Imperial Tobacco Sees Significant Revenue Decline Due to Russian Market Exit

Nov.16.2022
Imperial Tobacco Sees Significant Revenue Decline Due to Russian Market Exit
Imperial Tobacco suffers significant decline in revenue due to exit from Russian market amid Ukraine conflict.

The profits of Empire Tobacco have seen a significant decline due to the tobacco giant's decision to withdraw from the Russian market amid escalating hostilities in the conflict between Russia and Ukraine, resulting in a major blow to sales.


A cigarette manufacturer based in Bristol, UK, owns multiple popular cigarette brands such as Gauloises, West, and Golden Virginia. The company has disclosed a 14.7% year-on-year decline in revenue and profit, totaling £2.68 billion as of September.


Imperial Tobacco's departure from Russia resulted in a loss of nearly £400 million in revenue for the group, with further impact from the previous year's sale of its premium cigar subsidiary no longer generating income.


In March, the FTSE 100 index company suspended its operations in Russia, including all production at its Volgograd factory, before transferring the business to local investors in the following month.


As a result, the total sales volume of tobacco decreased by 8.4% in the second half of the year compared to the same period in 2021, and declined by 4.7% for the entire year.


The higher prices helped offset the decline in production, but the weakening of the euro against the dollar still resulted in a decrease in total revenue by 240 million pounds to 32.6 billion pounds.


Imperial Tobacco has increased its market share in four out of its five largest traditional cigarette markets, with the majority of its operating profits coming from these markets.


The company reported in the UK that its increase in market share was driven by investments in local "jewellery" brands such as Embassy, which have made progress in areas where tobacco brands are underrepresented.


As part of a five-year strategy led by CEO Stefan Bomhard, increasing market share in its top five cigarette sales regions (United Kingdom, United States, Germany, Spain, and Australia) is a priority.


The plan also calls for streamlining operations, including cost-cutting measures, as well as expanding the sales of "next-generation products (NGPs)" such as heated tobacco and electronic cigarettes.


Although NGPs (Next-Generation Products) still make up only a small portion of Imperial Tobacco's overall trade, their popularity is increasing due to their launch in more regions and government regulations imposing heavy taxes on and strict regulations of traditional cigarette brands.


However, the significant investment required to introduce brands such as Pulze, iD (both heated tobacco products), and the electronic cigarette device Blu 2.0 into new markets resulted in the NGP department losing £87 million in the year.


Bomhard, who was born in Germany, took over the business a month before the start of the COVID-19 pandemic. However, he stated that the Empire was "prepared and ready to achieve the next stage of our five-year strategy.


He added, "As we face a more challenging macroeconomic environment, the extra investments and actions we took during the initial two years of strengthening phase have laid a stronger foundation for us.


We are fully capable of building upon our delivery record in the next three years, increasing returns, and creating sustainable growth that adds value for our shareholders.


Imperial Tobacco announced today that, in addition to the £1 billion share buyback plan announced in October, it is proposing to distribute a final dividend of £467 million to investors in March next year.


The share price of Imperial Tobacco rose to 20.54 pounds, up 0.5% in late morning trading on Tuesday, indicating an approximately 30% increase in value over the past 12 months.


Statement:


This article is compiled from third-party information and is intended only for industry communication and learning.


This article does not represent the views of 2FIRSTS and 2FIRSTS cannot confirm the truthfulness or accuracy of its contents. Its translation is only intended for industry communication and research.


Due to limited translation capabilities, the translated article may not fully convey the original meaning. Please refer to the original article for accuracy.


2FIRSTS maintains complete alignment with the Chinese government regarding any domestic, Hong Kong, Macau, Taiwan, and foreign-related expressions and positions.


The copyright of compiled information belongs to the original media and authors. If there is any infringement, please contact us for deletion.



Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

Innovation, Insights and Networking: NUBIZ Brings the Global NGP Industry Together in Dortmund
Innovation, Insights and Networking: NUBIZ Brings the Global NGP Industry Together in Dortmund
The market for next-generation products is expanding rapidly, with vapes, e-cigarettes, pouches, snus and heat-not-burn products among the industry’s most innovative segments. As part of InterTabac, NUBIZ provides a central platform for reduced-risk tobacco and nicotine products, bringing together global leaders and newcomers from 15 to 17 September. The show combines market insights, product comparisons, networking, a high-level conference programme and exclusive side events.
Jun.03
Sesh touts independence, 8VC backing and retail reach as it challenges tobacco-owned pouch brands
Sesh touts independence, 8VC backing and retail reach as it challenges tobacco-owned pouch brands
U.S. nicotine pouch brand Sesh has emphasized its independence from Altria, Philip Morris International and British American Tobacco, along with backing from investors including 8VC, celebrity supporters and a retail footprint of more than 7,500 stores, as it seeks to differentiate itself in a market where major pouch brands are owned by large tobacco companies.
Regulations
Jul.07 by 2Firsts Perspectives
AP Questions FDA Rationale as Glas Fruit-Flavored Vapes Won Authorization Without Added Cessation Benefit
AP Questions FDA Rationale as Glas Fruit-Flavored Vapes Won Authorization Without Added Cessation Benefit
The U.S. Food and Drug Administration (FDA) recently authorized two fruit-flavored vaping products from Glas, but a newly released agency memo shows the products did not demonstrate greater smoking-cessation benefits than tobacco-flavored e-cigarettes. The Associated Press said the findings are likely to raise further questions about the FDA’s regulatory rationale and standards for flavored vaping products.
Jun.12
PMI Partners With Italian Tenor Andrea Bocelli to Launch “Believe. Further” Platform
PMI Partners With Italian Tenor Andrea Bocelli to Launch “Believe. Further” Platform
Philip Morris International (PMI) and Italian tenor Andrea Bocelli have launched “Believe. Further,” a multi-year communications platform targeting cultural, institutional and business audiences in Europe, as PMI says smoke-free products accounted for 43% of its net revenues as of the first quarter of 2026.
Jul.01
Trump’s Tobacco Investments and Industry Donations Draw Scrutiny as FDA Eases Vape and Nicotine Pouch Rules
Trump’s Tobacco Investments and Industry Donations Draw Scrutiny as FDA Eases Vape and Nicotine Pouch Rules
A report by KFF Health News says that as the Trump administration pursued a series of policies favorable to the nicotine and tobacco industry, President Donald Trump increased his holdings in tobacco companies while benefiting from substantial industry-linked political donations, prompting questions from public health advocates about potential conflicts of interest and regulatory direction.
Jun.12
South Korea’s New Vape Rules Raise Bar for E-Liquid Makers and China-Linked Supply Chains, Expert Says
South Korea’s New Vape Rules Raise Bar for E-Liquid Makers and China-Linked Supply Chains, Expert Says
South Korea’s new vape regulations are reshaping the e-liquid market, raising compliance requirements for manufacturers, retailers and overseas suppliers. In an interview with 2Firsts, Korean nicotine products specialist Sam Kim discusses licensing barriers, inventory impacts, China-linked supply chains, and emerging regulatory challenges around nicotine analogues, nicotine-free products and DIY mixing. The Korean case may offer broader insights as governments worldwide adapt to rapidly evolving nicotine products.
Jul.16