: £77 million)
and the total value of the intangible asset recognised was £102 million (2024: £139 million).
In March 2025, Group purchased 2ONE brand for £40 million; in December 2024, Group purchased
a supply contract in Mali for consideration of £28 million.
Included within assets under construction is £352 million (2024: £261 million) relating to
software. This includes capitalised development costs of £210 million (2024: £143 million) related
to the Unify programme. Total amortisation costs during the year were £1 million (2024: £nil)
resulting in a net book value of £209 million (2024: £143 million).
Goodwill and intangible asset impairment review
The Group’s Cash Generating Unit Groupings (CGUG) are used for annual goodwill impairment
testing and are aligned to the Group’s operating segments, namely Europe, Americas and AAACE
for the Tobacco & NGP business, and Distribution. Goodwill is allocated at a CGUG level where
components of that grouping are expected to benefit from the business combination in which
the goodwill arose. The groupings represent the lowest level at which goodwill is monitored for
internal management purposes. A summary of the carrying value of goodwill and intangible
assets with indefinite lives is set out below:
2025
2024
Intangible Intangible
assets with assets with
£ million
Goodwill
indefinite lives
Goodwill
indefinite lives
Europe
4,055
309
3,919
296
Americas
4,081
-
3,945
-
AAACE
2,147
163
2,076
156
Tobacco & NGP
10,283
472
9,940
452
Distribution
1,823
-
1,744
-
12,106
472
11,684
452
Goodwill has arisen principally on the acquisitions of Reemtsma in 2002 (all CGUG),
Commonwealth Brands in 2007 (USA), Altadis in 2008 (all CGUG) and ITG Brands in 2015 (USA).
Intangible assets with indefinite lives relate to the tobacco trademark, Davidoff, which was
purchased as part of the acquisition of Reemtsma in 2002.
The Group tests goodwill and intangible assets with indefinite lives for impairment annually, or
more frequently if there are any indications that impairment may have arisen. The value of a CGUG
is based on value in use calculations. These calculations use cash flow projections derived from
financial plans of the business which are based on detailed bottom-up market-by-market forecasts
of projected sales volumes for each product line. These forecasts reflect, on an individual market
basis, numerous assumptions and estimates regarding anticipated changes in market size, prices
and duty regimes, consumer uptrading and downtrading, consumer preferences and other
changes in product mix, based on long-term market trends, market data, anticipated regulatory
developments, and management experience and expectations. We consider that pricing, market
size, market shares and cost inflation are the key assumptions used in our plans.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Growth rates and discount rates used
The compound annual growth rates implicit in these value in use calculations are shown below:
2025
2024
Pre-tax Initial Long-term Pre-tax Initial Long-term
% discount rate growth rate growth rate discount rate growth rate growth rate
Europe
10.6
2.3
0.5
9.9
4.1
0.2
Americas
9.2
5.7
2.1
8.7
6.5
1.9
AAACE
13.1
3.5
2.0
13.3
2.0
1.9
Distribution
11.5
6.3
1.6
12.1
4.1
1.6
The calculation to determine the value in use involves a discounted future cash flow forecast
model. Nominal cash flows are used in the calculation which will themselves already factor in
the effects of inflation. The cash flows are sourced from the Group business plan which considers
and factors in the risk of variability of future business performance and hence cash flow
variation. A nominal discount rate is used within the model based on the Group’s weighted
average cost of capital which is calculated using the Capital Asset Pricing Model. As risk has
been applied within the undiscounted cash flows no adjustment is made to the discount rate
for risk, except for the application of country risk premia over and above the Group’s weighted
average cost of capital where appropriate.
Country-specific discount rates are used based on the Group’s weighted average cost of capital
adjusted for country risk premium. The impairment review is undertaken at a CGUG level which
involves the aggregation of the individual value in use amounts for the individual countries
which constitute each CGUG. Our impairment projections are prepared under the basis set
out in IAS 36.
Nominal cash flows from the business plan period are used for year one, two and three, then
extrapolated out to year five using the implicit growth rate, shown in the table above as the initial
growth rate. In certain markets, the extrapolated cash flow growth rate can exceed the long-term
growth rate based on the business plan being a better reflection of the anticipated initial growth.
Where there are specific indications that the cash flow growth rates for years four and five are
lower than those for the earlier years, the lower rates will be used. Estimated long-term weighted
average compound growth rates are used beyond year five.
Long-term growth rates are determined as the lower of:
• the nominal GDP growth rates for the country of operation;
• the extrapolation of the initial growth rates as estimated by management for years one to five; and
• the management long-term expectations of growth for a specific market.
Long-term growth rates are based on management’s long-term expectations, taking account
of industry-specific factors such as the nature of our products, the role of excise in government
fiscal policy, and relatively stable and predictable long-term macro trends in the Tobacco
industry. Year-on-year variations in initial growth rates may result in consequential changes
to estimated long-term rates. Key year on year changes in growth rates are as follows:
Europe’s initial growth rate fell by 1.8%. This is primarily a reflection of a reduction in the
medium-term growth outlook for the UK market.
Americas initial growth rate fell by 0.8% driven by lower expectation of combustible product
growth partially offset by improved prospects for NGP products.
AAACE had a 1.5% increase in the initial growth rate primarily driven by forecast improvements
to profit growth in Ivory Coast and Morocco.
The Distribution initial growth rate increased by 2.2% compared to the prior year reflecting an
expected acceleration in the rate of profit growth following a number of acquisitions in prior years.
Goodwill and intangible asset impairment review conclusion
Our impairment testing confirms there are sufficient cash flows to support the current carrying
values of the goodwill held at 30 September 2025. Any reasonable movement in the assumptions
used in the impairment tests would not result in an impairment. The complexity of the
estimation process and issues related to the assumptions, risks and uncertainties inherent in
the application of the Group’s accounting estimates in relation to intangible assets can affect the
amounts reported in the financial statements, especially the estimates of the expected useful
economic lives and the carrying values of those assets. If business conditions significantly
change it is possible that materially different amounts could be reported in the Group’s financial
statements in future periods. There are uncertainties associated with estimating the valuation of
the recoverable amount. At the present time the recoverable amount is significantly in excess of
the carrying value of goodwill and other intangible assets. However, given the uncertainties
mentioned above this could change in the future.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Consideration of the impact of climate change
The Group has completed an assessment of the impact of climate change which includes
how it will vary future costs and therefore cash flows. The review has concluded that there are
impacts on future cash flows as a result of climate change, with the most significant relating to
non-tobacco materials and leaf costs due to increases in the operating costs of suppliers and raw
materials. We have factored the additional costs to the Group relating to forecast climate costs
into our discounted cash flow forecasts used for impairment testing valuation purposes. There
continues to be improvements in the way the Group models the financial impact of climate risks.
Updated climate impact models have been used in the current year which factor in an improved
degree of risk assessment. The climate impact assessment for the Distribution CGUG has been
fully integrated into the wider Group assessment model this year. The modelled impact for the
Group was £360 million (2024: £504 million). There continues to be sufficient headroom after
factoring in climate risk and there is therefore no impairment recognised as result of incremental
climate change costs. However, the Group will continue to review the climate change impact
going forward and any future changes in impact assessment could potentially result in changes
to the impairment assessment.
Other intangible assets
Other intangible assets are considered for impairment risk. The carrying values of brand
intangibles are reviewed against expected future cash flows of associated products. Impairment
will only be recognised where there is evidence that the carrying value of the brand cannot be
recovered through those cash flows. Included within these reviews is a test to determine the
recoverability of the Davidoff indefinite life brand intangible asset. The carrying value of this
asset as at 30 September 2025 was £472 million (2024: £452 million). Recoverability of Davidoff
has been measured against the net brand contribution which confirms that the carrying value
of the brand will be recovered within a two year period. No impairments (2024: £nil) have been
recognised for brand intangibles.
£1 million (2024: £nil) impairment charge was incurred in the year relating to software.
All other classes of intangible assets, including assets under construction, have also been
reviewed to consider recoverability and therefore identify potential impairment. No impairments
were recognised in the year ended 30 September 2025 and hence no impairment charge has been
incurred (2024: £nil).
13. PROPERTY, PLANT AND EQUIPMENT
Plant and Fixtures and 2025
£ million
Property
equipment
motor vehicles
Total
Cost
At 1 October 2024
736
2,048
450
3,234
Additions
11
144
32
187
Acquisitions
1
2
3
6
Disposals
(32)
(64)
(31)
(127)
Hyperinflation adjustment
-
4
-
4
Reclassifications
8
(31)
23
-
Exchange movements
28
78
14
120
At 30 September 2025
752
2,181
491
3,424
Depreciation and impairment
At 1 October 2024
168
1,222
283
1,673
Depreciation charge for the year
14
100
41
155
Impairment
12
75
13
100
Disposals
(18)
(51)
(26)
(95)
Reclassifications
7
(10)
3
-
Exchange movements
9
46
12
67
At 30 September 2025
192
1,382
326
1,900
Net book value
At 30 September 2025
560
799
165
1,524
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2024
Plant and Fixtures and
£ million
Property
equipment
motor vehicles
Total
Cost
At 1 October 2023
756
2,065
484
3,305
Additions
10
127
41
178
Acquisitions
-
1
-
1
Disposals
(24)
(69)
(48)
(141)
Hyperinflation adjustment
1
10
1
12
Reclassifications
18
(5)
(13)
-
Exchange movements
(25)
(81)
(15)
(121)
At 30 September 2024
736
2,048
450
3,234
Depreciation and impairment
At 1 October 2023
177
1,203
308
1,688
Depreciation charge for the year
16
102
36
154
Impairment
(3)
2
-
(1)
Disposals
(12)
(47)
(46)
(105)
Reclassifications
-
4
(4)
-
Exchange movements
(10)
(42)
(11)
(63)
At 30 September 2024
168
1,222
283
1,673
Net book value
At 30 September 2024
568
826
167
1,561
Assets under construction
included above:
At 30 September 2025
156
At 30 September 2024
122
14. RIGHT OF USE ASSETS AND LEASE LIABILITIES
The movements in right of use assets in the year were as follows:
Plant and Fixtures and 2025
£ million
Property
equipment
motor vehicles
Total
Net book value
At 1 October 2024
267
2
93
362
Additions and modifications
59
4
43
106
Terminations
(3)
(1)
(4)
(8)
Depreciation and impairment
(59)
(3)
(39)
(101)
Exchange movements
10
-
4
14
At 30 September 2025
274
2
97
373
The movements in lease liabilities in the year were as follows:
£ million
Lease Liabilities
At 1 October 2024
386
Cash flow
(109)
Accretion of interest
15
New leases, terminations and modifications
95
Exchange movements
15
At 30 September 2025
402
The following are the amounts recognised in the consolidated income statement:
£ million
2025
2024
Expenses relating to short-term leases
6
10
Expenses relating to low value asset leases
1
2
Depreciation and impairment expense of right of use assets
101
95
Interest on lease liabilities
15
14
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The movements in right of use assets in the year ending 30 September 2024 were as follows:
2024
Plant and Fixtures and
£ million
Property
equipment
motor vehicles
Total
Net book value
At 1 October 2023
256
2
68
326
Additions and modifications
82
4
69
155
Terminations
(4)
(1)
(5)
(10)
Depreciation
(57)
(3)
(35)
(95)
Exchange movements
(10)
-
(4)
(14)
At 30 September 2024
267
2
93
362
The movements in lease liabilities in the year ending 30 September 2024 were as follows:
£ million
Lease Liabilities
At 1 October 2023
349
Cash flow
(107)
Accretion of interest
14
New leases, terminations and modifications
144
Exchange movements
(14)
At 30 September 2024
386
The maturity profile and the future minimum lease payments of the carrying amount of the Group’s
lease liabilities and the contractual cash flows as at 30 September 2025 and 30 September 2024
are disclosed in Note 21.
15. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
The principal joint venture during the year was Global Horizon Ventures Limited. Summarised
financial information for the Group’s joint ventures, which are accounted for using the equity
method, is shown below:
Global Horizon 2025
£ million
Ventures
Others
Total
Revenue
28
40
68
Profit after tax
24
1
25
Non-current assets
-
9
9
Current assets
62
59
121
Total assets
62
68
130
Current liabilities
(5)
(54)
(59)
Non-current liabilities
-
(14)
(14)
Total liabilities
(5)
(68)
(73)
Net assets
57
-
57
2024
Global Horizon
£ million
Ventures
Others
Total
Revenue
25
40
65
Profit after tax
17
3
20
Non-current assets
-
8
8
Current assets
60
62
122
Total assets
60
70
130
Current liabilities
(11)
(56)
(67)
Non-current liabilities
-
(13)
(13)
Total liabilities
(11)
(69)
(80)
Net assets
49
1
50
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Transactions and balances with joint ventures
£ million
2025
2024
Purchases from
15
9
Accounts payable to
(11)
(4)
Movement on investments accounted for using the equity method
£ million
2025
2024
At 1 October
56
55
Share of profit for the year from joint ventures
12
9
Share of profit for the year from associates
5
1
Dividends
(7)
(9)
At 30 September
66
56
16. INVENTORIES
£ million
2025
2024
Raw materials
992
960
Work in progress
83
84
Finished inventories
3,207
2,887
Other inventories
184
149
4,466
4,080
Other inventories mainly comprise duty-paid tax stamps.
Within finished inventories of £3,207 million (2024: £2,887 million) there is excise duty
of £1,201 million (2024: £1,118 million).
It is generally recognised industry practice to classify leaf tobacco inventory as a current asset,
although part of such inventory, because of the duration of the processing cycle, ordinarily would
not be consumed within one year. We estimate that around £203 million (2024: £204 million) of
leaf tobacco held within raw materials will not be utilised within a year of the balance sheet date.
17. TRADE AND OTHER RECEIVABLES
2025
2024
£ million
Current
Non-current
Current
Non-current
Trade receivables
2,446
4
2,395
1
Less: loss allowance
(66)
(1)
(64)
(1)
Net trade receivables
2,380
3
2,331
-
Other receivables
205
32
156
37
Prepayments
131
98
158
81
2,716
133
2,645
118
Trade receivables may be analysed as follows:
2025
2024
£ million
Current
Non-current
Current
Non-current
Within credit terms
2,228
3
2,194
-
Past due by less than 3 months
118
-
111
-
Past due by more than 3 months
34
-
26
-
Amounts that are impaired
66
1
64
1
2,446
4
2,395
1
The movements in the total loss allowance for receivables can be analysed as follows:
£ million
2025
2024
At 1 October
65
66
Net increase/(decrease) in provision
2
(1)
At 30 September
67
65
Trade receivables are reviewed by their risk profiles and loss patterns to assess credit risk.
Historical and forward-looking information is considered to determine the appropriate expected
credit loss allowance. Provision levels are calculated on the residual credit risk after
consideration of any credit protection which is used by the Group. Expected credit losses (ECLs)
are applied to net trade receivables which are measured reflecting lifetime ECLs using the
simplified approach.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
18. CASH AND CASH EQUIVALENTS
£ million
2025
2024
Cash at bank and in hand
683
607
Short-term deposits and other liquid assets
756
471
1,439
1,078
£220 million (2024: £217 million) of total cash and cash equivalents is held in countries in which
prior approval is required to transfer the funds abroad. Nevertheless, if the Group complies with
these requirements, such liquid funds are at its disposition within a reasonable period of time,
which in all cases is three months or less from the date the transfer is requested.
19. TRADE AND OTHER PAYABLES
2025
2024
£ million
Current
Non-current
Current
Non-current
Trade payables
1,709
-
1,499
-
Duties payable
5,225
-
5,156
-
Other taxes and social security
contributions
1,532
-
1,381
-
Other payables
607
-
623
-
Accruals
967
41
838
86
10,040
41
9,497
86
20. BORROWINGS
The Group’s borrowings, held at amortised cost, are as follows:
£ million
2025
2024
Current borrowings
Bank loans and overdrafts
4
34
Capital market issuance:
European commercial paper (ECP)
-
21
€500m 1.375% notes due January 2025
-
421
US$ 950m 4.25% notes due July 2025
-
715
€650m 3.375% notes due February 2026
579
-
US$ 400m 3.5% notes due July 2026
300
-
£188m 5.5% notes due September 2026
187
-
Total current borrowings
1,070
1,191
Non-current borrowings
Capital market issuance:
€650m 3.375% notes due February 2026
-
553
US$ 750m 3.5% notes due July 2026
-
563
£500m 5.5% notes due September 2026
-
500
€750m 2.125% notes due February 2027
663
634
US$ 1,000m 6.125% notes due July 2027
750
752
US$ 850m 4.5% notes due June 2028
638
-
US$ 1,000m 3.875% notes due July 2029
748
751
US$ 1,250m 5.5% notes due February 2030
936
944
€1,050m 5.25% notes due February 2031
940
898
£500m 4.875% notes due June 2032
506
505
€1,000m 1.75% notes due March 2033
879
840
€1,000m 3.875% notes due February 2034
886
-
US$ 750m 5.875% notes due July 2034
564
566
US$ 850m 5.625% notes due July 2035
639
-
US$ 500m 6.375% notes due July 2055
375
-
Total non-current borrowings
8,524
7,506
Total borrowings
9,594
8,697
Analysed as:
Capital market issuance
9,590
8,663
Bank loans and overdrafts
4
34
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Current and non-current borrowings include interest payable of £14 million (2024: £10 million)
and £128 million (2024: £102 million) respectively as at the balance sheet date.
Interest payable on capital market issuances is at fixed rates of interest and interest payable
on bank loans and overdrafts are at floating rates of interest.
On 27 January 2025, €500 million (£420 million equivalent) 1.375% notes were repaid. On
12 February 2025, €800 million (£668 million equivalent) 3.875% notes were issued. On 1 July 2025,
US$ 850 million (£619 million equivalent) 4.5% notes were issued, US$ 850 million (£619 million
equivalent) 5.625% notes were issued, US$ 500 million (£364 million equivalent) 6.375% notes were
issued. On 11 July 2025, a partial repayment of the £500 million 5.5% notes was made; £312 million
was repaid with the remaining £188 million due September 2026, a partial repayment of the US$
750 million 3.5% notes was made; US$ 350 million (£259 million equivalent) was repaid with the
remaining US$ 400 million due July 2026. On 21 July 2025, US$ 950 million (£705 million
equivalent) 4.25% notes were repaid. On 4 September 2025, €200 million (£173 million equivalent)
3.875% notes were issued, supplementary to the 12 February 2025 €800 million issue, listed as
€1,000 3.875% notes due February 2034 in the above table.
All borrowings are unsecured and the Group has not defaulted on any borrowings during the year
(2024: no defaults).
The maturity profile of the Group’s bonds and the contractual cashflows as at 30 September 2025
is disclosed in Note 21.
Fair value of borrowings
The fair value of borrowings as at 30 September 2025 is estimated to be £9,526 million (2024:
£8,567 million). £9,522 million (2024: £8,533 million) relates to capital market issuance and has
been determined by reference to market prices as at the balance sheet date. A comparison of the
carrying amount and fair value of capital market issuance by currency is provided below. The fair
value of all other borrowings is considered to equal their carrying amount.
Balance sheet
2025
Balance sheet
2024
£ million
amount
Fair value
amount
Fair value
GBP
693
671
1,006
985
EUR
3,947
3,839
3,367
3,245
USD
4,950
5,012
4,290
4,303
Total capital market issuance
9,590
9,522
8,663
8,533
Undrawn revolving credit facilities
At 30 September the Group had the following undrawn committed facilities:
£ million
2025
2024
Amounts maturing:
In less than one year
700
853
Between one and two years
-
153
Between two and five years
2,619
2,608
3,319
3,614
On 18 September 2025 the Group’s existing syndicated multicurrency facility of €3,493 million
(2024 €3,493 million) was cancelled and a new syndicated multicurrency facility of €3,000
million was arranged, with an initial maturity date of 31 March 2029.
During September 2025 six bilateral facilities for a total £700 million were terminated. Six new
bilateral facilities for a total £700 million were arranged, £600 million of which were available
at 30 September 2025 and £100 million from 1 October 2025; all maturing in September 2026.
21. FINANCIAL RISK FACTORS
Financial risk management
Overview
In the normal course of business, the Group is exposed to financial risks including, but not
limited to, market, credit and liquidity risk. This note explains the Group’s exposure to these risks,
how they are measured and assessed, and summarises the policies and processes used to
manage them, including those related to the management of capital.
The Group operates a centralised treasury function which is responsible for the management of
the financial risks of the Group, together with its financing and liquidity requirements. Financial
risks comprise, but are not limited to, exposures to funding and liquidity, interest rate, foreign
exchange and counterparty credit risk. The treasury function is also responsible for the financial
risk management of the Group’s global defined benefit pension schemes and management of
Group wide insurance programs. The treasury function does not operate as a profit centre, nor
does it enter into speculative transactions.
The Group’s treasury activities are overseen by the Treasury Committee, which meets four times
a year and comprises the Chief Financial Officer, the Director of Treasury, the Group Finance
Director, the Chief Legal Risk Governance & Compliance Officer and three Group Regional
Finance Directors. The Treasury Committee operates in accordance with the terms of reference
set out by the Board and a policy (the Treasury Operations Policy) which sets out the expectations
and boundaries to assist in the effective oversight of treasury activities.
The Board reviews and approves all major treasury decisions.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The Group’s management of financial risks covers the following:
(A) Market risk
Price risk
The Group is not exposed to equity securities price risk other than assets held by its pension
funds disclosed in note 24. The Group is exposed to commodity price risk in that there may
be fluctuations in the price of tobacco leaf. As with other agricultural commodities, the price
of tobacco leaf tends to be cyclical as supply and demand considerations influence tobacco
plantings in those countries where tobacco is grown. Also, different regions may experience
variations in weather patterns that may affect crop quality or supply and so lead to changes
in price. The Group seeks to reduce this price risk by sourcing tobacco leaf from a number of
different countries and counterparties and by varying the levels of tobacco leaf held. Currently,
these techniques reduce the expected exposure to this risk over the short to medium term to
levels considered not material and accordingly, no sensitivity analysis has been presented.
Foreign exchange risk
The Group is exposed to movements in foreign exchange rates due to its commercial trading
transactions and profits denominated in foreign currencies, as well as the translation of cash,
borrowings and derivatives held in non-functional currencies.
The Group’s financial results are principally exposed to fluctuations in euro and US dollar
exchange rates. Management of the Group’s foreign exchange transaction and translation risk
is addressed below.
Transaction risk
The Group’s material transaction exposures arise on costs denominated in currencies other than
the functional currencies of subsidiaries, including the purchase of tobacco leaf, which is sourced
from various countries but purchased principally in US dollars, and packaging materials which
are sourced from various countries and purchased in a number of currencies. The Group is also
exposed to transaction foreign exchange risk on the conversion of foreign subsidiary earnings
into sterling to fund the external dividends to shareholders. This is managed by selling euros
and US dollars monthly throughout the year. Other foreign currency flows are matched where
possible and remaining foreign currency transaction exposures are not hedged.
Translation risk
The Group’s currency mix of debt and related derivatives is held with consideration to the
currency mix of its net assets and profits, which are primarily euros and US dollars. The Group
issues debt in the most appropriate market or markets at the time of raising new finance and has
a policy of using cross-currency swap derivative financial instruments to change the currency
of debt as required. Borrowings denominated in, or swapped into foreign currencies to match the
Group’s investments in overseas subsidiaries are treated as a hedge against the net investment
where appropriate.
Foreign exchange sensitivity analysis
The Group’s sensitivity to foreign exchange rate movements, which impacts the translation
of monetary items held by subsidiary companies in currencies other than their functional
currencies, is illustrated on an indicative basis below. The sensitivity analysis has been prepared
on the basis that net debt and the proportion of financial instruments in foreign currencies
remain constant, and that there is no change to the net investment hedge designations in place at
30 September 2025. The sensitivity analysis does not reflect any change to revenue or non-finance
costs that may result from changing exchange rates, and ignores any taxation implications and
offsetting effects of movements in the fair value of derivative financial instruments.
2025
2024
Increase/ Increase/
(decrease) in (decrease) in
£ million income income
Income statement impact of non-functional currency foreign
exchange exposures:
10% appreciation of sterling against euro (2024: 10%)
78
87
10% appreciation of sterling against US dollar (2024: 10%)
(25)
(17)
10% depreciation of sterling against euro (2024: 10%)
(95)
(106)
10% depreciation of sterling against US dollar (2024: 10%)
31
20
Movements in equity in the table below relate to intercompany loans treated as quasi-equity
under IAS 21 and hedging instruments designated as net investment hedges of the Group’s Euro
and US Dollar denominated assets.
2025
2024
£ million
Change in equity
Change in equity
Equity impact of non-functional currency foreign exchange
exposures:
10% appreciation of sterling against euro (2024: 10%)
934
928
10% appreciation of sterling against US dollar (2024: 10%)
328
272
10% depreciation of sterling against euro (2024: 10%)
(1,141)
(1,134)
10% depreciation of sterling against US dollar (2024: 10%)
(401)
(332)
At 30 September 2025, after the effect of derivative financial instruments, approximately 101% of
the Group’s net debt was denominated in euro and non US Dollar currencies (2024: 102%) and (1)%
in US dollars (2024: (2)%).
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Interest rate risk
The Group’s interest rate risk arises from its borrowings net of cash and cash equivalents, with
the primary exposures arising from fluctuations in euro and US dollar interest rates. Borrowings
at variable rates expose the Group to cash flow interest rate risk. Borrowings at fixed rates expose
the Group to fair value interest rate risk.
The Group manages its exposure to interest rate risk on its borrowings by entering into derivative
financial instruments, interest rate swaps, to achieve an appropriate mix of fixed and floating
interest rate debt in accordance with the Treasury Operations Policy and Treasury Committee
discussions.
As at 30 September 2025, after adjusting for the effect of derivative financial instruments detailed
in note 22, approximately 109% (2024: 109%) of reported net debt was at fixed rates of interest and
(9)% (2024: (9)%) was at floating rates of interest. After adjusting for cash held in subsidiary bank
accounts and cash in transit, accrued interest, the mark to market of the derivative portfolio,
finance leases and the trade receivables that were sold to a financial institution under a non-
recourse factoring arrangement, approximately 98% (2024: 97%) of debt was at fixed rates of
interest and 2% (2024: 3%) was at floating rates of interest.
Interest rate sensitivity analysis
The Group’s sensitivity to interest rates on its euro and US dollar monetary items which are
primarily external borrowings, cash and cash equivalents, is illustrated on an indicative basis
below. The impact in the Group’s Income Statement reflects the effect on net finance costs in
respect of the Group’s net debt and the fixed to floating rate debt ratio prevailing at 30 September
2025, ignoring any taxation implications and offsetting effects of movements in the fair value of
derivative financial instruments.
The sensitivity analysis has been prepared on the basis that net debt and the derivatives portfolio
remain constant and that there is no net impact on other comprehensive income.
2025
2024
Change in Change in
£ million income income
Income statement impact of interest rate movements:
+/- 1% increase in euro interest rates (2024: 1%)
-
1
+/- 1% increase in US dollar interest rates (2024: 1%)
(9)
(2)
(B) Credit risk
IFRS 9 requires an expected credit loss (ECL) model to be applied to financial assets. The expected
credit loss model requires the Group to account for expected losses as a result of credit risk on
initial recognition of financial assets and to recognise changes in those expected credit losses at
each reporting date. Allowances are measured at an amount equal to the lifetime expected credit
losses where the credit risk on the receivables increases significantly after initial recognition.
The Group is primarily exposed to credit risk arising from the extension of credit to its customers,
on cash deposits and derivatives. The maximum aggregate credit risk to these sources was
£4,322 million at 30 September 2025 (2024: £3,947 million).
Trade and other receivables
Policies are in place to manage the risk associated with the extension of credit to third parties to
ensure that commercial intent is balanced effectively with credit risk management. Subsidiaries
have policies in place that require appropriate credit checks on customers and credit is extended
with consideration to financial risk and creditworthiness. If a customer requires credit beyond an
acceptable limit, security may be put in place to minimise the financial impact in the event of a
payment default. Instruments that may typically be used as security include non-recourse
receivables factoring and bank guarantees. At 30 September 2025 the level of trade receivables that
were sold to a financial institution under a non-recourse factoring arrangement, and subsequently
derecognised, totalled £483 million (2024: £570 million). The decrease compared with the prior year
primarily reflects the timing of sales. The total value of trade receivables reclassified as fair value was
£89 million at 30 September 2025 (2024: £53 million). There was no valuation difference between
amortised cost and fair value. Analysis of trade and other receivables is provided in note 17.
Supplier financing arrangements
The Group participates in a supply chain financing arrangement (SCF). Under the arrangement,
a single bank agrees to pay amounts to a participating supplier in respect of invoices owed by the
Group and receives settlement from the Group at a later date. The Group extends payment terms with
suppliers in the ordinary course of business and then offers them access to the SCF arrangement
so the supplier can get paid early by the bank. The value is discounted at a rate that is based on the
Group’s credit profile, meaning the Group can leverage its credit rating. There is a parental guarantee
in place in favour of the bank but this is contingent only and does not change the Group’s financial
obligations. The principal purpose of this arrangement is to facilitate efficient payment processing
and enable the willing suppliers to receive payments from the bank before the invoice due date.
2025
2024
Carrying amount of liabilities that are part of supplier financing arrangements
£ million
£ million
Presented within trade and other payables
84
3
- of which suppliers have received payment from finance provider
58
1
2025
Range of payment due dates
Days
Liabilities that are part of the arrangement
1 - 183
Trade payables that are not part of an arrangement
0 - 120
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Financial instruments
In order to manage its credit risk to any one counterparty, the Group places cash deposits and
enters into derivative financial instruments with a diversified group of financial institutions
carrying suitable credit ratings in line with the Treasury Operations Policy. Utilisation of
counterparty credit limits is regularly monitored by treasury and ISDA agreements are in place
to permit the net settlement of assets and liabilities in certain circumstances.
The table below summarises the Group’s largest exposures to financial counterparties as at
30 September 2025. At the balance sheet date management does not expect these counterparties
to default on their current obligations.
2025
2024
Maximum Maximum
exposure to exposure to
credit risk £ credit risk £
Counterparty exposure million million
Highest
515
253
2nd highest
87
134
3rd highest
73
50
4th highest
27
27
5th highest
19
10
These exposures are held with counterparties with investment grade credit ratings or in money
market funds with a AAA rating.
(C) Liquidity risk
The Group is exposed to liquidity risk, which represents the risk of having insufficient funds to
meet its financing needs in any particular location when needed. To manage this risk the Group
has a policy of actively maintaining a mixture of short, medium and long-term committed
facilities that are structured to ensure that the Group has sufficient available funds to meet the
forecast requirements of the Group over the short to medium term. To prevent over-reliance on
individual sources of liquidity, funding is provided across a range of instruments including debt
capital market issuance, bank term loans, bank revolving credit facilities, European commercial
paper and US commercial paper.
The Group primarily borrows centrally in order to meet forecast funding requirements, and the
treasury function is in regular dialogue with subsidiary companies to ensure their liquidity
needs are met. Subsidiary companies are funded by a combination of share capital and retained
earnings, intercompany loans, and in very limited cases through external local borrowings. Cash
pooling processes are used to centralise surplus cash held by subsidiaries where possible in order
to minimise external borrowing requirements and interest costs. Treasury invests surplus cash
in bank deposits and money market funds and uses foreign exchange contracts to manage short
term liquidity requirements in line with short term cash flow forecasts. As at 30 September 2025,
the Group held liquid assets of £1,439 million (2024: £1,078 million).
The table below summarises the Group’s non derivative financial liabilities by maturity based on
their contractual cash flows as at 30 September 2025. The amounts disclosed are undiscounted
cash flows calculated using spot rates of exchange prevailing at the relevant balance sheet date.
Contractual cash flows in respect of the Group’s derivative financial instruments are detailed
in note 22.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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2025
Balance Contractual
sheet cash flows Between 1 Between 2
£ million amount
total
<1 year
and 2 years
and 5 years
> 5 years
Non-derivative
financial liabilities:
Bank loans
4
4
4
-
-
-
Capital market issuance
9,590
12,181
1,462
1,763
3,141
5,815
Trade payables
1,709
1,709
1,709
-
-
-
Accruals
1,008
1,008
967
17
24
-
Other contractual liabilities
607
607
607
-
-
-
Lease liabilities
402
456
108
86
156
106
Total non-derivative
financial liabilities
13,320
15,965
4,857
1,866
3,321
5,921
2024
Balance Contractual
sheet cash flows Between 1 Between 2
£ million amount
total
<1 year
and 2 years
and 5 years
> 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
-
-
-
Accruals
924
924
838
14
72
-
Other contractual liabilities
623
623
623
-
-
-
Lease liabilities
386
435
96
82
144
113
Total non-derivative
financial liabilities
12,129
13,733
4,587
2,007
2,968
4,171
Following a review of the definition of financial instruments and associated disclosure
requirements as set out by IAS 32, accruals and other contractual liabilities have now been
included in the financial instrument disclosure table. This is because the definition of a financial
liability includes contractual liabilities in addition to debt instruments. Liabilities associated with
taxes and levies have not been included as these items are recognised as a result of legislation
and not through contract.
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.
The Group continues to manage its capital structure to maintain investment grade credit
rating 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 2025 the Group was rated Baa2/P-2/stable 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
2025
2024
Adjusted net debt
8,406
7,740
Equity attributable to the owners of the parent
4,824
5,442
Total capital
13,230
13,182
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.
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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
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 2025.
The following table sets out the maturity profile of the hedging instruments used in the Group’s
net investment hedging strategies:
2025
Total notional Between 1 Between 2 Maturity
£ million
balance
<1 year
and 2 years
and 5 years
> 5 years
Capital market issuance
(5,703)
(567)
(1,399)
(1,674)
(2,063)
Cross-currency swaps
(5,481)
-
(837)
(2,474)
(2,170)
Foreign exchange swaps
(486)
(486)
-
-
-
(11,670)
(1,053)
(2,236)
(4,148)
(4,233)
2024
Maturity
Total notional Between 1 Between 2
£ million
balance
<1 year
and 2 years
and 5 years
> 5 years
Capital market issuance
(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)
The following table contains details of the hedging instruments and hedged items used in the
Group’s net investment hedging strategies:
2025
Carrying
amount
Changes in fair
value used for
Notional calculating hedge
£ million
balance
Assets
Liabilities
Balance sheet line item
in-effectiveness
Hedging instrument:
Capital market
issuance
5,703
-
5,764
Borrowings
(99)
Bank Loans
-
-
-
Borrowings
(11)
Cross-currency swaps
5,481
-
195
Derivative financial
(265)
instruments
Foreign exchange
486
2
-
Derivative financial
(2)
swaps instruments
Hedged item:
Investment in a
foreign operation
n/a
11,670
-
(377)
2024
Carrying
amount
Changes in fair
value used for
Notional calculating hedge
£ million
balance
Assets
Liabilities
Balance sheet line item
in-effectiveness
Hedging instrument:
Capital market
issuance
4,595
-
4,584
Borrowings
321
Cross-currency swaps
5,501
118
76
Derivative financial
instruments
213
Foreign exchange
-
-
-
Derivative financial
swaps
instruments
6
Hedged item:
Investment in a
foreign operation
n/a
10,096
-
540
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Reconciliation of changes in the value of net investment hedges:
2025
Other
At the beginning Income comprehensive Designations/ At the end
£ million of the year statement income (de-designations) of the year
Derivatives in net
investment hedges of
foreign operations
42
32
(267)
-
(193)
Bonds in net investment
hedges of foreign operations
(4,584)
(71)
(110)
(999)
(5,764)
Total
(4,542)
(39)
(377)
(999)
(5,957)
2024
Other
At the beginning Income comprehensive Designations/ At the end
£ million of the year statement income (de-designations) of the year
Derivatives in net
investment hedges of
foreign operations
(248)
71
219
-
42
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)
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. Intra-group
loans with a notional value of €2,534 million (£2,212 million equivalent) (2024: €3,714 million
(£3,099 million equivalent)) were treated as part of the Group’s net investment in foreign
operations at the balance sheet date.
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 £14 million (2024: £12 million) and would have been a £17 million
(2024: £15 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:
2025
Net financial Related
Gross financial assets/ amounts not
assets/ (liabilities) per set-off in the
£ million (liabilities) balance sheet
balance sheet
Net
Assets
Derivative financial instruments
437
437
(436)
1
Liabilities
Derivative financial instruments
(834)
(834)
436
(398)
2024
Net financial Related amounts
Gross financial assets/(liabilities) not set-off in the
£ million assets/(liabilities) per balance sheet
balance sheet
Net
Assets
Derivative financial instruments
474
474
(462)
12
Liabilities
Derivative financial instruments
(809)
(809)
462
(347)
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
The table below sets out the Group’s accounting classification of each class of financial assets
and liabilities:
2025
Fair value
Fair value
through other
Assets and
through income
comprehensive liabilities at
£ million
statement
income
amortised cost
Total
Current
Non-Current
Trade and
other
receivables
89
-
2,531
2,620
2,585
35
Cash and cash
equivalents
-
-
1,439
1,439
1,439
-
Derivatives
435
2
-
437
45
392
Total financial
assets
524
2
3,970
4,496
4,069
427
Borrowings
-
-
(9,594)
(9,594)
(1,070)
(8,524)
Trade and
other payables
-
-
(3,324)
(3,324)
(3,283)
(41)
Derivatives
(639)
(195)
-
(834)
(28)
(806)
Lease
liabilities
-
-
(402)
(402)
(89)
(313)
Total financial
liabilities
(639)
(195)
(13,320)
(14,154)
(4,470)
(9,684)
Total net
financial
liabilities
(115)
(193)
(9,350)
(9,658)
(401)
(9,257)
2024
Fair value
Fair value
through other
Assets and
through income
comprehensive liabilities at
£ million
statement
income
amortised 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)
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
2025 of those external borrowings included in the above table is £5,764 million (2024: £4,639
million). All of the Group’s net investment hedges remain effective. The figure which has been
disclosed for trade and other payables for the year ended 30 September 2025 has been aligned
with the table of non derivative financial liabilities by maturity in this note.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
22. DERIVATIVE FINANCIAL INSTRUMENTS
The Group’s derivative financial instruments held at fair value, are as follows:
2025
2024
Net Fair Net Fair
£ million
Assets
Liabilities
Value
Assets
Liabilities
Value
Current derivative
financial instruments:
Interest rate swaps
11
(8)
3
65
(54)
11
Foreign exchange contracts
4
(3)
1
1
(4)
(3)
Cross-currency swaps
30
(17)
13
78
(129)
(51)
Total current derivatives
45
(28)
17
144
(187)
(43)
Non-current derivative
financial instruments:
Interest rate swaps
242
(263)
(21)
240
(365)
(125)
Cross-currency swaps
150
(543)
(393)
90
(257)
(167)
Total non-current derivatives
392
(806)
(414)
330
(622)
(292)
Total carrying value of derivative
financial instruments
437
(834)
(397)
474
(809)
(335)
Analysed as:
Interest rate swaps
253
(271)
(18)
305
(419)
(114)
Foreign exchange contracts
4
(3)
1
1
(4)
(3)
Cross-currency swaps
180
(560)
(380)
168
(386)
(218)
Total carrying value of derivative
financial instruments
437
(834)
(397)
474
(809)
(335)
The classification of these derivative assets and liabilities under the IFRS 7 fair value hierarchy
is provided in note 21.
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 2025.
The table below summarises the Group’s derivative financial instruments by maturity based on
their remaining contractual cash flows as at 30 September 2025. 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.
2025
Balance Contractual
sheet cash flows Between 1 Between 2
£ million amount
total
<1 year
and 2 years
and 5 years
>5 years
Net settled derivatives
(18)
(228)
(7)
(13)
(81)
(127)
Gross settled derivatives
(379)
-
-
-
-
-
• receipts
-
22,490
3,176
3,056
8,467
7,791
• payments
-
(22,382)
(3,109)
(3,083)
(8,514)
(7,676)
(397)
(120)
60
(40)
(128)
(12)
2024
Balance Contractual
sheet cash flows Between 1 Between 2
£ million amount
total
<1 year
and 2 years
and 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
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 2025, 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 £3,862 million equivalent (2024: £6,349 million equivalent) with a fair value of
£246 million liability (2024: £339 million liability). The fixed interest rates vary from 1.7% to 5.1%
(2024: 1.3% to 5.4%), and the floating rates are based on EURIBOR, SONIA and SOFR.
As at 30 September 2025, 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 £10,137 million equivalent (2024:
£12,119 million equivalent) with a fair value of £228 million asset (2024: £225 million asset). The
fixed interest rates vary from 1.0% payable to 4.0% payable (2024: 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 £4,602 million equivalent (2024: £4,719 million
equivalent) with tenors between 3 and 10 years, starting between October 2025 and October 2032.
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 2025, the notional amount of cross currency swaps entered into to convert
sterling debt into the desired currency was £500 million (2024: £1,000 million) and the fair value
of these swaps was £63 million net liability (2024: £76 million net liability); the notional amount
of cross currency swaps entered into to convert US Dollar debt into the desired currency was
US$ 6,200 million (2024: US$ 6,950 million) and the fair value of these swaps was £317 million net
liability (2024: £142 million net liability). As at 30 September 2025 there were no forward starting
cross currency swaps (2024: forward starting cross currency swaps with a total notional amount
of US$ 1,250 million equivalent).
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 2025, the notional amount of these contracts
was £2,010 million equivalent (2024: £842 million equivalent) and the fair value of these contracts
was a net liability of £1 million (2024: £3 million net liability).
Hedges of net investments in foreign operations
As at 30 September 2025, cross currency swaps with a notional amount of €6,281 million
(2024: €6,593 million) were designated as hedges of net investments in foreign operations. During
the year, foreign exchange translation losses amounting to £265 million (2024: £213 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 (2024: £nil).
As at 30 September 2025, foreign exchange swaps with a notional amount of €556 million
(2024: €nil) were designated as hedges of net investments in foreign operations. During the year,
foreign exchange translation losses amounting to £2 million (2024: £6 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 (2024: £nil).
The movements in other comprehensive income due to net investment hedging in the period
were as follows:
£ million
2025
2024
Foreign exchange (losses)/gains on borrowings
(110)
321
Foreign exchange (losses)/gains on derivative financial instruments
(267)
219
(377)
540
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax relates to the following:
Consolidated Consolidated
income income Consolidated Consolidated
statement statement balance sheet balance sheet
£ million
2025
2024
2025
2024
Temporary differences on depreciation
and amortisation
83
(53)
(645)
(711)
Retirement benefits
(12)
(5)
41
48
Tax credits and losses
(146)
393
455
579
Accruals, provisions and other temporary
differences
88
(48)
295
193
Deferred tax benefit
13
287
Net deferred tax assets
146
109
Reflected in the consolidated balance sheet as follows
£ million
2025
2024
Deferred tax assets
893
889
Deferred tax liabilities
(747)
(780)
146
109
Reconciliation of net deferred tax assets
£ million
2025
2024
At 1 October
109
(218)
Credited to the income statement
13
287
(Charged)/credited to other comprehensive income
(3)
36
Credited to equity
4
2
Exchange movements
23
2
As at 30 September
146
109
Unrecognised deferred tax assets
£ million
Gross 2025
Net 2025
Gross 2024
Net 2024
Tax losses
105
21
245
64
Tax credits
800
283
806
282
Other temporary differences
68
22
77
22
973
326
1,128
368
Analysis of unrecognised deferred tax assets by expiry date
£ million
Gross 2025
Net 2025
Gross 2024
Net 2024
Tax losses expiring:
Within 2-5 years
-
1
-
-
No expiry
105
20
245
64
105
21
245
64
Tax credits expiring:
No expiry
800
283
806
282
800
283
806
282
Other temporary differences expiring:
No expiry
68
22
77
22
68
22
77
22
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
applies to the Group for the financial year ending 30 September 2025. The Group has applied the
mandatory exemption under IAS 12 in relation to the accounting for deferred tax assets and
liabilities arising from the implementation of the Pillar Two model rules.
The Group has not recorded any significant exposure to Pillar Two income taxes in those
jurisdictions where the minimum tax requirement is not met, based on the forecast data.
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.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Included within net deferred tax assets are deferred tax assets recognised of £199 million (2024:
£213 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 15 years.
Included within the accruals, provisions and other temporary differences of the net deferred tax
assets are deferred tax assets recognised for carried forward corporate interest disallowances of
£156 million (2024: £57 million) arising in the Group’s UK business. These disallowances have no
time expiry and will be reactivated where net interest expense in any given year falls below 30%
of the UK Tax -EBITDA. The Group considers there to be forecast future taxable profits and
forecast reductions in the future net interest expenses to support the recognition of these long
term deferred tax assets. The period over which these brought forward tax attributes are utilised
is sensitive to forecasting assumptions concerning changes to the Group’s debt structure
reducing net interest expense, future growth rates of the underlying business (which may be
influenced by the future effect of climate change) and regulatory changes. These deferred tax
assets are expected to be recovered within a period of 9 years (i.e. by FY34).
Included within net deferred tax assets are deferred tax assets recognised for retirement benefits
of £83 million (2024: £98 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 £34 million (2024: £49 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 assets are deferred tax assets recognised for intangibles of
£175 million (2024: £179 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 13 years corresponding to the life of the intangibles.
Included within net deferred tax assets are deferred tax assets recognised of £231 million (2024:
£293 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. 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 credits 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 2025 we have recognised deferred tax assets of £2 million that
were previously unrecognised (2024: recognised deferred tax assets of £3 million that were
previously unrecognised) on the basis that it is more likely than not that these are recoverable.
A deferred tax liability of £64 million (2024: £46 million) is recognised in respect of taxation
expected to arise on the future distribution of unremitted earnings totalling £2.09 billion
(2024: £2.17 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 £1,070 million (2024: £1,472 million) for which a deferred tax liability of
£27 million (2024: £37 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.
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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 64%,
17% and 7% of the Group’s total defined benefit obligations (2024: 66%, 16% and 7%) and 0%, 47% and
11% of the current service cost (2024: 0%, 41% and 11%) respectively.
Imperial Tobacco Pension Fund
The UK scheme, the Imperial Tobacco Pension Fund (“ITPF”), was closed to future accrual on
30 September 2023. All former active members are now enrolled into the defined contribution
scheme along with all other UK employees. 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 income statement.
A further cost of £5.6 million was reported in the 2024 income statement due to a legal ruling in
the year which became applicable to ITL. The ruling required some elements of the compensation
paid in 2023 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
83% in respect of pensioners and dependants, 17% in respect of deferred members and has a
weighted average maturity of 11 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 57% of the pensioner defined benefit obligation. The buy-in eliminates risks
relating to investments, longevity, inflation and funding risks in respect of those benefits covered.
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.
At present a new valuation is underway effective 31 March 2025, the valuation process has not
yet been finalised and is expected to complete during the first half of financial year 2026. The last
agreed was at 31 March 2022 and 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 2025.
ITL does not expect to pay any contributions to the ITPF or the escrow account for the year to
31 March 2026. 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.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 has final salary benefits. The
RCPP defined benefit obligation comprises 55% in respect of pensioners and dependants, 22% in
respect of deferred members and 23% in respect of active members and has a weighted average
maturity of 15 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
£26 million (2025: £24 million) in respect of benefits.
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, held by ITG Brands, is the ITG Scheme, is a defined benefit pension
plan that is closed to new entrants. The ITG Scheme defined benefit obligation comprises 78% in
respect of pensioners and dependants, 3% in respect of deferred members and 19% 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 £5 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 DBO 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.
Over the year the defined benefit plans in Australia and Ireland were closed to future accrual,
with all active members taking a lump sum in lieu of these benefits and combining them with
their defined contribution funds for future service. In Spain, a number of pensioners elected to
take a one time lump sum option offered in lieu of future payments from the Company. These
were reported in the P&L as predominately settlement costs.
The results of the most recent available actuarial valuations for the various plans have been
updated to 30 September 2025 in order to determine the amounts to be included in the Group’s
consolidated financial statements. The aggregate IAS 19 position is as follows:
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Defined benefit plans
2025
2024
£ million
DBO
Assets
Total
DBO
Assets
Total
At 1 October
(3,287)
2,844
(443)
(3,370)
2,977
(393)
Consolidated income statement expense:
Current service cost
(19)
-
(19)
(18)
-
(18)
Settlements gains/(losses)
13
(15)
(2)
109
(107)
2
Past service income
-
-
-
12
-
12
Cost of termination benefits
(6)
-
(6)
(2)
-
(2)
Net interest (expense)/income on net defined benefit (liability)/asset
(149)
138
(11)
(171)
160
(11)
Administration costs paid from plan assets
-
(6)
(6)
-
(5)
(5)
Cost recognised in the income statement
(44)
(22)
Remeasurements:
Actuarial (loss)/gain due to liability experience
(64)
-
(64)
13
-
13
Actuarial gain/(loss) due to financial assumption changes
227
-
227
(161)
-
(161)
Actuarial gain due to demographic assumption changes
31
-
31
1
-
1
Return on plan assets excluding amounts included in net interest (expense)/income above
-
(221)
(221)
-
44
44
Remeasurement effects recognised in other comprehensive income
(27)
(103)
Cash:
Employer contributions
-
57
57
-
55
55
Benefits paid
253
(253)
-
247
(247)
-
Net cash
57
55
Changes to immaterial benefit plans categorised as an IAS 19 obligation recognised in the prior year
-
-
-
(11)
-
(11)
Exchange movements
(32)
2
(30)
64
(33)
31
Total other
(30)
20
At 30 September
(3,033)
2,546
(487)
(3,287)
2,844
(443)
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Retirement benefit scheme costs charged to operating profit
£ million
2025
2024
Defined benefit expense in operating profit
33
11
Defined contribution expense in operating profit
23
23
Total retirement benefit scheme cost in operating profit
56
34
Split as follows in the consolidated income statement:
£ million
2025
2024
Cost of sales
17
12
Distribution, advertising and selling costs
25
13
Administrative and other expenses
14
9
Total retirement benefit scheme costs in operating profit
56
34
Assets and liabilities recognised in the consolidated balance sheet
£ million
2025
2024
Retirement benefit assets
314
376
Retirement benefit liabilities
(801)
(819)
Net retirement benefit liability
(487)
(443)
Key figures and assumptions used for major plans
2025
2024
£ million unless otherwise indicated
ITPF
RCPP
ITG Scheme
ITPF
RCPP
ITG Scheme
Defined benefit obligation (DBO)
1,951
511
224
2,157
524
235
Fair value of scheme assets
(2,196)
-
(253)
(2,459)
-
(264)
Net defined benefit (asset)/
liability
(245)
511
(29)
(302)
524
(29)
Current service cost
-
9
2
-
7
2
Employer contributions
-
24
-
-
23
-
Principal actuarial assumptions
used (% per annum)
Discount rate
5.7
3.9
5.2
5.1
3.4
4.8
Future salary increases
n/a
3.0
n/a
n/a
3.1
n/a
Future pension increases
3.0
2.0
n/a
3.2
2.0
n/a
Inflation
3.0
2.0
2.3
3.1
2.0
2.3
2025
ITPF
RCPP
ITG Scheme
Male
Female
Male
Female
Male
Female
Life expectancy at age 65 years:
Member currently aged 65
21.6
22.0
21.0
24.4
19.9
21.9
Member currently aged 50
22.4
23.1
23.1
26.0
21.1
23.1
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
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 S4 (2024: SAPS S3)
tables are used with various adjustments for different groups of members, reflecting observed
experience. The largest group of members uses the SAPS S4 Normal Health Male table with a
100% multiplier. An allowance for improvements in longevity is made using the 2023 (2024: 2021)
CMI improvement rates with a long-term trend of 1.25% per annum.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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.
2025
2024
% increase in DBO
ITPF
RCPP
ITG Scheme
ITPF
RCPP
ITG Scheme
Discount rate: 0.5% decrease
5.2
7.5
4.6
5.7
8.1
4.9
Rate of inflation: 0.5% decrease
(4.2)
(5.4)
n/a
(4.3)
(5.6)
n/a
One year increase in longevity
for a member currently age 65,
corresponding changes at
other ages
4.0
3.9
4.2
3.6
4.1
4.2
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 £7 million
(2024: £8 million).
An approximate split of the major categories of ITPF scheme assets is as follows:
2025
2024
Percentage of Percentage of
ITPF scheme ITPF scheme
£ million unless otherwise indicated
Fair value
assets
Fair value
assets
Bonds - index linked government /
LDI funds
444
20.2
487
19.8
Bonds - corporate and other
114
5.2
-
-
Property including ground leases
388
17.7
446
18.1
Secured finance and private debt funds
303
13.7
463
18.8
Insurance contract (buy-in policy)
926
42.2
1,035
42.1
Other - including cash and short-term
loan drawings
21
1.0
28
1.1
2,196
100.0
2,459
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 (2024: £nil).
An approximate split of the major categories of ITG Scheme assets is as follows:
2025
2024
Percentage of
ITG Scheme Percentage of ITG
£ million unless otherwise indicated
Fair value
assets
Fair value
Scheme assets
Bonds - government, corporate and other
Other - including derivatives,
134
53.0
122
46.2
commodities and cash
119
47.0
142
53.8
253
100.0
264
100.0
The majority of the assets are non-quoted.
25. PROVISIONS
Employment 2025
£ million
Restructuring
related claims
Other
Total
At 1 October 2024
130
112
69
311
Additional provisions charged to the
consolidated income statement
1
14
12
27
Amounts used
(26)
(27)
(14)
(67)
Unused amounts reversed
(9)
(13)
(10)
(32)
Exchange movements
5
5
3
13
At 30 September 2025
101
91
60
252
Analysed as:
£ million
2025
2024
Current
55
89
Non-current
197
222
252
311
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Restructuring provisions relate mainly to our 2021 Strategic Review Programme and Cost
optimisation programmes (see note 6).
The restructuring provision is split between 2021 Strategic Review Programme of £49 million
(2024: £63 million), and other programmes of £52 million (2024: £67 million).
During the year, the new 2030 Strategy Review Programme commenced. The total costs of this
programme is expected to be c.£740 million of which c.£600 million are anticipated to be cash
costs. The majority of the cash spend, c.£500 million is expected to be split between FY27 and
FY28. For the year ended 30 September 2025, a total of £21 million of costs were incurred on
restructuring activities for this programme, these costs were paid during the period and a
provision of £1 million (2024: £nil) is included at 30 September 2025.
Employment related claims provisions include £17 million (2024: £23 million) relating to local
employment requirements including holiday pay and £20 million (2024: £25 million) of distribution
requirements relating to employment and duty. An amount of £54 million (2024: £64 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, 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 £30 million (2024: £29 million) relating to various local tax or duty
requirements, £8 million (2024: £8 million) of market exit provisions and £2 million for factory
closure provisions (2024: £12 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.
26. SHARE CAPITAL
2025
2024
Ordinary shares Ordinary shares
10p each 10p each
Number
£ million
Number
£ million
Authorised, issued and fully paid:
1 October
914,502,882
91
968,590,194
97
Shares cancelled
(44,612,248)
(4)
(54,087,312)
(6)
30 September
869,890,634
87
914,502,882
91
On 5 October 2023, the Board approved a £1,100 million share buyback programme in order to return
capital to shareholders. Pursuant to the completion of this programme, the Group purchased
3,565,595 shares for a cost of £80 million in the period from 1 October 2024 to 29 October 2024.
On 8 October 2024, the Board approved a £1,250 million share buyback programme in order to
return capital to shareholders, which has been completed on 29 October 2025. On 30 October 2024
it was announced that in order to execute the first tranche of this buyback, the Group had entered
into an irrevocable and non-discretionary arrangement with its broker Morgan Stanley & Co.
International Plc (“Morgan Stanley”) to buy back up to £625 million of its shares, commencing
from 30 October 2024 and ended on 30 April 2025. The first tranche purchased 23,488,623 shares
for a cost of £625 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 entered into an irrevocable and non-discretionary arrangement with Barclays Capital
Securities Limited (“Barclays”) to buy back up to £625 million of its shares. The second tranche
commenced on 1 May 2025 and in the period to 30 September 2025, the second tranche
purchased 17,558,030 shares for a cost of £519 million.
In the period to 30 September 2025 44,612,248 shares have been bought back and cancelled at a
cost of £1,224 million. The stamp duty and other tax costs were £11 million and the fees charged
for the share repurchase were £2 million. Upon completion of the purchase, these shares were
cancelled and transferred to the capital redemption reserve. As at 30 September 2025, the Group
has recognised a liability of £116 million for the remaining shares to be purchased.
For the year ended 30 September 2025 the amounts recognised in the share premium and capital
redemption reserves were £5,833 million (2024: £5,833 million) and £20 million (2024: £16 million)
respectively.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 provided within the “Determination of 2025 annual bonus plan” and “Long-Term
Incentive Plan awards vesting” sections of the Directors’ Remuneration Report.
Analysis of charge to the consolidated income statement
£ million
2025
2024
Share Matching Scheme
2
2
Long Term Incentive Plan
32
28
Sharesave Plan
1
1
Discretionary Share Awards Plan
1
1
36
32
The awards are predominantly equity settled. The balance sheet liability in respect of cash-settled
schemes at 30 September 2025 was £1.8 million (2024: £3.5 million).
Reconciliation of movements in awards/options
2025
Sharesave
Share weighted
Matching average
Scheme Sharesave DSAP exercise
Thousands of shares unless otherwise indicated
awards
LTIP awards
options awards price £
Outstanding at 1 October 2024
371
8,565
1,540
211
14.78
Granted
104
3,296
311
166
21.64
Cancelled/forfeited/lapsed
(15)
(1,171)
(75)
(15)
14.80
Exercised
(167)
(2,383)
(231)
(75)
14.36
Outstanding at 30 September 2025
293
8,307
1,545
287
16.22
Exercisable at 30 September 2025
-
-
34
-
14.56
2024
Sharesave
Share weighted
Matching average
Scheme Sharesave exercise price
Thousands of shares unless otherwise indicated
awards
LTIP awards
options
DSAP awards
£
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
The weighted average Imperial Brands PLC share price at the date of exercise of awards and
options was £29.16 (2024: £20.06). The weighted average fair value of Sharesave options granted
during the year was £4.99 (2024: £3.40).
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Summary of awards/options outstanding at 30 September 2025
Number of Vesting period Exercise price
awards/options remaining in of options
Thousands of shares unless otherwise indicated outstanding months outstanding £
Share Matching Scheme
2023
109
5
n/a
2024
112
17
n/a
2025
72
29
n/a
Total awards outstanding
293
Long Term Incentive Plan
2023
2,413
5
n/a
2024
3,256
17
n/a
2025
2,638
29
n/a
Total awards outstanding
8,307
Sharesave Plan
2022
34
-
14.56
2023
786
10
14.29
2024
415
22
15.96
2025
310
34
21.64
Total options outstanding
1,545
Discretionary Share Awards Plan
2023
58
6
n/a
2024
63
17
n/a
2025
166
29
n/a
Total options outstanding
287
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, and
Discretionary Share Awards Plan with no market conditions. A summary of the assumptions
used in the Black-Scholes model for 2025 and 2024 is as follows:
Share Matching 2025
Scheme
Sharesave
DSAP
Risk-free interest rate %
4.0
3.7
3.9
Volatility (based on 3-year history)%
20.0
19.0
19.7
Expected lives of options granted years
3.0
3.0
3.0
Dividend yield %
7.8
7.8
7.8
Fair value £
22.01
4.99
21.97
Share price used to determine exercise price £
27.80
29.09
27.75
Exercise price £
n/a
21.64
n/a
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
Market conditions were incorporated into the Monte Carlo method used in determining the fair
value of LTIP awards at grant date. Assumptions in 2025 and 2024 are given in the following table:
%
2025
2024
Future Imperial Brands share price volatility
17.8
18.1
Share price volatility of the tobacco and alcohol comparator group
14.0-24.7
15.4-23.1
Correlation between Imperial Tobacco and the alcohol and tobacco
comparator group
21.0
18.9
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 2025. 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
2025
2024
At 1 October
0.3
1.6
Gift of shares from Treasury
5.7
2.0
Distribution of shares held by Employee Share Ownership Trusts
(3.0)
(3.3)
At 30 September
3.0
0.3
The shares in the Trusts are accounted for on a first in first out basis and comprise nil shares
acquired in the open market (2024: nil) and 3.0 million (2024: 0.3 million) treasury shares gifted to
the Trusts by the Group. 5.7 million (2024: 2.0 million) shares were gifted in the financial year 2025.
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 8 October 2024
were cancelled immediately on completion of the purchase. During the financial year 5.7 million
shares (2024: 2.0 million shares) were gifted to Employee Share Ownership Trusts.
2025
2024
Millions of
Millions of Value shares Value
£ million unless otherwise indicated shares (number) £ (number) £
At 1 October
68.3
2,183
70.3
2,183
Gifted to Employee Share Ownership
Trusts
(5.7)
-
(2.0)
-
At 30 September
62.6
2,183
68.3
2,183
Percentage of issued share capital
7.2
n/a
7. 5
n/a
29. COMMITMENTS
Capital commitments
£ million
2025
2024
Contracted but not provided for:
Property, plant and equipment and software
160
207
30. CONTINGENT LIABILITIES
The following summary includes updates to matters that have developed since the 2024 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. 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 the Previously Settled States’ state courts and elsewhere. The cases in the Previously
Settled States’ courts are now resolved, with the Florida court holding ITGB did not assume
settlement payment liability through the acquisition and the remainder resolved by settlement.
Litigation with Reynolds related to the acquisition continues in Delaware.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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.
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 unambiguously provided 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. 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. Philip Morris dismissed its appeal from
that denial, but has stated it may raise independent claims against Reynolds and/or ITGB on its
unjust enrichment and other theories.
Following the Court’s 30 September 2022 opinion on liability which found against ITGB, the Court
held a trial on damages on 8-9 July 2024. The Court issued an opinion on 3 March 2025 on the
matter of damages, finding in favour of Reynolds based on contract language rather than the
evidence at trial, except with regard to Reynolds’ claim for attorney’s fees. A final order reflecting
the Court’s opinions was issued on 9 April 2025. Damages include US$ 276 million through 2024,
plus accrued interest of US$ 94 million calculated through the date of the judgment entered in
April 2025. Additional damages through the end of 2025 are estimated at US$ 50.8 million,
including US$ 24.2 million for the annual settlement payment for 2025 and additional interest
from April 2025 through December 2025 of US$ 26.6 million. Additional amounts based on the
annual settlement payment will accrue for 2026 and each year after, estimated at US$ 24.2 million
for each year, plus additional interest so long as the prior balance remains unpaid.
ITGB filed a notice of appeal to the Delaware Supreme Court on 8 May 2025 both on the question
of liability and on the calculation of damages and has posted a bond to suspend the payment of
damages. The amount of the bond is costed at circa US$ 1.5 million per year. The appeal is based
on arguments that ITGB has no liability under the APA and that, if liable, damages should be
reduced. Oral argument in the appeal has been set for 3 December 2025, and a ruling is expected
approximately 90 days later. If our appeal is successful, the subsequent legal processes are
expected to take one to three years or more to conclude.
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. Philip Morris has
settled that claim as it relates to Minnesota and Texas, but not Florida. 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 up to circa 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.
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. The Group believes it 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
2024 Annual Report and Accounts.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 were alleged to have infringed competition law by
participating in an exchange of sales volume data between 2008 and February 2017. The CNMC
considered that this conduct had the effect of restricting competition in the Spanish tobacco
market. In June 2019, both Altadis and Logista commenced appeals to the CNMC’s decision, and
the fines imposed in the Spanish High Court. 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 was not considered appropriate.
On 7 November 2025, Altadis was notified of the judgment from the Spanish High Court,
annulling the CNMC’s decision and the penalty imposed on Altadis, which is now entitled to
cancel the bank guarantee arranged for the fine. Logista was subsequently notified of the High
Court’s ruling on 11 November 2025, which also confirmed the annulment of the penalty imposed
on Logista. According to the judgment, the alleged exchange of sales volume data between 2008
and February 2017 did not have the effect of restricting competition in the Spanish tobacco
market. The National Court has ordered the CNMC to pay court costs. There are thirty days
to appeal the Spanish High Court’s judgment before the Spanish Supreme Court.
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 (now the Department for Business and 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 proceeding, 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 appeal hearing took place on 12 August 2025. A decision on the appeal
could take 3-12 months. No provision has been made for potential liabilities related to this claim
based on the current accounting assessment of the probability of a future economic outflow.
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 expected to take
place until 2026. The claim is unquantified and given the early stage of the litigation a provision
would not be appropriate.
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CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31. NET DEBT
The movements in cash and cash equivalents, borrowings, and derivative financial instruments in the year were as follows:
Derivative Liabilities from
Current Non-current financial financing Cash and cash
£ million
borrowings
Lease liabilities
borrowings instruments activities
equivalents
Total
At 1 October 2024
(1,191)
(386)
(7,506)
(335)
(9,418)
1,078
(8,340)
Reallocation of current borrowings from non-current borrowings
(1,613)
-
1,613
-
-
-
-
Cash flow
1,774
109
(2,438)
144
(411)
310
(101)
Change in accrued interest
12
(15)
(38)
3
(38)
-
(38)
Change in fair values
-
-
-
8
8
-
8
New leases, terminations and modifications
-
(95)
-
-
(95)
-
(95)
Exchange movements
(52)
(15)
(155)
(217)
(439)
51
(388)
At 30 September 2025
(1,070)
(402)
(8,524)
(397)
(10,393)
1,439
(8,954)
Derivative Liabilities from
Current Non-current financial financing Cash and cash
£ million
borrowings
Lease 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)
Average reported net debt during the year was £10,131 million (2024: £10,037 million).
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Analysis by denomination currency
2025
£ million
GBP
EUR
USD
Other
Total
Cash and cash equivalents
185
522
256
476
1,439
Total borrowings
(693)
(3,943)
(4,950)
(8)
(9,594)
(508)
(3,421)
(4,694)
468
(8,155)
Effect of cross-currency
swaps
477
(5,519)
4,662
-
(380)
(31)
(8,940)
(32)
468
(8,535)
Lease liabilities
(36)
(291)
(37)
(38)
(402)
Derivative financial
instruments
(17)
Net debt
(8,954)
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)
32. RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT
£ million
2025
2024
Increase/(decrease) in cash and cash equivalents
310
(203)
Cash flows relating to derivative financial instruments
144
34
Repayment of lease liabilities
109
107
Increase in borrowings
(3,899)
(3,848)
Repayment of borrowings
3,235
3,948
Change in net debt resulting from cash flows
(101)
38
Other non-cash movements including revaluation of derivative
financial instruments
(30)
(105)
New leases, terminations and modifications
(95)
(144)
Exchange movements
(388)
309
Movement in net debt during the year
(614)
98
Opening net debt
(8,340)
(8,438)
Closing net debt
(8,954)
(8,340)
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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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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
2025
2024
Current assets
6,575
6,290
Current liabilities
(7,251)
(6,990)
Current net liabilities
(676)
(700)
Non-current assets
1,732
1,790
Non-current liabilities
(414)
(449)
Non-current net assets
1,318
1,341
Net assets
642
641
Summarised statement of comprehensive income
for the year ended 30 September
Euro million
2025
2024
Revenue
13,536
12,986
Profit for the year
281
308
Total comprehensive income
281
308
Summarised cash flow statement
for the year ended 30 September
Euro million
2025
2024
Cash flows from operating activities
601
397
Cash flows from investing activities
(223)
(51)
Cash flows from financing activities
(373)
(370)
Net increase/(decrease) in cash and cash equivalents
5
(24)
34. POST BALANCE SHEET EVENTS
Langenhagen factory
On 1 October 2025 the Group announced its intention to cease production at its Langenhagen
factory in Germany. The future of the site is currently subject to a consultation with the works
councils which will involve a review of available options. The outcome of the consultation will
either be a sale of the site to a third party or the closure of the factory, supporting the Group’s
2030 Strategy Review Programme.
Share buybacks
On 8 October 2024 Imperial Brands PLC (‘the Company’) announced a share buyback programme
to repurchase up to £1.25 billion of shares. This programme completed on 29 October 2025 with
the Company having repurchased 3,501,120 million shares for a total consideration of £106 million
in the period from 1 October 2025 to 29 October 2025.
On 7 October 2025 Imperial Brands PLC (“the Company”) announced the start of a new ongoing
share buyback programme, to initially repurchase up to £1.45 billion of shares in the period to
28 October 2026. On 30 October 2025, in order to execute the first tranche of this buyback, the
Company announced it had entered into an irrevocable and non-discretionary arrangement
with its broker Morgan Stanley & Co. International Plc to buy back up to £725 million of its shares
commencing from 30 October 2025 and expected to end no later than 30 April 2026.
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 2025, are provided in the
entity financial statements of Imperial Brands PLC. There are no material related parties other
than Group companies.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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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, 2030 strategy implementation costs and non-cash costs, fair
value adjustment and impairment of other financial assets, structural changes to defined benefit
pension schemes, fair value and exchange gains and losses on financial instruments, post-
employment benefits net financing cost, 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 2025 2024
Amortisation and impairment of acquired intangibles (369) (353)
2030 Strategy implementation costs 6 (21) -
2030 Strategy non-cash costs 6 (101) -
Structural changes to defined benefit pension schemes (7) (4)
Total adjusting administrative and other expenses (498) (357)
Total non-adjusting administrative and other expenses (545) (485)
Administrative and other expenses (1,043) (842)
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 £425 million (2024: £399 million) of which
£369 million (2024: £353 million) relates to acquired intangibles and is adjusting and £56 million
(2024: £46 million) relates to internally generated intangibles and is non adjusting. In the year
ended 30 September 2025 adjusting items all relate to amortisation. £358 million (2024: £345 million)
is attributable to Tobacco & NGP and £11 million (2024: £8 million) is attributable to Distribution.
2030 Strategy implementation and non-cash costs
Significant one-off costs incurred in integrating acquired businesses and in major rationalisation
and optimisation initiatives together with their related tax effects are excluded from our adjusted
earnings measures. These include 2030 strategy implementation and non-cash costs incurred as
part of fundamental multi-year transformational change projects but do not include costs related
to ongoing cost reduction activity. These costs are all Board approved, and include impairment of
property, plant and equipment which are surplus to requirements due to restructuring activity.
These costs are required in order to address structural issues associated with operating within
the Tobacco sector that have required action to both modernise and right-size the organisation,
ultimately delivering an operating model suitable for the future of the business. The Group’s view
is that as these costs are both significant and one-off in nature, excluding them allows a clearer
presentation of the underlying costs of the business.
ALTERNATIVE PERFORMANCE MEASURES
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Structural changes to defined benefit pension schemes
These are non-recurring pension scheme restructuring costs (see note 24). These comprise
£7 million of costs related to the closure to future benefit build up of defined benefit retirement
schemes in Australia and Ireland and the buy-out of pensioners in the Australian defined
benefit scheme.
The prior year included a net cost of £4 million related to the closure of the UK defined benefit
scheme, lump sum exercise in Ireland and partial buy-out of pensioner and dependent population
in the USA.
Adjusting items recognised within tax
£ million 2025 2024
Deferred tax on amortisation of acquired intangibles 17 -
Tax on net foreign exchange and fair value gains and losses on
financial instruments (168) 224
Tax on post-employment benefits net financing cost 5 5
Tax on charges relating to legal provisions - 2
Tax on 2030 strategy implementation costs 5 -
Tax on 2030 strategy non-cash costs 33 -
Tax on interest settlements (2) (1)
Recognition and utilisation of deferred tax assets (66) 293
Provision for state aid tax recoverable - 101
Uncertain tax positions 64 (164)
Prior year adjustments 40 57
Total adjusting taxation charges (72) 517
Other non-adjusting taxation charges (836) (799)
Reported tax (908) (282)
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, 2030 strategy implementation and
non-cash 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
• 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 and utilisation 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.
Deferred tax on unremitted earnings
Significant one-off tax charges or credits arisingfrom prior period items are excluded from the
adjusted tax charge. The tax effect of the release of a provision for deferred tax on unremitted
earnings is 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.
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.
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ALTERNATIVE PERFORMANCE MEASURES CONTINUED
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
2025 2024
£ million Tobacco NGP Total To bacco NGP To tal
Revenue 21,071 432 21,503 21,708 376 22,084
Duty and similar items (13,120) (64) (13,184) (13,877) (47) (13,924)
Sale of peripheral products (3) - (3) (3) - (3)
Net revenue 7,948 368 8,316 7,828 329 8,157
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 2025 2024
Distribution revenue 11,448 11,104
Distribution cost of sales (9,918) (9,601)
Distribution gross profit 1,530 1,503
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 2025 2024
Profit before tax 3,128 3,029
Net finance costs 374 534
Share of profit of investments accounted for using the equity method (12) (9)
Operating profit 3,490 3,554
Amortisation and impairment of acquired intangibles 369 353
2030 Strategy implementation costs 21 -
2030 Strategy non-cash costs 101 -
Structural changes to defined benefit pension schemes 7 4
Total adjustments 498 357
Adjusted operating profit 3,988 3,911
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ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Reconciliation from Tobacco & NGP operating profit to adjusted operating profit
2025 2024
£ million Tobacco NGP Total To bacco NGP To tal
Operating profit/(loss) 3,299 (121) 3,178 3,321 (83) 3,238
Amortisation and impairment
of acquired intangibles 313 45 358 341 4 345
2030 Strategy implementation
costs 21 - 21 - - -
2030 Strategy non-cash costs 101 - 101 - - -
Structural changes to defined
benefit pension schemes 7 - 7 4 - 4
Adjusted operating profit/(loss) 3,741 (76) 3,665 3,666 (79) 3,587
Reconciliation from Distribution operating profit to Distribution adjusted operating profit
£ million 2025 2024
Distribution operating profit 305 322
Amortisation of acquired intangibles 11 8
Distribution adjusted operating profit 316 330
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.
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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.
Reconciliation from reported net finance costs to adjusted net finance costs
£ million 2025 2024
Reported net finance costs 374 534
Fair value gains on derivative financial instruments 227 513
Fair value losses on derivative financial instruments (219) (632)
Exchange gains on financing activities 5 9
Net fair value and exchange gains/(losses) on financial instruments 13 (110)
Interest income on net defined benefit assets 18 22
Interest cost on net defined benefit liabilities (29) (33)
Post-employment benefits net financing cost (11) (11)
Tax interest income/(cost) 38 (10)
Effect of discounting on long-term provisions (1) (1)
Adjusted net finance costs 413 402
Comprising:
Interest income on bank deposits (14) (16)
Interest cost on lease liabilities 15 14
Interest cost on bank and other loans 412 404
Adjusted net finance costs 413 402
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 profit before tax.
Reconciliation from reported tax to adjusted tax
£ million 2025 2024
Reported tax 908 282
Deferred tax on amortisation of acquired intangibles 17 -
Tax on net foreign exchange and fair value gains and losses
on financial instruments (168) 224
Tax on post-employment benefits net financing cost 5 5
Tax on charges relating to legal provisions - 2
Tax on 2030 strategy implementation costs 5 -
Tax on 2030 strategy non-cash costs 33 -
Tax on interest settlements (2) (1)
Recognition and utilisation of deferred tax assets (66) 293
Provision for state aid tax recoverable - 101
Uncertain tax positions 64 (164)
Prior year adjustments 40 57
Adjusted tax charge 836 799
ALTERNATIVE PERFORMANCE MEASURES CONTINUED
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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
2025 2024
£ million unless otherwise indicated
Earnings per
share (pence) Earnings
Earnings per
share (pence) Earnings
Reported basic 251.1 2,071 300.7 2,613
Amortisation and impairment
of acquired intangibles 42.7 352 40.6 353
2030 Strategy implementation costs 1.9 16 - -
2030 Strategy non-cash costs 8.3 68 - -
Tax on charges related to legal provisions - - (0.2) (2)
Structural changes to defined benefit
pension schemes 0.8 7 0.5 4
Net fair value and exchange movements
on financial instruments 18.9 155 (13.1) (114)
Post-employment benefits net
financing cost 0.7 6 0.7 6
Tax interest (income)/cost (4.4) (36) 1.3 11
Effect of discounting on long-term
provisions 0.1 1 0.1 1
Recognition and utilisation of deferred
tax assets 8.0 66 (33.7) (293)
Provision for state aid tax recoverable - - (11.6) (101)
Uncertain tax positions (7.8) (64) 18.9 164
Prior year adjustments (4.8) (40) (6.6) (57)
Adjustments above attributable
to non-controlling interests (0.5) (4) (0.6) (4)
Adjusted 315.0 2,598 2 97.0 2,581
Adjusted diluted 312.8 2,598 295.3 2,581
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 2025 2024 2023
Reported operating profit 3,490 3,554 3,402
Adjusting items (see section C) 498 357 485
Adjusted operating profit 3,988 3,911 3,887
Equivalent tax charge (929) (888) (871)
Net adjusted operating profit after tax 3,059 3,023 3,016
Working capital (2,858) (2,772) (2,567)
Intangibles 16,208 15,938 16,944
Property, plant and equipment 1,524 1,561 1,617
Invested capital 14,874 14,727 15,994
Average annual invested capital 14,801 15,361 16,304
Return on invested capital (%) 20.7 19.7 18.5
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.
ALTERNATIVE PERFORMANCE MEASURES CONTINUED
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J) Adjusted net debt
Management monitors the Group’s borrowing levels using adjusted net debt which excludes
interest accruals, the fair value of derivative financial instruments providing commercial
cashflow hedges and lease liabilities.
Adjusted net debt calculation
£ million 2025 2024
Reported net debt (8,954) (8,340)
Accrued interest 123 95
Lease liabilities 402 386
Fair value of interest rate derivatives 23 119
Adjusted net debt (8,406) (7,740)
Average adjusted net debt during the year was £9,527 million (2024: £9,506 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 2025 2024
Adjusted operating profit (see section C above) 3,988 3,911
Depreciation, amortisation and impairments 311 294
Adjusted EBITDA 4,299 4,205
L) Adjusted operating cash conversion
Adjusted operating cash conversion is calculated as cash flow from operations pre 2030 strategy
implementation costs, 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 2025 2024
Net cash flows generated from operating activities 3,627 3,307
Tax 513 888
Net capital expenditure (338) (321)
2030 Strategy implementation costs 21 -
Restructuring 29 43
Cash flow post capital expenditure pre interest and tax 3,852 3,917
Adjusted operating profit 3,988 3,911
Adjusted operating cash conversion 97% 100%
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 2025 2024
Net cash generated from operating activities 3,627 3,307
Net capital expenditure (338) (321)
Cash interest (384) (416)
Minority interest dividends (156) (136)
Free cash flow 2,749 2,434
ALTERNATIVE PERFORMANCE MEASURES CONTINUED
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Financial terms
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 which 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 to 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
This is an alternative performance measure which is defined within
section D of the supplementary information.
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 adjusted net debt
in the year.
Adjusted operating
cash conversion
Cash conversion is calculated as cash flowfrom operations pre 2030
strategy implementation costs, 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 Defined Benefit Obligation
EBITDA Earnings before interest, taxation, depreciation and amortisation.
EPS Earnings per share
Free cashflow This is an alternative performance measure which is defined within
section M of the supplementary information.
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.
GLOSSARY
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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 Organisation
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
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 initiative
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
GLOSSARY CONTINUED
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£ million Notes 2025 2024
Fixed assets
Investments iii 7,968 7,968
Current assets
Debtors iv 2,659 1,929
Creditors: amounts falling due within one year v (146) (189)
Net current assets 2,513 1,740
Net assets 10,481 9,708
Capital and reserves
Called up share capital vi 87 91
Capital redemption reserve 20 16
Share premium account 5,833 5,833
Retained earnings - brought forward 3,768 4,551
Retained earnings - profit for the year 3,552 1,616
Retained earnings - share options reserve 35 14
Retained earnings - dividends paid (1,558) (1,299)
Retained earnings - repurchase of shares (1,256) (1,114)
Total shareholders’ funds 10,481 9,708
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 £3, 5 5 2 million (2024: £1,616 million).
The financial statements on pages 202 to 215 were approved by the Board of Directors on 18 November 2025 and signed on its behalf by:
MURRAY MCGOWAN
DIRECTOR
IMPERIAL BRANDS PLC BALANCE SHEET
at 30 September 2025
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IMPERIAL BRANDS PLC FINANCIALS
£ million Share capital
Share
premium and
capital
redemption
Retained
Earnings Total Equity
At 1 October 2024 91 5,849 3,768 9,708
Profit for the year - - 3,552 3,552
Total comprehensive income - - 3,552 3,552
Transactions with owners
Share options reserve - - 35 35
Repurchase of shares (4) 4 (1,256) (1,256)
Dividends paid - - (1,558) (1,558)
At 30 September 2025 87 5,853 4,541 10,481
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
Total distributable reserves were £4,506 million (2024: £3,754 million).
IMPERIAL BRANDS PLC STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2025
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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 8. 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.
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.
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NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
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 2025.
New accounting standards that are effective after the year ended 30 September 2025
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.
II. DIVIDENDS
Distributions to ordinary equity holders
Pence per share £ million
2025 2024 2023 2025 2024 2023
Cash:
December 54.26 51.82 49.31 455 461 464
March 54.26 51.82 49.32 451 453 457
June 40.08 22.45 21.59 328 193 196
September 40.08 22.45 21.59 324 192 195
Total 188.68 148.54 141.81 1,558 1,299 1,312
The declared third interim dividend for the year ended 30 September 2025 of 40.08 pence per
share amounts to a proposed dividend of £322 million, which will be paid in December 2025. The
proposed final dividend for the year ended 30 September 2025 of 40.08 pence per share amounts
to a proposed dividend payment of £322 million in March 2026 based on the number of shares
ranking for dividend at 30 September 2025, and is subject to shareholder approval. If approved,
the total dividend paid in respect of 2025 will be £1,314 million (2024: £1,303 million). The dividend
paid during 2025 is £1,558 million (2024: £1,299 million).
III. INVESTMENTS
Cost of shares in Imperial Tobacco Holdings (2007) limited
£ million 2025 2024
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 2025 2024
Amounts owed from Group undertakings 2,659 1,929
Amounts owed from Group undertakings are unsecured, interest bearing, have no fixed date for
repayment and are repayable on demand. All intragroup receivables are considered to be fully
recoverable against the requirements of expected credit losses under IFRS 9.
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V. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
£ million 2025 2024
Amounts owed by Group undertakings - 35
Bank overdrafts 2 2
Contracted liability for share buyback 116 90
Other creditors 28 62
146 189
Amounts owed by Group undertakings are unsecured, interest bearing, have no fixed date for
repayment and are repayable on demand.
VI. CALLED UP SHARE CAPITAL
2025 2024
Ordinary shares
10p each
Ordinary shares
10p each
Number £ million Number £ million
Authorised, issued and fully paid:
1 October 914,502,882 91 968,590,194 97
Shares cancelled (44,612,248) (4) (54,087,312) (6)
30 September 869,890,634 87 914,502,882 91
On 5 October 2023, the Board approved a £1,100 million share buyback programme in order to return
capital to shareholders. Pursuant to the completion of this programme, the Group purchased
3,565,595 shares for a cost of £80 million in the period from 1 October 2024 to 29 October 2024.
On 8 October 2024, the Board approved a £1,250 million share buyback programme in order to
return capital to shareholders, which has been completed on 29 October 2025. On 30 October 2024
it was announced that in order to execute the first tranche of this buyback, the Group had entered
into an irrevocable and non-discretionary arrangement with its broker Morgan Stanley & Co.
International Plc (“Morgan Stanley”) to buy back up to £625 million of its shares, commencing
from 30 October 2024 and ended on 30 April 2025. The first tranche purchased 23,488,623 shares
for a cost of £625 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 entered into an irrevocable and non-discretionary arrangement with Barclays Capital
Securities Limited (“Barclays”) to buy back up to £625 million of its shares. The second tranche
commenced on 1 May 2025 and in the period to 30 September 2025, the second tranche
purchased 17,558,030 shares for a cost of £519 million.
In the period to 30 September 2025 44,612,248 shares have been bought back and cancelled at a
cost of £1,224 million. The stamp duty and other tax costs were £11 million and the fees charged
for the share repurchase were £2 million. Upon completion of the purchase, these shares were
cancelled and transferred to the capital redemption reserve. As at 30 September 2025, the Group
has recognised a liability of £116 million for the remaining shares to be purchased.
For the year ended 30 September 2025 the amounts recognised in the share premium and capital
redemption reserves were £5,833 million (2024: £5,833 million) and £20 million (2024: £16 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 8 October 2024
will be cancelled immediately on completion of the purchase. During the financial year 5.7 million
shares (2024: 2.0 million shares) were gifted to Employee Share Ownership Trusts.
2025 2024
£ million unless otherwise indicated
Millions of
shares (number)
Value
£
Millions of
shares
(number)
Value
£
At 1 October 68.3 2,183 70.3 2,183
Gifted to Employee Share Ownership
Trusts (5.7) - (2.0) -
At 30 September 62.6 2,183 68.3 2,183
Percentage of issued share capital 7.2 n/a 7. 5 n/a
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
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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 2025:
• 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 Holdings Limited
• Nerudia Consulting Limited
• Imperial Brands Ventures Finance Limited
• Imperial Brands Ventures Holdings (1) Limited
• Imperial Brands Ventures Holdings (2) Limited
• Altadis Newco Limited
The Company has guaranteed various committed and uncommitted borrowings facilities
and liabilities of certain UK and overseas undertakings. As at 30 September 2025, the amount
guaranteed is £14,451 million (2024: £13,791 million).
Many of the committed revolving credit facilities remain undrawn as at 30 September 2025
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 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 8 October 2024 Imperial Brands PLC (‘the Company’) announced a share buyback programme
to repurchase up to £1.25 billion of shares. This programme completed on 29 October 2025 with
the Company having repurchased 3,501,120 million shares for a total consideration of £106
million in the period from 1 October 2025 to 29 October 2025.
On 7 October 2025 Imperial Brands PLC (“the Company”) announced the start of a new ongoing
share buyback programme, to initially repurchase up to £1.45 billion of shares in the period to
28 October 2026. On 30 October 2025, in order to execute the first tranche of this buyback, the
Company announced it had entered into an irrevocable and non-discretionary arrangement
with its broker Morgan Stanley & Co. International Plc to buy back up to £725 million of its shares
commencing from 30 October 2025 and expected to end no later than 30 April 2026.
X. RELATED PARTY DISCLOSURES
Details of Directors’ emoluments and interests, which represent related-party transactions
requiring disclosure under IAS 24, are provided within the “Remuneration earned by our Directors
for the financial year ended 30 September 2025” section of the Directors’ Remuneration Report.
This includes details on salary, benefits, pension and share plans.
RELATED UNDERTAKINGS
In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships,
associates, and joint ventures, the country of incorporation and the effective percentage of equity
owned, as at 30 September 2025 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.
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
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SUBSIDIARIES: REGISTERED IN ENGLAND AND WALES, WHOLLY OWNED
Unless otherwise stated, the aggregate percentage of capital held by the Group is 100%, the
Group’s shareholding represents one type of ordinary share capital held indirectly by Imperial
Brands PLC, the year end is 30 September, the country of incorporation is the United Kingdom
and the address of the registered office is 121 Winterstoke Road, Bristol BS3 2LL, United Kingdom.
For companies incorporated outside of the United Kingdom, the country of incorporation is
shown in the address.
Name
Altadis Newco Limited
Attendfriend Limited
British Tobacco Company Limited
Congar International UK Limited
Imperial Brands Enterprise Finance Limited
Imperial Brands Finance PLC
Imperial Brands Ventures Finance Limited
(v)
Imperial Brands Ventures Holdings Limited
Imperial Brands Ventures Holdings (1) Limited
Imperial Brands Ventures Holdings (2) Limited
(xi)
Imperial Brands Ventures Limited
Imperial Investments Limited
Imperial Tobacco Altadis Limited
Imperial Tobacco Capital Assets (1)
Imperial Tobacco Capital Assets (2)
Imperial Tobacco Capital Assets (3)
Imperial Tobacco Capital Assets (4)
Imperial Tobacco Group Limited
Name
Imperial Tobacco Holdings (1) Limited
(iv)
Imperial Tobacco Holdings (2007) Limited
(iv)
Imperial Tobacco Holdings Limited
Imperial Tobacco Initiatives
Imperial Tobacco Lacroix Limited
Imperial Tobacco Limited
Imperial Tobacco Overseas (Polska) Limited
Imperial Tobacco Overseas Holdings (1) Limited
(viii)
Imperial Tobacco Overseas Holdings (2) Limited
Imperial Tobacco Overseas Holdings (3) Limited
Imperial Tobacco Overseas Holdings (4) Limited
Imperial Tobacco Overseas Holdings Limited
Imperial Tobacco Overseas Limited
(x)
Imperial Tobacco Pension Trustees (Burlington House) Limited
Imperial Tobacco Pension Trustees Limited
(iv)
Imperial Tobacco Ventures Limited
ITG Brands Limited
Joseph & Henry Wilson Limited
Nerudia Limited
(v)
Nerudia Consulting Limited
La Flor de Copan UK Limited
Park Lane Tobacco Company Limited
Rizla UK Limited
Tabacalera de Garcia UK Limited
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
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SUBSIDIARIES: INCORPORATED OVERSEAS, WHOLLY OWNED
Name Registered address
1213509 B.C. Limited Suite 1700, Park Place, 666 Burrard Street, Vancouver, BC. V6C
2X8, Canada
Altadis Canarias S.A.U.
(ii)
C/Comandante Azcarraga 5, Madrid, 28016, Spain
Altadis Holdings USA Inc 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
Altadis Middle East FZCO P.O. Box. No. 261718, Jebel Ali Free Zone, Dubai, 261718, United
Arab Emirates
Altadis Ocean Indien S.A.S. 5 C, Rue Pierre Emilien KICHENAPANAIDOU, Saint Pierre,
France, La Reunion, 97410
Altadis S.A.U. C/Comandaute Azcarraga 5, Madrid 28016, Spain
Altadis Shade Company LLC 217 Shaker Road, Somers, CT, 06071, USA
Athena IP
Vermögensverwaltung GmbH
Friesenweg 18, 22763, Hamburg, Germany
Cacique, SA - Comércio,
Importaçao e Exportaçao
Rua Marechal Deodoro, 690 - Centro Arapiraca, Alagoas, Brazil
Commonwealth Brands LLC 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
Congar International Corp
(Delaware)
Road 14, Km. 72.2, Ave. Antonio R. Barcelo, Cayey, DE, PR
00736, USA
Connecticut Shade
Corporation
628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
Consolidated Cigar Holdings
Inc
(vii)
628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
Coralma International S.A.S. 122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France
Dunkerquoise des Blends
S.A.S.
122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France
Ets L Lacroix Fils NV/SA Sint-Bavostraat 66, 2610 Wilrijk, Belgium
Fontem Canada Limited C/O BDO Canada LLP, 6940 Mumford Road, Suite 510, Halifax,
NS, B3L 0B&, Canada
Fontem (Shenzhen)
Technology Solutions
Limited
(i)
Room 11E/F&17F/G/H,Block F, XinghangHuafu Phase 4, No.2
Xinghua Road, XingWei Community, Fuyong Street, Baoan
District, Shenzhen, 518100, China
Fontem US, LLC. 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
Name Registered address
Fontem Ventures B.V. Radarweg 60, Amsterdam, 1043 NT, Netherlands
Huotraco International
Limited
No 299, Preah Ang Duong Street, (and corner of street no.108)
Sangkat Wat Phnom, Khan Daunh Penh, Phnom Penh,
Cambodia
Imperial Brands Bulgaria
EOOD
(i)
EN 1 Building, floor 8, 1 Atanas Dukov Str. 1407 Sofia, Bulgaria
Imperial Brands CR s.r.o Karla Engliše 3201/6, 15 00, Praha 5, Czech Republic
Imperial Brands Finance
Netherlands B.V.
Slachtedijk 28a, 8501 ZA, Joure, Netherlands
Imperial Brands Finland Oy Auriga Business Center, Juhana Herttuan Puistokatu 21, 20100
Turku, Finland
Imperial Brands Global Duty
Free & Export S.L.
Calle Comandaute Azcarraga 5, Madrid 28016, Spain
Imperial Brands Hellas S.A. 300 Klisthenous Str, 15344 Gerakas, Attikis, Athens, Greece
Imperial Brands Holdings
International B.V.
Slachtedijk 28a, 8501 ZA, Joure, Netherlands
Imperial Brands Italia S.r.l. Piazzale Luigi Sturzo 21/33, 00144, Roma
Imperial Brands La Romana Industrial Free Zone #1, La Romana, Dominican Republic
Imperial Brands Luxembourg
sarl
56 Rue Charles Martel, L-2134, Luxembourg
Imperial Brands Malta
Limited
Office 3, AX Business Centre, Ground Floor, Triq id-Difiza Civili
Mosta, MST 1741, Malta
Imperial Brands Norway A.S. Ryensvingen 2-4, 0680, Oslo, Norway
Imperial Brands Portugal,
Sociedade Unipessoal Lda
144, 7 DT, Avenida da Liberdade, Lisbon, Portugal
Imperial Brands Production
Ukraine LLC
(i)
ul. Akademika Zabolotnogo, 35, 03026, Kiev, Ukraine
Imperial Brands Romania s.r.l. Gara Herastrau Street 4C, Green Court, Building B, Floor 11,
Sector 2, Postal Code 020334, Bucharest, Romania
Imperial Brands Trading
Polska spolka z.o.o
Rondo Ignacego Daszynskiego 1, 00-843 Warsaw, Poland
Imperial Brands Ventures LLC 251 Little Falls Drive, Wilmington, DE 19808, USA
Imperial Brands PLC Annual Report and Accounts 2025
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Governance Financials Supplementary
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Imperial Brands PLC
financials
Shareholder
information
IMPERIAL BRANDS PLC FINANCIALS CONTINUED
Name Registered address
Imperial Brands Ventures
Malta Limited
Office 3, AX Business Centre, Ground Floor, Triq id-Difiza Civili
Mosta, MST 1741, Malta
Imperial Finance Ireland
Limited
21 Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland
Imperial Finance Malta
Limited
Office 3, AX Business Centre, Ground Floor, Triq id-Difiza Civili
Mosta, MST 1741, Malta
Imperial Tobacco (Asia) Pte.
Ltd
9 Raffles Place, #26-01 Repulic Plaza, 048619, Singapore
Imperial Tobacco Australia
Limited
John Player Special House, Level 4, 4-8 Inglewood Place,
Norwest, NSW 2153, Australia
Imperial Tobacco Austria
Marketing Service GmbH
Zieglergasse 6, A-1070 Vienna, Austria
Imperial Tobacco BH doo
(i)
Adema Buce 102, Sarajevo, 71000, Bosnia & Herzegovina
Imperial Tobacco EFKA
Management GmbH
Friesenweg 18, 22763, Hamburg, Germany
Imperial Tobacco España,
S.L.U.
C/Comandaute Azcarraga 5, Madrid 28016, Spain
Imperial Tobacco Estonia OÜ Veskiposti 2, 10138 Tallinn, Tallinn, Estonia
Imperial Tobacco Holdings
International B.V.
Slachtedijk 28a, 8501 ZA, Joure, Netherlands
Imperial Tobacco Intellectual
Property Limited
21, Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland
Imperial Tobacco
International GmbH
Friesenweg 18, 22763, Hamburg, Germany
Imperial Tobacco Ireland
Unlimited Company
(v)
6th Floor, 2 Grand Canal Square, Dublin 2, Ireland
Imperial Tobacco Italy S.r.l. Piazzale Luigi Sturzo 21/33, 00144, Roma, Italy
Imperial Tobacco Kyrgyzstan
LLC
(i)
115, Ibraimov Street, 10th Floor, Business Center ‘Asyl-Tash’,
Bishkek, 720021, Kyrgyzstan
Imperial Tobacco La Romana
S.A.S.
320, Rue Saint-Honore, Paris, 75001, France
Name Registered address
Imperial Tobacco
Magyarország
Dohányforgalmázo Kft
(Imperial Tobacco Hungary)
Váci út 141, 1138, Budapest, Hungary
Imperial Tobacco New
Zealand Limited
Level 24, 157 Lambton Quay, Wellington Central, Wellington
6011, New Zealand
Imperial Tobacco Polska
Manufacturing S.A.
Ul. Tytoniowa 2/6, Radom, 26-600, Poland
Imperial Tobacco Polska S.A. Jankowice, ul. Przemyslowa 1, Pl-62-080, Tarnowo-Podgome,
Poland
Imperial Tobacco SCG doo
Beograd
(i)
Milutina Milankovica 11a, Novi Beograd, Serbia
Imperial Tobacco Sigara ve
Tutunculuck Sanayi Ve
Ticaret A.S.
Kecilikoy OSB, Mah Ahmet Tutuncuoglu Cad. No.11, 45030
Yunusemre, Manisa, Turkey
Imperial Tobacco Slovakia a.s. 7A Galvaniho, 824 53 Bratislava, Slovakia
Imperial Tobacco Taiwan Co
Limited
6F1-2 No.2 Sec. 3, Minsheng E road, Zhongshen District, Taipei,
Taiwan, Province of China
Imperial Tobacco Taiwan
Manufacturing Company
Limited
No 8 Cyunyi Road, Jhunan, MiaoLi County 350, Taiwan,
Province of China
Imperial Tobacco Tutun
Urunleri Satis Ve Pazarlama
A.S.
Kecilikoy OSB, Mah Ahmet Tutuncuoglu Cad. No.11, 45030
Yunusemre, Manisa, Turkey
Imperial Tobacco Ukraine
(i)
ul. Akademika Zabolotnogo, 35, 03026, Kiev, Ukraine
Imperial Tobacco US Holdings
BV
121, Winterstoke Road, Bristol, BS3 2LL
Imperial Tobacco West Africa
S.A.S.
(i)
Cocody-Nord, Quartier Gendarmerie, TF 5937, 01 B.P. 724
Abidjan, Cote D’Ivoire
IMPTOB South Africa (Pty)
Limited
5 Sandwood Hills, Dunkirk Estate, Zimbali, South Africa
ITG Brands Holdco LLC 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
ITG Brands, LLC 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
ITG Cigars Inc 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
Imperial Brands PLC Annual Report and Accounts 2025
210
Strategic
report
Governance Financials Supplementary
information
Imperial Brands PLC
financials
Shareholder
information
IMPERIAL BRANDS PLC FINANCIALS CONTINUED
Name Registered address
ITG Holdings USA Inc
(iv)
628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
ITL Pacific (HK) Limited Unit 3906, 39th Floor, Hopewell Centre, 183 Queens Road East,
Wanchai, Hong Kong
Imperial Ventures Malta
Limited
Office 3, AX Business Centre, Ground Floor, Triq id-Difiza Civili
Mosta, MST 1741, Malta
JAW-Invest Oy Auriga Business Center, Juhana Herttuan puistokatu 21, 20100
Turku, Finland
John Player & Sons Limited 21, Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland
JSNM SARL 122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France
Macotab S.A.S. (Manufacture
Corse des Tabacs)
Route Nationale 193, Furiani, 20600, France
MYBLU Spain SLU CR. Robledo de Chavela, S/N. San Lorenzo del Escorial, Madrid,
28200, Spain
Millennium Tobacco
Unlimited Company
21, Beckett Way, Park West, Nangor Road, Dublin, 12, Ireland
Newglade International
Unlimited Company
6th Floor, 2 Grand Canal Square, Dublin 2, Ireland
Petone Vapes Limited Russell Mcveagh, Level 24,157 Lambton Quay, Wellington
Central, Wellington, 6011, New Zealand
Philippine Bobbin Corporation Cavite Economic Zone, Phase II, Rosario, Cavite, Philippines
Real Club de Golf la Herrería
S.A.
CR. Robledo de Chavela, S/N. San Lorenzo del Escorial, Madrid,
28200, Spain
Reemtsma Cigarettenfabriken
Gmbh
Friesenweg 18, 22763 Hamburg, Germany
Skruf Snus AB PO Box 3068, Stockholm, SE-103 61, Sweden
Société Centrafricaine de
Cigarettes S.A.
(i)
Rue David Dacko, BP 1446, Bangui, Central African Republic
Société Centrafricaine de
Distribution Sarl
(i)
Avenue Boganda Pk4, Bangui, Central African Republic
Société du Mont Nimba Sarl
(i)
BP 3391, Conakry, Guinea
Name Registered address
Société Nationale
d’Exploitation Industrielle des
Tabacs et Allumettes SAS
(SEITA)
200-216 rue Raymond Losserand, Paris, 75014, France
Société pour le
Développement du Tabac en
Afrique S.A.S.
122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France
System Designed to Africa
Sarl
Km 17, Route national de Rabat, Ain Harrouda, Morocco
Tabacalera de Garcia Ltd
(Bermuda)
Claredon House, 2 Church Street, Hamilton, HM 11, Bermuda
Tahiti Tabacs SASU PK 4, 300 Côté mer, 98701 Arue, BP 20692 Papeete, French
Polynesia
Tobaccor S.A.S.
(v)
122 Avenue Charles de Gaulle, Neuilly sur Seine, 92200, France
Tobačna 3DVA, trgovsko
podjetje, d.o.o.
Cesta 24., junija 90, SI 1231 Ljubljana - Ĉrnuče, Slovenia
Tobačna Grosist d.o.o. Cesta 24., junija 90, SI 1231 Ljubljana - Ĉrnuče, Slovenia
Tobačna Ljubljana d.o.o. Cesta 24., junija 90, SI 1231 Ljubljana - Ĉrnuče, Slovenia
Van Nelle Tabak Nederland
B.V.
Slachtedijk 28a, 8501 ZA, Joure, Netherlands
Van Nelle Tobacco
International Holdings B.V.
Slachtedijk 28a, 8501 ZA, Joure, Netherlands
Von Erl. Gmbh
(i)
Hegelgasse 13/26, 1010 Vienna, Austria
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
Imperial Brands PLC Annual Report and Accounts 2025
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Strategic
report
Governance Financials Supplementary
information
Imperial Brands PLC
financials
Shareholder
information
IMPERIAL BRANDS PLC FINANCIALS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
SUBSIDIARIES: INCORPORATED OVERSEAS, PARTLY OWNED
Name Registered address Percentage owned
3 For One, SA Avenue Hermann-Debroux 54. 1160
Anderghem, Belgium
50.0
24 Hours B.V Wijkermeerstraat 31, 2131 HB, Hoofddorp,
Netherlands
50.0
Albacetrans, S.L.U Poligono Industrial Campollano, Avenida
Sexta, 0.02007 Albacete, Spain
50.0
Belgium Parcels Service, Srl Avenue Hermann-Debroux 54. 1160
Anderghem, Belgium
50.0
Be To Be Pharma, S.L.U C/ Trigo, 39 - Polígono Industrial Polvoranca,
Leganés, Madrid, 28914, Spain
50.0
Carbo Collbatalle, S.L.U. Zona Franca, Sector E, Calle L, No 6-8. 08040
Barcelona, Spain
50.0
CDIL - Companhia de
Distribuicao Integral Logista
Portugal, SA.
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.
143 bd Romain Rolland, Cedex 14, Paris, 75685,
France
99.9
Compagnie Réunionnaise des
Tabacs S.A.S.
5 C, Rue Pierre Emilien KICHENAPANAIDOU,
Saint Pierre, 97410, La Reunion, France
98.9
Compañía de Distribución
Integral de Publicaciones
Logista S.L.U.
(iv)
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. (SL)
AV. Jerozolimskie 96 - 7ª Planta, Edificio
Equator II, 02-304 Varsaw, Poland
50.0
Compañía de Distribución
Integral Logista S.A.U.
C/ Trigo, 39 - Polígono Industrial Polvoranca,
Leganés, Madrid, 28914, Spain
50.0
Distribuidora Valenciana de
Ediciones S.A.U.
Pedrapiquers 5, Poligono Industrial Vara de
Quart, Valencia, 46014, Spain
50.0
Dronas 2002, S.L.U. Energía, 25-29; Polígono Industrial Nordeste,
Sant Andreu de la Barca, Barcelona, 08740,
Spain
50.0
German-Ex B.V. Wijkermeerstraat 31, 2131 HB, Hoofddorp,
Netherlands
50.0
Name Registered address Percentage owned
Herinvemol, S.L. Hercas Industrial Estate Street Sector ZI1, 2T,
Molina de Segura 30509 (Murcia) Spain
50.0
Imperial Tobacco TKS a.d.
(i)
ul 11, Oktomvri 125, P O Box 37, 1000 Skopje,
Macedonia
99.1
Imprimerie Industrielle
Ivoirienne SA
(i)
Zone Industrielle du Banco, Lots No 147-149-150,
01 BP 4124, Yopougon/Abdjan, Cote d’Ivoire
78.8
Innoreste, S.L.U. Carretera De Madrid-Cartegena, KM. 376.
30500 Molina de Segura (Murcia), Spain
50.0
Logesta Deutschland Gmbh,
Sociedad Unipersonal
Pilotystrasse, 4, 80538 München, Germany
50.0
Logesta Freight France Sarl Inmeuble Le Bristol, 27 Avenue des Murs du
Parc, 94300 Vincennes, France
50.0
Logesta Lusa LDA Edifico Logista, Pracetta do Vale da Fonte
Coberta, 153 E 167, 2890-182 Alcochete, Portugal
50.0
Logista France Holding S.A. Inmeuble Le Bristol, 27 Avenue des Murs du
Parc, 94300 Vincennes, France
50.0
Logista France S.A.S. Inmeuble Le Bristol, 27 Avenue des Murs du
Parc, 94300 Vincennes, France
50.0
Logista Freight Italia S.R.L Via Valadier, 37 - 00193 Roma, Italy
50.0
Logista Freight Polska S.R.L. Av. Jerozolimskie 96 - 7ª Planta Edificio
Equator II, Varsovia, Poland
50.0
Logista Freight, S.A.U C/ Trigo, 39 - Polígono Industrial Polvoranca,
Leganés, Madrid, 28914, Spain
50.0
Logista Integral, S.A.
(iii)
C/ Trigo, 39 - Polígono Industrial Polvoranca,
Leganés, Madrid, 28914, Spain
50.0
Logista Italia Spa Via Valadier, 37 - 00193 Roma, Italy
50.0
Logista Payments, S.L.U. C/ Trigo, 39 - Polígono Industrial Polvoranca,
Leganés, Madrid, 28914, Spain
50.0
Logista Pharma Canarias,
S.A.U.
C/ Entreríos Nave 3; Las Palmas de Gran
Canaria, 35600, Spain
50.0
Logista Pharma Italia, S.R.L. C/ Entreríos Nave 3; Las Palmas de Gran
Canaria, 35600, Spain
50.0
Logista Pharma S.A.U. C/ Trigo Núm. 39 - Polígono Industrial
Polvoranca, Leganés, Madrid, 28914, Spain
50.0
Logista Promotion et
Transport S.A.S.
Inmeuble Le Bristol, 27 Avenue des Murs du
Parc, 94300 Vincennes, France
50.0
Imperial Brands PLC Annual Report and Accounts 2025
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Governance Financials Supplementary
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Imperial Brands PLC
financials
Shareholder
information
IMPERIAL BRANDS PLC FINANCIALS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
Name Registered address Percentage owned
Logista Regional de
Publicaciones, S.A.U.
Avenida de Europa No.2, Edificio Alcor Plaza/
Ala Este Planta 4a - Modulo 3, Alcorcor, Madrid,
28922, Spain
50.0
Logista Retail France SAS Inmeuble Le Bristol, 27 Avenue des Murs du
Parc, 94300 Vincennes, France
50.0
Logista Retail Italia S.P.A Via Valadier, 37 - 00193 Roma, Italy
50.0
Logista Retail S.A.U C/ Trigo, 39 - Polígono Industrial Polvoranca,
Leganés, Madrid, 28914, Spain
50.0
Logista Strator Portugal,
Unipessoal Lda.
Edificio Logista, Pracetta do Vale Da Fonte,
Coberta 153/167, Freguesia de Alcochete,
Portugal
50.0
Logista Strator, SLU C/ Trigo, 39 - Polígono Industrial Polvoranca,
Leganés, Madrid, 28914, Spain
50.0
Logista Transport Europe B.V. Wijkermeerstaat 31. 2131 HB, Hoofddorp,
Netherlands
50.0
Logista, Transportes,
Transitários e Pharma, Lda.,
Sociedad Unipersonal
Edifico Logista, Pracetta do Vale da Fonte
Coberta, 153 E 167, 2890-182 Alcochete, Portugal
50.0
MABUCIG Industries S.A. No 55, Rue 19.14, B.P. 94, Kodeni, - Bobo
Dioulasso, Burkina Faso
50.0
MABUCIG SA (Manufacture
Burkinabe de Cigarette)
Zone Industrielle de Bobo-Dioulasso, Secteur
No 19, Rue 19.14 No adressage 55, B.P. 94 - Bobo
Dioulasso, Burkina Faso
72.7
Manufacture de Cigarettes du
Tchad S.A.
0502 rue 1039, Arrondissement 1, N’DJamena,
Chad
95.0
Midsid – Sociedade
Portuguesa de Distribução,
S.A., Sociedad Unipersonal
Edificio Logista, Pracetta do Vale Da Fonte,
Coberta 153/167, Freguesia de Alcochete,
Portugal
50.0
Mosca China Logistics Ltd 603, no.32 Hong Kong Road, Nanfang district,
Qingdao City, China
50.0
Mosca Italia, Srl Via Roma 2, Cap, 16121, Rome, Italy
50.0
Mosca Maritimo, S.L.U. Hercas Industrial Estate Street Sector ZI1, 2T,
Molina de Segura 30509 (Murcia) Spain
50.0
Mosca Portugal, Lda Santa Iria, Na Avenida Casal SA Serra No 9,
Portugal
50.0
MTOA S.A.
(i)
Km 2-5 Bld du Centenaire de la commune de
Dakar, Dakar, Senegal
98.3
Name Registered address Percentage owned
Publicaciones y Libros S.A.U. Avenida de Europa No.2, Edificio Alcor Plaza/
Ala Este Planta 4a - Modulo 3, Alcorcon,
Madrid, 28922, Spain
50.0
Reemtsma Kyrgyzstan
OJSC
(i)
115, Ibraimov Str., 10th Floor, Business Center
“Asyl-Tash”, Bishkek, Kyrgyzstan
99.7
S3T Pte Ltd
(i)
9 Raffles Place, #26-01 Republic Plaza, 048619,
Singapore
51.0
SACIMEM S.A.
(i)
110 Antsirabe - Madagascar, Route d’Ambositra,
BP 128, Madagascar
65.4
SGEL Libros, S.L.U. Polígono Industrial La Quinta, Avda Castilla La
Mancha, 2, Nave 3-4, 19171 Cabanillas del
Campo, Guadalajara, Mexio
50.0
SITAB Industries S.A.
(i)
Rue de I’Industrie - Lot No 19, 01 - BP 607,
Bouake, Cote d’Ivoire
75.9
SITAR Holding S.A.S. Z.I n2, B.P. 256, 97457 Saint Pierre, IIe de la
Reunion, La Reunion, France
99.0
Société Africaine
d’Impression Industrielle S.A.
(i)
Route de Bel Air - Km 2200, Dakar, Senegal
99.8
Société des Cigarettes
Gabonaises S.A.
(i)
2381 bld Léon MBA, BP 2175, Libreville, Gabon
87. 8
Société Industrielle et
Agricole du Tabac Tropical
S.A.
(i)
Avenue de la Pointe Hollandaise, Mpila, BP 50,
Brazzaville, Congo
89.7
Société Ivoirienne des Tabacs
S.A.
(i) (iii)
Cocody-Nord, Quartier Gendarmerie, TF 5937,
01 B.P. 724 Abidjan, Cote D’Ivoire
74.9
Société Marocaine des Tabacs
S.A.
87 Rue Hamed El Figuigui, Casablanca, 20500,
Morocco
99.9
SOCTAM S.A.
(i)
15 Rue Geoges V, Mahajanga, Madagascar
50.5
SOTCHADIS S.A.S. 502 Rue 1039, BP 852, N’Djamena, Chad
95.0
Speedlink Worldwide Express
B.V.
Wijkermeerstraat 31, 2131 HB, Hoofddorp,
Netherlands
50.0
Transportes El Mosca, S.A.U. Hercas Industrial Estate Street Sector ZI1,
2T,Molina de Segura 30509 (Murcia), Spain
50.0
Transportes Moncayo, S.L.U. Poligno Alfinden, Manzana I-2, Lote A. 50071 La
Puebla De Alfinden, Zaragoza, Spain
50.0
Imperial Brands PLC Annual Report and Accounts 2025
213
Strategic
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Governance Financials Supplementary
information
Imperial Brands PLC
financials
Shareholder
information
IMPERIAL BRANDS PLC FINANCIALS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
ASSOCIATES: INCORPORATED OVERSEAS
Name Registered address Percentage owned
Alcome S.A.S. 164 rue du faubourg Saint Honore, 75008 Paris,
France
24.0
Compañia Española de
Tabaco en Rama SA (Cetarsa)
(i)
Avenida de las Angustias, 20, 10300
Navalmoral de la Mata, Cáceres, Spain
20.8
Distribuidora de Ediciones
SADE, S.A.
Calle B, esquina calle 4, s/n. Sector B, Polígono
Industrial Zona Franca, 08040 Barcelona,
Spain
35.0
Distribuidora de Publicaciones
del Sur, S.L.
Polígono Industrial Pineda, Carretera de Cádiz
a Dos Hermanas, Km 547, Nave D. 41014 Sevilla,
Spain
25.0
Distribución de Publicaciones
Siglo XXI, Guadalajara
Francisco Medina y Mendoza, 2, 19171
Cabanillas del Campo, Guadalajara, Spain
40.0
Erion Care Via Angelo Scarsellini 14, 20161, Milan, Italy
25.0
Entreprises des Tabacs en
Guinée
(i)
B.P 3391, Conakry, Guinée Conakry, Guinea
34.0
Lao Tobacco Limited KM 8, Thadeua Road, P O Box 181, Vientiane,
Lao People’s Democratic Republic
43.7
Logista Libros S.L. Avda. Castilla La Mancha, 2 - Naves 3-4 del
Polígono Industrial La Quinta, Cabanillas del
Campo, Guadalajara, Spain
25.0
Mosca Italia, Srl Via Roma 2, Cap, 16121, Rome, Italy
36.6
Nevajgluj a.s Na strži 1702/65, Nusle, 140 00 Prague 4, Czech
Republic
25.0
Promotion et Distribution a
Madagascar
Tour ZITAL Ankorondrano, Antananarivo,
Madagascar
33.4
Sociedad Anonima
Distribuidora De Ediciones
Calle B, esquina calle 4, s/n. Sector B, Polígono
Industrial Zona Franca, 08040, Barcelona,
Spain
35.0
Société Internationale des
Tabacs Malgaches
(i)
BP 270, 401 Mahajanga, Madagascar
47.9
Société Nationale des Tabacs
et Allumettes du Mali S.A.
(i)
Route Sotuba - Z.I., BP 59, Bamako, Mali
28.0
SPAK-EKO a.s. Vajnorská 100/B 831 04 Bratislava, Slovakia
25.0
JOINT VENTURES: INCORPORATED OVERSEAS
Name Registered address Percentage owned
Global Horizon Ventures
Limited
Unit 3907-08, 39th Floor, Hopewell Centre, 183
Queens Road East, Wanchai, Hong Kong
50.0
Intertab S.A.
(i)
Société Fiduciaire Suisse-Coopers & Lybrand
S.A., Route de la Glâne 107, Villars-sur-Glâne,
1752, Switzerland
50.0
West Tobacco Pte Ltd
(i)
1 Harbourfront Avenue #14-07, Keppel Bay
Tower, 098632, Singapore
50.0
PARTNERSHIPS
The Group also owns the following partnerships:
Name Registered address and principal place of business
Fabrica de Tabacos La Flor de
Copan S de R.L. de CV
Apartado Postal 209, Colonia Mejia-García, Santa Rosa de
Copán, Honduras
Imperial Tobacco (Efka)
GmbH & Co. KG
Friesenweg 18, 22763 Hamburg, Germany
Imperial Tobacco Kazakhstan
LLP
(i)
3rd Floor, Prime Business Park, 100/2 Nursultan Nazarbayev
Avenue, Medeuskiy District, Almaty, 050000, Kazakhstan
ITG Brands Holdpartner LP 628 Green Valley Road, Suite 500, Greensboro, NC 27408, USA
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Shareholder
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IMPERIAL BRANDS PLC FINANCIALS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC CONTINUED
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.
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IMPERIAL BRANDS PLC FINANCIALS CONTINUED
Financial calendar and dividends
Half year results are expected to be announced
in May 2026 and the Full year results in
November 2026.
The Annual General Meeting of the Company
will be held on Wednesday 28 January 2026
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 2025 final dividend, if approved,
will be on 31 March 2026 to shareholders on the
Register of Members at the close of business on
20 February 2026. The associated ex-dividend
date will be 19 February 2026.
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
8.00am and 4.30pm Monday to Friday for more
information about this service. If you wish to sell
your Imperial Brands PLC ordinary shares, you
will need your shareholder reference number,
which you can find on your share certificate.
Individual savings account
Investors in Imperial Brands PLC ordinary
shares may take advantage of a low-cost
Individual Savings Account (ISA) and
Investment Account where they can hold
their Imperial 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 7.00am to 7.00pm
(Central Time US).
Corporate brokers
Morgan Stanley & Co. International plc
25 Cabot Square
Canary Wharf
London El4 4QA
+44 (0)20 7425 8000
Barclays Bank PLC
1 Churchill Place
Canary Wharf
London El4 5HP
+44 (0)20 7623 2323
Auditor
Ernst & Young LLP
1 More London Place
London SE1 2AF
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SHAREHOLDER INFORMATION
Certain statements in this report constitute
or may constitute forward-looking statements.
Any statement in this report that is not a
statement of historical fact including, without
limitation, those regarding the Company’s
future expectations, operations, 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 such responsibility
or liability is expressly disclaimed.
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CAUTIONARY STATEMENT
Registered office
Imperial Brands PLC
121 Winterstoke Road
Bristol BS3 2LL
UK
www.imperialbrandsplc.com