IMPERIAL BRANDS PLC

ANNUAL REPORT 2024

ACCELERATING

GROWTH

WITH

A CHALLENGER

MINDSET

INTRODUCTION AND CONTENTS

SUPPLEMENTARY

INFORMATION

Alternative Performance Measures

202

Glossary

210

IMPERIAL BRANDS PLC

FINANCIALS

Imperial Brands PLC

Balance Sheet

213

Imperial Brands PLC Statement of

Changes in Equity

214

Notes to the Financial Statements of

Imperial Brands PLC

215

SHAREHOLDER

INFORMATION

Shareholder Information

230

Cautionary Statement

231

MEET OUR PEOPLE

Agnès, Mathilde and Emilie,

Internal Communications Officer,

Social Affairs Manager and Trade

Marketing Manager, France

cover

Samanli, End-to-End Planning

Team Manager, Poland

Khadar, Information Systems

Support Specialist, France

Adeline, Merchandising

Manager, France

Amir, Brand Manager, Austria

Justin Norman, Packing

Operator, USA

Dimitra, Brand Executive, UAE

Lalanirina, Emmanuel and Julia,

Supply Chain Manager, Process

& Industrial Projects Manager

and Manufacturing Excellence

Manager, Madagascar

Andre, Lab Assistant, Germany

Chia-Wei and Chang-Wei,

Technicians, Taiwan

GOVERNANCE

Governance at a Glance

Board Leadership

Board and Culture

101

Section 172

102

Board Statements

103

People, Governance & Sustainability

Committee

104

Audit Committee

108

Remuneration Report

115

Directors’ Report

130

FINANCIALS

Independent Auditor’s Report

135

Consolidated Income Statement

145

Consolidated Statement

of Comprehensive Income

145

Consolidated Balance Sheet

146

Consolidated Statement

of Changes in Equity

147

Consolidated Cash

Flow Statement

148

Notes to the Consolidated Financial

Statements

149

Performance measures used

throughout the report

Reported (GAAP)

Complies with UK-adopted

International Accounting Standards

and the relevant legislation.

Adjusted (Non-GAAP)

Non-GAAP measures provide a

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Constant currency basis

Removes the effect of exchange rate

movements on the translation of the

results of our overseas operations.

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prior year foreign exchange rates.

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Market share

Market share data is presented

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weighted across the markets in

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Stick equivalent

Stick equivalent volumes reflect our

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For more information see

www.imperialbrandsplc.com

STRATEGIC REPORT

At a Glance

Our Consumer Focus

Our Investment Case

Chair’s Statement

Chief Executive’s Statement

Business Model

Our Strategy

Strategic Review

KPIs

Industry Overview

Operating Review

Group Financial Review

Principal Risks and Uncertainties

Stakeholder Engagement

Non-Financial and Sustainability

Information Statement

ESG Review

By becoming more consumer focused, more agile and more performance driven we are better

able to deliver enhanced shareholder returns and meet the needs of our wider stakeholders.

WE ARE A

CONSUMER-LED

CHALLENGER

BUSINESS

www.imperialbrandsplc.com 1

AT A GLANCE

DELIVERING

ON OUR STRATEGY

MARKETS WE

OPERATE IN

c.120

OUR FOCUSED STRATEGY

Strategic pillars

+5bps

DRU

AGGREGATE MARKET SHARE OF OUR FIVE PRIORITY

COMBUSTIBLE MARKETS (BASIS POINTS)

Critical enablers

2024 Tobacco & NGP net revenue growth at constant

currency +4.6%

TOBACCO AND NGP NET REVENUE

(£ BILLION)

£8.2bn

cDP

£7.6bn

£7.7bn

£8.0bn

£8.2bn

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£1.25bn

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NGP NET REVENUE GROWTH AT CONSTANT

CURRENCY (PER CENT)

FY25 SHARE REPURCHASE ANNOUNCED (£ BILLION)

+26.4%



DIVIDEND PER SHARE

(PENCE)

153.42p

R

ABSOLUTE CO

EQUIVALENT EMISSIONS SCOPE 1

AND SCOPE 2 MARKET-BASED (TONNES)

89,120t

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2024 Dividend per share growth +4.5% Our target is to be Net Zero in our direct

operations by 2030

* 2017 is the baseline.

** Baseline and previous years have been restated due to Scope 2 market-based

emissions correction.

139.08p

141.17p

146.82p

153.42p

17*

20,326

81,089

85,829

91,007

176,176

114,270

15,683

73,437

www.imperialbrandsplc.com 3

OUR CONSUMER FOCUS

WE START WITH

THE CONSUMER

INTERNATIONAL BRANDS

LOCAL JEWELS

NEXT GENERATION PRODUCTS (NGP)

We put the consumer at the centre of our business, with strong insights guiding our

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“I used to smoke socially, but vaping

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isn’t so strong. A lot of my friends

smoke, so vaping means I’m not left

out. I can join in, but in my own way.

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rechargeable, and quite compact.”

Claudia,

“Zone is my go-to pouch, it has a

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of intensity. My friends and family

have noticed that I no longer smell of

cigarettes, and I have more confidence

because of it.”

Vonte,

USA

“The best moment to smoke is

when I am alone, with my coffee

and I have zero issues on my mind.

A smoker always sees tobacco

quality first, and for me, why would

I pay more when Gauloises gives

me the quality I need?”

Mohamed,

Morocco

“I wanted to find something that

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would be flavourful and enjoyable to

use among friends. I like the iSenzia

flavours and I like that the device is

small and handy. I like to use Pulze

when reading – it’s relaxing.”

Julia,

Poland

www.imperialbrandsplc.com 5

OUR INVESTMENT CASE

WHY INVEST

IN IMPERIAL?

BUILDING A SUSTAINABLE NEXT GENERATION

PRODUCT BUSINESS

Next generation products (NGP) offer adult smokers a route

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markets. As a challenger, our role is to offer consumers a choice

where they have already expressed an NGP preference and

where we can leverage our existing customer relationships.

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adapt swiftly to changing consumer preferences and with our

consumer focus and disciplined execution we have built an

NGP business that offers choice.

Aggregate priority market share

cumulative 2021-2024 (basis points)

+48bps

REVITALISED TOBACCO BUSINESS

Investment in our brand equity and sales force initiatives

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pricing. The tobacco value creation model remains resilient,

with affordability enabling sustainable pricing to offset

volume declines. In our top five combustible markets that

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share after years of declines. This, combined with a more

disciplined focus on our broader market portfolio, is driving

improved combustible returns.

We are a consumer-focused business underpinned by a disciplined capital allocation

framework. This gives us the ability to invest in our strategy, while maintaining a strong,

efficient balance sheet and delivering enhanced shareholder returns.

£188m

£208m

£265m

£329m

NGP net revenue

(£ million)

£329m

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SELF-HELP INITIATIVES DELIVERING OPERATIONAL

IMPROVEMENT

We have identified multiple initiatives to deliver operational

improvements that will enhance our decision making and

drive efficiencies. For example, we are adopting new ways of

working with our enabling functions using a global business

service model and implementing a new ERP system to replace

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COMBINED, THESE ARE GENERATING A STRONG

FINANCIAL OUTLOOK

Improving tobacco and NGP net revenue trajectory,

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Enhancing profitability through operational leverage,

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market shares, reduced losses from our investment in NGP and

restructuring cost savings driving a mid single-digit compound

annual growth rate for Group adjusted operating profit.

The business is highly cash generative with low capital

intensity, a working capital focus and disciplined capital

expenditure producing adjusted operating cash conversion

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Free cash flow generated in FY24

£2.4bn

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ENHANCING OUR CAPITAL RETURNS

We have a clear capital allocation framework alongside

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1. Invest in strategic delivery

Since our strategy is largely organic and we work with

innovation partners, our capital expenditure needs are

relatively light. Any M&A is likely to be small.

2. Maintain leverage

We are committed to an investment grade credit rating

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3. Progressive dividend growth

We have committed to grow our dividend every year,

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4. Return surplus capital to shareholders

We have an ongoing share buyback programme,

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Further information on our strategy can be found

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Capital returns to shareholders committed in FY25

£2.8bn

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www.imperialbrandsplc.com 7

CHAIR’S STATEMENT

Dear Shareholders

I am pleased to report a further step-up in performance:

operationally, financially, and in the delivery of our ambitious

People and Planet objectives. Our success in 2024 builds on

the consistent track record we have been developing since the

launch of our current strategy four years ago. As we enter the

final year of the plan, I couldn’t be more proud of the progress

the company has made leaning into our challenger status and

embedding the consumer at the heart of everything we do.

Against an unpredictable environment, the team has been

innovative, resourceful and resilient, and has demonstrated

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While Imperial Brands’ transformation journey continues,

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journey in 2021. We are now better able to create predictable

and sustainable value for shareholders and meet the needs

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STARTING WITH THE CONSUMER

The scale of our transformation, particularly within our

growing consumer capabilities, was brought home to me

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In March, we visited the Czech Republic, a highly competitive

market for next generation products (NGP). I was pleased to

see our team using a challenger mindset to compete

successfully against our larger competitors.

Fresh consumer insights were being used to build targeted,

differentiated brands. Our agile sales teams were getting new

products to market at pace and identifying new channels and

promotional opportunities. This activity was underpinned by

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smokers and existing nicotine consumers.

Our second visit in July was to our fast-developing innovation

centre – or “Sense Hub” – in Liverpool. It is a great case study

for Imperial’s challenger way of developing new products.

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third-party partners in the same space to drive new insights

and accelerate development cycles. This distinctive way of

working has taken us from a position four years ago where

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DEVELOPING

OUR TRACK RECORD

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ACCELERATING CAPITAL RETURNS

FOR SHAREHOLDERS

Our consumer-focused transformation has supported a further

improvement in financial performance. This year we met

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and mid-single-digit adjusted operating profit growth. In NGP,

we achieved double-digit net revenue growth while also

reducing our losses.

We have clearly defined our capital allocation priorities,

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Our objective is to support the long-term sustainable cash

flows of the business to enable us to maintain our progressive

dividend policy and ongoing share buyback. The Board is

recommending a total annual dividend of 153.42 pence per

share, which represents an increase of 4.5% on the prior

financial year in line with the Group’s progressive policy.

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profile to four equal dividend payments for FY25 onwards.

Smoothing of the dividend payment profile will result in more

consistent cash returns to shareholders throughout the year,

compared to the current 30:70 split. This is enabled by the

strong visibility of cash flows from our portfolio following

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During the five-year period of our current strategy we expect

to make total capital returns including dividends and share

buybacks of £10 billion – equivalent to 67% of our market value

in January 2021 when we launched our strategy.

DELIVERING ON PEOPLE AND PLANET OBJECTIVES

Our challenger mindset has been important in the way we are

now consistently delivering on our People and Planet priorities,

which focus on building a healthier future for our consumers,

colleagues and wider environment. Our recent progress is a

result of the resourcefulness, deep accountability and purposeful

collaboration of a great many people in our business.

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carbon emissions, waste and workplace accidents.

Our broad plan to improve diversity, equity and inclusion is

starting to yield results. In particular, we have seen

improvements in female representation in senior management.

The Board plays a highly engaged role providing support

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their ESG plans. Over the past year, we have made further

improvements to the way we provide oversight, including

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Committee, now known as the People, Governance

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see pages 59-77

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ENGAGING FOR CONSUMER HEALTH

A key ESG priority is to play a growing role in tobacco harm

reduction by developing our NGP business and engaging for

balanced, strongly enforced regulatory environments.

We are building on our long-term commitment to science

which analyses the harm reduction potential of our NGP

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In our major markets, we seek regulation that balances

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available to adult smokers, while driving out irresponsible

products and preventing youth access.

We continue to be concerned with policy in some markets

which leans towards prohibition. In August, I visited our

employees, consumers and customers in Australia, one of the

most challenging markets in our portfolio, where around 30%

of tobacco products are illicit. The Australian market is a

sobering example of the unintended consequences of

over-restrictive regulation. Onerous limits on the availability

of NGP and extremely high taxation on tobacco products have

led to a spiralling trade in illegal products. These prohibitive

policies have been damaging both for consumers seeking

trusted reduced harm products and for the government,

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BOARD CHANGES

Our Board has a strong and diverse mix of skills and experiences,

and we continue to develop our capabilities through education

sessions and new appointments. In January, we welcomed

Julie Hamilton to the Board and to our People, Governance

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Remuneration Committee. Julie, who was Chief Commercial

and Global Sales Officer at Diageo, has over 30 years’ experience

in marketing, strategy and digital transformation. Prior to

Diageo, Julie spent 25 years at the Coca-Cola Company where

she held a range of leadership positions, including Chief

Customer and Commercial Leadership Officer.

Diane de Saint Victor has decided to retire from the Board at

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member of the Board, with roles on the Remuneration and

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BECOMING AN EVEN STRONGER CHALLENGER

As we enter the final year of our current strategy,

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develop consumer capabilities, agile ways of working and our

performance culture. In March 2025, I look forward to joining

Stefan and our management team, when we provide detail of

our next five-year strategy, which will build on our recent

success and evolve Imperial Brands into an even stronger

challenger business.

Thérèse Esperdy

Chair

“We are better able to create

predictable and sustainable value

for shareholders and meet the

needs of our wider stakeholders.”

YYYKORGTKCNDTCPFURNEEQO 9

CHIEF EXECUTIVE’S STATEMENT

As we enter the final year of our current

strategy, I am pleased with how we have

strengthened the Company and delivered

amore consistent performance.

Imperial Brands has become a more effective

challenger business through new consumer

capabilities, agile ways of working, and a

high-performance culture.

This ongoing transformation is driving

improving operational and financial

outcomes, and growing capital returns.

STRONG PERFORMANCE

In combustible tobacco, our focus on operational excellence

has enabled us to grow aggregate market share in our five

priority markets with a five basis point improvement, while

driving further strong pricing.

Since the launch of our strategy in 2021, these five largest

markets, which account for c.70% of operating profit, have

recorded a cumulative aggregate share increase of 48 basis

points. This performance is consistent with our strategic

objective to hold or grow aggregate share across these

markets, balancing market share delivery with value creation.

Over the past year, tobacco pricing increased 7.8%, more than

offsetting declining volumes, to deliver tobacco net revenue

growth of 3.8% at constant currency.

In next generation products (NGP), we continue to grow

through product innovation and scaling up within our existing

market footprint. NGP net revenue grew by 26% on a constant

currency basis. At actual exchange rates, this takes our

cumulative growth over the four years since 2020 to 64%.

The Company’s strong performance has driven constant

currency net revenue growth in tobacco and NGP revenue of

4.6% – the strongest like-for-like top-line growth in more than

10 years. Logista in our Distribution segment also contributed

positively to our financial results with gross profit up 4.4%.

This was driven by strong performance in the underlying

business particularly in Spain and Italy as well as the benefit

of prior year acquisitions.

DELIVERING

ON OUR STRATEGY

Imperial Brands PLC | Annual Report and Accounts 202410

All of this helped to drive Group adjusted operating profit

growth of 4.6% at constant currency and reported operating

profit growth of 4.5%.

A STRONGER CHALLENGER BUSINESS

This strong financial performance is underpinned by our

transformation into a strong challenger business better

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Being a successful challenger is about getting closer to

consumers, making targeted technology investments to

improve agility, and building a culture of high performance.

Our Global Consumer Office, set up in 2021, is now well

established, with a team of 1,000 experts in insights,

innovation, marketing and revenue growth management,

working seamlessly with our markets.

A highlight of my year was visiting our new sensory

laboratory in Shenzhen, which further strengthens our

innovation capabilities, helping us link our consumers

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Over the past 12 months, we passed important milestones

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project to create a unified enterprise resource planning

system replacing 60 legacy systems.

We continue to add to our capabilities through senior

appointments. During the year we welcomed three new

members of the Executive Leadership Team. Priyali Kamath

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deep experience of regulated businesses to the new role of

Chief Corporate Affairs Officer. Kevin Massie has been

appointed General Counsel, having held a range of senior

roles, most recently at the international consumer business

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Across the organisation, we continue to invest in developing

our culture. 850 colleagues have now completed Connected

Leadership, our intensive seven-day programme which enables

our senior people to become better coaches to their teams.

This year in our Employee Experience survey we maintained

our 74% engagement score, which is one percentage point

above the global benchmark.

CONSISTENT COMBUSTIBLE PERFORMANCE

Our transformation is leading to further success at a market

level, where in combustibles we focus on the performance

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Share gains in the US, Germany, Spain and Australia have

been offset by a decline in the UK.

In the US, our portfolio, which offers adult smokers a brand

offering at each key price point, enabled us to continue to gain

share. This structured approach, combined with our continued

investment in improving our sales and marketing capabilities,

has supported more than four years of stable or growing share

and an improved financial performance.

In Germany, our initiatives have stabilised our market share

after more than a decade of steep losses. In Spain, we delivered

another year of share gains coupled with improved pricing.

The UK and Australia are challenging markets with elevated

market size declines caused by high excise and growth in

illicit trade. Here, we have continued to balance value

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market share performance.

We are also delivering strong performances in our medium-

sized and smaller markets. For example, in our Africa, Asia,

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we delivered an improved financial performance after a

difficult first half which was affected by disruption to

shipment timings in the Middle East.

SUSTAINABLE GROWTH IN NEXT

GENERATION PRODUCTS

In NGP, we made significant progress towards our goal of a

sustainable business which makes a strong contribution to

both Group performance and reducing harm for consumers.

For the first time, we reported increased revenue in all three

regions. We are also growing revenue and market share across

all three categories.

In the US, our return to growth was spearheaded by the launch

in February of Zone, our modern oral nicotine proposition.

Early feedback from both consumers and the retail trade has

been extremely positive.

In the Europe region, we saw strong growth in vape, led by the

UK and supported by new products including the 1,000-puff

blu bar disposable and the rechargeable blu bar kit. In this

category, we now have a highly competitive product portfolio

focused on responsibly meeting the needs of adult smokers

and existing nicotine consumers.

In AAACE, improving revenues were supported by progress in

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Europe, we are building consumer loyalty and securing our

fair share against strong competition. Our iSenzia tea-based

heat sticks are emerging as an important addition to our offering.

Following the launch of our strategy in 2021, we needed to reset

our NGP operations while we gathered consumer insights and

modernised our product portfolio. Now, following a period of

test-and-learn launches, we are operating at scale with NGP

available in over 20 markets. In eight markets, NGP account

for 20% or more of total tobacco and NGP net revenue and in

11 markets, we have brands which occupy top three positions

in their categories. Our growing success has meant that we

have been able to continue to reduce losses while continuing

to invest in future growth. We still have a long way to go on

this journey, but we have built the foundations for a sustainable

business, underpinned by disciplined investment and increased

agility to meet changing consumer needs.

“Being a successful challenger

is about getting closer to

consumers, making targeted

technology investments to

improve agility, and building

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YYYKORGTKCNDTCPFURNEEQO 11

CHIEF EXECUTIVE’S STATEMENT continued

TOWARDS A HEALTHIER FUTURE

Our NGP business is not just growing consistently – it is also

growing responsibly.

During the year we completed several scientific studies

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smokers seeking to quit cigarettes.

We maintain rigorous marketing standards to ensure

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which build trust in NGP by minimising youth access and

eliminating illegal products.

Strong progress continues to be made on our other People

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Direct carbon emissions are now down 69% since our baseline

year of 2017 and we remain on course to become Net Zero

across our supply chain by 2040. Since May 2024, within our

own operations we have sent zero waste to landfill and have

reduced absolute waste by 32% compared to our 2017 baseline.

The number of lost-time accidents has reduced by 47%

compared to our 2019 baseline year.

In September, we were pleased to showcase our evolving

approach to ESG through an investor webinar. For more

information on our progress see pages 59-77. A replay of

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CVǭwww.imperialbrandsplc.com.

ALLOCATING CAPITAL WITH DISCIPLINE

As a highly cash generative business, we recognise the

importance of a clear and transparent capital allocation

framework to our stakeholders. Consistency and discipline are

key principles that underpin our four capital allocation priorities:

• Invest behind the strategy to deliver our growth initiatives

• Maintain a strong and efficient balance sheet with a target

leverage towards the lower end of our adjusted net debt to

EBITDA range of 2-2.5 times

• A progressive dividend policy with dividends

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• Return surplus capital to shareholders

Since reaching our target leverage in September 2022, we have

entered into an ongoing, multi-year buyback, which began

with an initial buyback of £1 billion during FY23, and a further

£1.1 billion for FY24. In October 2024, we announced a third

year of buybacks with a £1.25 billion programme – an increase

of 14% on the prior year. This will be largely completed during

FY25 and will bring our capital returns via buybacks under the

current strategy to £3.35 billion.

In line with our progressive dividend policy, we are

recommending a 4.5% increase for the FY24 dividend to

153.42 pence per share. In October, we announced our intention

to change the payment profile of our dividend to four equal

quarterly payments for FY25 onwards. This change in the

dividend payment profile will lead to more consistent cash

returns to shareholders throughout the year and, during the

transitional period of FY25, will result in increased dividend

payments of 40.08 pence per share in June and September 2025.

OUTLOOK

We are now working on our strategy for the next five-year

period through to 2030, which will build on the foundations

established under the current strategy. Further details will be

provided at a capital markets event on 26 March 2025. In the

meantime, our priority is to deliver on the final 12 months of

the current five-year plan and, while we take nothing for

granted, we remain confident in our ability to deliver on our

existing operational and financial commitments.

In the coming year, at constant currency we expect to deliver

low single-digit tobacco and NGP net revenue growth and to

grow our Group adjusted operating profit close to the middle

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profit growth from our combustible tobacco business and a

further reduction in operating losses in our NGP portfolio.

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constant currency net revenue growth, while balancing our

objective to build a sustainable and profitable business.

In line with previous years, performance will be weighted

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combustible pricing and investment. As a result, first half

Group adjusted operating profit is expected to grow at low

single digits at constant currency.

We expect to deliver at least high-single-digit earnings per

share growth at the full year at constant currency supported

by the ongoing share buyback and partly offset by higher

adjusted finance and tax costs. At current rates, foreign

exchange translation is expected to be a headwind of 1-2% to

net revenue, adjusted operating profit and earnings per share.

We remain focused on driving sustainable growth in cash

flows to underpin another year of shareholder returns and

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Stefan Bomhard

Chief Executive Officer

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1. Stefan Bomhard (German)

Chief Executive Officer

2. Lukas Paravicini (Swiss)

Chief Financial Officer

3.Deborah Binks-Moore (British)

Chief Corporate

Affairs Officer

4. Alison Clarke (British)

Chief People and

Culture Officer

5. Javier Huerta (Mexican)

Chief Supply Chain Officer

6. Priyali Kamath (Indian)

President, Africa, Asia,

Australasia, and Central

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(AAACE) Region

7. Kevin Massie (Canadian)

General Counsel

8. Murray McGowan (British)

Chief Strategy and

Development Officer

9. Paola Pocci (Italian)

Chief Consumer Officer

10. Kim Reed (American)

President and CEO,

Americas Region

11. Aleš Struminský (Czech)

President, Europe Region

A TEAM WITH DIVERSE EXPERIENCE

Our Executive Leadership Team (ELT) has a strong blend

of experience from across leading global consumer

companies and deep tobacco and local market knowledge.

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LEADERSHIP

YYYKORGTKCNDTCPFURNEEQO 13

BUSINESS MODEL

OUR DISTINCTIVE

APPROACH

Our colleagues

Our colleagues are our most

important asset. We have

25,000 committed and

passionate employees who

want to make a difference.

Our brands

Our portfolio of 160 brands

provides enjoyment and

pleasure for millions of

adult consumers every day.

Our relationships

We have solid, trusted

partnerships with

stakeholders, including

customers and suppliers

across c.120 markets.

Our operations

We have a network of

27 manufacturing sites that

source and process tobacco

raw materials to provide

high-quality products at

lowest cost.

Our industry knowledge

Our deep knowledge of

thetobacco and nicotine

industry, including our

consumer insights, helps

us to operate responsibly

in all our markets.

Our financial strength

We are able to raise prices

tomore than offset

volume declines to deliver

high margins and strong

cash flows to invest and

drive returns.

ADULT CONSUMER INSIGHTS

We start with the consumer –

and everything we do is based

around a deep understanding

of existing adult smokers and nicotine

consumers. Our insights research is

led by our Global Consumer Office and

we unlock value by ensuring we offer

our consumers the right product choices

to meet their needs. These insights

provide competitive advantage and

inform our product offerings in both

combustible tobacco and NGP.

SCIENCE & REGULATION

We use our know-how and smaller

sizeto be agilein how we respond to

regulatory changes. This is supported

by our science and corporate affairs

teams, who understand the regulatory

environment in all our markets and

ensure we operate responsibly and

provide high-quality products compliant

with local standards. We work to

scientifically substantiate the harm

reduction potential of all our NGP

relative to cigarettes.

MARKETING & INNOVATION

Our marketing and innovation teams

addvalue by using consumer insights

todevelop a portfolio of combustible

tobacco and potentially reduced-harm

productsto engage and excite adult

consumers.We use sales and marketing

communications and innovation to

differentiate our brands and meet

evolvingconsumer needs, while at

thesame time ensuring our products

are not marketed to youth.

OUR ASSETS

WHAT WE DO

The choices we make in running our business

differentiate us from our global peers.

Consumer centricity

We put the consumer at

thecentre of our business

with strongconsumer

insightguiding all our

decision-making.

Local and international

brands

Our differentiated brand

portfolio means we offer

consumers heritage brands

with local provenance and

international brands that have

a broader geographic appeal.

Focus

We focus our investment on

clear performance drivers in

our five priority combustible

markets and drive value from

our broader market portfolio.

We are building our NGP

business in markets where

consumers have already

expressed their preferences

and where we already have

established distribution.

Partnerships

Our partnership approach

toinnovation enables us

tocompete in multiple NGP

categories with an agile

response to changing market

dynamics and fast product

development.

Imperial Brands PLC | Annual Report and Accounts 202414

SUSTAINABLE SOURCING

Our leaf purchasing teams work with

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from smallholder farmers to

multinational companies to procure

high-quality leaf and nicotine for our

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value by responsibly meeting all our

sourcing needs including leaf, nicotine

and non-tobacco materials such as

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our factories. Their decisions are

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EFFICIENT MANUFACTURING

Our manufacturing teams employ

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product manufacturing standards.

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competitive strengths, enabling us to

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logistics companies to distribute

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STRONG RETAIL PARTNERSHIPS

We sell our products to our customers.

Our sales and marketing teams have

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through sales force coverage,

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sale advertising, where appropriate.

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regulatory environment. Our goal is to

deliver mutually attractive commercial

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wholesaler and distributor customers.

STAKEHOLDER VALUE

Consumers

Millions of adults worldwide choose to enjoy our

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their evolving requirements are vital for the

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Governments and regulators

Approaches to legislation vary significantly

across geographies. We support reasonable

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Colleagues

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rewarding work environment to enable them

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Investors

Our investors provide capital to the business

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capital within the business.

Customers

We work closely with distributors, wholesalers

and retailers to ensure our products are available

to adult consumers in a diverse range of outlets

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business model.

Suppliers

We maintain strong relationships with our

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suppliers to help ensure sustainable supply and

business continuity, underpinned by fair contract

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YYYKORGTKCNDTCPFURNEEQO 15

OUR STRATEGY

IN ACTION

STRATEGIC PILLARS

CRITICAL ENABLERS

The choices we make are

guided by our strategy,

purpose and vision as well as

our approach to managing

our environmental, social and

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OUR PURPOSE

Forging a path to a healthier

future for moments of

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OUR VISION

To build a strong

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focus and choice.

HOW WE MEASURE OUR PERFORMANCE

To measure our performance we have 10 financial and four

non-financial key performance indicators. We also measure

the performance of several other indicators.

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OUR BEHAVIOURS

HEALTHIER FUTURES

POSITIVE CONTRIBUTION TO SOCIETY

SAFE & INCLUSIVE WORKPLACE

Consumer health Climate change Packaging and waste

Farmer livelihoods

& welfare

Sustainable &

responsible sourcing

Human

rights

Employee health,

safety & wellbeing

Diversity, equity

& inclusion

OUR APPROACH TO ESG

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YYYKORGTKCNDTCPFURNEEQO 17

STRATEGIC PILLARS

FOCUSING ON

PRIORITY MARKETS

Our approach is creating growing revenue

and profit from our largest tobacco businesses

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businesses through targeted brand building, improvements in

sales capabilities and careful portfolio management.

Our ambition is to maintain stable market share in aggregate

and in any given year some markets will grow share while

other markets may see reductions. In 2024, we recorded the

fourth consecutive year of stable or growing aggregate share

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STRATEGIC REVIEW

DRIVING VALUE

FROM OUR

BROADER MARKET

PORTFOLIO

We focus on the medium-sized and smaller

markets with the strongest opportunities

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We have developed a rigorous approach to managing our

broader portfolio of markets. This involves stronger consumer

engagement, targeted investment in brands and improved

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The establishment of the Africa, Asia, Australasia and

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performance management of these markets and more

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broader market portfolio.

BUILDING SCALE

IN NEXT

GENERATION

PRODUCTS

We are defining a distinctive challenger

position offering strong consumer choices

across multiple categories

Our consumer-led, partnership approach to innovation and

development means we now have attractive propositions

across all categories: vape, heated products and oral nicotine.

However, we continue to be disciplined in our market entry

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consumer demand for the category and where we already

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was driven by the launch of our new Zone oral nicotine pouches.

In the Europe region, growth was led by our refreshed portfolio

of vaping products including the new blu bar disposable and

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consumer loyalty in heated products, including our new

iSenzia tea-based sticks.

KEY DEVELOPMENTS

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU18

2021

Definition of key

operational levers to

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combustible markets; US,

the largest global market

established as separate

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aggregate market share

for priority markets

stabilised after a period

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2022

Branding refreshed for

local jewel brands

including Winston in

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2023

Focused investment in

sales force in US and

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2024

Aggregate market share

growth alongside strong

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share growth

2021

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established to enable

stronger focus on

attractive medium-sized

and smaller markets

2022

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2023

Strong revenue growth

reported in Africa; Asia,

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2024

Further consumer

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ELT with the appointment

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2020

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underperforming

investments cut

2021

Investment aligned

behind new strategy;

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2022

blu 2.0 pod device pilots

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oral pouch flavours in

European markets

2023

Multiple vape and heated

product and market

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available in more than

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2024

Launch of Zone oral

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revenue in eight European

markets

USA

+15bps

Germany

+2bps

-50bps

Five priority markets and their FY24 share gains/losses

12-month share

In each of these markets Imperial

enjoys a top-three market position,

with established brands and strong

customer relationships. Our aggregate

market share has improved by +5bps

versus the prior year.

Spain

+5bps

Australia

+5bps

NGP as a percentage of Imperial’s tobacco and NGP net

revenue in European markets

FY24 Tobacco and NGP net revenue growth by wider

market clusters

OUR TRANSFORMATION IN ACTION

Middle East &

Turkey

Africa

6.0%

Central &

Eastern Europe

4.9%

1.9%

Germany

Hungary

France

Spain

Czech Republic

Poland

Sweden

Finland

Norway

Austria

Estonia

Portugal

Italy

Greece

43%

36%

27%

21%

20%

12%

31%

27%

34%

YYYKORGTKCNDTCPFURNEEQO 19

CRITICAL ENABLERS

PUTTING THE

CONSUMER AT

THE CENTRE OF

THE BUSINESS

Investments in insights, innovation,

marketing and portfolio management are

supporting success in global markets

The tobacco and nicotine environment is undergoing

transformative change with consumer tastes becoming more

eclectic. The pace of innovation is accelerating and there is

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been patiently investing in our consumer capabilities.

In consumer insights, there has been a step change in our

level of consumer interactions. During FY24 we conducted

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least 70 research programmes in flight. Also during the year,

we opened a new sensory laboratory in Shenzhen adding to

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growth management, after initial pilots, we have begun a

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STRATEGIC REVIEW continued

DEVELOPING OUR

PERFORMANCE

CULTURE

We have a structured approach to becoming

a more accountable, collaborative and

inclusive organisation

Our progress towards becoming a consistently high-performing

business has been driven by an integrated multi-year

programme. Underpinning all our activities have been our

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and Inclusive to all; and Build our Future.

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%QPPGEVGF.GCFGTUJKRRTQITCOOGYJKEJGPCDNGUQWTUGPKQT

people to become better coaches and unlock the full potential

of their teams. We have also launched new initiatives to support

career development and the acceleration of high-potential

female leaders.

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one point above the global benchmark.

SIMPLIFYING

AND BECOMING

MORE EFFICIENT

New ways of working and improvements in

tech and data are enabling more sustainable

growth

Our 2021 strategy identified a need to better integrate our

operations to become simpler and more efficient.

We have made significant structural changes to our

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to help these teams partner more closely with the business.

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We have also embarked on Unify, our multi-year business

transformation programme, enabling the simplification of our

operations and making them more efficient by standardising

our core business processes, harmonising our data and

unifying our core system that connect us globally to provide

enhanced business and consumer insights, enabling informed

decisions at speed for us to be an agile and challenger

business. In October 2024, we passed an important milestone

with the first market cluster adopting these tools.

KEY DEVELOPMENTS

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2021

)TQWR%QPUWOGT1HHKEG

established, creating

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for insights, innovation,

marketing and portfolio

management

2022

Acceleration of

development

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0)2ǭNCWPEJGU

2023

Innovation hubs open in

Liverpool and Hamburg;

launch of “Dimensions”,

global insights project

segmenting individual

consumer moments; New

York capital markets day

showcasing consumer

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CRRQKPVGFCU%JKGH

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2024

Opening of Shenzhen

sensory laboratory,

enabling closer

collaboration

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2021

Strategy launch identifies

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improved performance;

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to embed five core

behaviours

2022

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– more rigorous

performance management

for objective setting and

bonuses; Board approves

long-term diversity, equity

and inclusion ambitions

2023

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coaching courses begin.

By end FY24, 850 leaders

have graduated from this

seven-day programme

2024

We maintained our

engagement score at

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point above the

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2021

New performance

management approach

introduced; market

clusters reduced

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2022

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support functions;

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system announced

2023

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Services unit

2024

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programme launched

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management skills

among senior leaders;

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first market October 2024

Consumer interviews in FY24

220,000

OUR TRANSFORMATION IN ACTION

Innovation centres

People in the Global Consumer universe

1,000

Legacy systems to be replaced by 2028

People employed in our Global Business Services unit

>320

Productivity gains

10%

Employee engagement

66%

74% 74% 74%

73%

Global benchmark

YYYKORGTKCNDTCPFURNEEQO 21

KPIs

We use key performance indicators to assess the progress

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FINANCIAL KPIs

Tobacco & NGP

net revenue (£bn)

Performance

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QPCEQPUVCPVEWTTGPE[DCUKU6QDCEEQǭPGV

TGXGPWGYCUWRCVEQPUVCPVEWTTGPE[

TGHNGEVKPIRTQITGUUOCFGKPVJGVYQ

EQODWUVKDNGUVTCVGIKERTKQTKVKGUQHŬHQEWUQP

QWTRTKQTKV[OCTMGVUŭCPFŬFTKXKPIXCNWGHTQO

QWTDTQCFGTRQTVHQNKQŭ

* 'ZENWFKPI4WUUKC

Tobacco & NGP adjusted

operating margin (%)

Performance

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9JKNGITQUUOCTIKPUKPETGCUGFVJGFGENKPGKP

CFLWUVGFQRGTCVKPIOCTIKPKUCTGUWNVQH

KPHNCVKQPCPFKPETGCUGFFGRTGEKCVKQP

* 'ZENWFKPI4WUUKC

Performance

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EWTTGPE[DCUKUKPVJG[GCT6JKUITQYVJKP

QWTǭ0)2TGXGPWGTGHNGEVUQWTUVTCVGIKERTKQTKV[

VQŬDWKNFCVCTIGVGF0)2DWUKPGUUŭCPFVJG

UVGRWRKPKPXGUVOGPVFWTKPIVJGRGTKQF

Performance

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WUVQUVCDKNKUGVJGOCTMGVUJCTGNQUUYG

GZRGTKGPEGFHQTCPWODGTQH[GCTU9GDCNCPEG

OCTMGVUJCTGYKVJXCNWGETGCVKQPUQYGCTG

PQNQPIGTVJGOCLQTOCTMGVUJCTGFQPQTVQ

QWTǭEQORGVKVQTUKPQWTJKIJGTXCNWGOCTMGVU

)CKPUKPVJG75)GTOCP[5RCKPCPF

#WUVTCNKCQHHUGVFGENKPGUKPVJG7-

Performance

Adjusted earnings per share increased

ǭCVǭCEVWCNGZEJCPIGTCVGUCPFKPETGCUGF

QPCEQPUVCPVEWTTGPE[DCUKU4GRQTVGF

GCTPKPIURGTUJCTGITGY6JKUOQXGOGPV

KUGZRNCKPGFKPVJG)TQWR(KPCPEKCN4GXKGY

* 'ZENWFKPI4WUUKC

Adjusted earnings

per share (pence)

HOW WE ARE

PERFORMING

NGP net revenue

(£m)

Aggregate priority

market share vs prior

year (basis points)

KPIs used as bonus and LTIP

performance criteria for Executive

Directors. See Remuneration Report

QPǭRCIGUHQTOQTGKPHQTOCVKQP

£7.6bn

£7.7bn*

£8.0bn

£8.2bn

246.5p

264.8p*

278.8p

297.0p

Performance

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KP(;ENQUGVQQWTECRKVCNCNNQECVKQPVCTIGV

QHZVQZ#FLWUVGFPGVFGDVTGFWEGFVQ

cDKNNKQPCHVGTcDKNNKQPQHTGVWTPUVQ

UJCTGJQNFGTUXKCFKXKFGPFCPFUJCTGDW[DCEM

'$+6&#KPETGCUGF[GCTQP[GCTTGHNGEVKPI

the growth in adjusted operating profit

FWTKPIVJGHKPCPEKCN[GCT

Adjusted net debt to EBITDA

(multiple)

2.2x

2.0x

1.9x

1.8x

Performance

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Adjusted operating cash

conversion rate (%)

83%

102%

92%

100%

2221

-2bps

+10bps

+35bps

+5bps

Dividend per share (pence)

Performance

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YKVJǭQWTECRKVCNCNNQECVKQPRQNKE[

139.08p

141.17p

146.82p

153.42p

£188m

£208m

£265m

£329m

43.5%

44.4%*

44.7%

44.0%

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NON-FINANCIAL KPIs

1,2

Absolute Scope 1 and 2

market-based C0

equivalent

emissions (tonnes)

Performance

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CPFRTGXKQWU[GCTUũFCVCJCUDGGPTGUVCVGF

FWGVQVJGEQTTGEVKQPKP5EQRGOCTMGV

DCUGFGOKUUKQPUTGNCVKPIVQVJGUQWTEGQH

JGCVCPFUVGCOKPQWTHCEVQT[KP6ȨTMK[G

 &GHKPKVKQPUHQTPQPHKPCPEKCN-2+UECPDGHQWPF

KPǭVJG'5)4GXKGYQPRCIGUCPFKPVJG

4GRQTVKPI%TKVGTKCFQEWOGPVCXCKNCDNGCV

YYYKORGTKCNDTCPFURNEEQO

 %GTVCKPPQPHKPCPEKCNFCVCJCUDGGP

KPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2';

WPFGTVJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG

+5#'UVCPFCTF';ũU#UUWTCPEG1RKPKQPKU

CXCKNCDNGQPQWTYGDUKVG1WTTGRQTVKPIUEQRGCPF

FGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKC

documentRWDNKUJGFQPQWTYGDUKVG

5GGYYYKORGTKCNDTCPFURNEEQOUWUVCKPCDKNKV[

HQTOQTGKPHQTOCVKQP

 1WTGPXKTQPOGPVCNFCVCHQNNQYUVJGTGRQTVKPI

RGTKQF3HKPCPEKCN[GCTVQ3HKPCPEKCN[GCT

6JKUKUVQCNNQYHQTFCVCEQNNGEVKQP

XCNKFCVKQPCPFGZVGTPCNCUUWTCPEG1WTTGRQTVKPI

UEQRGCPFFGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI

%TKVGTKCFQEWOGPVRWDNKUJGFQPQWTYGDUKVG

 1WTJGCNVJCPFUCHGV[FCVCKUHQTVJGHWNN

HKPCPEKCN[GCT1WTTGRQTVKPIUEQRGCPFFGHKPKVKQPU

CTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKCFQEWOGPV

RWDNKUJGFQPQWTYGDUKVG

Performance

4GVWTPQPKPXGUVGFECRKVCNKORTQXGFKPVJG

[GCTD[DRUVQDGPGHKVKPIHTQOC

TGFWEVKQPKP(;KPXGUVGFECRKVCNEQORCTGF

VQVJGRTKQT[GCTOCKPN[FWGVQVJGHQTGKIP

GZEJCPIGKORCEVQPKPVCPIKDNGCUUGVU

Return on invested capital (%)

Lost time accident frequency rate

(per 200,000 hours)

Performance

#NVJQWIJYGJCXGTGFWEGFVJGPWODGTQH

NQUVǭVKOGCEEKFGPVUKP(;VJGNQUVVKOG

accident rate has remained unchanged from

NCUV[GCTFWGVQCEQTTGURQPFKPITGFWEVKQP

KPǭJQWTUYQTMGF

9GJCXGUGGPCFGETGCUGKPVJG.6#TCVG

EQORCTGFVQVJGDCUGNKPG[GCT

0.40

0.30

0.24

0.30

16.5%

17.7%

18.5%

19.7%

Scope 1

Total value is total Scope 1 and Scope 2

market-based absolute CO

e emissions

Scope 2 market-based

2024202320222017

114,270

91,007

81,089

73,437

15,683

176,176

85,829

20,326

Waste (tonnes)

Performance

1WTVCTIGVKUVQTGFWEGYCUVGD[

D[ǭǭ9GJCXGGZEGGFGFVJKUVCTIGV

YKVJǭCǭTGFWEVKQPKPYCUVGEQORCTGF

VQǭVJGǭDCUGNKPG[GCT9GYKNNUGVC

PGYǭYCUVGTGFWEVKQPVCTIGVUWDLGEVVQ

'5)ǭ%QOOKVVGGCRRTQXCN

49,141

35,744

41,969

33,211

Total shareholder return

Performance

9GJCXGFGNKXGTGFVQVCNUJCTGJQNFGT

TGVWTPUǭQHǭQXGTVJGRTKQTVJTGG[GCT

RGTKQF&GNKXGT[KPNKPGYKVJQWTIWKFCPEG

UWRRQTVUITQYKPIKPXGUVQTEQPHKFGPEG

KPǭQWTǭOCPCIGOGPVVGCOũUCDKNKV[VQ

KORNGOGPVǭQWTUVTCVGI[

120

160

200

2024202320222021

Imperial Brands total return

Energy consumption (GWh)

Performance

9GUGVCVCTIGVVQTGFWEGCDUQNWVGGPGTI[

EQPUWORVKQPD[D[XGTUWUVJG

ǭDCUGNKPG[GCT+P(;YGGZEGGFGF

VJKUǭVCTIGVYKVJCTGFWEVKQPEQORCTGF

VQǭVJGDCUGNKPG[GCT9GYKNNUGVCPGY

GPGTI[ǭTGFWEVKQPVCTIGVUWDLGEVVQ

'5)ǭ%QOOKVVGGCRRTQXCN

1WTTGNCVKXGGPGTI[EQPUWORVKQP

KUǭǭM9JcOPGVTGXGPWG

875

650

712

595

Employee experience

6QOQPKVQTVJGRTQITGUUQHQWTEWNVWTCN

EJCPIGRTQITCOOGYGEQPFWEVCP

CPPWCN'ORNQ[GG'ZRGTKGPEGUWTXG[

+Pǭ(;QWTGORNQ[GGGPICIGOGPVUEQTG

YCUVJGUCOGNGXGNCUVJGRTKQT

[GCTCPFCDQXGVJGINQDCNDGPEJOCTM

2CTVKEKRCVKQPKPVJGUWTXG[YCU

#FFKVKQPCNN[YGJCXGFGXGNQRGFCP

KPVGTPCNDGURQMGKPFGZYKVJYJKEJVQ

OQPKVQTVJGQWVEQOGQHQWTNGCFGTUJKR

VCNGPVFGXGNQROGPVRTQITCOOGU

/QTGPQPHKPCPEKCNRGTHQTOCPEG

indicators can be found in the

'5)ǭ4GXKGYQPRCIGUCPF

in our 4GRQTVKPI%TKVGTKCFQEWOGPV

CXCKNCDNGQPQWTYGDUKVG

YYYKORGTKCNDTCPFURNEEQO 23

INDUSTRY OVERVIEW

GLOBAL MARKET

CONTEXT

As the highly regulated global market for

tobacco transforms into a more diverse

market for nicotine across multiple categories,

Imperial is leveraging its challenger mindset

to deliver for consumer needs and

EQPUWOGTǭJGCNVJ

EVOLVING CONSUMER DEMAND

The global nicotine market represents US$ 957 billion of retail

UCNGUYKVJQHVJKUCEEQWPVGFHQTD[EQODWUVKDNGVQDCEEQ

Within combustible tobacco, cigarettes remain the largest

ECVGIQT[YKVJOQTGVJCPVTKNNKQPEQPUWOGFGCEJ[GCT

However, the development and consumer adoption of next

generation products (NGP) and smokeless tobacco over the

past decade has led to retail sales of US$ 77 billion, accounting

HQTVJGTGOCKPKPI0)2GPEQORCUUGUXCRKPIRTQFWEVU

JGCVGFVQDCEEQFGXKEGUCPFUVKEMUCPFQTCNPKEQVKPGRQWEJGU

Despite the well-known health risks of smoking, more than

QHVJGYQTNFũUCFWNVRQRWNCVKQPUVKNNEJQQUGVQUOQMG

1WTǭEQPUWOGTUVGNNWUVJG[XCNWGQWTRTQFWEVUHQTVJGOQOGPVU

QHTGNCZCVKQPCPFRNGCUWTGVJG[RTQXKFG/CP[QHVJGUG

consumers also tell us that they are looking for potentially

NGUUǭJCTOHWNCNVGTPCVKXGUVQVTCFKVKQPCNEQODWUVKDNGRTQFWEVU

but that they have yet to find a perfect replacement for

EKICTGVVGU(QTOQTGKPHQTOCVKQPUGGRCIGU

This means we are seeing a growing diversity of behaviour,

with consumers using different products for different

OQOGPVUKPVJGKTFC[

Our strategy prepares us for a market where multiple nicotine

categories coexist, but these market developments are not

YKVJQWVVJGKTEJCNNGPIGU#ITGCVGTPWODGTQHPKEQVKPGRTQFWEV

categories introduces supply chain complexity – which Imperial

OKVKICVGUWUKPICUVTQPIUWRRNKGTRCTVPGTUJKROQFGN+VCNUQ

introduces regulatory complexity, which can be harder to

OKVKICVG(QTOQTGKPHQTOCVKQPUGGRCIGU

Thanks to our focused investments in transformation, we are

now well placed to provide much greater consumer choice and

VQOCMGCRQUKVKXGEQPVTKDWVKQPVQVJKUYKFGTOCTMGVVTCPUKVKQP

PROMOTING HARM REDUCTION

Regional and market regulators have diverse policies

VQYCTFUǭVQDCEEQJCTOTGFWEVKQP2WDNKEJGCNVJDQFKGUCITGG

KVǭKUVJGUOQMGETGCVGFD[VJGDWTPKPIQHVQDCEEQNGCHVJCV

contains most of the harmful chemicals responsible for

UOQMKPITGNCVGFFKUGCUG6JKUKUPQVCNYC[UTGHNGEVGFKPRQNKE[

Some governments, such as the UK and New Zealand,

JCXGǭRQNKEKGUVJCVUWRRQTVGZKUVKPIUOQMGTUũVTCPUKVKQP

VQǭRQVGPVKCNN[NGUUJCTOHWNRTQFWEVUCPFVJGUGOCTMGVU

JCXGǭUGGPRQUKVKXGRWDNKEJGCNVJDGPGHKVU

Other governments and the World Health Organization (WHO)

FQPQVTGEQIPKUGVJGRWDNKEJGCNVJDGPGHKVUQH0)26JKUKUQHVGP

FWGVQCUQNGHQEWUQPEQPEGTPUCDQWVC[QWVJCEEGUUŬQPTCORŭ

This is an important consideration, although it should not

detract from the much larger – and scientifically substantiated

– value of the “off-ramp” that NGP can provide to many

OKNNKQPUQHGZKUVKPIUOQMGTU

We will continue to advocate for policies that embrace the

EQPEGRVQHVQDCEEQJCTOTGFWEVKQP

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU24

NAVIGATING REGULATION AND EXCISE

6JGVTCFKVKQPCNVQDCEEQOCTMGVTGOCKPUJGCXKN[TGIWNCVGF

Such regulation continues to evolve and remains a significant

influence on how we manufacture, advertise and sell our

RTQFWEVUCPFJQYQWTEQPUWOGTUDW[CPFGPLQ[VJGO

4GIWNCVKQPXCTKGUYKFGN[CETQUUTGIKQPUCPFOCTMGVU

Nationally, countries such as New Zealand and Australia

JCXGǭWPXGKNGFEQORTGJGPUKXGRTQITCOOGUQHPGYTGIWNCVKQP

while other countries such as the US and Greece have further

developed product-by-product approval pathways for the

OCTMGVKPIQHVQDCEEQCPFPKEQVKPGRTQFWEVU

At a regional level, the EU is re-examining its Tobacco

Products Directive, Tobacco Advertising Directive and

6QDCEEQ'ZEKUG&KTGEVKXG

Combustible tobacco is heavily taxed, contributing more than

€80 billion to European governments alone each year, and is

often seen as a non-controversial source of urgent additional

IQXGTPOGPVHWPFKPI

High excise taxes are also a tool governments use to curb

EQODWUVKDNGFGOCPF'ZEKUGVCZGUXCT[UQOGCTGDCUGFQPC

percentage share of the retail price while others are linked to

inflation, such as in the UK, where we have seen drastic excise

TKUGUQXGTVJGNCUV[GCT

Imperial Brands supports reasonable and rational regulation

QHǭVQDCEEQCPFPKEQVKPGRTQFWEVU9GDGNKGXG0)2QHHGTRQVGPVKCN

harm reduction and should be subject to excise rates at

significantly lower levels than combustible products to help

GPEQWTCIGUOQMGTVTCPUKVKQP

We are also clear that all our products are for adult nicotine

EQPUWOGTUQPN[(QTOQTGKPHQTOCVKQPUGGRCIGU

Global nicotine market retail sales:

US$ 957 billion

of which NGP and smokeless tobacco accounts for:

US$ 77 billion

5QWTEG'WTQOQPKVQT

Cigarettes consumed globally each year:

5.3 trillion

5QWTEG'WTQOQPKVQT

Percentage of world’s adult population

who smoke:

>20%

5QWTEG1WT9QTNFKP&CVCQTI

Combustible tobacco tax contribution

to European governments:

€80 billion

Source: EU Commission (2022, last full year available)

COMBATTING ILLICIT TRADE

The prevalence of the illicit trade in tobacco and nicotine

products means that we face competition from a criminal

UWRRN[EJCKP

Illicit tobacco deprives the responsible industry of revenue,

deprives governments of vital excise and deprives consumers of

VJGUGEWTKV[QHGPLQ[KPITKIQTQWUN[VGUVGFJKIJSWCNKV[RTQFWEVU

The illicit trade is a complex phenomenon, driven by economic,

RTCEVKECNCPFRQNKVKECNHCEVQTU

Where governments have adopted aggressive policies against

NGP to limit the development of the nicotine market, we have

seen negative consequences for population-level public health

CPFVJGITQYVJQHCPKNNKEKVVTCFGKP0)2

At the extreme end is the difference between New Zealand,

where the legalisation of vape coincided with a steep fall in

youth smoking rates, and Australia, where there has never been

CUKIPKHKECPVNGICNOCTMGVHQT0)2CPF[GVCDNCEMOCTMGVVJTKXGU

(KIJVKPIKNNKEKVVTCFGTGSWKTGUCEQQTFKPCVGFCRRTQCEJHTQO

IQXGTPOGPVCPFKPFWUVT[+ORGTKCNEQPVKPWGUVQYQTMYKVJ

enforcement agencies and to encourage proportionate

regulation that will minimise the likelihood of nicotine

RTQFWEVUDGKPIVCTIGVGFD[ETKOKPCNQTICPKUCVKQPU

YYYKORGTKCNDTCPFURNEEQO 25

OPERATING REVIEW

HEADLINES

• (KPCPEKCNRGTHQTOCPEGFTKXGPD[UVTQPIRTKEKPI

CETQUUǭOWNVKRNGOCTMGVUCUXQNWOGFGENKPGTCVGU

continue to improve

• Encouraging stabilisation in German market share,

with market share growth in Spain and decline in

VJGǭ7-

• Leveraging our local jewel brand strategy to drive

operational and financial performance

• NGP net revenue performance reflects scale building

KPǭGZKUVKPIOCTMGVUCPFPGYRTQFWEVKPPQXCVKQPU

• Successful roll-out of new vapour products including

the 1,000-puff blu bar disposable and the rechargeable

blu bar kit during the year

• Adjusted operating profit growth reflects strong

combustible performance and improving NGP

ITQUUǭOCTIKPU

Tobacco volume

-3.7%

Tobacco & NGP

net revenue*

+5.6%

Tobacco net revenue*

+4.5%

NGP net revenue*

+20.5%

Adjusted

operating profit*

+7.5%

* %JCPIGCVEQPUVCPVEWTTGPE[

EUROPE

REGION

AT A GLANCE

Our results in Europe are driven by strong

combustible pricing, an improvement in

volume decline rates and growth in NGP

PGVǭTGXGPWG

Strategic initiatives in our priority markets supported our

EQODWUVKDNGVQDCEEQRGTHQTOCPEG+P)GTOCP[YGFGNKXGTGF

an encouraging stabilisation in market share after more than

CFGECFGQHOCTMGVUJCTGFGENKPGU+PXGUVOGPVUKPQWTUCNGU

force size and capabilities have led to an improvement of our

retailer coverage and mean we are better able to take advantage

QHOCTMGVQRRQTVWPKVKGU9GNGXGTCIGFQWTRQTVHQNKQCPFTGXGPWG

management capabilities to support the roll-out of new formats

KPDQVJVJGRTGOKWOCPFVJGXCNWGRTKEKPIRQKPVU+P5RCKP

QWTǭDTCPFGSWKV[KPXGUVOGPVUUWRRQTVGFRTKEGǭKPETGCUGUYJKNG

UVKNNFGNKXGTKPIOCTMGVUJCTGITQYVJ5VTQPIUCNGUITQYVJYCU

driven by our local jewel brands strategy with a new value

RTQRQUKVKQPYKVJ(QTVWPC)1VQECRVWTGFQYPVTCFKPICUVJG

RTKEKPINCFFGTGZRCPFUCPFCHQEWUQPMG[FKUVTKDWVKQPEJCPPGNU

In the UK, our continued brand equity investment in our

NQECNǭLGYGNDTCPFUWPFGTRKPPGFVJGTQNNQWVQHCPGYHKPG

EWVǭQHHGTCPFUWRRQTVGFRTKEGKPETGCUGUYJKEJJGNRGFVQRCTVKCNN[

OKVKICVGǭVJGEJCNNGPIKPIOCTMGVXQNWOGFGENKPGUCPFOCTMGV

UJCTGFGENKPGU

Tobacco volumes were broadly in line with long-term decline

TCVGUCV)GTOCPXQNWOGUDGPGHKVGFHTQOVJGGCUKPIQH

pressures on consumer incomes combined with an encouraging

OCTMGVUJCTGRGTHQTOCPEG6JKUQHHUGVVJGKORCEVQHGNGXCVGF

excise regimes in markets, such as the UK, which contributed to

EQPVKPWKPIRTGUUWTGQPXQNWOGUKPVJQUGOCTMGVU6QDCEEQPGV

TGXGPWGKPETGCUGFCVEQPUVCPVEWTTGPE[TGHNGEVKPICUVTQPI

RTKEGOKZQHYJKEJOQTGVJCPQHHUGVVJGXQNWOGFGENKPGU

Our NGP portfolio has delivered strong net revenue growth

QHǭCVEQPUVCPVEWTTGPE[YKVJITQYVJCETQUUCNNVJTGG

ECVGIQTKGUCUYGICKPGFUECNGKPQWTGZKUVKPIOCTMGVHQQVRTKPVU

Our consumer-led partnership model on NGP innovation

UWRRQTVGFPGYRTQFWEVTQNNQWVUKPCNNVJTGGECVGIQTKGU+PXCRKPI

KPVJG7-(TCPEGCPF5RCKPYGKPVTQFWEGFCPGYFKURQUCDNG

FGXKEGWPFGTVJGDNWDTCPFYJKEJǭFGNKXGTUCPKPETGCUGF

RWHHU#FFKVKQPCNN[KPTGURQPUGVQEQPUWOGTFGOCPFHQTC

more sustainable product, towards the end of the year we

TQNNGFQWVQWTRQFDCUGFDNWDCTMKVKP(TCPEGCPFVJG7-

offering consumers the same experience as blu bar but with a

TGEJCTIGCDNGDCVVGT[+PJGCVGFVQDCEEQYGKPVTQFWEGFK5GP\KC

tea-based heat sticks into Italy and Greece to extend choice

VQǭCFWNVUOQMGTUYKVJHNCXQWTGFPQPVQDCEEQUVKEMUYJKEJ

ECPǭDGWUGFKPQWT2WN\GFGXKEGU+POQFGTPQTCNPKEQVKPG

we continue to meet evolving consumer preferences with

HNCXQWTNCWPEJGUKP<QPG:CPF5MTWH/QFGTPKP0QTYC[

Tobacco and NGP adjusted operating profit for the year

KPETGCUGFCVEQPUVCPVEWTTGPE[OCKPN[TGHNGEVKPIVJG

strong tobacco performance together with improvement in

0)2ITQUUOCTIKPU

Aleš Struminský

President, Europe Region

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU26

Full year result Change

2024 2023 Actual

Constant

currency

Tobacco volume bn SE 86.6 89.9 -3.7% –

Tobacco & NGP net revenue £m 3,366 3,240 +3.9% +5.6%

Tobacco net revenue £m 3,106 3,020 +2.8% +4.5%

NGP net revenue £m 260 220 +18.2% +20.5%

Adjusted operating profit £m 1,541 1,482 +4.0% +7.5%

Priority market Performance

Tobacco share

Germany

• DRU

• QHVQDCEEQ0)2PGV

revenue

We have delivered an encouraging turnaround in our market share as investments in our strategic

KPKVKCVKXGUICKPGFVTCEVKQP5CNGUHQTEGGZRCPUKQPJCUKORTQXGFQWTFKUVTKDWVKQPEQXGTCIGCPF

enabled greater frequency of store visits, while capability enhancements supported improved

CIKNKV[VQECRVWTGEJCPPGNUJKHVU9GEQPVKPWGVQOCPCIGQWTDTCPFRQTVHQNKQCETQUUCNNMG[RTKEG

UGIOGPVUVQCRRGCNVQCTCPIGQHEQPUWOGTPGGFU+PVJGRTGOKWOUGEVQTYGITGYQWT&CXKFQHH

brands with new pack formats and in the value sector, we extended our Paramount brand with

VJGUWEEGUUHWNNCWPEJQHTQNN[QWTQYPHQTOCVKPHKPGEWVVQDCEEQ+P0)2QWTDNWDCTXCRQWT

RTQFWEVJCUEQPVKPWGFVQITQYUJCTGUKPEGKVUNCWPEJKP

• DRU

• 7% of tobacco & NGP net

revenue

6JG7-OCTMGVTGOCKPUCPKORQTVCPVXCNWGEQPVTKDWVQTVQVJG)TQWR9GKPETGCUGFRTKEGUKP

VJGǭRGTKQFCUYGEQPVKPWGFVQDCNCPEGXCNWGETGCVKQPCNQPIUKFGOCPCIKPIQWTQXGTCNNUJCTG

YJKEJFGENKPGFQXGTVJG[GCT1WTUVTCVGIKEKPXGUVOGPVUKPQWTNQECNLGYGNDTCPFUWPFGTRKPPGF

VJGUWEEGUUHWNTQNNQWVQHCHKPGEWVQHHGT6JKUUQOGYJCVQHHUGVVJGQXGTCNNOCTMGVUK\GFGENKPG

driven by above inflation excise tax increases across both cigarettes and fine cut tobacco and

ITQYVJKPVJGKNNKEKVOCTMGVHQTVQDCEEQCPFXCRKPIRTQFWEVU1WT0)2UCNGUDGPGHKVGFHTQOVJG

successful roll-out of new products including the 1,000-puff blu bar disposable and the

TGEJCTIGCDNGDNWDCTMKV

Spain

• DRU

• 5% of tobacco & NGP net

revenue

We delivered market share gains for the sixth successive year, offsetting the modest decline in

VJGQXGTCNNVQDCEEQOCTMGVXQNWOG1WTOCTMGVUJCTGKPETGCUGYCUFTKXGPD[KPPQXCVKQPUWEJCU

VJGEQPVKPWGFUWEEGUUQH9GUVRCEMHQTOCVGZVGPUKQPUCPFCHQEWUQPMG[FKUVTKDWVKQPEJCPPGNU

In NGP, the roll-out of the 1,000-puff blu bar disposable and blu box, an ergonomic design popular

YKVJEQPUWOGTUKP5RCKPJCUDGGPYGNNTGEGKXGFD[EQPUWOGTUCPFVJGVTCFG6JGDNWDTCPFKU

VJGLQKPVOCTMGVNGCFGTKPXCRQWTD[TGVCKNUCNGUXCNWGCUCV#WIWUV

* /CTMGVUJCTGJCUDGGPTGUVCVGFVQTGHNGEVOQTGCEEWTCVGFCVCUQWTEGUCPFEJCPPGNOKZ

YYYKORGTKCNDTCPFURNEEQO 27

OPERATING REVIEW continued

We delivered a strong performance with market

share gains in our cigarette portfolio coupled

with strong pricing, which supported growth

KPPGVTGXGPWGCPFCFLWUVGFQRGTCVKPIRTQHKV

We are pleased to report strong growth in

QWTǭ0)2PGVTGXGPWGFTKXGPD[VJGUWEEGUUHWN

NCWPEJQHQWTOQFGTPQTCNDTCPF<QPG

Share gains supported an outperformance in our tobacco

XQNWOGUFQYPCICKPUVCPKPFWUVT[XQNWOGFGENKPGQH

KPEKICTGVVGUCPFCHCNNKPKPFWUVT[OCUUOCTMGVEKICT

XQNWOGU+PFWUVT[EKICTGVVGFGENKPGUCTGUVGGRGTVJCPVJG

long-term average driven by macroeconomic pressure on

consumer disposable income and increased sales of illicit

XCRKPIRTQFWEVU/CUUOCTMGVEKICTKPFWUVT[XQNWOGFGENKPGU

TGHNGEVUCNGUQHKNNKEKVRTQFWEVUCVVJGNQYGUVRTKEGRQKPV

On a constant currency basis, tobacco net revenue increased

D[CUUVTQPIRTKEKPIQHCTQWPFQHHUGVXQNWOGFGENKPGU

Our cigarette out-performance reflects the improvement in our

EKICTGVVGOCTMGVUJCTGQHDCUKURQKPVUVQťQWTUKZVJ

EQPUGEWVKXG[GCTQHOCTMGVUJCTGITQYVJ6JKUYCUFTKXGP

D[ǭQWTKPXGUVOGPVKPUCNGUGZGEWVKQPCPFDTCPFDWKNFKPI

CPFǭVJGECTGHWNRQUKVKQPKPIQHQWTDTCPFRQTVHQNKQVQOGGV

VJGǭPGGFUQHEQPUWOGTUCETQUUCTCPIGQHRTKEGRQKPVU

We continue our focused investment on sales force

effectiveness, and the expansion of the number of retail

UVQTGUǭYJGTGYGUGNNQWTDTCPFU(QTGZCORNGKPXGUVOGPV

supported share growth in Winston within the premium

segment, which helped to offset KOOL performance in the

HCEGǭQHKPETGCUGFEQORGVKVQTFKUEQWPVKPIKPVJGOGPVJQN

UGIOGPV+ORTQXGFUCNGUHQTEGGZGEWVKQPGPCDNGFCP

expansion of store listings for Crowns, supporting market

share growth of the brand in the growing deep discount

UGIOGPV6JKURTQITGUUKPEKICTGVVGUKUFGURKVGEQPVKPWGF

RTKEKPICEVKQPUHTQOQWTEQORGVKVQTU

Our mass market cigar portfolio improved against a weak

comparator in the prior year due to supply disruptions as

CǭTGUWNVQH*WTTKECPG+CPKP5GRVGODGT#FFKVKQPCNN[

continued innovation and investment in quality supported

market share gains in the natural leaf segment with

$CEMYQQFUQWTRTGOKWOKEQPKEJGTKVCIGDTCPF

AMERICAS

REGION

Tobacco volume

-7.7%

Tobacco & NGP

net revenue*

+4.3%

Tobacco net revenue*

+4.0%

NGP net revenue*

+29.4%

Adjusted

operating profit*

+1.8%

* %JCPIGCVEQPUVCPVEWTTGPE[

HEADLINES

• %KICTGVVGUJCTGITQYVJWRDCUKURQKPVUVQ

• Tobacco net revenue growth at constant currency

TGHNGEVUUVTQPIRTKEKPICPFOCTMGVUJCTG

ICKPUǭQHHUGVVKPIXQNWOGFGENKPGU

• /CUUOCTMGVEKICTRGTHQTOCPEGKORTQXGFDGPGHKVKPI

from product innovation and brand loyalty

• NGP net revenue growth reflecting successful

VCTIGVGFǭNCWPEJQHOQFGTPQTCNDTCPF<QPG

KPǭOGVTQRQNKVCPCTGCU

• Adjusted operating profit grew at constant currency,

reflecting strong cigarette pricing, which more than

offset the reduction in volumes, increased NGP

investment, higher leaf costs, leaf inventory

CFLWUVOGPVUCPFYCIGKPHNCVKQP#VCEVWCNGZEJCPIG

rates, adjusted operating profit declined

Kim Reed

President and CEO, Americas Region

AT A GLANCE

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU28

Full year result Change

2024 2023 Actual

Constant

currency

Tobacco volume bn SE 19.1 20.7 -7.7% –

Tobacco & NGP net revenue £m 2,836 2,812 +0.9% +4.3%

Tobacco net revenue £m 2,793 2,778 +0.5% +4.0%

NGP net revenue £m 43 34 +26.5% +29.4%

Adjusted operating profit £m 1,235 1,257 -1.8% +1.8%

1WT0)2PGVTGXGPWGITGYQPCEQPUVCPVEWTTGPE[DCUKU

VJGHKTUV[GCTQHITQYVJWPFGTVJGEWTTGPVUVTCVGI[6JKUJCU

been driven by our entry into the fast-growing modern oral

PKEQVKPGRQWEJUGIOGPVKP(GDTWCT[YKVJCVCTIGVGFNCWPEJ

WPFGTVJG<QPGDTCPFKPOGVTQRQNKVCPCTGCU6JGDTCPF

offers a differentiated option for consumers with a range of

ǭRTQFWEVXCTKCPVUCPFNGXGTCIGUVJG%QORCP[ũUGZKUVKPI

75ǭUCNGUHQTEG9GCTGGPEQWTCIGFD[GCTN[EQPUWOGT

repurchase rates and have increased the number of stores

UKPEGNCWPEJ

#FLWUVGFQRGTCVKPIRTQHKVITGYCVEQPUVCPVEWTTGPE[

reflecting strong cigarette pricing, which more than offset

VJGǭTGFWEVKQPKPXQNWOGUKPETGCUGF0)2KPXGUVOGPVKPVQ

supporting the launch of Zone, higher leaf costs, leaf inventory

CFLWUVOGPVUCPFYCIGKPHNCVKQP#VCEVWCNGZEJCPIGTCVGU

CFLWUVGFQRGTCVKPIRTQHKVFGENKPGF

YYYKORGTKCNDTCPFURNEEQO 29

OPERATING REVIEW continued

AFRICA, ASIA, AUSTRALASIA

AND CENTRAL & EASTERN EUROPE

HEADLINES

• Strong financial results at constant currency reflecting

recovery in the second half of the year as earlier

disruption due to shipment timings abated

• Tobacco and NGP net revenue growth at constant

currency driven by our African, Central & Eastern

'WTQRGCPCPF#UKC/KFFNG'CUV6WTMG[

OCTMGVǭENWUVGTU

• At actual exchange rates, tobacco & NGP net

TGXGPWGǭFGENKPGF

• Positive tobacco price mix across region offset

XQNWOGǭFGENKPGU

• /CTMGVUK\GRTGUUWTGUKP#WUVTCNKCUQOGYJCVQHHUGVD[

market share growth and pricing supported by active

brand portfolio management

• NGP net revenue growth reflecting new product

introductions in Central & Eastern Europe markets

• Adjusted operating profit delivery at constant currency

driven by strong tobacco performance and reduction of

0)2NQUUGU#VCEVWCNGZEJCPIGTCVGUCFLWUVGFQRGTCVKPI

profit declined

The region delivered a solid operational and

financial performance, benefiting from a

recovery in the second half as we mitigated

VJGKORCEVQHFKUTWRVKQPQH4GF5GCVTCFG

6QDCEEQCPF0)2PGVTGXGPWGITGYCVEQPUVCPVEWTTGPE[

reflecting continued focus on pricing discipline across the

TGIKQPYKVJVQDCEEQRTKEGOKZQHQHHUGVVKPIXQNWOG

FGENKPGUQH6JGUGTGUWNVUTGHNGEVVJGVCTIGVGFCRRTQCEJYG

are taking to our investment in sales execution and marketing

in Australia, our one priority market in the region, and our

improved consumer insight and revenue growth management

VQQNUCRRNKGFVQQWTDTQCFOCTMGVENWUVGTU#VCEVWCNGZEJCPIG

TCVGUVQDCEEQCPF0)2PGVTGXGPWGFGENKPGF

Australia delivered a resilient profit performance with further

OCTMGVUJCTGICKPUHQTVJGHKHVJEQPUGEWVKXG[GCT6JKUJCU

been driven by the active management of brand portfolio to

ensure we have an offer for consumers across all key price

points, as well as a continued close partnership with our retail

EWUVQOGTU6JGUGICKPUJCXGDGGPFGNKXGTGFCICKPUVCDCEMFTQR

of increased volume declines driven by excise tax increases

CPFITQYVJKPDQVJKNNKEKVEQODWUVKDNGCPFXCRKPIRTQFWEVU

In our African markets, we grew revenue through strong pricing

as we focused on increasing consumer engagement through

the management of our local jewel and key international

DTCPFU+PQWTUWD5CJCTCP#HTKECPOCTMGVUQWTNQECNLGYGN

DTCPFURGTHQTOGFYGNNYKVJ(KPGVCMKPIUJCTGKP+XQT[%QCUV

supported by format innovation, strengthening distribution

CPFRQKPVQHUCNGURTGUGPEG6JKUOQTGVJCPQHHUGVRTGUUWTGUKP

/QTQEEQYJGTGTGEGPVGZEKUGVCZEJCPIGUJCXGFKUCFXCPVCIGF

VJGNQYRTKEGUGIOGPVCPFKORCEVGF)CWNQKUGU

+PQWT#UKC/KFFNG'CUVCPF6WTMG[#/'6ENWUVGTVJGKORCEV

of the Red Sea disruption seen in the first half of the year was

OKVKICVGFCPFYGGZGTEKUGFUVTQPIRTKEKPIFKUEKRNKPG1WTINQDCN

brand Davidoff resonates with local consumers and performed

YGNNKP5CWFK#TCDKC&CXKFQHHCNUQJCUUVTQPIDTCPFNQ[CNV[KP

Taiwan, where a refocus to convenience channels together

with brand innovation has led to market share growth after

several years of decline and an improving contribution to

RGTHQTOCPEGVJTQWIJQWVVJG[GCT

In our Central & Eastern European (CEE) market cluster our

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doubled over the period as we refined our go-to-market approach

KP2QNCPFCRRN[KPINGCTPKPIUHTQOQWT%\GEJ4GRWDNKEOCTMGV

In combustibles, strong pricing offset volume declines to

UWRRQTVHKPCPEKCNFGNKXGT[

NGP net revenue growth in the period reflects the launch

QHǭQWTRWHHDNWDCTXCRKPIRTQFWEVKP2QNCPF+PJGCVGF

tobacco products, the introduction of iSenzia, tea-based heat

sticks, to Czech Republic and Poland, extended the choice to

adult smokers with a flavoured non-tobacco stick that can

DGǭWUGFKPQWT2WN\GFGXKEG

#FLWUVGFQRGTCVKPIRTQHKVITGYCVEQPUVCPVEWTTGPE[

driven by a strong tobacco performance in all market clusters

CPFCTGFWEVKQPKP0)2NQUUGU#VCEVWCNGZEJCPIGTCVGU

CFLWUVGFQRGTCVKPIRTQHKVFGENKPGF

Priyali Kamath

President, Africa, Asia, Australasia

and Central & Eastern Europe

NGP net revenue*

+136.4%

Adjusted

operating profit*

+2.3%

* %JCPIGCVEQPUVCPVEWTTGPE[

AT A GLANCE

Tobacco volume

-3.5%

Tobacco & NGP

net revenue*

+3.3%

Tobacco net revenue*

+2.5%

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU30

Full year result Change

2024 2023 Actual

Constant

currency

Tobacco volume bn SE 84.3 87.4 -3.5% –

Tobacco & NGP net revenue £m 1,955 1,960 -0.3% +3.3%

Tobacco net revenue £m 1,929 1,949 -1.0% +2.5%

NGP net revenue £m 26 11 +136.4% +136.4%

Adjusted operating profit £m 811 844 -3.9% +2.3%

Priority market Performance

Tobacco share

Australia

• DRU

• QH)TQWRVQDCEEQ0)2

net revenue

6JG#WUVTCNKCPOCTMGVEQPVTKDWVGFVQ)TQWRRTQHKVITQYVJKPVJGRGTKQF#ICKPUVCDCEMFTQR

QHǭUVGGROCTMGVXQNWOGFGENKPGUCUEQPUWOGTUPQTOCNKUGFWUGQHKNNKEKVRTQFWEVUYGITGYQWT

OCTMGVUJCTGUWRRQTVGFD[CHQEWUGFCRRTQCEJVQTGXGPWGITQYVJOCPCIGOGPV%NGCTRTKEG

VKGTKPICPFRTQFWEVFKHHGTGPVKCVKQPUWRRQTVGFUVCDNGOCTMGVUJCTGHQT,25+PVJGHKHVJRTKEG

segment, L&B is now Australia’s fastest growing cigarette brand since inception in 2021, driven

D[RCEMHQTOCVGZVGPUKQPU+PHKPGEWVVQDCEEQQWTNQECNLGYGNDTCPF%JCORKQPKPVJGJKIJGT

RTKEGUGIOGPVGZVGPFGFKVUNGCFQHVJGECVGIQT[YJKNG4KXGTUVQPGTGOCKPGFUVCDNG%QPVKPWGF

improvements in the supply chain supported increased efficiencies and underpinned positive

RTQHKVEQPVTKDWVKQPHTQOVJGOCTMGV

* /CTMGVUJCTGJCUDGGPTGUVCVGFVQTGHNGEVOQTGCEEWTCVGFCVCUQWTEGUCPFEJCPPGNOKZ

YYYKORGTKCNDTCPFURNEEQO 31

OPERATING REVIEW continued

DISTRIBUTION

HEADLINES

• Gross profit reflects good underlying growth and

integration of prior year acquisitions

• Diversification strategy means over 50% gross profit

from non-tobacco-related businesses

• Adjusted operating profit includes strong contribution

from profit on inventory following tobacco price increases

Gross profit*

+4.4%

Adjusted operating

margin excluding

eliminations*,**

+109bps

Adjusted operating

profit excluding

eliminations*,**

+9.8%

&KUVTKDWVKQPEQPUKUVUQHQWTUVCMGKP

Logista, a Spanish-listed distributor of

tobacco and other convenience products and

provider of freight, parcel, courier services

CPFRJCTOCEGWVKECNNQIKUVKEU+VQRGTCVGUCP

end-to-end distribution model that covers

the full value chain from collection to more

VJCPRQKPVUQHUCNGCETQUU'WTQRG

Performance was in line with expectations and includes the

incremental financial contribution from acquisitions made

during this period and the prior two financial years in line

with Logista’s strategy to accelerate growth in European

PQPVQDCEEQFKUVTKDWVKQP6JGUGKPENWFGVJGCESWKUKVKQPQH

$GNIKWO2CTEGN5GTXKEG$25VJGCESWKUKVKQPQH5)'..KDTQU

CǭPCVKQPCNDQQMFKUVTKDWVKQPCPFRWDNKUJKPIEQORCP[

YJKEJǭYCUHQTOCNN[CESWKTGFD[.QIKUVC.KDTQUC

UWDUKFKCT[QH.QIKUVCCPF)TWRQ2NCPGVCKP1EVQDGT

CPFǭVJGCESWKUKVKQPQH)TCOOC(CTOCEGWVKEKCRJCTOCEGWVKECN

FKUVTKDWVKQPEQORCP[KP+VCN[YJKEJEQORNGVGFKP,WN[

+P/C[.QIKUVCCESWKTGFVJGTGOCKPKPIUVCMGKP

5RGGFNKPMCUGZRGEVGFWPFGTVJGQTKIKPCNCITGGOGPV

(WTVJGTOQTGKP,WN[.QIKUVCCESWKTGFVJGTGOCKPKPI

UVCMGKP*GTKPXGOQN5.VTCFKPICUŬ6TCPURQTVGU'N/QUECŭ

IKXKPI.QIKUVCQYPGTUJKRQHVJGEQORCP[

Full year result Change

2024 2023 Actual

Constant

currency

Distribution gross profit* £m 1,503 1,466 +2.5% +4.4%

Adjusted operating profit £m 330 306 +7.8% +9.8%

Adjusted operating profit margin % 22.0 20.9 +108bps +109bps

Eliminations £m (6) (2) -200.0% -200.0%

#FLWUVGFQRGTCVKPIRTQHKVKPEGNKOKPCVKQPU £m 324 304 +6.6% +8.6%

* &KUVTKDWVKQPITQUURTQHKVKU&KUVTKDWVKQPTGXGPWGNGUUVJGEQUVQHFKUVTKDWVKPIRTQFWEVU

AT A GLANCE

Adjusted operating

profit including

eliminations*,**

+8.6%

* %JCPIGCVEQPUVCPVEWTTGPE[

** Eliminations relate to sales of

tobacco and NGP product to

Logista that are still held in

VJGKTKPXGPVQT[

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU32

Gross profit

ť)TQUURTQHKVCVcOKNNKQPYCUJKIJGT

on a constant currency basis with good performance in

particular in Spain and Italy reflecting the integration of

RTKQT[GCTCESWKUKVKQPU

In Iberia, growth in gross profit was driven in part by

tobacco and related products, with the former benefiting

from manufacturer price increases in Spain for the third

EQPUGEWVKXG[GCT6TCPURQTVUGTXKEGUTGEQTFGFITQYVJ[GCT

on year, with a positive contribution from long-distance

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'N/QUECVJGNCVVGTKPEQTRQTCVGFCVVJGGPFQHǭ1EVQDGT

6JGTGYCUIQQFITQYVJKP0CEGZVJGGZRTGUUEQWTKGT

DWUKPGUUCPF.QIKUVC2CTEGNUWRRQTVGFD[ǭVJGQRGPKPIQH

PGYVGORGTCVWTGEQPVTQNNGFECRCEKV[FWTKPIVJGRGTKQF

Pharmaceutical distribution continues to expand both its

EWUVQOGTDCUGCPFRTQFWEVQHHGTKPI

In Italy, gross profit was supported by good performance

in tobacco, benefiting from growth in volumes and

manufacturer price increases which led to a higher

RTQHKVǭQPKPXGPVQT[VJCPKPVJGRTKQT[GCT6JGRGTKQF

benefits from the first full incorporation of Gramma

(CTOCEGWVKEKYKVJVJGCESWKUKVKQPEQORNGVKPIKP,WN[

6JKUCESWKUKVKQPKUVJGHKTUVUVCIGQHQWTGZRCPUKQP

KPVQVJGRJCTOCUGIOGPVKP+VCN[

+P(TCPEGITQUURTQHKVTGHNGEVUVQDCEEQXQNWOGFGENKPGU

partially offset by price increases following excise tax

increases and subsequent manufacturer price increases

which led to a profit on inventory higher than in the prior

[GCT.QIKUVCCNUQUWEEGUUHWNN[EQORNGVGFCRKNQVHQT0)2

TGE[ENKPIFWTKPIVJGRGTKQF

Operating profit –

Adjusted operating profit margin increased

by 109 basis points at constant currency reflecting the strong

performance from profit on inventory in tobacco following

OCPWHCEVWTGTUũRTKEGKPETGCUGUKPVJGRGTKQF#HVGTGNKOKPCVKQPU

the adjusted operating profit contribution to the Group

KPETGCUGFQPCEQPUVCPVEWTTGPE[DCUKU+PNKPGYKVJQWT

policy of adjusting items for only Board-approved restructuring

programmes, charges and profits/losses on disposals relating

to restructuring activities have not been recognised as

CFLWUVKPIKVGOU

Cash –

In line with the rest of Imperial Brands, Logista is part

of the inter-company cash pooling arrangement, which further

GPJCPEGUVJG)TQWRũUNKSWKFKV[1PCOQPVJDCUKUVJGFCKN[

average cash balance loaned to the Group by Logista was

EcDKNNKQPYKVJOQXGOGPVUKPVJGECUJRQUKVKQPFWTKPIVJG

OQPVJRGTKQFXCT[KPIHTQOCJKIJQHEcDKNNKQPVQCNQY

QHEcDKNNKQPRTKOCTKN[FWGVQVJGVKOKPIQHGZEKUGFWV[

RC[OGPVU#V5GRVGODGTVJGNQCPRQUKVKQPYCU

EcDKNNKQPEQORCTGFVQEcDKNNKQPCV5GRVGODGT

YYYKORGTKCNDTCPFURNEEQO 33

GROUP FINANCIAL REVIEW

Volumes

-4.0%

reflecting wider industry market size

declines across our footprint

Tobacco & NGP net revenue

+4.6%

at constant currency, driven by robust

tobacco price mix and NGP growth

Adjusted operating

cash conversion

100%

2023: 92%

Reported operating profit

+4.5%

reflecting operating performance, with

adverse foreign exchange movements

Adjusted operating profit

+4.6%

at constant currency, driven by tobacco

pricing, reduced NGP losses and Logista

Adjusted net debt/EBITDA

1.8x

2023: 1.9x

Reported basic EPS

300.7p

an increase of 19.1%

Adjusted EPS

297.0p

an increase of 10.9% on a constant

currency basis

Lukas Paravicini

Chief Financial Officer

ACCELERATING

RETURNS

SUMMARY FINANCIAL INFORMATION

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU34

Cash generation remains a key focus, and we have delivered

cDKNNKQPQHHTGGECUJHNQYYKVJCFLWUVGFQRGTCVKPI

ECUJEQPXGTUKQP6JGUVTQPIECUJIGPGTCVKQPJCUGPCDNGFWU

VQKPXGUVKPQWTUVTCVGI[EQOOKVVKPIVQTGVWTPcDKNNKQPVQ

UJCTGJQNFGTUXKCFKXKFGPFCPFUJCTGDW[DCEM4GRQTVGFPGV

FGDVTGFWEGFD[cDKNNKQPVQcDKNNKQPYKVJCFLWUVGFPGV

FGDV'$+6&#CVZKP(;

On a reported basis, cash flow improved year on year due

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9GJCXGCPPQWPEGFCHWTVJGTcDKNNKQPUJCTGDW[DCEM

YJKEJYGGZRGEVVQEQORNGVGPQNCVGTVJCP1EVQDGT

6JKUTGRTGUGPVUCRRTQZKOCVGN[QHVJGUJCTGECRKVCNCU

CVǭ5GRVGODGTCPFKUCKPETGCUGQPNCUV[GCTũU

cDKNNKQPDW[DCEMYJGTGYGTGRWTEJCUGFUJCTGU

QTQHQWTUJCTGECRKVCNKP(;+PUWRRQTVQHQWT

progressive dividend policy, we are also increasing our

FKXKFGPFRGTUJCTGD[HQT(;

We anticipate our growth phase will continue for the

remainder of our five-year strategy as the business capitalises

QPVJGICKPUCPFKPXGUVOGPVUYGJCXGRTGXKQWUN[OCFG

As we enter the final year of our current strategy, these results

reflect Imperial’s improved resilience to withstand geopolitical

and macroeconomic pressures and the benefit of our

continued investments in consumer capability and cultural

VTCPUHQTOCVKQP9GJCXGFGNKXGTGFOCTMGVUJCTGICKPUKPQWT

priority markets and achieved robust tobacco pricing to

support the delivery of another year of improving financial

RGTHQTOCPEGCPFITQYKPIECRKVCNTGVWTPU

On a constant currency basis, tobacco & NGP net revenue

ITGYǭTGHNGEVKPIUVTQPIVQDCEEQRTKEGOKZCPF0)2ITQYVJ

)TQWRCFLWUVGFQRGTCVKPIRTQHKVTQUGQPCEQPUVCPVEWTTGPE[

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strong performance in the underlying business particularly in

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4GRQTVGFTGXGPWGFGENKPGFTGHNGEVKPIXQNWOGFGENKPGU

KPǭQWTJKIJGZEKUGOCTMGVUCPFCFXGTUGHQTGKIPGZEJCPIG

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4GRQTVGFQRGTCVKPIRTQHKVKPETGCUGFFTKXGPD[UVTQPI

operating performance, with adverse foreign exchange

movements offset by the non-repeat of charges relating to

legal provisions and fair value adjustments and impairment

QHǭQVJGTHKPCPEKCNCUUGVU

SUMMARY INCOME STATEMENT

Reported Adjusted

£ million (unless otherwise indicated) 2024 2023 2024 2023

Revenue/net revenue/gross profit*

Tobacco & NGP revenue/net revenue 21,307 21,656 8,157 8,012

Distribution revenue/gross profit 11,104 10,819 1,503 1,466

Operating profit

Tobacco & NGP 3,238 3,106 3,587 3,583

Distribution 322 298 330 306

Eliminations (6) (2) (6) (2)

Group operating profit 3,554 3,402 3,911 3,887

Net finance costs (534) (298) (402) (410)

Share of profit/(losses) of investments accounted for using the equity method 9 7 9 7

Profit before tax 3,029 3,111 3,518 3,484

Tax (282) (655) (799) (781)

Profit for the year 2,747 2,456 2,719 2,703

/KPQTKV[KPVGTGUVU (134) (128) (138) (131)

Earnings per ordinary share (pence) 300.7 252.4 297.0 278.8

Dividend per share (pence) 153.42 146.82 153.42 146.82

* 4GRQTVGFTGXGPWGKPENWFGUFWV[UKOKNCTKVGOUFKUVTKDWVKQPCPFUCNGQHRGTKRJGTCNRTQFWEVUYJKEJCTGGZENWFGFHTQOPGVTGXGPWGPGVTGXGPWGEQORTKUGUTGRQTVGFTGXGPWG

NGUUFWV[CPFUKOKNCTKVGOUGZENWFKPIUCNGQHRGTKRJGTCNRTQFWEVUCPFFKUVTKDWVKQPTGXGPWG&KUVTKDWVKQPITQUURTQHKVKU&KUVTKDWVKQPTGXGPWGNGUUVJGEQUVQHFKUVTKDWVKPI

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Alternative performance measures (APM)

When managing the performance of our business we focus on

PQP)##2OGCUWTGUYJKEJYGTGHGTVQCUCFLWUVGFOGCUWTGU

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

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supplementary to, and should not be regarded as a substitute

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The basis of our adjusted measures is explained in the

accounting policies accompanying our financial statements

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Reconciliations between reported and adjusted measures are

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figures for adjusted results are given on a constant currency

basis, where the effects of exchange rate movements on the

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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

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In the prior year, we included measures of performance to

exclude our exit from Russia in April 2022 in the comparator

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#2/UWUGFKPVJGRGTKQF

YYYKORGTKCNDTCPFURNEEQO 35

44.4%

45.6%

10.0%

Europe

86.6bn SE

Americas 19.1bn SE

AAACE 84.3bn SE

39.4%

20.7%

8.3%

31.6%

Europe

£1,541m

Americas £1,235m

AAACE £811m

Distribution £324m

41.3%

23.9%

34.8%

Europe

£3,366m

Americas £2,836m

AAACE £1,955m

Tobacco & NGP net revenue

(actual FX rate), £ million

Adjusted operating profit

(actual FX rate), £ million

Volumes, billion stick equivalent

(SE)

GROUP RESULTS – ADJUSTED CONSTANT CURRENCY ANALYSIS

£ million

(unless otherwise indicated)

Full year

ended 30

September

2023

Foreign

exchange

Constant

currency

movement

Full year

ended 30

September

2024 Change

Constant

currency

change

Tobacco & NGP net revenue

Europe 3,240 (56) 182 3,366 3.9% 5.6%

Americas 2,812 (96) 120 2,836 0.9% 4.3%

Africa, Asia, Australasia and Central & Eastern Europe 1,960 (69) 64 1,955 (0.3%) 3.3%

Tobacco & NGP net revenue 8,012 (221) 366 8,157 1.8% 4.6%

Tobacco & NGP adjusted operating profit

Europe 1,482 (52) 111 1,541 4.0% 7.5%

Americas 1,257 (44) 22 1,235 (1.8%) 1.8%

Africa, Asia, Australasia and Central & Eastern Europe 844 (52) 19 811 (3.9%) 2.3%

Tobacco & NGP adjusted operating profit 3,583 (148) 152 3,587 0.1% 4.2%

Distribution

Gross profit 1,466 (27) 64 1,503 2.5% 4.4%

Adjusted operating profit including eliminations 304 (6) 26 324 6.6% 8.6%

Group adjusted results

Adjusted operating profit 3,887 (154) 178 3,911 0.6% 4.6%

Adjusted net finance costs (410) 15 (7) (402) 2.0% (1.7%)

Adjusted EPS (pence) 278.8 (12.2) 30.4 297.0 6.5% 10.9%

GROUP FINANCIAL REVIEW continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU36

+4.6%

FY24 Constant

currency net revenue

£8,378m

FY24 Tobacco &

NGP net revenue

+1.8%

£8,157m

FY23 Tobacco &

NGP net revenue

£8,012m

NGP

net revenue

£70m

-2.8%

Translational FX

£(221)m

Tobacco

volume

£(311)m

Tobacco

price mix

£607m

FY24 adjusted

operating proﬁt at

constant currency

£4,065m

FY23 adjusted

operating proﬁt

£3,887m

Logista

£26m

Reduced NGP losses

£58m

Tobacco

performance

£94m

+4.6%

Translation FX

£(154)m

-4.0%

FY24 adjusted

operating proﬁt

£3,911m

+0.6%

SALES PERFORMANCE

• 4GRQTVGFTGXGPWGFGENKPGFTGHNGEVKPIXQNWOGFGENKPGU

in high excise markets and adverse foreign exchange,

largely offset by growth in NGP and Distribution revenues

• 6QDCEEQ0)2PGVTGXGPWGITGYCVEQPUVCPVEWTTGPE[

EQORTKUKPIHTQOVQDCEEQCPFHTQO0)2

• 6QDCEEQXQNWOGYCUFQYPTGHNGEVKPIYKFGTKPFWUVT[

market size declines across our footprint

• Aggregate market share growth in our five priority markets

QHDRU(;DRU

• 6QDCEEQRTKEGOKZYCUUVTQPICVFWGVQRQUKVKXGRTKEKPI

offsetting a small negative mix

• 0)2PGVTGXGPWGKPETGCUGFVQcOCVEQPUVCPV

currency, driven by growth across all geographies with the

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• &KUVTKDWVKQPITQUURTQHKVITGYFTKXGPD[UVTQPI

tobacco pricing and benefit of prior year acquisitions

• 6TCPUNCVKQP(:YCUCJGCFYKPFCVFWGVQCXGTCIG

sterling strengthening against the dollar and euro

Reported revenue

-0.2%

Tobacco & NGP

net revenue

+4.6%

Reported operating

profit

+4.5%

Group adjusted operating

profit

+4.6%

OPERATING PROFIT

• 4GRQTVGF)TQWRQRGTCVKPIRTQHKVQHcOKPETGCUGFD[

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foreign exchange offset by the non-repeat of charges relating

to legal provisions and the write-down of financial assets

• #FLWUVGF)TQWRQRGTCVKPIRTQHKVKPETGCUGFCVEQPUVCPV

currency, driven by strong tobacco pricing offsetting tobacco

volume declines, lower NGP losses and Logista performance

• 6QDCEEQCFLWUVGFQRGTCVKPIRTQHKVKPETGCUGFD[CV

constant currency, reflecting strong pricing offsetting

volume declines

• 0)2NQUUGUTGFWEGFCVEQPUVCPVEWTTGPE[VQcO

with improved gross margin and volume growth supporting

continued investment in new product launches

• 6TCPUNCVKQP(:QPCFLWUVGFQRGTCVKPIRTQHKVQHTGHNGEVU

average sterling strengthening against the dollar and euro

YYYKORGTKCNDTCPFURNEEQO 37

FY23

adjusted EPS

278.8p

+10.9%

Adjusted

operating

proﬁt

19.3p

Interest

(0.8)p

Minorities

& JV

(0.5)p

Tax

(5.5)p

Number of

17.9p

FY24

adjusted constant

currency EPS

309.2p

Translation

(12.2)p

-4.4%

FY24

adjusted EPS

297.0p

+6.5%

Reported EPS

+19.1%

Adjusted EPS

+10.9%

EARNINGS PER SHARE

• 4GRQTVGF'25KPETGCUGFVQRGPEGTGHNGEVKPIUVTQPI

operating performance, lower tax charge and reduced share

count, offsetting higher interest costs

• #FLWUVGF'25YCURGPEGWRCVEQPUVCPVEWTTGPE[

with adjusted operating profit growth enhanced by the

reduced share count due to the ongoing share buyback

GROUP FINANCIAL REVIEW continued

SUMMARY CASH FLOW STATEMENT*

Reported Adjusted

£ million 2024 2023 2024 2023

Group operating profit 3,554 3,402 3,911 3,887

Depreciation, amortisation and impairments 647 632 294 270

EBITDA 4,201 4,034 4,205 4,157

Loss on disposal of subsidiary – 1 – –

Profit on disposal of assets (13) (39) (13) (39)

Other non-cash movements (93) 70 (54) 46

Operating cash flows before movement in working capital 4,095 4,066 4,138 4,164

Working capital 100 (347) 100 (347)

Tax cash flow (888) (590) (888) (590)

Cash flows from operating activities 3,307 3,129 3,350 3,227

Net capital expenditure (321) (254) (321) (254)

Restructuring – – (43) (98)

Cash interest (416) (407) (416) (407)

/KPQTKV[KPVGTGUVFKXKFGPFU (136) (104) (136) (104)

Free cash flow 2,434 2,364 2,434 2,364

Acquisitions (42) (183) (42) (183)

Acquisition of non-controlling interests (49) – (49) –

Shareholder dividends (1,299) (1,312) (1,299) (1,312)

Share buyback (1,020) (1,006) (1,020) (1,006)

Net cash inflow/(outflow) 24 (137) 24 (137)

Leases paid

(93) (92)

Increase in borrowings 3,848 1,462

Repayment of borrowings (3,948) (1,518)

Cash flow relating to derivative instruments (34) (64)

Net decrease in cash and cash equivalents (203) (349)

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CASH FLOW

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expenditure is anticipated to remain within an expected range

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expenditure is supporting projects to drive simplified and

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£ million (unless otherwise indicated) 2024 2023

Adjusted operating profit 3,911 3,887

Cash flow from operating activities post

capital expenditure pre interest and tax 3,917 3,563

Adjusted operating cash conversion 100% 92%

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the prior year primarily due to the higher cash flows from

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compared to the outflow in the prior year, offset by higher

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Restructuring cash costs relating to Board-approved

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and comprised three previous programmes: Cost Optimisation

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Together, the cumulative cash spend for all three restructuring

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spend is ongoing, although not expected to be in excess of

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£ million 2024 2023

Restructuring cash cost 43 98

Cumulative to date 1,389 1,346

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improved year on year, reflecting positive working capital

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include Imperial’s deferred consideration for intellectual

property relating to nicotine pouches marketed in the US

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RETURN ON INVESTED CAPITAL

Return on invested capital (ROIC) increased by 120 basis points,

FTKXGPD[CTGFWEVKQPKPKPXGUVGFECRKVCN41+%KU



#FLWUVGFQRGTCVKPIRTQHKVKPETGCUGFD[cOKNNKQP

1WT(;KPXGUVGFECRKVCNJCUTGFWEGFEQORCTGFVQVJG

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KPVCPIKDNGCUUGVU

£ million 2024 2023

Reported operating profit 3,554 3,402

#FLWUVKPIKVGOU#2/UGEVKQPYKVJKP

Supplementary Information) 357 485

Adjusted operating profit 3,911 3,887

Equivalent tax charge (888) (871)

Net adjusted operating profit after tax 3,023 3,016

Working capital (2,772) (2,567)

Intangible assets 15,938 16,944

Property, plant and equipment 1,561 1,617

Invested capital 14,727 15,994

Average annual invested capital 15,361 16,304

Return on invested capital 19.7% 18.5%

ADJUSTED NET DEBT/EBITDA

#FLWUVGFPGVFGDVTGFWEGFD[cOKNNKQPVQcOKNNKQP

cOKNNKQPKPVJG[GCTCPFEQPVKPWGFUVTQPIECUJ

generation supported additional return of capital to

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4GRQTVGFPGVFGDVTGFWEGFD[cOKNNKQPVQcOKNNKQP

cOKNNKQP'ZENWFKPICEETWGFKPVGTGUVNGCUGNKCDKNKVKGU

and the fair value of interest rate derivatives providing

commercial hedges of interest risk, Group adjusted net debt

YCUcOKNNKQPcOKNNKQP

£ million 2024 2023

Reported net debt (8,340) (8,438)

Accrued interest 95 125

Lease liabilities 386 349

(CKTXCNWGQHKPVGTGUVTCVGFGTKXCVKXGU 119 (62)

Adjusted net debt (7,740) (8,026)

Adjusted EBITDA 4,205 4,157

Adjusted net debt/EBITDA 1.8x 1.9x

YYYKORGTKCNDTCPFURNEEQO 39

GROUP FINANCIAL REVIEW continued

RECONCILIATION BETWEEN REPORTED AND ADJUSTED PERFORMANCE MEASURES

£ million unless otherwise indicated

Operating profit Net finance (costs)/income Earnings per share (pence)

2024 2023 2024 2023 2024 2023

Reported 3,554 3,402 (534) (298) 300.7 252.4

Russia, Ukraine and associated markets – 4 – – – 0.4

Amortisation and impairment of acquired intangibles 353 347 – – 40.6 38.0

(CKTXCNWGCFLWUVOGPVCPFKORCKTOGPV

of other financial assets – 36 – – – 3.4

Loss on disposal of subsidiaries – 1 – – – 0.1

Charges related to legal provisions – 85 – – (0.2) 6.4

Structural changes to defined benefit pension schemes 4 12 – – 0.5 1.0

Net fair value and exchange movements

on financial instruments – – 110 (149) (13.1) (25.8)

Post-employment benefits net financing cost/(income) – – 11 (13) 0.7 (1.4)

Tax interest cost – – 10 50 1.3 5.2

Effects of discounting long-term provisions – – 1 – 0.1 –

Recognition of deferred tax assets – – – – (33.7) (23.0)

Provision for state aid recoverable – – – – (11.6) –

Uncertain tax positions – – – – 18.9 22.4

Prior year adjustments – – – – (6.6) –

Adjustments above attributable to

non-controlling interests – – – – (0.6) (0.3)

Adjusted 3,911 3,887 (402) (410) 297.0 278.8

Adjusting items

The main reconciling items of the Group’s reported to adjusted

QRGTCVKPIRTQHKVCTGUJQYPCDQXG

+PVJGRGTKQFVQ5GRVGODGTCFLWUVKPIKVGOUTGNCVG

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cOKNNKQPCPFHCKTXCNWGOQXGOGPVUQPFGTKXCVKXG

HKPCPEKCNKPUVTWOGPVUQHcOKNNKQPcOKNNKQP

Restructuring charges relating to Board-approved restructuring

programmes have already been fully recognised in profit and

loss in previous years but provisions and cash spend are

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have therefore not been recognised as adjusting items in the

(;TGUWNVU6JGTGYKNNDGQPIQKPIECUJURGPFHTQORCUV

TGUVTWEVWTKPIRTQITCOOGU

During the period factory footprint rationalisation costs were

supported by profit on sale of former operational sites and

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Finance costs

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CǭVCKNYKPFHTQOCJKIJGT)$2'74(:TCVGCPFNQYGTCXGTCIG

adjusted net debt over the course of the year offset by the

refinancing of naturally maturing cheaper debt at higher

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impact of net fair value and foreign exchange losses on

HKPCPEKCNKPUVTWOGPVUQHcOKNNKQPcOKNNKQPICKP

post-employment benefits net financing costs of £11 million

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EQUVUǭQHcOKNNKQPcOKNNKQP6JGPGVHCKTXCNWG

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due to negative valuation movement of the Group’s interest

rate derivatives reflecting lower future market interest

TCVGǭGZRGEVCVKQPU

1WTCNNKPEQUVQHFGDVOQFGUVN[FGETGCUGFVQ

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HKPCPEGEQUVUHQTVJG[GCT

While interest rates are expected to fall, they are likely to

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meaning we will continue to refinance naturally maturing

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pressure on finance costs going forward although we have

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+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU40

Taxation

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TGRQTVGFGHHGEVKXGVCZTCVGKU6JGKPETGCUG

KPǭVJGCFLWUVGFGHHGEVKXGVCZTCVGQPVJGRTKQT[GCTKUFTKXGPD[

upward pressure from a higher UK corporation tax rate offset

by reduced negative impacts from the prior year’s adjustment

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reported rate mainly due to the positive outcome in the state

aid litigation following the European Court of Justice decision

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We expect our adjusted effective tax rate for the year ended

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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 lower rates in other markets

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changes affecting international businesses such as changes

arising from the OECD’s (Organisation for Economic Cooperation

and Development) Base Erosion and Profits Shifting (BEPS)

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we anticipate there will be further upward pressure on the

adjusted and reported tax rate in the medium term, due to

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Our Group tax strategy is publicly available and can be found

in the Governance section of our corporate website

Exchange rates

(QTGKIPGZEJCPIGJCFCPGICVKXGKORCEVQP)TQWR

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Dividend payments

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KP,WPGCPF5GRVGODGT

The Board has approved a further interim dividend of

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ǭ/CTEJǭVQUJCTGJQNFGTUTGIKUVGTGFQP(GDTWCT[

We have announced a change to the future dividend payment

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variance within the year, particularly around the half year,

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To create the base for future quarterly payments, we intend

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KPǭ,WPGCPF5GRVGODGT

Dividend payments

Amount (pence) Ex-date Record date Payment date

(;(KTUVKPVGTKO 22.45 23-May-24 24-May-24 28-Jun-24

(;5GEQPFKPVGTKO 22.45 22-Aug-24 23-Aug-24 30-Sep-24

(;6JKTFKPVGTKO 54.26 28-Nov-24 29-Nov-24 31-Dec-24

(;(KPCN 54.26 20-Feb-25 21-Feb-25 31-Mar-25

(;(KTUVKPVGTKO 40.08 22-May-25 23-May-25 30-Jun-25

(;5GEQPFKPVGTKO 40.08 21-Aug-25 22-Aug-25 30-Sep-25

Funding/liquidity

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,WN[+P,WPGYGKUUWGFDQPFUVQVCNNKPI75DKNNKQP75DKNNKQPYKVJCEQWRQPQHOCVWTKPIKP(GDTWCT[

CPFǭ75ǭOKNNKQPYKVJCEQWRQPQHOCVWTKPIKP,WN[5KOWNVCPGQWUN[YGCNUQTGRWTEJCUGF75OKNNKQPQH

VJGǭGZKUVKPI75ǭDKNNKQPDQPFOCVWTKPIKP,WN[XKCCECRRGFVGPFGTQHHGT9GUYCRRGFVJGPGY75FQNNCTDQPFUVQGWTQ

VJGTGHQTGENQUKPICFLWUVGFPGVFGDVEQPVKPWGUVQDGOCVGTKCNN[CNNGWTQ#UCV5GRVGODGTVJG)TQWRJCFEQOOKVVGF

HKPCPEKPIKPRNCEGQHCTQWPFcDKNNKQPYJKEJEQORTKUGFDCPMHCEKNKVKGUCPFTCKUGFHTQOECRKVCNOCTMGVU&WTKPIVJG

[GCTVJGOCVWTKV[FCVGQHżOKNNKQPQHVJG)TQWRũUGZKUVKPIU[PFKECVGFOWNVKEWTTGPE[HCEKNKV[YCUGZVGPFGFVQ5GRVGODGT

1PGHWTVJGTVTCPEJGQHżOKNNKQPYCUPQVGZVGPFGFCPFVJGTGHQTGOCKPVCKPUKVUOCVWTKV[FCVGQH5GRVGODGT

+Pǭ1EVQDGTVJGUGEQPFVTCPEJGQHżOKNNKQPYJKEJJCFPQVDGGPGZVGPFGFFWTKPIVJG[GCTCPFJCFCOCVWTKV[FCVGQH

/CTEJYCUUQNFVQCPQVJGTHKPCPEKCNKPUVKVWVKQPCPFVJGOCVWTKV[FCVGQHVJCVVTCPEJGYCUGZVGPFGFVQ5GRVGODGT

6JG)TQWRCNUQRWVKPRNCEGCPCFFKVKQPCNcOKNNKQPQHEQOOKVVGFDKNCVGTCNDCPMHCEKNKVKGUYKVJOCVWTKV[FCVGUKP5GRVGODGT

6JG)TQWRTGOCKPUHWNN[EQORNKCPVYKVJCNNQWTDCPMKPIEQXGPCPVUCPFTGOCKPUEQOOKVVGFVQTGVCKPKPIQWTKPXGUVOGPVITCFGTCVKPIU

Lukas Paravicini

Chief Financial Officer

YYYKORGTKCNDTCPFURNEEQO 41

MANAGING

RISK

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks faced by the Group

CPFǭ+ORGTKCNũUTKUMOCPCIGOGPVCRRTQCEJ

CTGFGUETKDGFKPVJGHQNNQYKPIRCIGU

4KUMUTGRTGUGPVVJGXCTKQWURQVGPVKCNQWVEQOGUVJCVCTG

OCPCIGFYJKNUVKORNGOGPVKPIVJG)TQWRũUUVTCVGI[

+ORGTKCNǭFGHKPGUCTKUMCUVJGGZRQUWTGVQVJGEQPUGSWGPEGU

QHǭWPEGTVCKPV[4KUMKUCP[VJKPIVJCVEQWNFFKUTWRVVJG

CEJKGXGOGPVQHVJG)TQWRũUUVTCVGI[CPFQDLGEVKXGU

6JG$QCTFCPFOCPCIGOGPVJCXGTGXKGYGFVJGTKUMNCPFUECRG

EWTTGPVCPFGOGTIKPICPFTGNCVGFRTQHKNKPIYKVJTKUM

OKVKICVKQPUCPFKORCEVUCUUGUUGF

/CP[QHVJGUGTKUMUCTGGZVGTPCNCPFECPPQVDGHWNN[OKVKICVGF

CPFYJKNGVJG)TQWREQPVKPWGUVQOQPKVQTKVUTKUMNCPFUECRG

VJGTGECPDGPQIWCTCPVGGVJCVCFFKVKQPCNTKUMUYKNNPQVCTKUG

QTVJCVQVJGTMPQYPTKUMUPQVOGPVKQPGFKPETGCUGKPOCVGTKCNKV[

Risk appetite

6JG$QCTFKUTGURQPUKDNGHQTUGVVKPIVJG)TQWRũUTKUMCRRGVKVG

CPFJCUEQORNGVGFKVUCPPWCNGZGTEKUGVQGPUWTGVJKUKU

CNKIPGFVQCPFUWRRQTVUFGNKXGT[QHVJG)TQWRUVTCVGI[

6JGTGUWNVCPVTKUMOCPCIGOGPVCRRTQCEJUWRRQTVUVJG

CEJKGXGOGPVQHQDLGEVKXGUCPFVJG$QCTFũUYKFGTTGURQPUKDKNKV[

HQTTKUMOCPCIGOGPVVJTQWIJENGCTEQOOWPKECVKQPQHVJG

GZRGEVGFQWVEQOGUQHMG[EQPVTQNUCPFTGNCVGFOQPKVQTKPI

Risk landscape

6JG)TQWRQRGTCVGUKPJKIJN[EQORGVKVKXGINQDCNOCTMGVU

CPFǭHCEGUIGPGTCNEQOOGTEKCNTKUMUCUUQEKCVGFYKVJCNCTIG

EQPUWOGTRCEMCIGFIQQFU%2)DWUKPGUU

+ORGTKCNEQPUVCPVN[CUUGUUGUCPFGXCNWCVGUVJGTKUMURQUGF

D[ǭVJGEJCPIKPIGPXKTQPOGPVUKPYJKEJVJG)TQWRQRGTCVGU

YJGVJGTIGQRQNKVKECNUQEKQGEQPQOKEQTVGEJPQNQIKECN

6JGǭEQPUKFGTCVKQPQHRQVGPVKCNKORCEVUCPFOQUVNKMGN[

ECWUGUǭGPUWTGUCVKOGN[OGCUWTGFCPFCRRTQRTKCVGTGURQPUG

6JG)TQWRCNQPIYKVJCNNQVJGTDWUKPGUUGUJCUHCEGF

EJCNNGPIGUFWGVQKPHNCVKQPCT[RTGUUWTGUYJKEJJCXGNGFVQ

JKIJGTEQOOQFKV[CPFGPGTI[RTKEGUCUYGNNCUGEQPQOKE

RTGUUWTGUQPEQPUWOGTURGPFKPI

Risk management framework

6JGHTCOGYQTMKUFGUKIPGFVQGPUWTGCEEQWPVCDKNKV[HQTVJG

KFGPVKHKECVKQPCUUGUUOGPVCPFOKVKICVKQPQHTKUMUVJTQWIJQWV

VJGDWUKPGUUUWRRQTVGFD[CRRTQRTKCVGECRCDKNKVKGU

6JGUWEEGUUQHVJGTKUMOCPCIGOGPVCRRTQCEJTGNKGUWRQPVJG

GHHGEVKXGPGUUQHVJGEQPVTQNHTCOGYQTMUKPRNCEGVQOCPCIG

TKUMUCPFUGK\GQRRQTVWPKVKGUVJCVCTKUG

+ORGTKCNũUCRRTQCEJVQIQXGTPCPEGTKUMOCPCIGOGPVCPF

KPVGTPCNEQPVTQNHQNNQYUVJGŬVJTGGNKPGUOQFGNŭYJKEJGPCDNGU

VJGDWUKPGUUVQCEJKGXGKVUUVTCVGIKEQDLGEVKXGUYJKNGTGOCKPKPI

CNKIPGFVQVJG$QCTFũUTKUMCRRGVKVG

6QGPJCPEGVJG)TQWRũUTKUMOCPCIGOGPVHTCOGYQTM

YGǭEQPVKPWQWUN[NQQMHQTYC[UVQKORTQXGCPFHWTVJGT

UVCPFCTFKUGVJGCRRNKECVKQPQHTKUMOCPCIGOGPVCPFEQPVTQNU

CETQUUVJG)TQWR(QTGZCORNGVJKU[GCTYGJCXGGUVCDNKUJGFVJG

+PVGITCVGF#UUWTCPEG(QTWOCPFRWDNKUJGFC)TQWR4KUM2QNKE[

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU42

RISK CAUSES

#UC)TQWRYGHCEGCPWODGTQHKUUWGUYJKEJYGVTGCVCU

ECWUGUQHEWTTGPVTKUMUTCVJGTVJCPGXCNWCVKPIVJGOCU

TKUMUǭKPVJGOUGNXGU$[CFQRVKPIVJKUCRRTQCEJYGGPUWTG

EQPUKFGTCVKQPQHKORCEVUCPFTGSWKTGFOKVKICVKQPUCETQUUVJG

business and increase the effectiveness and accountability

HQTCUUGUUOGPVUQPCŬDQVVQOWRŭDCUKUGPCDNKPINQECNCPF

)TQWRKPKVKCVKXGUVQDGFGXGNQRGFVQQRVKOKUGQWTTGURQPUGU

Climate risk

6JGKORCEVUQHENKOCVGTKUMQPVJGDWUKPGUUJCXGDGGP

GXCNWCVGFCETQUUVJG)TQWRKPTGNCVKQPVQVJGKTKORCEVQP

GZKUVKPITKUMU-G[KORCEVUGZKUVYKVJKPQWTOCPWHCEVWTKPI

HQQVRTKPVCPFYKFGTUWRRN[EJCKPYKVJUJQTVCPFNQPIVGTO

EQPUKFGTCVKQPQHRQUUKDNGXWNPGTCDKNKVKGUCPFTGSWKTGF

OKVKICVKQPUVQGPUWTGTGUKNKGPEG

Inflation

6JGKORCEVQHKPHNCVKQPCT[RTGUUWTGUQPDQVJVJGDWUKPGUU

CPFEQPUWOGTUJCUDGGPCUUGUUGFCURCTVQHTKUM

CUUGUUOGPVU

6JKUETGCVGUOQTGF[PCOKEHGGFDCEMDGVYGGPŬDQVVQOWRŭ

ŬVQRFQYPŭCPFETQUUHWPEVKQPCNRGTURGEVKXGUGPUWTKPI

VJGǭDTQCFGUVEQPUKFGTCVKQPQHKORCEVUCPFOKVKICVKQPU

Geopolitical risk

6JG)TQWRKUGZRQUGFVQIGQRQNKVKECNCPFGEQPQOKE

EQPFKVKQPUQHVJGEQWPVTKGUCPFTGIKQPUKPYJKEJKV

QRGTCVGUYJKEJEQWNFKORCEVKVUNCTIGUVOCTMGVUCPF

OC[ǭCHHGEVEQPVKPWKV[QHUWRRN[

#P[CFXGTUGIGQRQNKVKECNQTGEQPQOKEFGXGNQROGPVU

KPǭQTǭCHHGEVKPIVJG)TQWRũUMG[EQWPVTKGUCPFTGIKQPU

KPENWFKPIDWVPQVNKOKVGFVQKPETGCUGFKPVGTPCVKQPCN

VTCFGǭVGPUKQPUQTVJGQWVDTGCMQHEQPHNKEVEQWNFKORCEV

VJGǭ)TQWRǭCPFKVUQRGTCVKQPU

6JGKFGPVKHKECVKQPCPFGHHGEVKXGOKVKICVKQPQHIGQRQNKVKECN

TKUMUJCUDGEQOGCPKPETGCUKPIN[KORQTVCPVHCEVQTYKVJKP

VJG)TQWRũUQRGTCVKQPCNEQPVKPWKV[RNCPPKPIHQTQWTKPVGTPCN

TGUKNKGPEGCPFVJGTGUKNKGPEGQHQWTYKFGTUWRRN[EJCKP

MG[ǭEWUVQOGTUCPFUGTXKEGRTQXKFGTU6JKUEQPUKUVGPV

CPFǭEQORNGVGCUUGUUOGPVDGVVGTKPHQTOU)TQWRCEVKQPU

EMERGING RISKS

#URCTVQHVJGTKUMCUUGUUOGPVRGTHQTOGFD[VJG)TQWR4KUM

%QOOKVVGGCPFVJG$QCTFGOGTIKPITKUMVQRKEUJCXGDGGP

FKUEWUUGFCPFEQPUKFGTGF

Regulatory change

&WGVQVJGJKIJN[TGIWNCVGFPCVWTGQHVJGKPFWUVT[VJG

)TQWRQRGTCVGUKPPGYTGIWNCVQT[EJCPIGTKUMUCTG

EQPVKPWQWUN[GOGTIKPI

6JG)TQWREQPUKFGTUCP[GOGTIKPITGIWNCVQT[EJCPIG

TKUMUǭDG[QPFVJGIGPGTCNVJTGG[GCTTKUMJQTK\QPUQVJCV

OKVKICVKQPUECPDGFGXGNQRGFVQOCPCIGVJGKORCEVUQH

HWVWTGEJCPIGU

(WTVJGTTGIWNCVQT[EJCPIGUCTGDGKPIEQPUKFGTGFYKVJVJG

7-IGPGTCVKQPCNUOQMKPIDCPCPFHWTVJGTTGUVTKEVKQPUQP

XCRKPIDGKPIWPFGTEQPUKFGTCVKQPKPOWNVKRNG'WTQRGCP

OCTMGVU6JG)TQWRKUCUUGUUKPIVJKUGOGTIKPITKUMCPF

FGXGNQRKPICRRTQRTKCVGOKVKICVKQPU

IT service concentration risk

&GRGPFGPEGQPCUKPING+6UGTXKEGRTQXKFGTHQTOWNVKRNG

DWUKPGUUECRCDKNKVKGURQUGUCTKUM#HCKNWTGEQWNFFKUTWRV

OWNVKRNGDWUKPGUUCURGEVUQTKPFKTGEVN[KORCEVVJG)TQWR

VJTQWIJWRUVTGCOUGTXKEGRTQXKFGTU

New types of cyber risk

5QOGU[UVGOUOC[DGRCTVKEWNCTN[XWNPGTCDNGVQTCPUQOYCTG

FWGVQWPFGTKPXGUVOGPVQTVGEJPKECNFGDVRQVGPVKCNN[

ECWUKPIRTQNQPIGFDWUKPGUUFKUTWRVKQPUQTOQTGUKIPKHKECPV

KORCEVU6JG)TQWREQPVKPWQWUN[CUUGUUGUE[DGTVJTGCVU

GURGEKCNN[COKFIGQRQNKVKECNVGPUKQPUCPFOQPKVQTUVJG

GHHGEVKXGPGUUQHUGEWTKV[EQPVTQNU

YYYKORGTKCNDTCPFURNEEQO 43

TOP-DOWN AND BOTTOM-UP RISK ASSESSMENT APPROACH

Who is involved? What activities are completed?

Assessment and evaluation of risks

How do we confirm risks are managed?

Board • 1XGTUKIJVQHVJG)TQWRũUKPVGTPCNEQPVTQNU[UVGOU

TKUMOCPCIGOGPVRTQEGUUCPFHTCOGYQTM

• 2TQXKFGUQRGTCVKQPCNCPFUVTCVGIKETKUMRGTURGEVKXGU

GPUWTKPIVJGUGCTGEQPUKFGTGFKP)TQWRUVTCVGI[

• 5GVUVJG)TQWRũUTKUMCRRGVKVGCPPWCNN[

• 4GXKGYUVJG)TQWRũURTKPEKRCNTKUMUCPFEQPUKFGTU

GOGTIKPITKUMUCPFVJGOGUKFGPVKHKGFKPVYKEG

[GCTN[TKUMCUUGUUOGPVRTQEGUU

• 1XGTUGGUTKUMOCPCIGOGPVCRRTQCEJ

CPFǭTGRQTVKPI

• Reviews results of twice yearly risk

CUUGUUOGPVKPENWFKPIVJG)TQWRũU

RTKPEKRCNǭTKUMU

• &KUEWUUGUCPFCITGGUTKUMCRRGVKVGHQTVJG

)TQWRũURTKPEKRCNTKUMU

Audit

Committee

• 4GXKGYUUEQRGSWCNKV[CPFTGUWNVUQHCUUWTCPEG

RTQXKFGFD[KPVGTPCNCPFGZVGTPCNCWFKV

• Reviews results of other internal assurance

provision over key controls of the Group

• 1XGTUGGUTKUMOCPCIGOGPVCRRTQCEJ

CPFTGRQTVKPI

• 4GIWNCTN[TGXKGYUTGUWNVUQHCUUWTCPEGCEVKXKVKGU

ELT • *KIJKORCEVTKUMUKFGPVKHKGFKPŬDQVVQOWRŭ

CUUGUUOGPVUCTGEQPUQNKFCVGFHQTTGXKGYD[ǭ'.6

• 4GURGEVKXG'.6TKUMFQOCKPQYPGTUũXCNKFCVKQPQH

TKUMCUUGUUOGPVQWVRWVRTKQTVQ4KUM%QOOKVVGG

• 4GIWNCTN[TGXKGYUTGUWNVUQH)TQWR%QPVTQNU/CVTKZ

)%/KPVGTPCNEQPVTQNVGUVKPI

• Reviews results of assurance activities

to ensure effective closure of any

observations raised

Risk

Committee

• 2TQXKFGUŬVQRFQYPŭKPUKIJVUVQTKUM

CUUGUUOGPVRTQEGUU

• %QPUKFGTUGOGTIKPITKUMUCPFVJGOGUKFGPVKHKGF

KPǭTKUMCUUGUUOGPVRTQEGUU

• 2TQXKFGUKPRWVKPVQFGXGNQROGPVQHTKUM

OCPCIGOGPVCEVKXKVKGU

• /GGVUVJTQWIJQWVVJG[GCTVQQXGTUGGTKUM

OCPCIGOGPVCRRTQCEJCPFTGRQTVKPI

• Reviews results of assurance activities to

GPUWTGVJGGHHGEVKXGPGUUQHTKUMOKVKICVKQPU

Integrated

Assurance

Forum

• %QQTFKPCVGUCUUWTCPEGCEVKXKVKGUVQGPUWTGCNN

TGNGXCPVTKUMUCPFEQORNKCPEGTGSWKTGOGPVUCTG

CFGSWCVGN[CFFTGUUGF

• 2TQXKFGUCRRTQRTKCVGKPHQTOCVKQPVQVJG)TQWR4KUM

%QOOKVVGGCPF$QCTFHQTKVVQDGCDNGVQCVVGUVVQVJG

GHHGEVKXGPGUUQHOCVGTKCNEQPVTQNU

• 5GNGEVKQPQHUGPKQTUVCMGJQNFGTUOGGVU

SWCTVGTN[VQGPUWTGCPCRRTQRTKCVGCUUWTCPEG

CRRTQCEJKUKPRNCEGHQTOCVGTKCNEQPVTQNU

Third line • )TQWR+PVGTPCN#WFKVRGTHQTOUTKUMDCUGF

EJCNNGPIKPICWFKVUCPFRTQXKFGUKPUKIJVUCPF

TGEQOOGPFCVKQPUVQVJG#WFKV%QOOKVVGG

CPFOCPCIGOGPV

• 2TQXKFGUVJG$QCTFYKVJKPFGRGPFGPVCUUWTCPEG

QXGTVJGGHHGEVKXGPGUUQHVJGFGUKIPCPF

QRGTCVKQPQHVJGTKUMOCPCIGOGPVHTCOGYQTM

• 2TQXKFGUCWFKVTGRQTVUCPFTGRQTVKPIVQ

OCPCIGOGPVCPFVJG#WFKV%QOOKVVGG

Second line • 'XCNWCVKQPQHHKTUVNKPGŬDQVVQOWRŭTKUM

CUUGUUOGPVUD[UWDLGEVOCVVGTGZRGTVU

KPǭNKPGǭYKVJǭ$QCTFTKUMCRRGVKVG

• 4GXKGYCPFCITGGOGPVQHHWPEVKQPCNTKUMTGIKUVGTU

D[HWPEVKQPCNNGCFGTUJKRVGCOUYKVJOKPKOWO

UKZOQPVJN[HQTOCNWRFCVG

• (QTOCNEQORNGVKQPQHNGICNCPFTGIWNCVQT[

FKUENQUWTGUGI'5)TGNCVGF6%(&*WOCP4KIJVU

)TQWR5EKGPEGTGIWNCVQT[EGTVKHKECVKQPU

• &GHKPGCPFKORNGOGPVRQNKE[CPFTKUM

OCPCIGOGPVCEVKXKVKGUCNKIPGFVQTKUMCRRGVKVG

• 2TQXKFGUWRRQTVVQDWUKPGUUKPFGUKIPCPF

KORNGOGPVCVKQPQHNQECNOKVKICVKQPU

• 4GXKGYTGUWNVUQH)%/VGUVKPICPFKFGPVKH[

EQOOQPVJGOGU

• Review results of assurance activities to ensure

effective closure of observations raised

First line

• .QECNQYPGTUJKRCPFCEEQWPVCDKNKV[HQTEQORNGVKQP

CPFEQPVKPWGFWRFCVGQHTKUMTGIKUVGTYKVJOKPKOWO

VYKEG[GCTN[HQTOCNWRFCVG

• .QECNNGCFGTUJKRVGCOKPRWVVQTGXKGYCPFHQTOCNN[

CITGGTKUMCUUGUUOGPVQWVEQOGU

• #RRTQCEJKPENWFGUTGSWKTGOGPVVQCUUGUU

GHHGEVKXGPGUUQHTGNCVGFTKUMOKVKICVKQPUQP

CPǭQPIQKPIDCUKU

• %QORNGVKQPQHTGIWNCTMG[EQPVTQNVGUVKPICETQUU

VJGǭDWUKPGUUť)%/EQOOWPKECVGUMG[

TGSWKTGOGPVUCPFTGSWKTGFVGUVKPI

• .GCFGTUJKRCEEQWPVCDKNKV[HQTTKUMCUUGUUOGPV

CPFOKVKICVKQPGHHGEVKXGPGUU

• 4GIKQPCNNGCFGTUJKRVGCOQXGTUKIJVCPFKPRWV

• &GFKECVGF)NQDCN$WUKPGUU5GTXKEGU)$5

%QORNKCPEGHWPEVKQPTGURQPUKDNGHQT

RGTHQTOKPIEQPVTQNCUUWTCPEGCEVKXKVKGU

KPǭUGNGEVGFHKTUVNKPGQRGTCVKQPU

• /CPCIGOGPVEGTVKHKECVKQPQHEQORNKCPEG

YKVJǭ)TQWRRQNKEKGU)%/HKPCPEKCNEQPVTQN

EQORNKCPEGNCYUCPFTGIWNCVKQPUCPF

PQVKHKECVKQPQHHTCWFQPCUKZOQPVJN[DCUKU

6JGOKVKICVKQPCPFOCPCIGOGPVQHKFGPVKHKGFTKUMUKUXKVCNVQVJGUWEEGUUQHVJG)TQWR6JG)TQWRũUTKUMOCPCIGOGPVCPFKPVGTPCN

EQPVTQNHTCOGYQTMCPFTGNCVGFTGRQTVKPICTGHWTVJGTFKUEWUUGFKPVJG#WFKV%QOOKVVGGTGRQTVQPRCIG

“Top-down”

“Bottom-up”

PRINCIPAL RISKS AND UNCERTAINTIES continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU44

PRICING & EXCISE CHANGE

4KUMUTGNCVKPIVQVJGKORCEVQHHWVWTGGZEKUGEJCPIGUCPFQWTCDKNKV[VQCEJKGXG

RNCPPGFRTKEKPI

Risk profile change Strategic impacts Change in year

• #VCINQDCNNGXGNTGFWEVKQPKP[GCTQP[GCTKPHNCVKQPTCVGUTGFWEKPIRTGUUWTG

QPǭRTKEKPI

• 2TKEKPIRTGUUWTGTGOCKPUYJGTGVJGTGKUCPGGFVQQHHUGVCEEGNGTCVGFGZEKUG

UEJGOGUCPFOCTMGVUK\GCPFXQNWOGFGENKPGU

Impact Mitigation

• +POCTMGVUYJGTGVJGKPETGCUGFEQUVQHNKXKPIOCMGU

EQPUWOGTUOQTGRTKEGUGPUKVKXGUKIPKHKECPVRTKEGKPETGCUGU

CHHGEVDQVJRTQFWEVFGOCPFCPFUCNGUXQNWOGU

• 2TKEKPIRTGUUWTGOC[DGGZCEGTDCVGFD[GZEKUGKPETGCUGUYJKEJ

HWTVJGTGNGXCVGURTQFWEVRTKEGU6JKUEQWNFTGUWNVKPǭFQYPVTCFKPI

VQNQYGTRTKEGRTQFWEVUECVGIQTKGUQTCPKPETGCUGKPVJG

CVVTCEVKXGPGUUQHKNNKEKVRTQFWEVKORCEVKPIUCNGUXQNWOGU

• +NNKEKVRTQFWEVUVJTKXGKPJKIJGZEKUGGPXKTQPOGPVUTGFWEKPI

VJGUK\GQHVJGNGIKVKOCVGVQDCEEQOCTMGVKPETGCUKPITKUMU

VQǭEQPUWOGTUHTQOPQPEQORNKCPVRTQFWEVCPFHKPCPEKPI

QTICPKUGFETKOG

• +PHGTKQTEQWPVGTHGKVRTQFWEVEQWNFTGUWNVKPFCOCIGVQDTCPFU

• %NGCTRTKEKPIUVTCVGI[CPFUVTQPIQXGTUKIJVD[TGIKQPCN

NGCFGTUJKRVGCOUUWRRQTVGFD[CPCN[UKUCPFGXCNWCVKQP

QHǭRTKEKPIF[PCOKEUGNCUVKEKV[CPFUGIOGPVUGXQNWVKQP

• 6JG)TQWRũU4GXGPWG)TQYVJ/CPCIGOGPVHWPEVKQPKU

U[UVGOCVKECNN[UWRRQTVKPIOCTMGVVGCOUYKVJCUUGUUOGPV

QHǭPGYGZEKUGUVTWEVWTGURTQRQUKPIQRVKOWOUQNWVKQPUXKC

UEGPCTKQRNCPPKPICPFEQPUWOGTRTKEKPICPCN[VKEU

• #+GPCDNGFVQQNUFGXGNQRGFVQDGVVGTOQFGNCPFRTGFKEV

KORCEVUQHGZEKUGKPHNCVKQPCPFQVJGTEQPUWOGTRTGUUWTGU

• 'PICIGOGPVYKVJCWVJQTKVKGURTQXKFKPIKPHQTOGFKPRWV

CPFǭGXKFGPEGCDQWVVJGWPKPVGPFGFEQPUGSWGPEGUQH

FKURTQRQTVKQPCVGEJCPIGUKPRTQFWEVVCZCVKQPUWRRQTVGF

D[ǭCDQXGOCTMGVGPICIGOGPVCTIWOGPVCVKQPCPFFCVC

• %QPVKPWQWUOQPKVQTKPICPFKPVGNNKIGPEGICVJGTKPIHQT

FGXGNQROGPVUVQJGNRRTGFKEVCPFRTGRCTGQWTTGURQPUGU

VQǭGZEKUGEJCPIGRTQRQUCNU

6JGHQNNQYKPIUGEVKQPJKIJNKIJVUVJGRTKPEKRCN

risks the Group faces and identifies the

OKVKICVKQPUVJCVCTGKPRNCEGVQOCPCIGVJGO

YKVJCNNTKUMUTGRQTVGFQPCOKVKICVGFDCUKU

0QVCNNQHVJGUGRTKPEKRCNTKUMUCTGYKVJKP+ORGTKCNũUFKTGEV

EQPVTQNCPFVJGNKUVECPPQVDGEQPUKFGTGFVQDGGZJCWUVKXG

CUǭQVJGTTKUMUCPFWPEGTVCKPVKGUOC[GOGTIGKPCEJCPIKPI

DWUKPGUUGPXKTQPOGPV

The risks reported are those currently considered by the

$QCTFǭVQJCXGVJGOQUVNKMGN[KORCEVQPCEJKGXGOGPVQH

VJGǭ)TQWRũUQDLGEVKXGU

#UGZRNCKPGFKPQWTJCNH[GCTTGUWNVUUVCVGOGPVVJGYQTFKPI

WUGFVQFGUETKDGVJGRTKPEKRCNTKUMUJCUDGGPWRFCVGFDWVVJG

TKUMUTGOCKPCNKIPGFYKVJVJQUGKFGPVKHKGFKPVJG#PPWCN

4GRQTVCPF#EEQWPVU

RISK ASSESSMENT PRINCIPLES

• 4KUMCUUGUUOGPVUCTGCNKIPGFYKVJVJGDWUKPGUURNCPPKPI

E[ENGCPFUVTCVGIKEQDLGEVKXGUHQEWUKPIPQVQPN[QPVJG

KFGPVKHKECVKQPCPFCUUGUUOGPVQHTKUMUDWVOQUVKORQTVCPVN[

QPVJGGHHGEVKXGPGUUQHVJGOKVKICVKQPUKPRNCEG

• +ORGTKCNCFQRVUCF[PCOKECRRTQCEJYJKEJHCEKNKVCVGUCPF

EQNNCVGUXKGYUHTQOHWPEVKQPCNTKUMQYPGTUCPFCDTQCF

URGEVTWOQHQVJGTTGNGXCPVUVCMGJQNFGTURTQXKFKPIGPFVQ

GPFKPUKIJVUHTQOCYKFGEQNNGEVKQPQHUGEQPFNKPGGZRGTVU

ťGPCDNKPICTKEJGTOQTGDCNCPEGFRGTURGEVKXGQPEWTTGPV

CPFGOGTIKPITKUMU

• %WTTGPVCPFGOGTIKPITKUMUCTGEQPUKFGTGFQPCPQPIQKPI

DCUKUCETQUUVJGDWUKPGUUYKVJCIGPGTCNVJTGG[GCT

JQTK\QPǭVJQWIJNQPIGTYJGTGCRRNKECDNGGIENKOCVGTKUM

This horizon ensures appropriate focus and includes

EQPUKFGTCVKQPQHEJCPIGUKPVJGECWUGUQHGZKUVKPITKUMU

GIǭURGEKHKERTQRQUGFTGIWNCVQT[EJCPIGGPUWTKPI

VKOGN[ǭGXCNWCVKQPQHVJGGHHGEVKXGPGUUQHEWTTGPVCPF

HWVWTGǭOKVKICVKQPU

• 5RGEKHKETKUMVQRKEUCTGRTGUGPVGFVQVJG$QCTF

#WFKVǭ%QOOKVVGG4KUM%QOOKVVGGCPF'.6FWTKPIVJG[GCT

6JGUGǭFKUEWUUKQPURTQXKFGHWTVJGTFGVCKNHTQOHKTUVCPF

UGEQPFNKPGOCPCIGOGPVQPVJGKTTKUMOCPCIGOGPV

responsibilities

Risk profile change

4KUMRTQHKNGKPETGCUKPI

4KUMRTQHKNGWPEJCPIGF

#PKNNWUVTCVKQPQHVJGRTKOCT[

KORCEVGCEJTKUMOKIJVJCXG

QPǭTGNGXCPVUVTCVGI[GNGOGPVU

CPFVJGEJCPIGKPTKUMRTQHKNG

EQORCTGFVQNCUV[GCTKU

KPENWFGFHQTGCEJRTKPEKRCN

TKUMǭWUKPIVJGUGU[ODQNU

4GHGTVQRCIGHQTOQTGFGVCKNU

QPǭQWTUVTCVGIKERKNNCTU

YYYKORGTKCNDTCPFURNEEQO 45

REGULATORY CHANGE

4KUMUTGNCVKPIVQVJGKORCEVQHHWVWTGTGIWNCVQT[EJCPIGQPQWTCDKNKV[VQRTQFWEG

OCTMGVCPFUGNNQWTRTQFWEVU

Risk profile change Strategic impacts Change in year

• 6JGTGIWNCVQT[NCPFUECRGEQPVKPWGUVQGXQNXGYKVJVJGKPVTQFWEVKQPQHOQTG

TGUVTKEVKXGEQODWUVKDNGTGIWNCVKQPUCPFKPETGCUKPIEQORNGZKV[GIEJCTCEVGTKUKPI

HNCXQWTDCPUECVGIQT[DCPUCPFIGPGTCVKQPCNCEEGUUDCPU

• 9KFGTCNKIPOGPVDGVYGGP6QDCEEQCPF0)2TGIWNCVKQPEQWNFCTKUGKPVJG'7WPFGT

GZRGEVGFTGHQTOUVQVJG'76QDCEEQ2TQFWEVU&KTGEVKXG'762&CPFQVJGTNGIKUNCVKQP

CPFINQDCNN[CUCTGUWNVQHFGEKUKQPUOCFGCVVJG9*1%QPHGTGPEGQH2CTVKGU

• ;QWVJ#EEGUU2TGXGPVKQPKUFTKXKPIRQNKVKECNCPFUQEKCNRTGUUWTGKPOCP[OCTMGVU

TGUWNVKPIKPNGIKUNCVKQPVQDCPFKURQUCDNGXCRGUVQIGVJGTYKVJEQPVKPWKPIHQEWUQP

UKPINGWUGRNCUVKEUGZVGPFGFRTQFWEGTTGURQPUKDKNKV[NGIKUNCVKQPKP'WTQRG

• 6TCEM6TCEGTGIWNCVKQPUOC[VCMGWPYGNEQOGPQPFKIKVCNHQTOUYJGPKORNGOGPVGF

KPEQWPVTKGUQWVUKFGQH'WTQRG%QPVKPWGFTKUMQH0)26TCEM6TCEGKPVTQFWEVKQP

• 0GYOCTMGVKPIFGPKCNQTFGTU/&1UJCXGDGGPKUUWGFHTQOVJG(&#KPEQPPGEVKQP

YKVJUQOGHNCXQWTGFFKURQUCDNGRTQFWEVU6JGUGCTGUWDLGEVVQQPIQKPINKVKICVKQP

• 9JKNGPGYTGIWNCVKQPUCPFGZEKUGVCZGUCTGDGKPIEQPUKFGTGFKPUQOGOCTMGVU

VJGTGJCXGDGGPQVJGTKPUVCPEGUYJGTGNGIKUNCVKQPJCUDGGPTGOQXGFUWEJCU

Ŭ5OQMGHTGGŭTGUVTKEVKQPUKP0GY<GCNCPFYJKEJKPENWFGFCIGPGTCVKQPCNDCP

QTǭFGNC[GFUWEJCUVJG75OGPVJQNDCP

Impact Mitigation

• 4GIWNCVQT[EJCPIGECPTGUVTKEVRTQFWEVURGEKHKECVKQP

UWEJCUDCPUQPOGPVJQNQTQVJGTHNCXQWTUQTKPITGFKGPVU

EQPUWOGTKPVGTCEVKQPCPFRTQFWEVUWRRN[6JGUGTGUVTKEVKQPU

ECPCHHGEVEQPUWOGTUũCDKNKV[VQGPLQ[QWTRTQFWEVU

RQVGPVKCNN[KORCEVKPIUCNGUXQNWOGUCPFOCTMGVUK\GCPF

TGNCVGFCEEGUUVQRQVGPVKCNN[TGFWEGFTKUMPKEQVKPGRTQFWEVU

• %QORNKCPEGYKVJKPETGCUKPIN[EQORNGZTGIWNCVQT[TGSWKTGOGPVU

increases the risk of additional cost to the Group and

KPCFXGTVGPVPQPEQORNKCPEG0QPEQORNKCPEGEQWNFTGUWNVKP

TGIWNCVQT[EGPUWTGHKPCPEKCNRGPCNV[CPFTGRWVCVKQPCNFCOCIG

• 9JGPTGIWNCVKQPUTGSWKTGKPVGTRTGVCVKQPVJGTGUWNVKPI

LWFIGOGPVUECPNGCFVQFKURWVGUQTKPXGUVKICVKQPUD[

TGIWNCVQTU6JKUECPKPEWTHKPCPEKCNEQUVUQTECWUG

TGRWVCVKQPCNFCOCIGGXGPKHPQHCWNVKURTQXGP

• Group policies and standards and a reviewed set of

)TQWRǭRWDNKERQNKE[RQUKVKQPUCTGKPRNCEGVQCNKIPYKVJ

TGIWNCVQT[ǭFGXGNQROGPVU

• %QPVKPWQWUOQPKVQTKPIQHCPFGPICIGOGPVYKVJTGIWNCVQTU

VQǭJKIJNKIJVTKUMUQHFKURTQRQTVKQPCVGTGIWNCVKQPRTQRQUCNQH

OQFGTCVGCNVGTPCVKXGUCPFFGXGNQROGPVQHUWUVCKPCDNG

TGIWNCVQT[HTCOGYQTMHQT0)2

• 5WDLGEVOCVVGTGZRGTVUGORNQ[GFVQCUUGUUVJGKORCEVU

QHǭRTQRQUGFTGIWNCVQT[EJCPIGCPF)TQWRYKFGKORCEVU

• 2TQLGEVVGCOUKPRNCEGVQOCPCIGVJGKORCEVUQHTGIWNCVQT[

EJCPIGGPUWTKPITGSWKTGFEQORNKCPEGKUCEJKGXGFCPF

opportunities identified

• .GICNCEVKQPECPDGVCMGPVQFGHGPFCICKPUVQTRTGXGPV

TGIWNCVQT[EJCPIGYJGTGVJKUKORCEVUNGICNHTGGFQOU

PRINCIPAL RISKS AND UNCERTAINTIES continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU46

PRODUCT SUPPLY

4KUMUTGNCVKPIVQVJGUWRRN[QHOCVGTKCNUCPFUGTXKEGUVQUWRRQTVQWTCDKNKV[VQQRGTCVG

and produce

Risk profile change Strategic impacts Change in year

• 9JKNGCVCINQDCNNGXGN[GCTQP[GCTKPHNCVKQPTCVGUJCXGTGFWEGFHNWEVWCVKQPUKP

NGCHCPFEQOOQFKV[RTKEKPIEQPVKPWGVQRQUGTKUMUCPFWRUKFGUVQQWTEQUVQHIQQFU

• )GQRQNKVKECNVGPUKQPUJCXGEQPVKPWGFVQKPETGCUGJQYGXGTQWTGZRQUWTGKPVJGUG

CTGCUGI/KFFNG'CUVUQHCTJCUPQVUGGPCP[OCVGTKCNKORCEVUKPVJG)TQWRũU

MG[ǭEQWPVTKGUCPFTGIKQPU

• %NKOCVGEJCPIGKURQVGPVKCNN[KPETGCUKPIVJGHTGSWGPE[CPFKPVGPUKV[QHCFXGTUG

YGCVJGTKORCEVKPIUWRRN[EJCKPUPQVCDN[EKICTQRGTCVKQPUKPQWT%CTKDDGCP

HCEVQTKGUCPFVJG2JKNKRRKPGU

• 4GEGPVCFXGTUGYGCVJGTKORCEVUQP75NGCHETQROC[UJKHVFGOCPFUCPFRTKEGU

QWVUKFGQHVJG75KPETGCUKPIEQUVTKUM

Impact Mitigation

• .QUUQHCMG[OCPWHCEVWTKPIUKVGQTECRCEKV[EQWNFKORCEV

VJGǭ)TQWRũUCDKNKV[VQOGGVUJQTVVGTORTQFWEVKQPFGOCPFU

• (CKNWTGVQUWRRN[OCTMGVUEQWNFNGCFVQCNQUUQHUJQTVVGTO

UCNGUXQNWOGCPFRQVGPVKCNN[GTQFGEQPUWOGTNQ[CNV[

YJKEJǭOC[KORCEVNQPIGTVGTOUCNGUXQNWOGUCPFDTCPFXCNWG

• (CKNWTGVQOCPCIGEQUVKPHNCVKQPEQWNFTGUWNVKPKPETGCUGF

EQUVQHIQQFU

• 5GXGTGYGCVJGTGRKUQFGUEQWNFKORCEVTCYOCVGTKCNUWRRN[

OCPWHCEVWTKPIUKVGUCPFYCTGJQWUKPIRQVGPVKCNN[CHHGEVKPI

UJQTVVGTOUWRRN[VQOCTMGVU

• #NCEMQHCXCKNCDKNKV[QHTCYOCVGTKCNUQTTCYOCVGTKCNUQH

RQQTSWCNKV[EQWNFKORCEVUJQTVVGTOUWRRN[VQOCTMGVU

• /CVGTKCNUVQEMUNGCHCPFPQPVQDCEEQOCKPVCKPGFKPNKPG

YKVJCUUGUUGFUWRRN[EQPVKPWKV[RNCPUCPFCNKIPGFVQUCNGU

HQTGECUVTGSWKTGOGPVU

• 2TQFWEVKQPECRCEKV[RNCPPKPIKPENWFGUCITGGFDWUKPGUU

EQPVKPWKV[OGCUWTGUKPVJGGXGPVQHOCEJKPGHCKNWTG

QTǭUKVGǭKUUWG

• 5WRRNKGTCITGGOGPVUUVCPFCTFUCPFRTCEVKEGUKPENWFG

TGSWKTGOGPVVQEQORN[YKVJ)TQWRRQNKEKGUKPENWFKPISWCNKV[

TGSWKTGOGPVUHQTIQQFUCPFUGTXKEGUUWRRNKGF

• 1PIQKPITKUMCUUGUUOGPVUCPFUWRRNKGTTGXKGYUKPENWFKPI

SWCNKV['5)CPFDWUKPGUUEQPVKPWKV[CPFEQPVKPIGPE[RNCPU

• #NVGTPCVKXGNQECVKQPUHQT0)2RTQFWEVKQPJCXGDGGPGZRNQTGF

9QTMEQPVKPWGUVQTGFWEGVJGTGNQECVKQPVKOGUCPF

RTQCEVKXGN[OCPCIGUCHGV[UVQEMUHQTEQODWUVKDNGU

TECHNOLOGY RESILIENCE

4KUMUTGNCVKPIVQVJGCDKNKV[QH+6KPHTCUVTWEVWTGVQUWRRQTVDWUKPGUUCPFTGIWNCVQT[

TGSWKTGOGPVU

Risk profile change Strategic impacts Change in year

• 6JG)TQWREQPVKPWGUVQQRGTCVGKPCPGZVGTPCNGPXKTQPOGPVYKVJJGKIJVGPGF

IGQRQNKVKECNTKUMUYJKEJJKIJNKIJVVJGEQPVKPWGFTKUMQHCPFKPETGCUKPIGZRQUWTG

VQǭEQTRQTCVGE[DGTCVVCEMU

• 'ZVGTPCNE[DGTVJTGCVUTGOCKPRGTXCUKXGKPENWFKPICPKPETGCUGKPVJKTFRCTV[

security incidents

• 9JKNGPQVCFKTGEVE[DGTKPEKFGPVVJGINQDCN%TQYFUVTKMG/KETQUQHVQWVCIG

JKIJNKIJVGFUWRRN[EJCKPTKUMUKPVGEJPQNQI[OCPCIGOGPV

• 6JGRTQNKHGTCVKQPQH#TVKHKEKCN+PVGNNKIGPEG#+RTGUGPVUPGYEJCNNGPIGUCPF

QRRQTVWPKVKGUVQUGEWTKV[QHU[UVGOUFCVCCPFRJ[UKECNHCEKNKVKGU9GGZRGEV

CPFǭRTGRCTGHQTKPETGCUKPIVTGPFUKPVJGUQRJKUVKECVKQPCPFEQORNGZKV[QH

VGEJPQNQI[CVVCEMU

Impact Mitigation

• .QUUQHETKVKECNU[UVGOUEQWNFKORCEVRTQFWEVUWRRN[

VQǭFKUVTKDWVQTUQTTGVCKNGTUTGUWNVKPIKPTGXGPWGNQUUCPF

TGRWVCVKQPFCOCIGYKVJEWUVQOGTUCPFQVJGTUVCMGJQNFGTU

• (CKNWTGVQRTQVGEVRGTUQPCNQTUGPUKVKXGEQTRQTCVGFCVC

HTQOǭNQUUEQWNFTGUWNVKPKPCDKNKV[VQCEJKGXGUVTCVGIKE

IQCNUǭTGIWNCVQT[DTGCEJCPFTGNCVGFEGPUWTGUKIPKHKECPV

HKPCPEKCNEQUVUQTRGPCNV[TGRWVCVKQPCNFCOCIGQTNQUV

EQORGVKVKXGCFXCPVCIG

• 8WNPGTCDKNKV[UECPPKPICPFRGPGVTCVKQPVGUVKPIVQTGFWEG

attack surface

• *KIJTKUMUWRRNKGTUXGVVGFCPFRGTKQFKECNN[TGXKGYGF

• 1PIQKPIKPXGUVOGPVKPUGEWTKV[VQQNUCPFECRCDKNKVKGU

• %TKUKUOCPCIGOGPVCPFFKUCUVGTTGEQXGT[RNCPUHQTETKVKECN

U[UVGOUVGUVGFVQUWRRQTVVJGCDKNKV[VQTGURQPFCPFTGEQXGT[

HTQOWPRNCPPGFGXGPVU

• 'ORNQ[GGCYCTGPGUUCPFVTCKPKPIVQGFWECVGEQNNGCIWGU

QPǭVJGE[DGTTKUMUVJCVYGHCEG

YYYKORGTKCNDTCPFURNEEQO 47

PRODUCT INNOVATION

AND PORTFOLIO

4KUMUTGNCVKPIVQGHHGEVKXGRTQFWEVKPPQXCVKQPCNKIPGFVQEQPUWOGTRTGHGTGPEGU

CPFǭTGIWNCVQT[TGSWKTGOGPVU

Risk profile change Strategic impacts Change in year

• %QPVKPWGFGOGTIGPEGCPFITQYVJQHPGYNQYGTRTKEGXCNWGDTCPFUKPEQODWUVKDNG

VKGTUCETQUUOCP[ǭOCTMGVU

• %QPVKPWCVKQPQHFQYPVTCFKPIVTGPFCUEQPUWOGTUDGEQOGKPETGCUKPIN[

XCNWGFTKXGPFWGVQKPHNCVKQPCT[RTGUUWTGUQPFKURQUCDNGKPEQOGCPF

KPETGCUKPIǭGZEKUGVCZGUQPVQDCEEQRTQFWEVU

• %QPVKPWGFEQORGVKVQTCEVKXKV[KPVJG0)2OCTMGVYKVJITQYVJKPECVGIQT[UK\G

VJTQWIJPGYRTQFWEVFGXGNQROGPVURTQFWEVNCWPEJGUCPFOCTMGVKPIKPKVKCVKXGU

• +PETGCUKPIVTGPFUVQYCTFURWTEJCUKPIKPPQXCVKXGCPFPGYXCRGUWDECVGIQTKGU

• 'XQNXKPITGIWNCVKQPQH0)2YKVJRQVGPVKCNHWTVJGTHNCXQWTDCPUFKURQUCDNGUDCPU

CPFRNCKPRCEMCIKPIDGKPIEQPUKFGTGF

Impact Mitigation

• +HVJG)TQWRũURTQFWEVRQTVHQNKQFQGUPQVCNKIPYKVJEQPUWOGT

RTGHGTGPEGUKVEQWNFNGCFVQTGFWEGFRTGHGTGPEGHQTQWT

RTQFWEVUNQYGTUCNGUXQNWOGUCPFFKOKPKUJGFDTCPFGSWKV[

• (CKNWTGVQCEVWRQPEQPUWOGTVTGPFUCPFKPUKIJVUEQWNFTGUWNV

KPNQUVQRRQTVWPKVKGUPQVCDN[KP0)2YJGTGKPPQXCVKQPUCTG

OQTGRTGXCNGPVCPFHCUVGTVQOCTMGVU

• (CKNWTGVQGPUWTGGHHGEVKXGKORNGOGPVCVKQPQHOCTMGVQTTGVCKN

KPKVKCVKXGUEQWNFTGUWNVKPNQUVQRRQTVWPKVKGUYCUVGFKPXGUVOGPVU

CPFRQVGPVKCNNQUUQHOCTMGVUJCTG

• (CKNWTGVQKFGPVKH[KPVGNNGEVWCNRTQRGTV[+2EQPUVTCKPVUKPVJG

KPPQXCVKQPQHPGYRTQFWEVUEQWNFKORCEVFGXGNQROGPVCPF

QTNCWPEJNKOKVKPIVJGCDKNKV[VQTGURQPFVQEQORGVKVQTQHHGTKPIU

CPFRQVGPVKCNNKVKICVKQP

• (CKNWTGVQCNKIP0)2RQTVHQNKQVQEQPUWOGTPGGFUCPF

GZRGEVCVKQPUEQWNFTGUWNVKPHCKNWTGVQCEJKGXG0)2CODKVKQP

• (CKNWTGVQFGXGNQR0)2ECVGIQTKGUEQWNFKORCEVCEJKGXGOGPV

QHMG['5)RTKQTKVKGU

• (CKNWTGVQFGXGNQRCUWUVCKPCDNGEQOOGTEKCNOQFGNHQTCNN

0)2ECVGIQTKGUEQWNFTGUWNVKPHCKNWTGVQCEJKGXG0)2CODKVKQP

• 9KFGRQTVHQNKQCETQUUCNNEQODWUVKDNGXCNWGVKGTU

• #ESWKUKVKQPQH75TCPIGQHPKEQVKPGRQWEJGUHTQO6,2.CDU

VQHCEKNKVCVGGPVT[KPVQVJG75OQFGTPQTCNOCTMGV

• %QPUQNKFCVGF0)2ECVGIQT[OCPCIGOGPVCRRTQCEJGPCDNKPI

JQNKUVKEXKGYQHQRRQTVWPKVKGUCPFKPHQTOGFKPXGUVOGPVUVTCVGI[

• )NQDCN%QPUWOGT1HHKEGCEEQWPVCDKNKV[HQTRTQFWEVDTCPF

UVTCVGI[CPFKPKVKCVKXGUVQIGVJGTYKVJUVTQPIRCTVPGTUJKR

CPFEQNNCDQTCVKQPYKVJUWRRN[EJCKPHQTOCTMGV

FGXGNQROGPVUCPFKPVTQFWEVKQPU

• %QPUWOGTECRCDKNKVKGUUVTGPIVJGPGFYKVJCNNVJTGG5GPUG*WD

innovation centres now fully operational

• (WTVJGTGNGXCVKQPQHEQPUWOGTKPUKIJVUCPFDTCPFDWKNFKPI

UMKNNUVQGPUWTGEQPUWOGTTGNGXCPEGCETQUUKPPQXCVKQP

• +PPQXCVKQPUCPFIQVQOCTMGVRNCPUCTGXCNKFCVGFCICKPUV

EQPUWOGTPGGFUCPFRTGHGTGPEGU

• 4GIWNCVQT[UVTCVGIKGUOCTMGVKPIIWKFGNKPGUCPF

RTQFWEVǭUVCPFCTFUFGXGNQRGFVQUWRRQTVQWTEQPUWOGTU

CPFǭQWTǭDWUKPGUU

• $TCPFOQPKVQTKPIKPENWFKPIGSWKV[VTCEMKPI

• +PPQXCVKQPRTQEGUUGUFGXGNQREQPUWOGTRTQFWEVUDCUGF

WRQPTQDWUVCPCN[UKUVGUVKPICPFUEKGPVKHKEUWRRQTV

PRINCIPAL RISKS AND UNCERTAINTIES continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU48

CONSUMER AND MARKET TRENDS

4KUMUTGNCVKPIVQVJGKORCEVQHEJCPIKPIEQPUWOGTDGJCXKQWTCPFOCTMGVVTGPFUQP

EQOOGTEKCNQDLGEVKXGU

Risk profile change Strategic impacts Change in year

• %QPVKPWGFTKUGKPKNNKEKVVTCFGFWGVQYKFGPKPIICRDGVYGGPFWV[RCKFCPFPQPFWV[

RCKFRTKEGUCUCTGUWNVQHGZEKUGKORCEVUPQVCDN[KP'WTQRGCPF#WUVTCNKCYJGTG

GZEKUGNGXGNUCTGXGT[JKIJ

• 75KNNKEKVVTCFGJCUTGEGPVN[DGEQOGOQTGRTQPQWPEGFGURGEKCNN[YKVJKPFKURQUCDNG

flavour vapes

• %QPVKPWGFTCRKFFGXGNQROGPVCPFRTQNKHGTCVKQPVQIGVJGTYKVJKPPQXCVKQPKPPGY

0)2ECVGIQTKGU

• %QPVKPWGFGEQPQOKERTGUUWTGQPEQPUWOGTUFWGVQKPHNCVKQPVJGKPETGCUGFEQUV

QHǭNKXKPICPFGEQPQOKEWPEGTVCKPV[CETQUUQWTOCTMGVHQQVRTKPVTGUWNVKPIKPFQYP

VTCFKPICPFKPETGCUKPIRTQRGPUKV[VQRWTEJCUGKNNKEKVRTQFWEV

Impact Mitigation

• (CKNWTGVQQDVCKPQTGHHGEVKXGN[TGURQPFVQEQOOGTEKCN

KPUKIJVUCPFNGCTPKPIUYQWNFTGUWNVKPNQUUQHOCTMGVUJCTG

QTKPCDKNKV[VQECRKVCNKUGQPEQOOGTEKCNQRRQTVWPKVKGU

• (CKNWTGVQTGURQPFVQEJCPIGUKPOCTMGVGPXKTQPOGPVEQWNF

TGUWNVKPVJG)TQWRũURQTVHQNKQDGKPINGUUCVVTCEVKXGVQEQPUWOGTU

TGUWNVKPIKPTGFWEGFUCNGU

• 'EQPQOKERTGUUWTGQPEQPUWOGTUEQWNFTGUWNVKP

TGFWEGFǭURGPFQPVQDCEEQRTQFWEVUCPFCNVGTPCVKXGU

TGFWEKPIOCTMGVUK\G

• +PETGCUGUKPKNNKEKVVTCFGKORCEVVJGUK\GQHVJGNGIKVKOCVG

OCTMGVKORCEVKPIUCNGUXQNWOGU

• 'PJCPEGFEQPUWOGTKPUKIJVUQRGTCVKPIOQFGNYKVJEQPVKPWGF

KPETGCUGKPECRCDKNKVKGUCPFVQQNUKPENWFKPICUGRCTCVG$WUKPGUU

+PVGNNKIGPEG8GTVKECNVJCVKPENWFGU%QORGVKVQT#PCN[UKU

• 5VTGPIVJGPKPIQHVJGKPPQXCVKQPRKRGNKPGCPFIQXGTPCPEG

• /CTMGVKORCEVUCPCN[UGFCURCTVQHOCTMGVUK\GECNEWNCVKQPU

• %KICTGVVG'ORV[2CEM5WTXG[EQNNGEVKQPTGRQTVKPIRTQXKFGU

VTGPFCPCN[UKUQHKNNKEKVKORCEVUGPCDNKPIOQTGVCTIGVGFCPF

effective interventions

• 2KNQVXCRG'ORV[2CEM5WTXG[EQORNGVGFKP7-ťEQPVKPWQWU

updates planned

• 'ZEKUGCPFRTKEGOQPKVQTKPIRTQXKFGUKPUKIJVUKPVQRQUUKDNG

EJCPIGUKPKNNKEKVKORCEVUVJTQWIJYKFGPKPIFKURCTKV[

DGVYGGPVJGRTKEGQHNGIKVKOCVGCPFKNNKEKVRTQFWEV

• +PFWUVT[VTCFGITQWRUCPFLQKPVQRGTCVKQPUYKVJGPHQTEGOGPV

CIGPEKGUVQEQODCVKNNKEKVVTCFG

ENVIRONMENT

4KUMUTGNCVKPIVQVJGKORCEVHTQODWUKPGUUQRGTCVKQPUQPVJGPCVWTCNGPXKTQPOGPVKP

which we operate

Risk profile change Strategic impacts Change in year

• %CTDQPGOKUUKQPUKPQWTQRGTCVKQPUJCXGTGFWEGFUKPEGCPFTGOCKP

QPǭVTCEMVQTGCEJ0GV<GTQCETQUUQWTXCNWGEJCKPD[

• #EJKGXGFCPGPGTI[EQPUWORVKQPTGFWEVKQPQHUKPEGCEJKGXKPIQWT

QTKIKPCNVCTIGVQHYJKEJJCUDGGPTGUGVVQCTGFWEVKQPD[

• 0GYKORGPFKPITGRQTVKPITGSWKTGOGPVUUWEJCUVJG'7%QTRQTCVG5WUVCKPCDKNKV[

4GRQTVKPI&KTGEVKXG%QORNKCPEGD[KPUEQRGUWDUKFKCTKGUTGSWKTGFD[

• 6JG)TQWREQPVKPWGUVQHCEGKPETGCUKPIENKOCVKEKORCEVUCETQUUKVUINQDCNHQQVRTKPV

#EEQTFKPIVQQWT6%(&CPCN[UGURCIGUYGFQPQVGZRGEVVJKUVQTGUWNVKP

UKIPKHKECPVEQUVGZRQUWTGYKVJKPVJGPGZV[GCTU

Impact Mitigation

• (CKNWTGVQOKVKICVGGPXKTQPOGPVCNKORCEVUQHQWTRTQFWEVU

CPFRTQEGUUGUOC[TGUWNVKPCTGFWEGFQTPGICVKXGRGTEGRVKQP

QH+ORGTKCNPGICVKXGN[KORCEVKPIOCTMGVUJCTGCPFTGXGPWG

• (CKNWTGVQOGGVGZRGEVCVKQPUQTVQGPUWTGCVNGCUVRCTKV[

YKVJǭKPFWUVT[RGGTUOC[KORCEVVJG)TQWRũUTGRWVCVKQP

CUǭCǭUWUVCKPCDNGDWUKPGUUCPFCFXGTUGN[CHHGEVUVCMGJQNFGT

UGPVKOGPVQTUJCTGRTKEG

• 2QQT'5)TCVKPIUEQWNFTGUWNVKPTGFWEGFCEEGUUVQECRKVCN

QTǭJKIJGTECRKVCNǭEQUVU

• (CKNWTGVQEQORN[YKVJMG['5)TGNCVGFTGIWNCVKQPKPENWFKPI

GPXKTQPOGPVCNNGIKUNCVKQPYQWNFTGUWNVKPCOCVGTKCNKORCEV

VQVJG)TQWRKPENWFKPIDWVPQVNKOKVGFVQHKPCPEKCNRGPCNVKGU

• (CKNWTGVQEQORN[YKVJKPETGCUKPITGIWNCVQT[TGRQTVKPI

TGSWKTGOGPVUHQTPQPHKPCPEKCNFCVCGIVJG'7%QTRQTCVG

5WUVCKPCDKNKV[4GRQTVKPI&KTGEVKXGEQWNFTGUWNVKPNGICN

QRGTCVKQPCNCPFTGRWVCVKQPCNEQPUGSWGPEGUHQT+ORGTKCN

• '5)UVTCVGI[CIGPFCCPFEQOOWPKECVKQPUKPENWFKPI

QPIQKPIFGXGNQROGPVCPFOCVGTKCNKV[CUUGUUOGPV

CNKIPGFVQUVTCVGIKEIQCNUCPFVCTIGVU

• %NKOCVGVCTIGVUCTGGODGFFGFKPGZGEWVKXGTGOWPGTCVKQP

• '5)%QOOKVVGGYKVJGZGEWVKXGTGRTGUGPVCVKQPKPRNCEG

VQǭRTQXKFGQXGTUKIJV

• +PXGUVQTCPFUVCMGJQNFGTRTGUGPVCVKQPUGPUWTGCNKIPOGPVYKVJ

GZRGEVCVKQPUCPFVTCPURCTGPE[QPRTQITGUUQH)TQWRCEVKQPU

• %54&YQTMKPIITQWRVQRTGRCTGHQTOCPFCVQT[FKUENQUWTGU

CPF'PXKTQPOGPVYQTMKPIITQWRKPRNCEGVQOCPCIGVJGO

• &GFKECVGFENKOCVGTKUMTGRQTVKPIVJTQWIJ6%(&HTCOGYQTM

• 1WTCEVKQPUVQOKVKICVGENKOCVGTKUMUJCXGGCTPGFWUCRQUKVKQP

QPVJG%&2ũU#.KUVHQTENKOCVGHQTCHKHVJEQPUGEWVKXG[GCT

• 5WUVCKPCDNG6QDCEEQ2TQITCOOG562CPFTGHQTGUVCVKQP

UEJGOGUJGNRTGFWEGVJGGPXKTQPOGPVCNKORCEVQHNGCHITQYKPI

YYYKORGTKCNDTCPFURNEEQO 49

SOCIAL

4KUMUTGNCVKPIVQUQEKCNEQPUKFGTCVKQPUYKVJKPCPFHTQOQWTDWUKPGUUQRGTCVKQPU

CPFǭGZVGPFGFUWRRN[EJCKP

Risk profile change Strategic impacts Change in year

• %QPVKPWGFHQEWUQP'5)TGNCVGFOCVVGTUHTQOKPXGUVQTUCPFGZVGTPCNUVCMGJQNFGTU

• 6JGTGEGPVN[CFQRVGF'7%QTRQTCVG5WUVCKPCDKNKV[&WG&KNKIGPEG&KTGEVKXG

KPVTQFWEGUHWTVJGTTGSWKTGOGPVUVQEQPFWEVFWGFKNKIGPEGVJTQWIJQWVQWTINQDCN

XCNWGEJCKPCPFYKNNDGCRRNKECDNGHTQO

Impact Mitigation

• (CKNWTGVQEQORN[YKVJMG['5)TGNCVGFTGIWNCVKQPKPENWFKPI

JWOCPTKIJVUNGIKUNCVKQPYQWNFTGUWNVKPCOCVGTKCNKORCEV

VQǭVJG)TQWRKPENWFKPIDWVPQVNKOKVGFVQHKPCPEKCNRGPCNVKGU

• 4GRWVCVKQPCNFCOCIGOC[TGUWNVHTQOCNNGICVKQPU

GXGPǭYJGTGPQYTQPIFQKPIJCUQEEWTTGF

• 'ORNQ[GGGPICIGOGPVQTCVVTCEVKXGPGUUQHVJG)TQWR

CUǭCPǭGORNQ[GTOC[DGCFXGTUGN[CHHGEVGFCUCTGUWNV

QHǭCP[ǭRGTEGRVKQPVJCVVJG)TQWRKUCEVKPIKPCP

KPCRRTQRTKCVGǭOCPPGT

• '5)UVTCVGI[CIGPFCCPFEQOOWPKECVKQPUKPENWFKPI

QPIQKPIFGXGNQROGPVCPFOCVGTKCNKV[CUUGUUOGPV

CNKIPGFVQUVTCVGIKEIQCNUCPFVCTIGVU

• '5)%QOOKVVGGYKVJGZGEWVKXGTGRTGUGPVCVKQPKPRNCEG

VQǭRTQXKFGQXGTUKIJV

• +PXGUVQTCPFUVCMGJQNFGTRTGUGPVCVKQPUGPUWTGCNKIPOGPVYKVJ

GZRGEVCVKQPUCPFVTCPURCTGPE[QPRTQITGUUQH)TQWRCEVKQPU

• *WOCP4KIJVU%QORNKCPEGYQTMKPIITQWROGGVUTGIWNCTN[

URGEKCNKUVJWOCPTKIJVUECRCDKNKVKGUTGETWKVGF*WOCP4KIJVU

2QNKE[KPRNCEGCPF*WOCP4KIJVU#WFKVUEQPFWEVGFD[VJG

'5)HWPEVKQP

• *WOCP4KIJVU2QNKE[CPFTKUMOCPCIGOGPVHTCOGYQTM

• 5GFGZ5WRRNKGT'VJKECN&CVC'ZEJCPIGWUGFHQTUWRRNKGT

GVJKECNVTCFKPITKUMCUUGUUOGPVU

LEGAL COMPLIANCE

4KUMUTGNCVKPIVQEQORNKCPEGYKVJNCYUCPFTGIWNCVKQPUCPFVJGOCPCIGOGPVQH

UKIPKHKECPVNGICNOCVVGTU

Risk profile change Strategic impacts Change in year

• %QPVKPWGFGZVGTPCNVTGPFQH'5)TGNCVGFNKVKICVKQPTKUMUYKVJGZVGTPCNHQEWUQP

JWOCPTKIJVUKUUWGUKPKPVGTPCVKQPCNUWRRN[EJCKPUCPFITGGPYCUJKPIENCKOU

Impact Mitigation

• #UYKVJQVJGTEQTRQTCVGUNKVKICVKQPCPFQVJGTENCKOUCTG

RGPFKPICICKPUVVJG)TQWR6JGKPVGTRTGVCVKQPQHVJGNCY

CPFǭVJGTGNCVGFLWFIOGPVUECPNGCFVQFKURWVGUQTKPXGUVKICVKQP

CPFRQUUKDNGHKPCPEKCNEQUVUQTTGRWVCVKQPCNFCOCIG

• (CKNWTGVQEQORN[YKVJTGIWNCVKQPUEQWNFTGUWNVKP

KPXGUVKICVKQPCPFVJGGPHQTEGOGPVQHHKPCPEKCNRGPCNVKGU

QTǭTGIWNCVQT[EGPUWTG

• +PXGUVKICVKQPUQTCNNGICVKQPUQHYTQPIFQKPIECPFGOCPF

UKIPKHKECPVOCPCIGOGPVVKOGRQVGPVKCNN[FKXGTVKPIHQEWU

HTQOQVJGTQRGTCVKQPCNOCVVGTU

• +HCP[ENCKOCICKPUVVJG)TQWRYCUVQDGUWEEGUUHWNKVOKIJV

TGUWNVKPCUKIPKHKECPVNKCDKNKV[HQTFCOCIGUCPFEQWNFNGCFVQ

HWTVJGTENCKOU

• 4GICTFNGUUQHVJGQWVEQOGVJGEQUVUQHFGHGPFKPIUWEJ

ENCKOUECPDGUWDUVCPVKCNCPFOC[PQVDGHWNN[TGEQXGTCDNG

• 6JGTGRWVCVKQPCNFCOCIGCTKUKPIHTQOKPXGUVKICVKQPUQT

CNNGICVKQPUQHPQPEQORNKCPEGEQWNFJCXGCITGCVGTKORCEV

YKVJGZVGTPCNUVCMGJQNFGTUVJCPVJGRGPCNVKGUQTCEVKQPU

TGNCVGFVQVJGOCVVGTKVUGNH

• +PVGTPCNCPFGZVGTPCNNCY[GTUGORNQ[GFURGEKCNKUKPIKP

VJGǭFGHGPEGQHRTQFWEVNKCDKNKV[ENCKOUCPFQVJGTNKVKICVKQP

6QFCVGPQVQDCEEQNKVKICVKQPENCKODTQWIJVCICKPUVVJG

Group has been successful and/or resulted in the recovery

QHFCOCIGUQTUGVVNGOGPVOQPKGU

• #FXKEGKURTQXKFGFVQOKVKICVGVJGECWUGUQHNKVKICVKQPCNQPI

YKVJIWKFCPEGQPFGHGPEGUVTCVGIKGUVQFKTGEVCPFOCPCIG

NKVKICVKQPTKUMCPFOQPKVQTRQVGPVKCNENCKOUCTQWPFVJG)TQWR

• 6JG)TQWRũU%QFGQH%QPFWEVCPFEQTGDGJCXKQWTUCTVKEWNCVG

VJGYC[GORNQ[GGUCTGGZRGEVGFVQCEVYKVJEQORNKCPEG

EGTVKHKGFD[OCPCIGOGPVCETQUUVJGDWUKPGUU

• 6JG)TQWRũURQNKEKGUCPFUVCPFCTFUOCPFCVGVJCVGORNQ[GGU

OWUVEQORN[YKVJNGIKUNCVKQPTGNGXCPVVQDQVJC7-NKUVGF

EQORCP[CPFNQECNNCY

PRINCIPAL RISKS AND UNCERTAINTIES continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU50

BUSINESS TRANSFORMATION

4KUMUTGNCVKPIVQVJGFGUKIPKORNGOGPVCVKQPCPFDGPGHKVTGCNKUCVKQPQHQTICPKUCVKQPCN

EJCPIGKPKVKCVKXGU

Risk profile change Strategic impacts Change in year

• %QPVKPWKPIJKIJXQNWOGQHVTCPUHQTOCVKQPCEVKXKV[CETQUUVJG)TQWR

KPENWFKPIVJG'42EQPUQNKFCVKQPRTQITCOOG

• *KIJXQNWOGQHEJCPIGCPFTGUQWTEGFGOCPFTGSWKTGFVQUWRRQTVVTCPUHQTOCVKQP

RTQITCOOGUCETQUUVJGDWUKPGUU

• +PETGCUKPIUECNGCPFEQORNGZKV[QHETQUUHWPEVKQPCNKPVGITCVKQPTGSWKTKPIECTGHWN

OCPCIGOGPVQHRTQLGEVKPVGTFGRGPFGPEKGU

Impact Mitigation

• +PGHHGEVKXGDWUKPGUUVTCPUHQTOCVKQPEQWNFTGUWNVKPFKUTWRVKQP

VQFGNKXGT[QHDWUKPGUUQDLGEVKXGUQTJKIJGTEQUVQH

KORNGOGPVCVKQPVJCPHQTGECUV

• *KIJFGOCPFHQTNQECNTGUQWTEGUVQUWRRQTVVTCPUHQTOCVKQP

OC[KORCEVGORNQ[GGGPICIGOGPV

• 6TCPUHQTOCVKQP%GPVTGQH'ZRGTVKUGYQTMKPIKPEQPLWPEVKQP

YKVJ+PFGRGPFGPV3WCNKV[#UUWTCPEGCPF+PVGTPCN#WFKVVQ

support successful delivery

• #NNUVTCVGIKERTQITCOOGUWPFGTIQCŬUGVWRHQTUWEEGUUŭ

TGXKGYQHMG[RTQITCOOGCVVTKDWVGU

• Ŭ#KTVTCHHKEEQPVTQNŭRNCPPKPIYKVJVJGDWUKPGUUVQGPUWTG

UWHHKEKGPVTGUQWTEGUCXCKNCDNGVQGPCDNGRTQITCOOGFGNKXGT[

KPCFFKVKQPVQDWUKPGUUCUWUWCNEQOOKVOGPVU

• %JCPIGECRCDKNKV[GODGFFGFKPVQOCLQTEJCPIG

RTQITCOOGUCPFUVCPFCTFKUGFCRRTQCEJVQEJCPIG

OCPCIGOGPVDGKPIFGXGNQRGF

• 5RGEKCNKUV1TICPKUCVKQP'HHGEVKXGPGUUGZRGTVKUGUCHGIWCTFU

FGUKIPCPFFGXGNQROGPVQHQTICPKUCVKQPCNECRCDKNKVKGU

KPNKPGYKVJUVTCVGIKEQDLGEVKXGU

YYYKORGTKCNDTCPFURNEEQO 51

LIQUIDITY AND GOING CONCERN STATEMENT

6JG)TQWRũURQNKE[KUVQGPUWTGVJCVYGCNYC[UJCXGUWHHKEKGPV

ECRKVCNOCTMGVUHWPFKPICPFEQOOKVVGFDCPMHCEKNKVKGUKPRNCEG

VQOGGVHQTGUGGCDNGRGCMDQTTQYKPITGSWKTGOGPVU

6JG)TQWRTGEQIPKUGUVJGTGECPDGWPEGTVCKPV[KPVJGGZVGTPCN

GPXKTQPOGPVJQYGXGTFWTKPIRCUVRGTKQFUQHFKUTWRVKQP

GIǭ%18+&RQNKVKECNWPEGTVCKPV[KP4WUUKCCPF7MTCKPGCPF

/KFFNG'CUVVJG)TQWRGHHGEVKXGN[OCPCIGFQRGTCVKQPUCETQUU

VJGYQTNFCPFJCURTQXGFKVJCUCPGUVCDNKUJGFOGEJCPKUOVQ

QRGTCVGGHHKEKGPVN[FGURKVGVJKUWPEGTVCKPV[6JG&KTGEVQTUEQPUKFGT

VJCVCQPGQHHFKUETGVGGXGPVYKVJKOOGFKCVGECUJQWVHNQYKUQH

ITGCVGUVEQPEGTPVQVJGUJQTVVGTONKSWKFKV[QHVJG)TQWR

6JG&KTGEVQTUJCXGCUUGUUGFVJGGOGTIKPICPFRTKPEKRCNTKUMU

QHVJGDWUKPGUUKPENWFKPIUVTGUUVGUVKPICTCPIGQHFKHHGTGPV

UEGPCTKQUVJCVOC[CHHGEVVJGDWUKPGUU6JGUGKPENWFGF

UEGPCTKQUYJKEJGZCOKPGFVJGKORNKECVKQPUQH

• #QPGQHHFKUETGVGGXGPVTGUWNVKPIKPKOOGFKCVGECUJQWVHNQY

UWEJCUWPGZRGEVGFFWV[CPFVCZRC[OGPVUCPFQTQVJGT

NGICNCPFTGIWNCVQT[TKUMUOCVGTKCNKUKPIQHEcOKNNKQP

• #TCRKFCPFNCUVKPIFGVGTKQTCVKQPVQVJG)TQWRũURTQHKVCDKNKV[

DGECWUGOCTMGVUDGEQOGENQUGFVQVQDCEEQRTQFWEVUQTVJGTG

CTGUWUVCKPGFHCKNWTGUVQQWTVQDCEEQOCPWHCEVWTKPICPF

UWRRN[EJCKPU6JGUGCUUWOGFCRGTOCPGPVTGFWEVKQPKP

RTQHKVCDKNKV[QHHTQO1EVQDGT

6JGUEGPCTKQRNCPPKPICNUQEQPUKFGTGFOKVKICVKQPCEVKQPU

KPENWFKPITGFWEVKQPUVQECRKVCNGZRGPFKVWTGFKXKFGPFRC[OGPVU

CPFUJCTGDW[DCEMRTQITCOOG6JGTGCTGCFFKVKQPCNCEVKQPU

VJCVYGTGPQVOQFGNNGFDWVEQWNFDGVCMGPKPENWFKPIQVJGT

EQUVǭOKVKICVKQPUUWEJCUUVCHHTGFWPFCPEKGUYQTMKPIECRKVCN

OCPCIGOGPVTGVTGPEJOGPVQHNGCUGUCPFFKUEWUUKQPUYKVJ

NGPFGTUCDQWVECRKVCNUVTWEVWTG

7PFGTVJGTGXGTUGUVTGUUVGUVUEGPCTKQCHVGTEQPUKFGTKPI

OKVKICVKQPCEVKQPUKPENWFKPITGFWEVKQPUQHECRKVCNGZRGPFKVWTG

FKXKFGPFRC[OGPVUCPFUJCTGDW[DCEMRTQITCOOGYGJCXG

OQFGNNGFVJCVC'$+6&#TGFWEVKQPYQWNFNGCFVJG)TQWR

VQǭJCXGUWHHKEKGPVJGCFTQQOWPVKN0QXGODGT

6JG)TQWRDGNKGXGUVJKUTGXGTUGUVTGUUVGUVUEGPCTKQVQDGTGOQVG

IKXGPVJGTGNCVKXGN[UOCNNKORCEVQPQWTVTCFKPIRGTHQTOCPEG

CPFDCFFGDVNGXGNUFWTKPIVJG%18+&RCPFGOKECPFRQNKVKECN

WPEGTVCKPV[YKVJTGICTFVQ7MTCKPGCPFǭ4WUUKC+PVJKUUEGPCTKQ

VJG)TQWRYQWNFKORNGOGPVCPWODGTQHOKVKICVKPICEVKQPU

KPENWFKPITGXQMKPIVJGWPEQOOKVVGFFKXKFGPFRCWUKPIVJG

UJCTGDW[DCEMCPFTGFWEKPIFKUETGVKQPCT[URGPFUWEJCU

ECRKVCNGZRGPFKVWTG

$CUGFQPKVUTGXKGYQHHWVWTGECUJHNQYUEQXGTKPIVJGRGTKQF

VJTQWIJVQ0QXGODGTCPFJCXKPICUUGUUGFVJGRTKPEKRCN

TKUMUHCEKPIVJG)TQWRVJG$QCTFKUQHVJGQRKPKQPVJCVVJG

)TQWRCUCYJQNGCPF+ORGTKCN$TCPFU2.%JCXGCFGSWCVG

TGUQWTEGUVQOGGVVJGKTQRGTCVKQPCNPGGFUHQTCRGTKQFQHVYGNXG

OQPVJUHTQOVJGFCVGQHCRRTQXCNQHVJGHKPCPEKCNUVCVGOGPVU

and concludes that it is appropriate to prepare the financial

UVCVGOGPVUQPCIQKPIEQPEGTPDCUKU

VIABILITY STATEMENT

6JG$QCTFJCUTGXKGYGFVJGNQPIVGTORTQURGEVUQHVJG)TQWR

VQCUUGUUKVUXKCDKNKV[6JKUTGXKGYYJKEJKUDCUGFQPVJGDWUKPGUU

RNCPYJKEJYCUEQORNGVGFKP,WN[KPEQTRQTCVGFVJG

CEVKXKVKGUCPFMG[TKUMUQHVJG)TQWRVQIGVJGTYKVJVJGHCEVQTU

NKMGN[VQCHHGEVVJG)TQWRũUHWVWTGFGXGNQROGPVRGTHQTOCPEG

HKPCPEKCNRQUKVKQPECUJHNQYUNKSWKFKV[RQUKVKQPCPFDQTTQYKPI

HCEKNKVKGUCUFGUETKDGFKPVJGŨ/CPCIKPITKUMũUGEVKQPQHVJKU

TGRQTVQPRCIGUVQ

+PCFFKVKQPYGFGUETKDGKPPQVGUVQVJG)TQWRũUQDLGEVKXGU

RQNKEKGUCPFRTQEGUUGUHQTOCPCIKPIKVUECRKVCNKVUHKPCPEKCN

TKUMOCPCIGOGPVQDLGEVKXGUFGVCKNUQHKVUHKPCPEKCNKPUVTWOGPVU

CPFJGFIKPICEVKXKVKGUCPFKVUGZRQUWTGUVQOCTMGV

ETGFKVCPFNKSWKFKV[TKUM

Assessment

6QTGRQTVQPVJGNQPIVGTOXKCDKNKV[QHVJG)TQWRVJG$QCTF

TGXKGYGFVJGQXGTCNNHWPFKPIECRCEKV[CPFJGCFTQQOCXCKNCDNG

VQYKVJUVCPFUGXGTGGXGPVUCPFEQPFWEVGFCTQDWUVCUUGUUOGPV

QHVJGGOGTIKPICPFRTKPEKRCNTKUMUHCEKPIVJG)TQWRKPENWFKPI

VJQUGVJCVYQWNFVJTGCVGPKVUDWUKPGUUOQFGNHWVWTGRGTHQTOCPEG

UQNXGPE[QTNKSWKFKV[6JGCUUGUUOGPVCUUWOGUVJCVCP[DCPM

FGDVOCVWTKPIKPVJGPGZVVJTGG[GCTUECPDGTGHKPCPEGFCV

EQOOGTEKCNN[CEEGRVCDNGVGTOUQTXKCQWTEWTTGPVUVCPFD[

HCEKNKV[6JG$QCTFDGNKGXGUVJCVVJTGG[GCTUKUCPCRRTQRTKCVG

VKOGJQTK\QPIKXGPVJGEWTTGPVDWUKPGUURQTVHQNKQCPFNKOKVGF

XKUKDKNKV[DG[QPFVJTGG[GCTU6JKUCUUGUUOGPVCNUQKPENWFGF

TGXKGYKPICPFWPFGTUVCPFKPIDQVJVJGKORCEVCPFVJGOKVKICVKQP

HCEVQTUKPTGURGEVQHGCEJQHVJQUGTKUMU6JGXKCDKNKV[

CUUGUUOGPVJCUVYQRCTVU

• (KTUVVJG$QCTFEQPUKFGTGFVJGRGTKQFQXGTYJKEJKVJCU

CǭTGCUQPCDNGGZRGEVCVKQPVJCVVJG)TQWRYKNNEQPVKPWGVQ

QRGTCVGCPFOGGVKVUNKCDKNKVKGUEQPUKFGTKPIEWTTGPVFGDV

HCEKNKVKGUCPFFGDVJGCFTQQOCPF

• 5GEQPFKVEQPUKFGTGFVJGRQVGPVKCNKORCEVQHUGXGTGDWV

RNCWUKDNGUEGPCTKQUQXGTVJKURGTKQFKPENWFKPI

• CUUGUUKPIUEGPCTKQUHQTGCEJKPFKXKFWCNRTKPEKRCNTKUM

HQTǭGZCORNGEQOOGTEKCNKUUWGUCPFVJGKORCEVQH

TGIWNCVQT[EJCNNGPIGUCPF

• CUUGUUKPIUEGPCTKQUVJCVKPXQNXGOQTGVJCPQPGRTKPEKRCN

TKUMKPENWFKPIOWNVKTKUMUEGPCTKQU

Findings

Viability review period

Whilst the Board has no reason to believe the Group will not

DGǭXKCDNGQXGTCNQPIGTRGTKQFVJGRGTKQFQXGTYJKEJVJG$QCTF

EQPUKFGTUKVRQUUKDNGVQHQTOCTGCUQPCDNGGZRGEVCVKQPCUVQVJG

)TQWRũUNQPIGTVGTOXKCDKNKV[DCUGFQPVJGTKUMCPFUGPUKVKXKV[

CPCN[UKUWPFGTVCMGPKUVJGVJTGG[GCTRGTKQFVQ5GRVGODGT

6JKUTGHNGEVUVJGRGTKQFWUGFHQTVJG)TQWRũUDWUKPGUU

RNCPUCPFJCUDGGPUGNGEVGFDGECWUGVQIGVJGTYKVJVJGRNCPPKPI

RTQEGUUUGVQWVCDQXGKVIKXGUOCPCIGOGPVCPFVJG$QCTF

UWHHKEKGPVTGCNKUVKEXKUKDKNKV[QPVJGHWVWTGKPVJGEQPVGZVQH

VJGǭKPFWUVT[GPXKTQPOGPV

6JG)TQWRũUCPPWCNEQTRQTCVGRNCPPKPIRTQEGUUGUKPENWFG

EQORNGVKQPQHCUVTCVGIKETGXKGYRTGRCTCVKQPQHCVJTGG[GCT

DWUKPGUURNCPCPFCRGTKQFKETGHQTGECUVQHEWTTGPV[GCTDWUKPGUU

RGTHQTOCPEGCPFNKMGN[NCPFKPI6JGRNCPUCPFRTQLGEVKQPU

RTGRCTGFCURCTVQHVJGUGEQTRQTCVGRNCPPKPIRTQEGUUGUEQPUKFGT

VJG)TQWRũUECUJHNQYUEQOOKVVGFHWPFKPIHQTGECUVHWVWTG

HWPFKPITGSWKTGOGPVUDCPMKPIEQXGPCPVUCPFQVJGTMG[

HKPCPEKCNTCVKQUKPENWFKPIVJQUGTGNGXCPVVQOCKPVCKPKPIQWT

KPXGUVOGPVITCFGTCVKPIU6JGUGRTQLGEVKQPUTGRTGUGPVVJG

&KTGEVQTUũDGUVGUVKOCVGQHVJGGZRGEVGFHWVWTGHKPCPEKCNRTQURGEVU

QHVJGDWUKPGUUDCUGFQPCNNEWTTGPVN[CXCKNCDNGKPHQTOCVKQP

6JGWUGQHVJGUVTCVGIKERNCPGPCDNGUCJKIJNGXGNQHEQPHKFGPEG

KPCUUGUUKPIXKCDKNKV[GXGPKPGZVTGOGCFXGTUGGXGPVUFWGVQC

PWODGTQHOKVKICVKPIHCEVQTUUWEJCU

• (NGZKDKNKV[QHECUJQWVHNQYYKVJTGURGEVVQVJGCDKNKV[VQ

OCPCIGFKXKFGPFTGVWTPUVQKPXGUVQTUECRKVCNGZRGPFKVWTG

RTQLGEVURNCPPGFVQVCMGRNCEGYKVJKPVJGVJTGG[GCTJQTK\QP

TGVWTPQHUWTRNWUECRKVCNVQKPXGUVQTUXKCUJCTGDW[DCEM

RNWUǭRTQOQVKQPCNOCTMGVKPIRTQITCOOGU

• 6JG)TQWRJCUOCVWTGDWUKPGUUTGNCVKQPUJKRUCPFQRGTCVGU

INQDCNN[YKVJKPYGNNGUVCDNKUJGFOCTMGVU

• 6JG)TQWRũUQRGTCVKQPUCTGJKIJN[ECUJIGPGTCVKXG

CPFVJG)TQWRJCUCEEGUUVQVJGGZVGTPCNFGDVOCTMGVU

VQǭTCKUGHWTVJGTHWPFKPI

PRINCIPAL RISKS AND UNCERTAINTIES continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU52

RISK IMPACT REVIEW

(QTGCEJQHQWTRTKPEKRCNTKUMURNCWUKDNGTKUMKORCEVUEGPCTKQUJCXGDGGPCUUGUUGFVQIGVJGTYKVJCOWNVKRNGTKUMUEGPCTKQ

6JGǭHQNNQYKPIVCDNGUWOOCTKUGUVJGMG[UEGPCTKQUVJCVYGTGEQPUKFGTGFDQVJKPFKXKFWCNN[CPFKPCIITGICVG

Risk scenarios modelled Level of severity reviewed Link to principal risk

6JGEQPUGSWGPEGUQHCFXGTUG

QRGTCVKPICPFEQOOGTEKCN

RTGUUWTGUKPXQNXKPIXQNWOG

reduction and/or falls in

OCTIKPFTKXGPD[WPHQTGUGGP

reductions in the size of

VJGǭNGIKVKOCVGVQDCEEQ

OCTMGVǭQTQVJGTEJCPIGU

KPǭVJGNGXGNQHEQPUWOGT

FGOCPFHQTQWTRTQFWEVU

6JGOCZKOWOSWCPVKHKCDNGKORCEVQHCNN

GPXKUCIGFDWUKPGUUTKUMUKPENWFKPIVJG

KORCEVǭQHCNQUUQHOCTMGVUK\GCPFUJCTG

CPFǭNCEMQHRTKEKPI

6JGXCNWGQHVJGUGEQODKPGFTKUMUVQVCNU

cDKNNKQPQXGTVJGVJTGG[GCTRGTKQF

WPFGTǭTGXKGY

#HWTVJGTYQTUVECUGUEGPCTKQJCUCNUQ

DGGPǭEQPUKFGTGFOQFGNNKPICTGFWEVKQP

QPǭTGOCKPKPI'$+6&#CHVGTEQPUKFGTCVKQPQH

VJGǭKUQNCVGFDWUKPGUUTKUMU6JGXCNWGQHVJKU

'$+6&#OQFGNNGFVQVCNUcDKNNKQPQXGTVJG

VJTGG[GCTRGTKQFWPFGTTGXKGY

9GJCXGTGFWEGFVJG'$+6&#TGFWEVKQPHTQO

KPVJGRTKQT[GCTVQVJKU[GCTVQDGVVGT

TGRTGUGPVCRNCWUKDNGFQYPUKFGUEGPCTKQ

• 2TKEKPICPFGZEKUGEJCPIG

• 4GIWNCVQT[EJCPIG

• 2TQFWEVUWRRN[

• 6GEJPQNQI[TGUKNKGPEG

• 2TQFWEVKPPQXCVKQPCPFRQTVHQNKQ

• %QPUWOGTCPFOCTMGVVTGPFU

• Social

• 'PXKTQPOGPV

• $WUKPGUUVTCPUHQTOCVKQP

The possible costs associated

YKVJNGICNCPFQVJGT

TGIWNCVQT[EJCNNGPIGU

KPENWFKPIEQORGVKVKQP

GPSWKTKGUCPFVCZCWFKVU

(CKNWTGVQUWEEGUUHWNN[FGHGPFGZKUVKPI

CPFǭTGCUQPCDN[HQTGUGGCDNGHWVWTGNGICN

CPFǭTGIWNCVQT[EJCNNGPIGUCVVJGGZRGEVGF

HKPCPEKCNGZRQUWTG

6JGXCNWGQHVJGUGEQODKPGFTKUMUKU

EcDKNNKQP

• .GICNEQORNKCPEG

• Social

• 'PXKTQPOGPV

0QPGQHVJGUEGPCTKQUTGXKGYGFGKVJGTKPFKXKFWCNN[QTKPCIITGICVGYQWNFECWUG+ORGTKCN$TCPFUVQEGCUGVQDGXKCDNG

%NKOCVGTGNCVGFTKUMUJCXGDGGPCUUGUUGFCUECWUGUQHCPWODGTQHQWTWPFGTN[KPITKUMUYJKEJCTGKPENWFGFYKVJKPVJGUEGPCTKQ

OQFGNNKPIKPENWFKPIDWVPQVNKOKVGFVQVJGHCKNWTGVQUWRRN[RTQFWEVFWGVQYGCVJGTTGNCVGFKORCEVUQPKPFKXKFWCNHCEVQTKGU

VJGǭEQUVQHEQORN[KPIYKVJGPXKTQPOGPVCNNGIKUNCVKQPUWEJCUECTDQPRTKEKPICPFVJGKORCEVVJCVENKOCVGEJCPIGJCUWRQP

VJGǭUWRRN[QHTCYOCVGTKCNUPQVCDN[NGCH

+PYGCNUQEQPFWEVGFCSWCPVKHKGFENKOCVGUEGPCTKQCPCN[UKUYKVJo%CPFo%RCVJYC[UCNKIPGFYKVJVJGTGEQOOGPFCVKQPU

QHVJG6%(&6CUM(QTEGQP%NKOCVGTGNCVGF(KPCPEKCN&KUENQUWTGUCPF2CTKU#ITGGOGPV6JGUEGPCTKQCPCN[UKUVCMGUKPVQEQPUKFGTCVKQP

ENKOCVGTGNCVGFRJ[UKECNCPFVTCPUKVKQPTKUMVQYJKEJYGFKUENQUGKPFGVCKNHQTVJGPGZV[GCTU6JG)TQWRFQGUPQVEQPUKFGT

ENKOCVGEJCPIGVQDGCTKUMHTQOCXKCDKNKV[RGTURGEVKXG6JG)TQWRJQNFUEOQPVJUQHNGCHUVQEMRTQVGEVKPICICKPUVCP[UJQTVCIG

QTKPETGOGPVCNEQUVECWUGFD[CPCVWTCNGXGPVJGPEGKVYQWNFPQVOCVGTKCNN[KORCEVVJGRGTKQFWPFGTTGXKGY#P[KPETGOGPVCNEQUV

YQWNFJCXGCP'$+6&#KORCEVNQYGTVJCPVJCVOQFGNNGFCURCTVQHVJGUEGPCTKQVGUVKPI

CONCLUSION

1PVJGDCUKUQHVJKUTQDWUVCUUGUUOGPVQHVJGGOGTIKPICPFRTKPEKRCNTKUMUHCEKPIVJG)TQWRCPFQPVJGCUUWORVKQPVJCVVJG[

CTGǭOCPCIGFQTOKVKICVGFKPVJGYC[UFKUENQUGFVJG$QCTFũUTGXKGYQHVJGDWUKPGUURNCPCPFQVJGTOCVVGTUEQPUKFGTGFCPF

TGXKGYGFFWTKPIVJG[GCTCPFVJGTGUWNVUQHVJGUGPUKVKXKV[CPCN[UKUWPFGTVCMGPCPFFGUETKDGFCDQXGVJG$QCTFJCUCTGCUQPCDNG

GZRGEVCVKQPVJCVVJG)TQWRYKNNDGCDNGVQEQPVKPWGKPQRGTCVKQPCPFOGGVKVUNKCDKNKVKGUCUVJG[HCNNFWGQXGTVJGRGTKQFVQ

5GRVGODGT

YYYKORGTKCNDTCPFURNEEQO 53

STAKEHOLDER ENGAGEMENT

Building and maintaining trust with our stakeholders

WPFGTRKPUǭVJGUWEEGUUCPFTGRWVCVKQPQH+ORGTKCN$TCPFU

6JTQWIJUVCMGJQNFGTEQNNCDQTCVKQPYGCKOVQFGXGNQRVJG

%QORCP[OKPKOKUGQWTGPXKTQPOGPVCNKORCEVOCMGCRQUKVKXG

UQEKCNEQPVTKDWVKQPCPFWRJQNFJKIJUVCPFCTFUQHIQXGTPCPEG

6JKUUGEVKQPQHVJG#PPWCN4GRQTVRTQXKFGUKPUKIJVKPVQ

JQYǭUVCMGJQNFGTGPICIGOGPVKUVCMGPKPVQEQPUKFGTCVKQPD[

VJGǭ$QCTFCPFVJG'ZGEWVKXG.GCFGTUJKR6GCO'.6KPVJGKT

FGEKUKQPOCMKPIRTQEGUUGU+VIQGUQPVQFGUETKDGJQYYG

OQPKVQTVJGGHHGEVKXGPGUUQHQWTGPICIGOGPV

BUILDING TRUST WITH OUR STAKEHOLDERS

1WTUVTCVGI[UVCTVUYKVJQWTEQPUWOGTU/KNNKQPUQHCFWNVU

YQTNFYKFGEJQQUGVQGPLQ[QWTVQDCEEQCPFPGZVIGPGTCVKQP

RTQFWEVU6JGDGVVGTYGWPFGTUVCPFVJGRTGHGTGPEGUQHQWT

EQPUWOGTUVJGDGVVGTYGCTGCDNGVQUGTXGVJGO6JKUJGNRU

WUǭITQYQWTDWUKPGUUCPFKVJGNRUWUKFGPVKH[CPFECRKVCNKUG

QPǭQRRQTVWPKVKGUCUCEJCNNGPIGTDWUKPGUU

• 6JG$QCTFRCTVKEKRCVGFKPCPWODGTQHEQPUWOGTKOOGTUKQP

GXGPVUQXGTVJGEQWTUGQHVJG[GCTKPVJG%\GEJ4GRWDNKECPF

VJG7-6JGUGCHHQTFGF$QCTFOGODGTUVJGQRRQTVWPKV[VQIGV

ENQUGTVQVJGEQPUWOGTD[JGCTKPIFKTGEVN[HTQOVJGOCDQWV

VJGKTDGJCXKQWTUNKMGUCPFFKUNKMGU$QCTFOGODGTUYGTGCNUQ

CDNGVQFKUEWUUOCVVGTUKORQTVCPVVQDQVJEQODWUVKDNGCPF

PKEQVKPGRTQFWEVEQPUWOGTUYKVJCRCTVKEWNCTHQEWUQP

JGCVGFVQDCEEQCPF0)2RTQFWEVKPPQXCVKQP

• 1WT%'1CNUQOGVUGRCTCVGN[YKVJEQPUWOGTUFWTKPIVJG[GCT

• #XKUKVVQQPGQHQWT+PPQXCVKQP*WDURTQXKFGF$QCTF

OGODGTUYKVJHKTUVJCPFKPUKIJVUVQEQPUWOGTRTGHGTGPEGU

HOW THE BOARD CONSIDERS

THIS STAKEHOLDER

• %QPUWOGTTQWPFVCDNGUCPFHQEWUITQWRUCTGJGNFǭVQWPFGTUVCPF

EQPUWOGTUũURGEKHKETGSWKTGOGPVUCPFRTGHGTGPEGU

• (GGFDCEMHTQOVJGUGHQEWUITQWRUKUWUGFKPQWTǭFGEKUKQP

OCMKPIHQTKPXGUVOGPVUKPDTCPFTGHTGUJGUCPFOCTMGVKPI

• 6JG)NQDCN%QPUWOGT1HHKEGJGCFGFD[VJG%JKGH%QPUWOGT

1HHKEGTNGCFUEQPUWOGTNKUVGPKPIKPKVKCVKXGUCETQUUVJG)TQWR

HOW WE ENGAGE WITH

THIS STAKEHOLDER

• 1WTHQEWUITQWRUKPHQTOGFWUVJCVCFWNVEQPUWOGTU

YCPVǭCǭEJQKEGQHDTCPFUCPFSWCNKV[RTQFWEVUCVVJG

TKIJVǭRTKEGǭRQKPVU

• %QPUWOGTRTGHGTGPEGUUWEJCUEKICTGVVGRCEMHQTOCVU

HNCXQWTUCPFHKNVGTUCUǭYGNNǭCUVJGEJQKEGQHRQVGPVKCNN[

NGUUǭJCTOHWN0)2GXQNXGǭQXGTVKOG

• (WNN[WPFGTUVCPFKPIEQPUWOGTPGGFUCNNQYUWUVQTGOCKP

TGNGXCPVCPFWPFGTRKPUEQPUWOGTNQ[CNV[VQDTCPFU

WHAT MATTERS TO

THIS STAKEHOLDER

• 9GJQNFTGIWNCTEQPUWOGTHQEWUITQWRUVQCUUGUUVJGǭKORCEV

QHQWTDTCPFTGHTGUJGUCPFǭOCTMGVKPIECORCKIPUQPEQPUWOGTU

• 9GDGNKGXGOCTMGVUJCTGEJCPIGUCETQUURTQFWEVU

EJCPPGNUǭCPFIGQITCRJKGUTGHNGEVVJGGHHGEVKXGPGUU

QHǭQWTǭGPICIGOGPVYKVJEQPUWOGTU

• 4GIWNCTFCVCNGFWRFCVGUHTQOVJG)NQDCN%QPUWOGT1HHKEG

RTQXKFGVJG'ZGEWVKXGYKVJGXKFGPEGCPFCPQRRQTVWPKV[VQ

EJCNNGPIGCUUWORVKQPUYJGPOCMKPIFGEKUKQPUTGNCVGFVQ

QWTǭRTQFWEVRQTVHQNKQ

HOW WE MONITOR

THE EFFECTIVENESS

OF OUR ENGAGEMENT

Further information on how the Board has considered

stakeholders when making key decisions is given on the

following pages and also in the Governance Report on

pages 98 to 103.

The Board’s decision-making process is illustrated in our

Section 172(1) statement on page 102 which is incorporated

into this Strategic Report by reference.

CONSUMERS

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU54

COLLEAGUES CUSTOMERS

1WTEQNNGCIWGUCTG+ORGTKCNũUOQUVKORQTVCPVCUUGVCPFCTG

ETKVKECNVQVJGUWEEGUUQHVJGDWUKPGUU+VKUGUUGPVKCNYG

ETGCVGǭCUWRRQTVKXGUCHGCPFTGYCTFKPIYQTMGPXKTQPOGPV

VQǭGPCDNGVJGOVQFGNKXGTQWTIQCNUCPFFGXGNQRVJGKTECTGGTU

9GǭDGNKGXGVJCVCFKXGTUGCPFGPICIGFYQTMHQTEGKUKORGTCVKXG

HQTDWUKPGUUUWEEGUU

9JGTGKVKUFKHHKEWNVVQGPICIGFKTGEVN[YKVJEQPUWOGTU

GPICIKPIYKVJTGVCKNGTURTQXKFGUWUGHWNKPUKIJVUKPVQQWT

EQPUWOGTUũDGJCXKQWTCPFRTGHGTGPEGU6JKUJGNRUWUITQY

QWTǭDWUKPGUUGXGPYJGTGVJGTGCTGTGIWNCVQT[JGCFYKPFU

CPFǭKFGPVKH[QRRQTVWPKVKGUVQDGCUWEEGUUHWNEJCNNGPIGT

9GǭYQTMENQUGN[YKVJFKUVTKDWVQTUYJQNGUCNGTUCPFTGVCKNGTU

VQǭGPUWTGQWTRTQFWEVUCTGCXCKNCDNGVQCFWNVEQPUWOGTUKPC

FKXGTUGTCPIGQHQWVNGVU6JGUGUVCMGJQNFGTURNC[CǭETWEKCN

TQNGǭKPQWTDWUKPGUUOQFGN

• %QNNGEVKXGTGURQPUKDKNKV[HQTYQTMHQTEGGPICIGOGPVJCUDGGP

GODGFFGFKPVQVJG$QCTFũUIQXGTPCPEGHTCOGYQTMKPVJG

TGOKVQHVJG2GQRNG)QXGTPCPEG5WUVCKPCDKNKV[%QOOKVVGG

QHYJKEJGXGT[0QP'ZGEWVKXG&KTGEVQTKUCOGODGT

• 6JG$QCTFJGNFVJTGGŬ/GGVVJG$QCTFŭGXGPVUYKVJǭITQWRU

QHǭEQNNGCIWGUFWTKPIVJG[GCTIKXKPIVJG$QCTFVJGQRRQTVWPKV[

VQJGCTEQNNGCIWGUũRGTURGEVKXGUCNNQYKPIVJGǭ$QCTFVQ

KPEQTRQTCVGEQNNGCIWGUũXKGYUKPVQKVUFGEKUKQPOCMKPI

• 6JG$QCTFCNUQGPICIGUYKVJCDTQCFETQUUUGEVKQPQH

GORNQ[GGUD[YC[QHFKPPGTUKPHQTOCNFTKPMUCPFUKVGXKUKVU

• 6JG$QCTFTGEGKXGUTGIWNCTHGGFDCEMHTQOQWTGORNQ[GGU

VJTQWIJWRFCVGUCVVJG2)5%QOOKVVGG

• 6JG$QCTFJCURCTVKEKRCVGFKPUVQTGXKUKVUKPVJG

%\GEJǭ4GRWDNKEQXGTVJGEQWTUGQHVJG[GCT6JGUGXKUKVU

RTQXKFGFVJGQRRQTVWPKV[VQVCNMFKTGEVN[VQTGVCKNGTU

• 1WT%'1OGGVUYKVJEWUVQOGTUTGIWNCTN[VJTQWIJQWVVJG[GCT

• Ŭ%QPPGEVKQPUŭQWTRWTRQUGXKUKQPCPFDGJCXKQWTU

FGXGNQROGPVRTQITCOOGEQPVKPWGFGPUWTKPICNNEQNNGCIWGU

GZRGTKGPEGVTCKPKPIVQGPJCPEGVJGKTWPFGTUVCPFKPIQHVJGUG

DGJCXKQWTUCPFYJCVVJG[OGCPHQTVJGOKPVJGKTTQNG

• 1XGTUGPKQTNGCFGTUYGTGGSWKRRGFYKVJUMKNNUKP

RGTHQTOCPEGEQCEJKPIVJTQWIJVJG%QPPGEVGF.GCFGTUJKR

2TQITCOOGCUMKPIRQYGTHWNSWGUVKQPUTGEQIPKUKPICPF

XCNWKPIFKHHGTGPEGCPFCEVKXGN[NKUVGPKPIVQGPICIGCPF

GORQYGTGORNQ[GGRGTHQTOCPEG

• %'1CPFNGCFGTUJKRVQYPJCNNOGGVKPIUKPRGTUQP

CPFǭXKTVWCNN[RTQXKFKPIFKTGEVHGGFDCEMQRRQTVWPKVKGU

• 1WTOCTMGVENWUVGTNGCFGTUJKRVGCOUGPICIGYKVJQWT

EWUVQOGTUVQWPFGTUVCPFJQYVQKORTQXGVJGGHHGEVKXGPGUU

QHVJGKTUCNGUHQTEGU

• 9GYQTMENQUGN[YKVJQWTFKUVTKDWVQTUVQǭWPFGTUVCPFJQY

YGǭECPDGUVOCPCIGQWTTGNCVKQPUJKRUCPFJCXGCFGFKECVGF

VGCOVQUWRRQTVFKUVTKDWVQTUCNGUCPFDWKNFDGUVRTCEVKEGKP

FKUVTKDWVQTOCPCIGOGPVCETQUUVJG%QORCP[

• 9GWUGMG[CEEQWPVOCPCIGOGPVRTCEVKEGUVQGPICIGYKVJ

QWTNCTIGUVEWUVQOGTUVQDGVVGTWPFGTUVCPFVJGKTǭPGGFUCPF

VQǭETGCVGUVTQPIEQOOGTEKCNRCTVPGTUJKRUVQJGNRQWT

DWUKPGUUGUETGCVGXCNWGVQIGVJGT

• %QPVKPWGFRTQITGUUQP&'+CPFKUUWGUQHCWVJGPVKEKV[

CPFǭKPENWUKQPRCTVKEWNCTN[CTQWPFIGPFGTGVJPKEKV[

.)$63CPFFKUCDKNKV[CTGVCMGPUGTKQWUN[

• 4GURQPUKDKNKV[CPFCEEQWPVCDKNKV[WPFGTRKPPGFD[CHCKT

CUUGUUOGPVQHEQPVTKDWVKQPYKVJUGPKQTOCPCIGTUNGCFKPI

D[ǭGZCORNG

• *GCNVJUCHGV[CPFYGNNDGKPIEQPVKPWGVQDGCRTKQTKV[

• #FKXGTUGRQTVHQNKQQHSWCNKV[RTQFWEVUVJCVCRRGCN

VQǭEQPUWOGTUYKVJEQPUKUVGPVEQOOWPKECVKQPQPVJG

NCWPEJRKRGNKPGCPFKPXGUVOGPVDGJKPFTGNGXCPVDTCPFU

• 'CUGQHQTFGTKPICPFCUVTQPIUWRRN[EJCKPVQOCKPVCKP

JKIJǭNGXGNUQHQPUJGNHCXCKNCDKNKV[

• 5WRRQTVVQRTQVGEVCICKPUVKNNKEKVVTCFGCPFWPFGTCIGUCNGU

CPFIWKFCPEGVJTQWIJKPFWUVT[EJCPIGUUWEJCUFKURNC[

DCPUQTRNCKPǭRCEMCIKPI

• 9GTGXKGYVJGTGUWNVUQHQWTCPPWCNYQTMHQTEGGPICIGOGPV

KPǭVJG'ORNQ[GG'ZRGTKGPEGUWTXG[CPFCUMRGQRNGNGCFGTU

VQǭETGCVGCEVKQPRNCPUCUCTGUWNVQHVJGUWTXG[CPFYGTGXKGY

EQORNGVKQPCPFRTQITGUUQHVJGUGRNCPU

• 9GTGXKGYVJGTGUWNVUQHQWTKPVGTKORWNUGUWTXG[U

• 6JG'5)%QOOKVVGGEJCKTGFD[VJG%'1TGEGKXGUHGGFDCEM

HTQOVJG$WUKPGUU'ORNQ[GG4GUQWTEG)TQWRU$'4)U

• (GGFDCEMKUUJCTGFD[$'4)OGODGTUCPFVJG)NQDCN&'+

6GCOKPVJG&'+5VGGTKPI)TQWR

• 9GEQNNCVGHGGFDCEMHTQOGZKVKPVGTXKGYUVQHKPFQWVYJ[

GORNQ[GGUEJQQUGVQNGCXGWU

• 9GOQPKVQTQWTRGTHQTOCPEGTGNCVKXGVQQVJGT(/%)

EQORCPKGUVJTQWIJVJG#FXCPVCIG5WTXG[CPFQVJGT

DGPEJOCTMKPIUWTXG[U(GGFDCEMHTQOVJGUGUWTXG[U

KUǭTGXKGYGFCPFVCMGPKPVQCEEQWPVKPQWTGPICIGOGPV

plans and in setting priorities

• 9GJQNFOCPCIGOGPVTQWPFVCDNGGXGPVUYKVJTGIKQPCN

EWUVQOGTUVQJGCTHKTUVJCPFJQY+ORGTKCNKURGTHQTOKPI

TGNCVKXGVQRGGTU

• #SWCTVGTN[RWNUGTGRQTVRTQXKFGURGTHQTOCPEGHGGFDCEM

YJKEJKUWUGFVQJKIJNKIJVCTGCUHQTKORTQXGOGPV

• 9GJCXG-2+UVQOQPKVQTRTQITGUUCICKPUV

QRGTCVKQPCNǭKPKVKCVKXGU

www.imperialbrandsplc.com 55

6JGTGIWNCVKQPQHVQDCEEQCPFPKEQVKPGXCTKGUUKIPKHKECPVN[

CETQUUQWTINQDCNOCTMGVU9GDGNKGXGVJCVTGCUQPCDNGCPF

DCNCPEGFTGIWNCVKQPQHVQDCEEQCPFPKEQVKPGRTQFWEVUKU

GUUGPVKCNVQUWRRQTVEQPUWOGTUQPVJGKTJCTOTGFWEVKQP

LQWTPG[CPFYGUGGMEQPUVTWEVKXGGPICIGOGPVYKVJRQNKE[

OCMGTUCPFTGIWNCVQTUVQCEJKGXGVJKU

• 1WTEQTRQTCVGUVTCVGI[KPENWFGUDWKNFKPICRQTVHQNKQQHPGZV

IGPGTCVKQPRTQFWEVU0)2YKVJRQVGPVKCNN[TGFWEGFJCTO

• The Board would like to engage more with this stakeholder

DWVQRRQTVWPKVKGUJCXGDGGPNKOKVGF

• 1WT%JKGH%QTRQTCVG#HHCKTU1HHKEGTRTGUGPVUVQVJG$QCTF

TGIWNCTN[QPVJG)TQWRũUTGIWNCVQT[TKUMUCPFQWTEQTRQTCVG

CHHCKTUUVTCVGI[VQOCPCIGVJGUGTKUMU

• /CPCIGOGPVRTQXKFGUWRFCVGUVQVJG$QCTFCURCTVQH

VJGǭTGIKQPCNDWUKPGUUTGXKGYUKPENWFKPIYJGTGTGNGXCPV

CP[ǭWRFCVGUQPVJGTGIWNCVQT[NCPFUECRG

• 6JG$QCTFYGNEQOGUEQPUVTWEVKXGGPICIGOGPVYKVJ

TGIWNCVQTUYKVJOCPCIGOGPVDGKPIRTKOCTKN[TGURQPUKDNG

HQTǭWPFGTUVCPFKPICPFGPUWTKPIEQORNKCPEGYKVJCRRNKECDNG

laws and regulations

• /CPCIGOGPVTGIWNCTN[FTCHVUTGURQPUGUVQIQXGTPOGPV

EQPUWNVCVKQPGZGTEKUGUJKIJNKIJVKPIVJGRQVGPVKCNKORCEVQH

CP[TGIWNCVQT[EJCPIGUWPFGTEQPUKFGTCVKQPQPQWTDWUKPGUU

QWTEQPUWOGTUEWUVQOGTUUWRRNKGTUYQTMHQTEGCPFQVJGT

UVCMGJQNFGTUCPFYJGTGTGNGXCPVUJCTKPIQWTUEKGPVKHKE

GXKFGPEGCPFEQPUWOGTTGUGCTEJYKVJIQXGTPOGPV

CPFVQGZRNQTGRQNKE[CNVGTPCVKXGU

• 9GCNUQCUUGUUTGIWNCVQT[KORCEVQPRTQFWEVFGUKIP

CPFǭOCTMGVKPIUWRRQTVCTQWPFDTCPFNCWPEJGU

• 6JKUOQPKVQTKPICNNQYUVJG$QCTFVQVCMGTGNGXCPVNGIKUNCVKQP

CPFTGIWNCVKQPKPVQCEEQWPVYJGPOCMKPIKVUFGEKUKQPU

• 6QDCEEQGZEKUGTGXGPWGU

• 2WDNKEJGCNVJURGPFKPIQPUOQMKPITGNCVGFJGCNVJKUUWGU

• #UUGUUOGPVQHTGFWEGFJCTOHTQO0)2

• %QPHKFGPEGVJCVQWTDWUKPGUUKUQRGTCVKPIKPEQORNKCPEG

YKVJǭNQECNNCYUCPFTGIWNCVKQPUKPGCEJIQXGTPOGPVũUQT

TGIWNCVQTũUTGIKQP

• %QNNCDQTCVKQPYKVJNCYGPHQTEGOGPVCIGPEKGUEQWPVGTKPI

KNNKEKVVTCFGCPFRTGXGPVKPI[QWVJCEEGUUVQVQDCEEQCPF

PKEQVKPGRTQFWEVU

• 9GVTCEMTGIWNCVQT[CRRTQXCNQHRTQFWEVUVJCVYGUWDOKV

HQTǭNKUVKPIKPOCTMGVUYJGTGVJKUKUTGSWKTGF

• 9GTGXKGYRTQRQUGFPGYNGIKUNCVKQPCPFVJG%QORCP[ũU

CDKNKV[VQDGKPXQNXGFKPVJGFGXGNQROGPVQHTGIWNCVKQP

GHHGEVKXGN[UWRRQTVKPIRWDNKEJGCNVJQDLGEVKXGU

• 9GOQPKVQTDQVJFKTGEVCPFKPFKTGEVHGGFDCEMHTQOTGIWNCVQTU

HOW THE BOARD CONSIDERS

THIS STAKEHOLDER

HOW WE ENGAGE WITH

THIS STAKEHOLDER

WHAT MATTERS TO

THIS STAKEHOLDER

HOW WE MONITOR THE

EFFECTIVENESS OF OUR

ENGAGEMENT

STAKEHOLDER ENGAGEMENT

continued

GOVERNMENTS AND REGULATORS

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU56

1WTKPXGUVQTURTQXKFGECRKVCNVQVJGDWUKPGUUYKVJCXKGYVQ

TGEGKXKPICTGVWTPQPVJCVKPXGUVOGPVVJTQWIJECRKVCNITQYVJ

CPFFKXKFGPFTGVWTPU

5WRRNKGTUCTGGUUGPVKCNRCTVPGTUKPQWTDWUKPGUUQRGTCVKQPUť

CPFVJGKTEQOOKVOGPVVQSWCNKV[KPPQXCVKQPCPFGVJKECN

RTCEVKEGUUWRRQTVUDQVJQWTEQOOGTEKCNUWEEGUUCPFQWT

2GQRNGCPF2NCPGVCIGPFC

• 1WT%'1%(1CPF%JCKTJCXGTGIWNCTOGGVKPIUYKVJQWT

OCLQTKPXGUVQTUVQWRFCVGVJGOQPQWTRGTHQTOCPEG

JGCTǭVJGKTXKGYUFKTGEVN[CPFEQPUWNVYKVJVJGO

• 6JG$QCTFTGEGKXGUCTGRQTVCVGXGT[OGGVKPIQPUVQEMOCTMGV

RGTHQTOCPEGKPXGUVQTGPICIGOGPVCPFKPXGUVQTCPCN[UV

HGGFDCEMHQNNQYKPICNNKPXGUVQTGXGPVU

• &WTKPIVJG[GCTVJG$QCTFEQOOKUUKQPGFCPKPXGUVQT

RGTEGRVKQPUVWF[VQICVJGTHGGFDCEMQPQWTFGNKXGT[QHQWT

UVTCVGI[RGTHQTOCPEGCPFEQOOWPKECVKQPU

• 1WT#)/RTQXKFGUCPQRRQTVWPKV[HQTVJG$QCTFVQOGGV

YKVJǭKPXGUVQTU

• 6JG$QCTFTGXKGYUCPFCRRTQXGUQWT/QFGTP5NCXGT[

5VCVGOGPVCPPWCNN[

• 5WRRNKGTUYKVJKPQWTUWRRN[EJCKPCTGKPENWFGFCURCTV

QHVJG$QCTFũU'5)EQPUKFGTCVKQPUHQEWUQPUWUVCKPCDNG

CPFǭTGURQPUKDNGUQWTEKPICPFHCTOGTũUNKXGNKJQQFCURCTVQH

QWTǭ2GQRNGCPF2NCPGVUVTCVGI[

• (CEVQT[CPFUKVGXKUKVUJGNRVJG$QCTFWPFGTUVCPFVJG

EQORNGZKVKGUQHQWTINQDCNUWRRN[EJCKP

• 1WT#PPWCNCPF+PVGTKOTGUWNVURTGUGPVCVKQPUKPHQTO

KPXGUVQTUJQYVJGDWUKPGUUKURGTHQTOKPI

• 9GOCKPVCKPCRTQITCOOGQHCEVKXGFKCNQIWGYKVJQWTMG[

HKPCPEKCNUVCMGJQNFGTUKPENWFKPIKPUVKVWVKQPCNUJCTGJQNFGTU

RQVGPVKCNKPXGUVQTUJQNFGTUQHQWTDQPFUCPFUGNNUKFG

TGUGCTEJCPCN[UVU

• 1WT%'1%(1CPFUGPKQTOCPCIGOGPVRTGUGPVCVXCTKQWU

EQPHGTGPEGUVJTQWIJQWVVJG[GCTKPENWFKPIVJG&GWVUEJG$CPM

%QPUWOGT%QPHGTGPEGKP2CTKUKP,WPGCPFVJG$CTENC[U

)NQDCN%QPUWOGT5VCRNGU%QPHGTGPEGKP5GRVGODGT

• 1WT%JCKTCPF%'1NGFCP'5)KPXGUVQTYGDKPCTKP5GRVGODGT

RTQXKFKPICPWRFCVGQPRTQITGUUYKVJQWT'5)RTKQTKVKGU

• 1WT5WRRNKGT4GNCVKQPUJKR/CPCIGOGPVŬ%QPPGEVŭ

2TQITCOOGETGCVGUHWTVJGTQRRQTVWPKVKGUVQCNKIPYKVJ

UWRRNKGTUQPQWTUVTCVGIKEIQCNUUVTKXGHQTOWVWCNITQYVJ

CPFEQOOWPKECVGVQUWRRNKGTUVJGKORQTVCPEGQHQWT

2GQRNGǭCPF2NCPGVCIGPFCCPFCNKIPYKVJVJGOQPQWT

DTQCFGT%QORCP[QDLGEVKXGU

• 1WT5WRRNKGT3WCNKHKECVKQP2TQITCOOGKUCUETGGPKPIRTQEGUU

HQTCNNPGYPQPVQDCEEQOCVGTKCNUCPF0)2UWRRNKGTU

• 2CTVPGTUWRRNKGTUEQORNGVGCUGNHCUUGUUOGPVSWGUVKQPPCKTG

EQXGTKPIVJGHQNNQYKPIECVGIQTKGU.CDQWT*GCNVJCPF5CHGV[

'PXKTQPOGPVCPF$WUKPGUU'VJKEU

• 1WT5WRRNKGT%QFGQH%QPFWEVJGNRUGPUWTGYGGPICIG

suppliers that meet our minimum standards

• %QPHKFGPEGKPVJG$QCTFVJCVKVJCUCRRTQRTKCVGQXGTUKIJV

QHǭVJGOCPCIGOGPVVGCO

• 6TWUVKPVJGOCPCIGOGPVVGCOVQJCXGCUVTCVGI[CPF

QRGTCVKQPCNRNCPVQQRVKOKUGXCNWGETGCVKQPCPFGPUWTG

VJGǭNQPIVGTOUWUVCKPCDKNKV[QHTGVWTPUCPFVQFGNKXGTQP

VJCVǭUVTCVGI[

• 6JGUGVVKPIQHTGCNKUVKEGZRGEVCVKQPUEQODKPGFYKVJ

VTCPURCTGPVTGRQTVKPIQHRGTHQTOCPEGCICKPUV-2+U

DQVJǭHKPCPEKCNCPFPQPHKPCPEKCNKPENWFKPI'5)OGVTKEU

• &KUEKRNKPGFECRKVCNCNNQECVKQP

• 5QWTEKPIRTQFWEVUCPFUGTXKEGUKPCEQORNKCPV

UWUVCKPCDNGǭCPFUQEKCNN[EQPUEKQWUOCPPGT

• (CKTCPFGVJKECNVTGCVOGPVQRGPPGUUCPFVTCPURCTGPE[

+HǭVJG[JCXGCEQPEGTPUWRRNKGTUECPWUGVJG5RGCM7RRTQEGUU

• 5WRRQTVKPICPFFGXGNQRKPIHCTOKPIEQOOWPKVKGUCPF

RTQOQVKPIUWUVCKPCDNGCITKEWNVWTG

• #EJKGXKPICFGEGPVUVCPFCTFQHNKXKPI

• 1WT.GCH2CTVPGTUJKR2TQLGEVUUWRRQTVEQOOWPKVKGU

KPǭVQDCEEQITQYKPIEQWPVTKGUOQUVKPPGGF

• 1WT%'1%(1CPF%JCKTGPICIGYKVJKPXGUVQTUVQICVJGT

HGGFDCEMQPJQYYGCTGRGTHQTOKPICICKPUVQWTUVTCVGI[

• 6QRKEUFKUEWUUGFFWTKPIVJG[GCTKPENWFGFVJGEQPVKPWGF

FGNKXGT[CICKPUVVJGUVTCVGI[UWUVCKPCDKNKV[QHVJGVQDCEEQ

XCNWGOQFGNFGXGNQROGPVQHQWT0)2DWUKPGUUECRKVCN

CNNQECVKQPEQPUKFGTCVKQPUCPF'5)

• 6JG$QCTFTGEGKXGUCPKPXGUVQTTGNCVKQPUWRFCVGCVGXGT[$QCTF

OGGVKPIYJKEJUGVUQWVVJGNCVGUVKPXGUVQTXKGYUUJCTGTGIKUVGT

OQXGOGPVUCPFTGEGPVOCTMGVCPFEQORGVKVQTFGXGNQROGPVU

• +PXGUVQTRGTEGRVKQPKUCUUGUUGFQPCPQPIQKPIDCUKUVJTQWIJ

HGGFDCEMQPOGGVKPIUQWTGXGPVUCPFQWTEQPHGTGPEG

RTGUGPVCVKQPU6JKUHGGFDCEMKUUJCTGFYKVJVJG$QCTFKP

VJGǭ+4$QCTF4GRQTV

• 1PIQKPINGICNCPFVTCFKPIEQORNKCPEGUETGGPKPI

• 5WRRNKGTRGTHQTOCPEGTGXKGYU

• $KCPPWCNUVTCVGIKEDWUKPGUUTGXKGYUKPENWFKPIy

HGGFDCEMRTQEGUUCETQUUQWTOQUVUVTCVGIKEUWRRNKGTU

• &GVCKNGFXGPFQTTCVKPIU[UVGO

• #PPWCN5WUVCKPCDNG6QDCEEQ2TQITCOOGCUUGUUOGPVHQTOU

RCTVQHUWRRNKGTTCVKPIUCNQPIYKVJSWCNKV[EQUVCPFXCNWG

• %TKVKECNUWRRNKGTUCTGTGSWKTGFVQWPFGTVCMGQPUKVGSWCNKV[

CUUWTCPEGCWFKVUCURCTVQHQPDQCTFKPICPFHWTVJGT

TKUMDCUGFCWFKVUCHVGTVJCV

• 'VJKECNVTCFKPITKUMUCTGOQPKVQTGFVJTQWIJQWTGVJKECN

VTCFKPITKUMCUUGUUOGPVRNCVHQTOCPFQVJGTEJCPPGNU

INVESTORS SUPPLIERS

www.imperialbrandsplc.com 57

NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT

NON-FINANCIAL AND SUSTAINABILITY

INFORMATION STATEMENT

6JGHQNNQYKPIVCDNGEQPUVKVWVGUQWT

0QP(KPCPEKCNCPF5WUVCKPCDKNKV[+PHQTOCVKQP

5VCVGOGPVKPEQORNKCPEGYKVJ5GEVKQPU

%#CPF%$QHVJG%QORCPKGU#EV

6JGKPHQTOCVKQPNKUVGFKUKPEQTRQTCVGFD[

ETQUUTGHGTGPEG#FFKVKQPCNPQPHKPCPEKCN

KPHQTOCVKQPKUCNUQCXCKNCDNGQPQWTYGDUKVG

Reporting requirement Policies Further information Page

Environmental matters* • 'PXKTQPOGPVCN2QNKE[

• (KNVGT2QNKE[

• 5WUVCKPCDNG6QDCEEQ2TQITCOOG

• $KQFKXGTUKV[5VCVGOGPV

'PXKTQPOGPVCNVCTIGVU

23, 66, 68, 88

+PVGTPCVKQPCNOCPCIGOGPVU[UVGOU

67, 78

Climate and energy

66, 78

4GFWEKPIYCUVG

5WUVCKPCDNGVQDCEEQUWRRN[

70, 72

Employees* • %QFGQH%QPFWEV

• )TQWRYKFG'ORNQ[OGPV2QNKE[

• (CKTPGUUCV9QTM2QNKE[

• 5RGCMKPI7R2QNKE[

• 1EEWRCVKQPCN*GCNVJ5CHGV[CPF

'PXKTQPOGPVCN2QNKE[CPFǭHTCOGYQTM

&KXGTUGCPFGPICIGFYQTMHQTEG

9QTMRNCEGJGCNVJCPFUCHGV[

+PVGTPCVKQPCNOCPCIGOGPVU[UVGOU

74, 75, 77

.QUVVKOGCEEKFGPV.6#TCVG

Respect for

human rights*

• *WOCP4KIJVU2QNKE[

• %QFGQH%QPFWEV

• 5WRRNKGT%QFGQH%QPFWEV

• *GCNVJ2TQVGEVKQPCPF

9GNNDGKPI2QNKE[

• (CKTPGUUCV9QTM2QNKE[

• 5RGCMKPI7R2QNKE[

&KXGTUGCPFGPICIGFYQTMHQTEG

9QTMRNCEGJGCNVJCPFUCHGV[

*WOCPTKIJVU

+PVGTPCVKQPCNOCPCIGOGPVU[UVGOU

Social matters* • +PVGTPCVKQPCN/CTMGVKPI5VCPFCTFU

• 2QNKE[QPVCZCVKQP

• %QOOWPKV[%QPVTKDWVKQPUCPF

8QNWPVGGTKPI2QNKE[

• +PHQTOCVKQP5GEWTKV[2QNKE[

*WOCPTKIJVU

;QWVJCEEGUURTGXGPVKQP

(CTOGTNKXGNKJQQFUCPFYGNHCTG

%JCTKVCDNGCPFRQNKVKECNFQPCVKQPU

130

Anti-corruption

and anti-bribery*

• %QFGQH%QPFWEV

• (TCWF4KUM/CPCIGOGPV2QNKE[

• 5RGCMKPI7R2QNKE[

• 5WRRNKGT%QFGQH%QPFWEV

*QYYGOCPCIGTKUM

)QXGTPCPEGTKUMOCPCIGOGPVCPF

KPVGTPCNEQPVTQN

42, 113

2QYGTGFD[TGURQPUKDKNKV[

Description of principal

risks and impact of

DWUKPGUUǭCEVKXKV[

2TKPEKRCNTKUMUCPFWPEGTVCKPVKGU

)QXGTPCPEGTKUMOCPCIGOGPV

CPFǭKPVGTPCNEQPVTQN

42, 113

Description of the

business model

Business model

1WT&KUVKPEVKXG#RRTQCEJ

Non-financial key

performance indicators

-G[RGTHQTOCPEGKPFKECVQTU

5WUVCKPCDKNKV[

RGTHQTOCPEGKPFKECVQTU

63, 66, 68

Climate-related

financial disclosures

6%(&TGRQTV

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ESG REVIEW

DELIVERING ON

OUR ESG PRIORITIES

THROUGH OUR STRONG

PERFORMANCE CULTURE

Purpose: Forging a path to a healthier future for moments

of relaxation and pleasure.

Vision: To build a strong challenger business powered

by responsibility, focus and choice.

Reduced our Scope 1 and Scope 2 market-based

emissions by

69%

since 2017

Last year we supported more than

128,000

New beneficiaries through our Leaf Partnership

Programme

Reduced lost time accidents by

47%

since 2019 (absolute numbers)

Our commitment to environmental,

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The Company’s overarching vision is to be a strong challenger

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and looking at issues, such as consumer health or sustainable

packaging, through the lens of the people who use our products.

It is also about acting with agility. The teams who lead our

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manufacturing processes.

Being a challenger is also about having a high-performance

culture. In each of our priority areas, we have clearly defined

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capabilities through external hires, the upskilling of our

existing people and the application of new systems enabling

us to become more data driven.

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and management. Please see page 61 for further details.

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strategy development, drive integration and set the tone

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strategy and to really harness the power of the collective.

Our eight focus areas are grouped into three categories:

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During 2024 there has been a particular focus on galvanising

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internally as our “People and Planet” agenda. An important

element of this engagement has been our Triple Zero initiative,

highlighting our aspirations for zero carbon, zero waste and

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To educate and raise awareness, we dedicated an episode

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www.imperialbrandsplc.com 59

ESG REPORTING FRAMEWORK

Our Reporting Criteria document provides further information

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Note: Logista is a public company listed on the Bolsa de Madrid

and is managed remotely due to commercial sensitivities

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'5)TGNCVGF-2+U*QYGXGTVJGUVGRU.QIKUVCKUVCMKPIVQ

address the impacts on its business of climate change are

detailed in our TCFD disclosures on page 78.

ESG: People and Planet Performance Summary 2024

Further information and data related to each of the

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ESG REVIEW continued

DOUBLE MATERIALITY ASSESSMENT

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(DMA). This year, as part of our preparation for the upcoming

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Double materiality identifies both how a company’s operations

impact people and the environment (impact materiality) and

how sustainability matters impact the company itself

(financial materiality).

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adopting an approach combining data and technology with

PRELIMINARY RESULTS FOR DOUBLE MATERIALITY ASSESSMENT

ESRS topic Financial materiality Impact materiality Link to ESG topic

E1 - Climate Change Material Material Climate Change

E2 - Pollution Material Material Climate Change and 2CEMCIKPI9CUVG

E3 - Water and marine resources Not material Not material

E4 - Biodiversity and ecosystems Not material Not material

E5 - Circular economy Material Material 2CEMCIKPI9CUVG

S1 - Own workforce Material Material &KXGTUKV['SWKV[+PENWUKQP,

*GCNVJ5CHGV[9GNNDGKPI, and Human Rights

S2 - Workers in the value chain Material Material &KXGTUKV['SWKV[+PENWUKQP,

*GCNVJ5CHGV[9GNNDGKPI, and Human Rights

S3 - Affected communities Not material Not material

S4 - Consumers and end users Material Material

Consumer Health

G1 - Business conduct Material Material 5WUVCKPCDNG4GURQPUKDNG5QWTEKPI

and (CTOGT.KXGNKJQQFU9GNHCTG

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software solution, to provide the process and data to facilitate

the identification, assessment and monitoring of material issues

across our value chain. Analysis of information from thousands

of data points, including corporate reports, mandatory and

voluntary regulations and online news, informed our stakeholder

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governance and due diligence oversight.

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business. In addition to this, the DMA has highlighted additional

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and frameworks in place for these areas, to ensure they are well

managed. The full, confirmed results will be disclosed in next

year’s Annual Report.

Further details on our DMA results and process can be found

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commitments and demonstrating a consistent track record

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culture and engagement of the workforce has helped to drive

this progress. However, we recognise there is more work to

FQǭHQTWUVQFGNKXGTQWT'5)CIGPFC

Tony Dunnage

Global ESG Director

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RESPONSIBILITY

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operations responsibly and respecting our

people, our communities and our planet.

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governance framework that emphasises high standards of

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committed to continuously reviewing and enhancing our

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practices and how risks in these areas are managed.

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for providing leadership and monitoring of our ethics and

compliance programme. It supports and reinforces effective

management of ethics and compliance risk, has oversight

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Conduct and establishes activities and processes that foster

ethical business conduct, legal and regulatory compliance.

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guiding the implementation of our People and Planet agenda.

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to achieve these goals.

There are a number of operational working groups that address

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REFRESHED CODE OF CONDUCT

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Front and centre of this new Code is the message that our people

should feel free to speak up about any concern they may have

relating to compliance or ethics matters, anonymously if

necessary, and without fear of retaliation. There is also new

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of a dedicated section on integrity in science.

Our Code is the foundational document of our Imperial Brands

governance framework. It is our guide to doing the right thing

and outlines the standards of behaviour that we expect from

everyone who works for our organisation.

It is aligned with the policies, internal controls and risk

management processes that underpin our strategy. The Code

sets out the responsible behaviours we expect including from

employees in their dealings with colleagues, customers,

consumers, suppliers, agents, intermediaries, advisers,

governments and competitors. All employees and business

partners are expected to act with integrity and in accordance

with the standards of behaviour set out in the Code.

At the end of FY24, the refreshed Code had been translated

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and responsible manner and to comply with all applicable

laws and regulations. Our 5WRRNKGT%QFGQH%QPFWEV, refreshed

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we expect our suppliers to demonstrate.

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Policy and processes, which govern how we select and contract

with our suppliers.

SPEAKING UP

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and to other stakeholders, including suppliers and farmers.

The platform offers a wide range of reporting routes and

supports anonymous reporting and feedback.

The 5RGCMKPI7R2QNKE[ is made available both internally

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#NNTGRQTVUOCFGVQQWT5RGCMKPI7RRNCVHQTOFWTKPIVJG

[GCTǭYGTGKPXGUVKICVGFD[CRRTQRTKCVGUGPKQTOCPCIGOGPV

including members of our People and Culture team,

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At all times, protection of the individual making the report

was a key consideration.

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grievances. Allegations were also received of misuse and/or theft

of Company property (including through our fraud reporting

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whole or part. None were found to be material in nature or

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ANTI-BRIBERY AND CORRUPTION POLICY

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These commitments are made in our Code of Conduct,

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CPFǭ%QTTWRVKQP#$#%2QNKE[/CPFCVQT[#$#%VTCKPKPIKU

provided to online employees. Measures are in place to assess

our business partners for compliance risk, including ABAC.

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CTGTGSWKTGFVQEQOOKVVQURGEKHKEEQPVTCEVWCNEQOOKVOGPVU

relating to ABAC compliance. Processes exist both to allow

reporting (including anonymously) of any allegations of

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During FY24 there were no confirmed cases of bribery

CICKPUVǭVJG)TQWR

www.imperialbrandsplc.com 61

ESG REVIEW continued

OUR ACTIONS RECOGNISED

2023 CDP A List for Climate

Change:

Our actions to cut emissions and mitigate

climate risks have earned us a position

on the CDP’s A List for climate change,

for a fifth consecutive year.

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CDP Supplier Engagement Leader:

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'PICIGOGPV.GCFGTD[VJG%&2HQTC

fifth successive year.

All companies making climate change

disclosures to the CDP receive a

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rating them on how effectively they

engage their suppliers on climate issues.

2024 Climate Leader:

Imperial has been recognised as a

ǭ%NKOCVG.GCFGTD[VJG(KPCPEKCN

Times for a fourth consecutive year,

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'WTQRGCPDWUKPGUUGU

SBTi

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5$6KJCUXGTKHKGFDQVJQWTPGCTVGTO

and long-term science-based emissions

reduction targets.

Our overarching target to be Net Zero

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VJGǭ5$6K

Race to Zero

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the world’s largest coalition of non-state

actors taking immediate action to halve

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swiftly and fairly, in line with the

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action plans and near-term targets.

Business Ambition for 1.5 degrees

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campaign was an urgent call to action

from a global coalition of UN agencies,

business and industry leaders, in a

partnership with the Race to Zero.

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our commitment to be Net Zero across

all three scopes by 2040.

INVESTOR BENCHMARKS

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range of external rating agencies.

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with companies, investors and other stakeholders to improve

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and ratings.

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is at high risk of experiencing material

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The company is noted for its strong

corporate governance performance,

which is reducing its overall risk.

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9&+UKPEG6JKUDGPEJOCTMKU

based on a disclosure score.

In 2024 we received a 97% disclosure

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/5%+JCUIKXGP+ORGTKCN$TCPFUCP

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Brands continues to lead global peers

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However, scrutiny over its supply

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Moody’s Analytics gave Imperial Brands

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last review update in January 2024.

INDEPENDENT ASSURANCE

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The assurance engagement was planned and performed

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'PICIGOGPVU1VJGT6JCP#WFKVUQT4GXKGYUQH*KUVQTKECN

Financial Information.

These procedures were designed to conclude on the accuracy

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YCUǭKUUWGFCPFKUCXCKNCDNGQPQWTwebsite along with further

details of the scope, respective responsibilities, work performed,

limitations and conclusions.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU62

ESG HIGHLIGHTS

CONSUMER HEALTH

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QWTPGZVIGPGTCVKQPRTQFWEVU0)2

and making a more meaningful

contribution to harm reduction by

offering adult smokers a range of

potentially less harmful products.

CLIMATE CHANGE

9GCTGEQOOKVVGFVQTGFWEKPIQWT

impact on the climate throughout

our value chain. Focusing on both

mitigation and adaptation.

PACKAGING & WASTE

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waste associated with our products,

packaging and production processes.

FARMER LIVELIHOODS & WELFARE

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to support and develop farming communities and

promote sustainable agriculture.

SUSTAINABLE & RESPONSIBLE SOURCING

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a compliant, sustainable and socially conscious manner.

9GYKNNYQTMYKVJUWRRNKGTUVQGPUWTGKORTQXGOGPVU

HEALTHIER FUTURES

POSITIVE CONTRIBUTION TO SOCIETY

SAFE & INCLUSIVE WORKPLACE

NGP net revenue

has increased

64%

since 2020

Reduced our Scope 1 and Scope 2

market-based emissions by

69%

since 2017

Reduced absolute waste

across our operations by

32%

since 2017

180,000

tobacco community members benefiting from

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CEEGUUǭVQǭENGCPYCVGT

We have been recognised by the CDP as

a supplier engagement leader in 2023 for a

year

EMPLOYEE HEALTH,

SAFETY & WELLBEING

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CEJKGXKPIǭYQTNFENCUU

QEEWRCVKQPCNǭJGCNVJ

UCHGV[ǭCPFǭYGNNDGKPI

HQTǭCNNǭQWTǭGORNQ[GGU

Reduced lost time

accidents by

47%

since 2019 (absolute numbers)

HUMAN RIGHTS

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awareness and improving

processes in our supply chains,

recognising the importance,

influence and role we have

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Factory sites self-assessment

compliance

98%

with human rights

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Disclosure score

97%

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DIVERSITY, EQUITY

& INCLUSION

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diverse and inclusive organisation

renowned for celebrating difference,

enabling our people to feel that

they belong and be their authentic

UGNXGU9GYKNNTGURGEVTGEQIPKUG

and value the diversity of our

consumers and reflect the

communities in which we operate.

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with the United Nations

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www.imperialbrandsplc.com 63

HEALTHIER FUTURES: CONSUMER HEALTH

CONSUMER HEALTH

FY24 Performance

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COMMITMENT:

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VQǭJCTOTGFWEVKQPD[QHHGTKPICFWNVUOQMGTUCTCPIGQH

potentially less harmful products.

Imperial Brands continues to transform, driven by consumer-

centric science and innovation and a commitment to make

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Access to choice

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VJCPǭEQWPVTKGUCPFQHHGTRQVGPVKCNN[JCTOTGFWEGF

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CPFǭCFWNVǭPKEQVKPGWUGTU

Last year we upscaled our heated, vape and oral nicotine

delivery (OND) propositions within existing market footprints.

Our blu vaping portfolio expanded with new formats like blu

bar kit and blu bar box, while we continued to responsibly

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Aligned with our challenger approach, we also entered the

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with Zone.

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launched in several markets.

Scientific substantiation

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CNNQWT0)2TGNCVKXGVQEKICTGVVGUVJTQWIJQWTOWNVKFKUEKRNKPG

scientific assessment framework.

As part of our meaningful contribution to THR, this research

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D[ǭTGIWNCVQTU

Last year, for instance, we undertook in-market observational

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The studies investigated how adult smokers use our products

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Our consumer health ambitions are underpinned

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 Consumer Choice: Providing adult smokers

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2. 5EKGPVKHKE5WDUVCPVKCVKQP&GOQPUVTCVKPIQWT0)2

CTGǭRQVGPVKCNN[JCTOTGFWEGFEQORCTGFVQUOQMKPI

3. 7PKPVGPFGF7UG2TGXGPVKQP'PUWTKPIQWT0)2CTG

used by adult smokers and adult nicotine users only.

Status: On track

KPI

0)2PGVTGXGPWG

METRIC

NGP net revenue

HTQOǭVQDCEEQCPF

0)2ǭPGVǭTGXGPWG

• 5&)9GCTGEQOOKVVGFVQ

tobacco harm reduction

Behaviours

Links to SDGs

2024'

Baseline Year (2020)

£329m

£201m

Our diverse network of professional scientists is spread across

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begun for a new state-of-the-art facility in Hamburg.

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Animal Testing (ATAT) programme. This year, using ATAT

methods our scientists demonstrated significant reductions

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products, compared to cigarettes.

Imperial Brands’ continuing contribution to the wider body

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peer-reviewed papers and presenting 24 scientific posters

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2NGCUGXKUKVQWTscience website

for more information.

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products. By the end of the study, half of the consumers

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six, up to 40% had either completely switched or cut their

cigarette consumption.

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consumers by taking care in the product design, manufacture,

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One such activity relates to governance, in particular the Product

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advising the Board on all consumer safety issues. Please see

our '5)2GTHQTOCPEG5WOOCT[ for more information.

Unintended use prevention

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public health potential.

To address key issues like these, we have accelerated external

engagement, education and communication. Over the last

year we have:

• 'PJCPEGFQWTEQPVTKDWVKQPVQGZVGTPCN0)2FGDCVGU

HQTǭGZCORNGFKUEWUUKQPUQPVJGKORQTVCPEGQHHNCXQWTU

CPFǭPKEQVKPGOKURGTEGRVKQPUD[JQUVKPICPFRCTVKEKRCVKPI

in THR-themed events in Brussels, Miami, Dubai,

9CTUCYǭCPF#VJGPU

• 5WEEGUUHWNN[RKNQVGFCVTCFGHQEWUGFGFWECVKQPRTQITCOOG

to our own sales force and external retailers to upskill their

6*4CPF0)2MPQYNGFIGCPFVQDWKNFITCUUTQQVUECRCDKNKV[

CPFCFXQECE[VJTQWIJQWTKPVGTPCN5EKGPEG#ECFGO[

9GCEVKXGN[RCTVKEKRCVGYKVJKPKPVGTPCVKQPCNRTQFWEVUVCPFCTFU

DQFKGUNKMGVJG+PVGTPCVKQPCN1TICPK\CVKQPHQT5VCPFCTFK\CVKQP

+51CPFVJG'WTQRGCP%QOOKVVGGHQT5VCPFCTFK\CVKQP%'0

and established industry scientific associations like the

%QQRGTCVKQP%GPVTGHQT5EKGPVKHKE4GUGCTEJ4GNCVKXGVQ

6QDCEEQǭ%14'56#

9GEQPVKPWGVQGPICIGGZVGPUKXGN[YKVJTGIWNCVQTUCPFRWDNKE

health bodies across the world to advocate for balanced

regulation, which offers adult smokers a range of effective

alternatives to cigarettes while minimising unintended use.

A. 5GNGEVFCVCJCUDGGPKPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2';WPFGTVJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG+5#'UVCPFCTF';ũU#UUWTCPEG1RKPKQP

is available on our website1WTTGRQTVKPIUEQRGCPFFGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKCFQEWOGPVRWDNKUJGFQPQWTǭwebsite.

www.imperialbrandsplc.com 65

CLIMATE CHANGE

COMMITMENT:

9GCTGEQOOKVVGFVQTGFWEKPIQWTKORCEVQPVJGENKOCVG

throughout our value chain, focusing on both mitigation

CPFǭCFCRVCVKQP

(QTOQTGVCTIGVUCPFOGVTKEUTGNCVGFVQENKOCVGEJCPIG

please see our '5)2GTHQTOCPEG5WOOCT[.

TARGET

4GFWEVKQPKPGPGTI[

EQPUWORVKQPD[

METRIC

Absolute energy

consumption in our

QRGTCVKQPU)9J

Status: Achieved, new target to be implemented

TARGET

4GFWEVKQPKP5EQRG

CPF5EQRG)*)

GOKUUKQPUD[

METRIC

Absolute Scope 1 and Scope

2 market-based CO

emissions (Tonnes)

Status: Achieved

Status: On track

TARGET

4GFWEVKQPKPCDUQNWVG

5EQRGGOKUUKQPUD[

METRIC

Total Scope 3 CO

emissions (Tonnes)

HEALTHIER FUTURES: CLIMATE CHANGE

#5GNGEVFCVCJCUDGGPKPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2';WPFGT

VJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG+5#'UVCPFCTF';ũUǭ#UUWTCPEG

Opinion is available on our website. Our reporting scope and definitions are

detailed in the Reporting Criteria document published on our website.

1WTGPXKTQPOGPVCNFCVCEQXGTUVJGTGRQTVKPIRGTKQF3VQ3

6JKUǭKUVQCNNQYHQTFCVCEQNNGEVKQPXCNKFCVKQPCPFGZVGTPCNCUUWTCPEG

9GWUGVJGKPFWUVT[NGCFKPI)TGGPJQWUG)CUGU)*)2TQVQEQNUVCPFCTF

VQǭKPHQTOQWTTGRQTVKPIQH5EQRGCPFGOKUUKQPU

2024

Baseline Year (2017)

595 GWh

875 GWh

2024

Baseline Year (2017)

89,120

290,446

2024

Baseline Year (2017)

981,703

1,478,494

Climate change is a key priority for our stakeholders and it

KUǭCNUQCETKVKECNDWUKPGUUEQPEGTPVJCVJCUVJGRQVGPVKCNVQ

directly impact financial performance and risk management.

'ZVTGOGYGCVJGTGXGPVUCPFUWRRN[EJCKPFKUTWRVKQPUECP

pose direct threats to our people, operations, assets and

TGXGPWGUVTGCOU9GCUUGUUCPFSWCPVKH[VJGUGEJCNNGPIGU

and mitigate significant risks.

Relevant risks and opportunities are disclosed in our Task

(QTEGQP%NKOCVGTGNCVGF(KPCPEKCN&KUENQUWTGU6%(&TGRQTV

see page 78 for details.

9GCTGEQOOKVVGFVQCFFTGUUKPIQWTENKOCVGEJCPIGKORCEV

aiming to be fully Net Zero by 2040. This long-term goal

KPXQNXGUGNKOKPCVKPIQWTPGVITGGPJQWUGICU)*)GOKUUKQPU

not only within our business operations but also throughout

our entire supply chain.

9GJCXGCNUQUGVVYQMG[KPVGTOGFKCVGIQCNUHQT

 6QDG0GV<GTQHQTQWT5EQRGCPFGOKUUKQPU

2. To have reduced all our carbon emissions related to

QWTǭDWUKPGUUťVJCVKU5EQRGCPF)*)GOKUUKQPU

VQIGVJGTǭťǭD[EQORCTGFVQVJGDCUGNKPG[GCT

1WTLQWTPG[VQ0GV<GTQRTGUGPVUCPQRRQTVWPKV[HQTWUVQRNC[

our part in curbing global warming and also to introduce

KORTQXGFOCPWHCEVWTKPICPFUCNGUVGEJPKSWGUCPFVQ

strengthen supply chain relationships.

&WTKPIVJG5EKGPEG$CUGF6CTIGVUKPKVKCVKXG5$6KXCNKFCVGF

our 2040 Net Zero target, along with our short and medium-term

QDLGEVKXGUTGCHHKTOKPIQWTCNKIPOGPVYKVJVJG2CTKU#ITGGOGPV

Behaviours

Links to SDGs

• SDG 13: Take urgent action

VQǭEQODCVENKOCVGEJCPIG

CPFǭKVUǭKORCEVU

• SDG 7:'PUWTGCEEGUUVQ

affordable, reliable, sustainable

and modern energy for all

Our target to be fully Net Zero by 2040 is one part of our

Triple Zero campaign.

Delivering on our direct targets

During 2024, we made further progress reducing our direct

GOKUUKQPUCPFECPTGRQTVCTGFWEVKQPKPQWTFKTGEV5EQRGCPF

2 market-based emissions compared to the 2017 baseline year.

Most of these emissions reductions come from changes to

manufacturing activities, where we take a data-led approach

to improve operational efficiency. In the past year, we invested

in a new global energy management system to continually

collect usage data. This system has allowed us to map and

compare our manufacturing energy usage across our footprint

which is already providing specific, actionable insights.

9GǭCTGPQYDWKNFKPICHTCOGYQTMQHNGCFKPIGPXKTQPOGPVCN

indicators and accompanying guidance, and over the next

year, this will be introduced to all factory sites.

Carbon reduction through fleet management

'OKUUKQPUHTQOQWTINQDCNHNGGVQHCTQWPFXGJKENGU

CEEQWPVHQTCTQWPFQH5EQRGGOKUUKQPU9GCTGUGGMKPI

solutions that drive energy efficiencies and support the

FY24 Performance

9GCEJKGXGFQWTGPGTI[TGFWEVKQPVCTIGVCJGCFQHVKOGYKVJC

decrease in energy consumption compared to the 2017 baseline year.

9GYKNNUGVCPGYVCTIGVUWDLGEVVQCRRTQXCND[VJG'5)%QOOKVVGG

9GCEJKGXGFCTGFWEVKQPKPQWTVQVCN5EQRGCPF5EQRGǭ

market-based CO

e emissions compared to the baseline year. *The

DCUGNKPGJCUDGGPTGUVCVGFFWGVQVJGEQTTGEVKQPKP5EQRGGOKUUKQPU

TGNCVKPIVQVJGUQWTEGQHJGCVCPFUVGCOKPQWTHCEVQT[ǭKP6ȨTMK[G

+P(;YGWRFCVGFQWT5EQRGECNEWNCVKQPOGVJQFQNQI[CPFCUC

result we have restated our 2017 baseline year** based on this new

OGVJQFQNQI[9GJCXGUGGPCFGETGCUGKPVQVCN5EQRG

emissions compared to the 2017 baseline year.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU66

energy transition. As we transition to lower carbon

alternatives, we will take actions such as the introduction and

expansion of electric vehicles where it makes practical sense,

as well as the use of hybrid vehicles as part of our approach.

Progress on our indirect targets

#EJKGXKPIQWT0GV<GTQIQCND[TGSWKTGUWUVQOCPCIG

ECTDQPTGFWEVKQPCETQUUQWT5EQRGGOKUUKQPUYJKEJ

account for more than 90% of our total carbon footprint.

Our strategy is to prioritise our large suppliers, those

YKVJǭJKIJǭURGPFCPFGOKUUKQPU9GCTGYQTMKPIYKVJVJGUG

suppliers to gain a more precise understanding of their most

OCVGTKCNGOKUUKQPUQWTEGU9GCNUQGPEQWTCIGVJGOVQ

establish reduction targets, improve disclosure, and seek

GZVGTPCNXCNKFCVKQPQHVJGKTRNCPUVJTQWIJVJG5$6K5WRRNKGTU

CTGDGKPIGPICIGFDQVJVJTQWIJVJG%&25WRRN[%JCKP

2TQITCOOGCPFQWTQYPKPVGTPCN5WRRNKGT4GNCVKQPUJKR

/CPCIGOGPV54/KPKVKCVKXGMPQYPCU54/%QPPGEV

(QTǭCFFKVKQPCNFGVCKNURNGCUGUGGRCIG

We have mapped a five-step approach towards Net Zero:

Undertake energy-

efficiency initiatives

Switch to

100% renewable

grid electricity

Transition all other

energy types to

renewable sources

Achieve Net

Zero in our

operations

Become climate positive, which means

saving more greenhouse gas emissions

than we are generating

+PYGYKNNHQEWUQPGZRCPFKPIVJGWUGQHVJG%&2

5WRRN[ǭ%JCKP2TQITCOOGVQGPJCPEGFCVCEQNNGEVKQPCPF

VTCPURCTGPE[9GYKNNGZRNQTGQRRQTVWPKVKGUVQEQNNCDQTCVG

with suppliers to reduce emissions and work closely with

VJGOVQKORTQXGQWTQXGTCNN5EQRGGOKUUKQPECNEWNCVKQPU

9KVJKP5EQRGVJG2WTEJCUGF)QQFUCPF5GTXKEGUECVGIQT[

KUǭVJGOQUVOCVGTKCNCV

tonnes of CO

e, accounting

HQTǭCRRTQZKOCVGN[QHVQVCNECTDQPGOKUUKQPU6JKU[GCT

YGǭJCXGǭQDVCKPGFKPFGRGPFGPVCUUWTCPEGQHVJKUFCVC(WTVJGT

information is provided in our '5)2GTHQTOCPEG5WOOCT[.

9GJCXGCEJKGXGFQWTQDLGEVKXGQHGPUWTKPIVJCVQH

suppliers by spend in this category commit to science-based

targets. Please see page 72 for more details.

+PYGYKNNDGNCWPEJKPI0GV<GTQUWRRNKGTEQPVTCEV

clauses to reinforce our commitment to reducing emissions

across our supply chain.

9GJCXGOCRRGFQWTLQWTPG[VQ0GV<GTQYKVJCHKXGUVGRRNCP

illustrated below.

LOGISTA EMISSIONS

Performance indicator Unit 2017 (base year) 2021 2022 2023 Commentary

Logista absolute

Scope 1 and 2

GǭGOKUUKQPU

Tonnes

38,554 45,557 47,099 132,262

Logista is managed remotely due to commercial sensitivities and is

responsible for its own data. Logista has provided independently

CUUWTGFFCVCHTQOHQTCDUQNWVG5EQRGCPFGOKUUKQPU

Data for 2024 is still undergoing independent assurance.

6JGKPETGCUGKP5EQRGCPFGOKUUKQPUUGGPKPECPDGCVVTKDWVGFVQ

CESWKUKVKQPUCPFVJGGZRCPUKQPQHVJGGOKUUKQPUCEEQWPVKPIDQWPFCT[VQ

include maritime and rail transport. This change reflects the diverse

VTCPURQTVUGTXKEGURTQXKFGFD[VJGPGYN[CESWKTGFGPVKVKGU

.QIKUVCũUTGNCVKXG5EQRGCPFGOKUUKQPUEQORTKUGVQPPGU

VQPPGUQH%1

GRGTcOKNNKQPQHFKUVTKDWVKQPHGGU

QWTǭPQP)##2TGXGPWGOGCUWTGHQT.QIKUVC

(WTVJGTKPHQTOCVKQPQPVJGUEQRGQH.QIKUVCũU)*)TGRQTVKPIKUCXCKNCDNG

at www.grupologista.com.

Logista absolute

Scope 3 CO

emissions

Tonnes

193,611 194,634 189,709 335,851

SCOPE 1 AND 2 EMISSIONS – UK AND GLOBAL

1,2,3

Performance indicator Units

2024 2023

UK and

offshore area

Global

(Excluding UK and

offshore area)

UK and

offshore area

Global

(Excluding UK and

offshore area)

5EQRGGOKUUKQPU tCO

e 1,688 71,749 1,841 79,248

4GNCVKXG5EQRGGOKUUKQPU tCO

e/£m net revenue 0.2 8.8 0.2 9.9

5EQRGNQECVKQPDCUGFGOKUUKQPU tCO

e 876 107,594 872 113,187

4GNCVKXG5EQRGNQECVKQPDCUGFGOKUUKQPU tCO

e/£m net revenue 0.1 13.2 0.1 14.1

5EQRGOCTMGVDCUGFGOKUUKQPU tCO

e 0 15,683 0 20,326*

4GNCVKXG5EQRGOCTMGVDCUGFGOKUUKQPU tCO

e/£m net revenue 0 1.9 0 2.5*

6QVCN)TQUU5EQRGCPF5EQRG

location-based emissions tCO

e 2,564 179,343 2,713 192,435

4GNCVKXG5EQRGCPF5EQRGNQECVKQPDCUGF tCO

e/£m net revenue 0.3 22.0 0.3 24.0

6QVCN)TQUU5EQRGCPF5EQRG

market-based emissions tCO

e 1,688 87,432 1,841 99,574*

4GNCVKXG5EQRGCPF5EQRGOCTMGVDCUGF tCO

e/£m net revenue 0.2 10.7 0.2 12.4*

'PGTI[EQPUWORVKQP M9J 12,495,251 582,776,582 13,233,516 637,059,838

1. 9GJCXGRTQXKFGFTGRQTVKPIKPEQORNKCPEGYKVJ7-5VTGCONKPGF'PGTI[CPF%CTDQP4GRQTVKPI5'%4TGIWNCVKQPUDGKPIVJG.CTIGCPF/GFKWOUK\GF%QORCPKGUCPF

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VJGǭ%QORCPKGU&KTGEVQTUũ4GRQTVCPF.KOKVGF.KCDKNKV[2CTVPGTUJKRU'PGTI[CPF%CTDQP4GRQTV4GIWNCVKQPU

2. (QTFGVCKNUQPVJGOGVJQFQNQI[WUGFHQT5'%4ECNEWNCVKQPURNGCUGUGGQWT4GRQTVKPI%TKVGTKCFQEWOGPVCXCKNCDNGQPQWTwebsite.

 'PGTI[GHHKEKGPE[OGCUWTGUVCMGPKP(;CTGTGRQTVGFKPQWT%&2%NKOCVG%JCPIGFKUENQUWTGUCXCKNCDNGQPVJG%&2website.

A. 5GNGEVFCVCJCUDGGPKPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2';WPFGTVJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG+5#'UVCPFCTF

';ũU#UUWTCPEG1RKPKQPKUCXCKNCDNGQPQWTwebsite1WTTGRQTVKPIUEQRGCPFFGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKCFQEWOGPVRWDNKUJGFQPQWTǭwebsite.

* 2TGXKQWU[GCTUũJCXGDGGPTGUVCVGFFWGVQVJGEQTTGEVKQPKP5EQRGOCTMGVDCUGFGOKUUKQPUTGNCVKPIVQVJGUQWTEGQHJGCVCPFUVGCOKPQWTHCEVQT[KP6ȨTMK[G

www.imperialbrandsplc.com 67

HEALTHIER FUTURES: PACKAGING & WASTE

PACKAGING

& WASTE

COMMITMENT:

9GCTGEQOOKVVGFVQOKPKOKUKPIYCUVGCUUQEKCVGF

YKVJǭRTQFWEVURCEMCIKPICPFRTQFWEVKQPRTQEGUUGU

As a responsible manufacturer, we are committed to minimising

our environmental impact and promoting sustainability

VJTQWIJQWVQWTXCNWGEJCKP6JG)TQWR'PXKTQPOGPVCN2QNKE[

makes our commitment clear, which extends through

UGXGTCNǭ)TQWRRQNKEKGUKPENWFKPIQWTCode of Conduct and

5WRRNKGTǭ%QFGQH%QPFWEV. These set out the foundations of

QWTǭCRRTQCEJVQGPXKTQPOGPVCNUWUVCKPCDKNKV[YJKEJCNNQWT

GORNQ[GGUUWRRNKGTUCPFDWUKPGUURCTVPGTUCTGTGSWKTGFVQ

adhere to. Our due diligence processes are designed to

WRJQNFǭJKIJUVCPFCTFUVQOKPKOKUGQWTGPXKTQPOGPVCN

KORCEVǭD[TGFWEKPIQWTECTDQPHQQVRTKPVGPGTI[YCUVG

CPFǭYCVGTEQPUWORVKQPCUYGNNCURTQVGEVKPIDKQFKXGTUKV[

This commitment involves responsible production, usage,

CPFǭFKURQUCNQHQWTRTQFWEVUTGSWKTKPICNNGORNQ[GGUCPF

partners to understand their roles.

The consumer is the starting point for our strategy.

And as consumers’ and policy makers’ attention shifts to more

sustainable manufacturing and recyclable packaging, we aim

to efficiently use resources and minimise waste at source.

9GCTGYQTMKPIVQYCTFUGPUWTKPICNNQWTRCEMCIKPIKU

reusable, recyclable or compostable and to minimise waste

across our products, packaging and production processes.

Innovating for waste reduction

Our research suggests that, while consumers value product

SWCNKV[CPFCTGWPYKNNKPIVQEQORTQOKUGQPVJKUVJG[CNUQJKIJN[

value waste reduction but do not want to pay extra for this.

9QTMKPIYKVJVJKTFRCTV[GZRGTVUVQCUUGUUVJGTGE[ENCDKNKV[

QHǭQWTRCEMCIKPIYGFGXGNQRGFPGYYC[UVQETGCVGVJGUCOG

SWCNKV[QTDGVVGTRCEMCIKPIYJGTGQWTGZKUVKPIRCEMCIKPIYCU

not recyclable.

6JKUWPFGTRKPUQWTVCTIGVHQTCNNQWT'7CPF7-RCEMCIKPIVQ

DGTGWUCDNGTGE[ENCDNGQTEQORQUVCDNGD[+P(;DCUGF

on third-party certifications, 94%

of our packaging formats

are now deemed recyclable.

9GCNUQUGVCVCTIGVHQTCNNQWTRTQFWEVUUQNFKPVJG'7CPF7-

to have an average packaging recyclability score of more than

D[$CUGFQPVJKTFRCTV[RCEMCIKPITGE[ENCDKNKV[

assessments, for the volume of packaging from products sold

in the year, in FY24 we achieved an average packaging

recyclability score of 84%

Recent innovations include make-your-own cigarette buckets

YKVJTGFWEGFSWCPVKVKGUQHRNCUVKEYKVJQWVEQORTQOKUKPIQP

EQPUWOGTCEEGRVCPEG+P5RCKPYGKPVTQFWEGFVJGKPFWUVT[ũU

first roll-your-own tobacco pouch, featuring a food-grade

TGE[ENGFRNCUVKEEQPVGPVQH9GJCXGCNUQNCWPEJGFC

UPWUǭECPOCFGHTQOHQQFCRRTQXGFDKQEKTEWNCTRNCUVKE

(QTOQTGVCTIGVUCPFOGVTKEUTGNCVGFVQRCEMCIKPICPFYCUVG

please see our '5)2GTHQTOCPEG5WOOCT[.

TARGET

20% Reduction in waste

generated in our

QRGTCVKQPUD[

METRIC

Absolute waste (Tonnes)

Status: Achieved, new target to be implemented

Status: On track

TARGET

<GTQ9CUVGVQNCPFHKNNKP

QWTQRGTCVKQPUD[

METRIC

Absolute non-hazardous

waste sent to landfill

(Tonnes)

TARGET

100% of all wood

HKDTGǭKPǭQWTRCEMCIKPI

YKNNǭDGǭUWUVCKPCDN[

UQWTEGFǭD[ǭ

METRIC

Percentage of

wood fibre in our packaging

sustainably sourced

Status: On track

A. 5GNGEVFCVCJCUDGGPKPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2';

WPFGTVJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG+5#'UVCPFCTF

';ũUǭ#UUWTCPEG1RKPKQPKUCXCKNCDNGQPQWTwebsite. Our reporting scope

CPFǭFGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKCFQEWOGPVRWDNKUJGF

QPǭQWTǭwebsite.

1. 1WTGPXKTQPOGPVCNFCVCEQXGTUVJGTGRQTVKPIRGTKQF3VQ3

This is to allow for data collection, validation and external assurance.

Links to SDGs

Behaviours

• SDG 12:'PUWTG

UWUVCKPCDNGǭEQPUWORVKQP

CPFǭRTQFWEVKQPRCVVGTPU

2024

Baseline Year (2017)

264

7,200

2024

Baseline Year (2022)

96%

97%

2024

Baseline Year (2017)

33,211

49,141

FY24 Performance

9GCEJKGXGFQWTYCUVGTGFWEVKQPVCTIGVCJGCFQHVKOGYKVJC

FGETGCUGKPYCUVGEQORCTGFVQVJGDCUGNKPG[GCT9GYKNNUGV

CPGYVCTIGVUWDLGEVVQCRRTQXCND[VJG'5)%QOOKVVGG

9GCEJKGXGFCTGFWEVKQPKPPQPJC\CTFQWUYCUVGUGPVVQ

landfill compared to the baseline year.

96%

of wood fibre in our packaging is now sustainably sourced.

The slight reduction of this score seen in 2024 is due to a change

in the calculation methodology.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU68

Zero Waste ambition

+PRWTUWKVQHQWT<GTQ9CUVGCODKVKQPYGGUVCDNKUJGFCIQCN

VQǭGNKOKPCVGNCPFHKNNYCUVGHTQOCNNQWTQRGTCVKQPUD[

9GǭECPTGRQTVVJCVUKPEG/C[YGJCXGUGPV\GTQYCUVG

VQǭNCPFHKNNHTQOQWTOCPWHCEVWTKPIQRGTCVKQPUCPFOCKP

offices. Three sites in the Central African Republic, Mali and

Ukraine are currently out of scope due to ongoing conflicts

KPǭVJGUGTGIKQPU&WGVQVJKUCPFQVJGTEJCNNGPIGUQWTHQEWUKU

on maintaining this zero landfill status at our in-scope sites.

To support the next phase of our waste reduction programme,

we have formed a global community of “Zero Heroes” to

EJCORKQPQPIQKPIKPKVKCVKXGU9GCEJKGXGFQWTYCUVG

reduction target ahead of time and will set a new target

UWDLGEVVQCRRTQXCND[VJG'5)%QOOKVVGG

Cigarette butts

9GDGNKGXGVJCVVJGOQUVGHHGEVKXGCRRTQCEJVQEQODCVKPI

littering is through partnership with other key stakeholders,

such as tobacco manufacturers, government agencies,

retailers and local communities, educating consumers on

VJGǭKORQTVCPEGQHVJGRTQRGTFKURQUCNQHWUGFǭEKICTGVVGDWVVU

9GRCTVKEKRCVGKP'ZVGPFGF2TQFWEGT4GURQPUKDKNKV[UEJGOGU

DQVJQPCXQNWPVCT[DCUKUCPFVQHWNHKNTGIWNCVQT[TGSWKTGOGPVU

WPFGTXCTKQWUNGIKUNCVKQPKPENWFKPIVJG'75KPING7UG2NCUVKEU

Directive. The costs of these can cover waste management,

the clean-up of litter and consumer awareness-raising measures.

Consumer acceptance and emissions regulation have meant

VJCVYGCTG[GVVQHKPFCPCFGSWCVGCNVGTPCVKXGUWDUVKVWVGHQT

the traditional cigarette filter. However, we continue to search

for alternative materials for our filters.

NGP waste

9GCTGEQOOKVVGFVQGPJCPEKPIVJGUWUVCKPCDKNKV[CPF

TGE[ENCDKNKV[QH0)2OCVGTKCNUCPFRCEMCIKPI

Our blu bar kit was developed to enable consumers to move

from disposable products into rechargeable pod systems.

9JKNUVQWTEWTTGPVDNWDCTCNTGCF[JCFCTGOQXCDNG

battery, our new blu bar kit enables consumers to have the

same sensory experience but in a pod format, allowing them

to keep the device and responsibly dispose of the pod only.

To support our consumers with the responsible disposal of our

blu products, “take-back” schemes for vaping devices and pods

continue in some markets.

1WTVCTIGVVQOCKPVCKP<GTQ9CUVGVQNCPFHKNNKUQPGRCTV

of our Triple Zero campaign.

www.imperialbrandsplc.com 69

POSITIVE CONTRIBUTION TO SOCIETY: FARMER LIVELIHOODS & WELFARE

FARMER

LIVELIHOODS

& WELFARE

(QTOQTGVCTIGVUCPFOGVTKEUTGNCVGFVQHCTOGTNKXGNKJQQFU

CPFǭYGNHCTGRNGCUGUGGQWT'5)2GTHQTOCPEG5WOOCT[.

COMMITMENT:

9GCTGEQOOKVVGFVQGPICIKPIYKVJQWTUWRRNKGTU

VQǭUWRRQTVǭCPFFGXGNQRHCTOKPIEQOOWPKVKGU

CPFǭRTQOQVGǭUWUVCKPCDNGCITKEWNVWTG

For us to be able to serve our consumers over the long term,

KVǭKUKORQTVCPVVJCVHCTOGTUEQPVKPWGEJQQUKPIVQITQYVQDCEEQ

9GRWTEJCUGCRRTQZKOCVGN[QHQWTVQDCEEQVJTQWIJ

DQVJǭINQDCNCPFPKEJGUWRRNKGTUHTQOOQTGVJCP

EQWPVTKGUǭYQTNFYKFGCPFCTQWPFHTQOQWTQYPFKTGEVN[

EQPVTCEVGFǭHCTOU

Tobacco farmers are facing new challenges including

GZVTGOGǭYGCVJGTGXGPVUUWEEGUUKQPEJCNNGPIGUCPFKPHNCVKQP

In addition farmers have choices over whether to prioritise

growing tobacco over other crops.

9GGPICIGYKVJQWTNGCHUWRRNKGTUVQGPUWTGUGEWTKV[QH

UWRRN[ǭFGXGNQRHCTOKPIEQOOWPKVKGUCPFRTQOQVG

sustainable agriculture. These activities include improving

farmer access to basic needs, a decent standard of living and

income diversification, enabling them to continue to grow

tobacco sustainably.

The Sustainable Tobacco Programme

9GEQNNCDQTCVGYKVJQWTUWRRNKGTUVQGPJCPEGUVCPFCTFUKP

QWTǭNGCHUWRRN[EJCKPCPFOCPCIGNGCHUWRRN[TKUMUYKVJQWT

suppliers and through partnerships, such as those created

VJTQWIJVJG5WUVCKPCDNG6QDCEEQ2TQITCOOG562

6JG562KUCPKPFWUVT[DQF[YJKEJXGTKHKGUCPPWCNUWRRNKGT

self-assessments. To accelerate positive social and

environmental impact in tobacco-growing communities

YGǭCKOVQGPJCPEGCITKEWNVWTCNUWRRN[EJCKPFWGFKNKIGPEG

6JG562KUKPFGRGPFGPVN[OCPCIGFCPFRTQXKFGUWUYKVJ

enhanced visibility over our leaf supply chain in two ways:

 By empowering our suppliers to report on the actions they

are taking to address any risks identified, and how they are

having a positive impact on the ground.

2. By verifying these actions either remotely or in the field.

This informs our strategy to support our suppliers in taking

effective action.

All our tobacco leaf suppliers are expected to participate in

VJGǭ562+PDCUGFQPVJGVQDCEEQNGCHETQR[GCT

100% of our suppliers reported on their due diligence.

Our key suppliers have mature due diligence processes

KPǭRNCEGWPFGTRKPPGFD[VJGUWRRNKGTUũQPHCTOOQPKVQTKPI

VGEJPQNQI[1WTǭUWRRNKGTUEQPVTCEVYKVJHCTOGTUCVVJG

DGIKPPKPIQHǭCITQYKPIUGCUQPYKVJVJGPGEGUUCT[VTCKPKPI

and inputs to grow tobacco responsibly. Their technicians

monitor the crop and labour practices throughout the year.

KPI

All leaf suppliers expressing

a commitment to supporting

their farmers to access a

decent standard of living

METRIC

Percentage of leaf

UWRRNKGTUǭGZRTGUUKPIC

commitment to support

VJGKTHCTOGTUVQǭCEEGUUC

decent standard of living

Status: On track

TARGET

5WUVCKPCDNG

wood used as tobacco

EWTKPIǭHWGN

D[

METRIC

Percentage of sustainably

sourced wood or matched

by managed planting

Status: On track

KPI

100% of our tobacco leaf

suppliers participating in

VJG5WUVCKPCDNG6QDCEEQ

2TQITCOOG562

METRIC

Percentage of total

leaf suppliers participating

in the STP

Status: Achieved

1. Based on flue cured and dark fire cured tobacco, which are the tobacco types

VJCVTGSWKTGYQQFHQTEWTKPI

2. Based on suppliers’ directly contracted farmers in 2021 sourcing origins that

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Opinion is available on our website.

Links to SDGs Behaviours

2024'

Baseline Year (2023)

98%

83%

2024 Sustainably

sourced wood

Baseline Year (2023)

2024 Managed

planting

86%

13%

85%

2024

Baseline Year (2022)

100%

96%

FY24 Performance

98%

of our leaf suppliers have expressed a commitment to

support their farmers to access a decent standard of living.

86%

of the wood was sourced from sustainable and traceable

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The baseline number* has been restated following a retesting

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Forestry

Many of our suppliers’ contracted farmers use wood in tobacco

production, either as a fuel in the curing of tobacco or for

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farmers access to 100% sustainable wood for use as tobacco

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harvested to be sourced sustainably or that the wood used

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In FY24, 86%

of the wood was sourced from sustainable and

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planting. Therefore, 99% of the wood used for tobacco curing is

now sustainably sourced or matched by managed planting.

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Imperial Brands’ own dedicated forestry programme managed

through a key supplier in Tanzania. Planting trees sustainably

that farmers can access decreases the pressures on the

indigenous woodland that is being harvested for use in tobacco

production. There are also economic benefits for farmers in

labour saving, reduced cost of wood and transport.

Addressing child labour

As with other agricultural industries, the risk of child labour is

highest in the cultivation part of our supply chain. Child labour

is a multi-stakeholder issue, which no single entity can

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including the industry and suppliers operating in these

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 The Sustainable Tobacco Programme (STP)

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with the relevant International Labour Organization (ILO)

core conventions and the principles and guidance

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2. Our Leaf Partnership Programme

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aim to tackle some of the root causes of child labour.

3. Eliminating Child Labour in Tobacco Growing Foundation

(ECLT)

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the root causes of child labour.

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Decent standard of living

The industry has formally adopted the Living Income

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secretariat which our suppliers can reference when

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The benchmark varies by country and includes costs for food,

housing, education, healthcare, transport, clothing and other

essential needs.

Overall farm net income, including income from outside

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Benchmark for that location. This income needs to exceed

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At the end of FY24, 98%

of our leaf suppliers expressed a

commitment to supporting their farmers to access a decent

standard of living.

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farmers that have difficulties in achieving a living income

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Partnership Programme.

Leaf Partnership Programme

Through our Leaf Partnership Programme, we support the

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standard of living.

The Leaf Partnership Programme is integral to our leaf sourcing

strategy and an essential part of our farmer livelihoods and

welfare ambition. The programme is conducted in close

partnership with suppliers. In each country, we identify the

best local solutions that the suppliers then implement using

our funding.

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three countries.

2. Increasing access to basic needs to make farming

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support suppliers to improve access to basic needs for

180,000 farmers

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we reached the target of 180,000 tobacco community

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access to clean water.

3. The introduction of sustainable agricultural practices

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support suppliers to provide access to 100% sustainable

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www.imperialbrandsplc.com 71

POSITIVE CONTRIBUTION TO SOCIETY: SUSTAINABLE & RESPONSIBLE SOURCING

SUSTAINABLE

& RESPONSIBLE

SOURCING

COMMITMENT:

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improvements.

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viability of our supply chain, supports the communities we

operate in, and aligns with our commitment to minimising

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practices supports both our commercial success and our

People and Planet agenda.

Supplier engagement

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incentives needed to build strong, consistent and sustainable

partnerships across all procurement spending areas globally.

6JG54/%QPPGEVHTCOGYQTMCNUQRTQXKFGUWUYKVJCP

improved ability to communicate to suppliers the importance

of our People and Planet agenda and align with them on our

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operational emissions. This programme provides tools and

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data directly from our suppliers. This approach allows us to

more precisely assess the emissions profile of the entire

supply chain.

Sedex

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to enhance supply chain visibility, assess risks and ensure

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our partner suppliers, covering over 60% of our supplier spend.

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with our suppliers to minimise risks and enhance their overall

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improvement plans will be developed and monitored to drive

continuous improvement and foster long-term partnerships

based on shared sustainability goals.

Suppliers with science-based targets (SBTs)

Our supply chain team continues to support our wider ambitions

to become a fully Net Zero emissions business by 2040.

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category are committed to science-based targets.

TARGET

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METRIC

Percentage of suppliers

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spend committed to

science-based targets

TARGET

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by spend have an ethical

trading assessment via

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D[ǭ

METRIC

Percentage of partner

suppliers by spend

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CUUGUUOGPVXKC5GFGZ

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Status: Achieved

Links to SDGs

Behaviours

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consumption and

production patterns

2024

Baseline Year (2022)

50%

25%

2024

Baseline Year (2023)

86%

FY24 Performance

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KPI

Factory sites self-assessment compliance with our

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SAFE & INCLUSIVE WORKPLACE: HUMAN RIGHTS

HUMAN RIGHTS

COMMITMENT:

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processes in our supply chains, and we recognise the

importance, influence and role we have in promoting

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Links to SDGs

Behaviours

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committed to

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and to sustainable

economic growth

Human rights are the fundamental rights and freedoms

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we are from, what we believe or how we choose to live our

lives. As a responsible business, we do not tolerate human

rights violations. If we identify potential or actual violations,

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Human rights leading indicators

To continue to minimise our risk of being exposed to modern

slavery and labour exploitation, we reframed our modern

slavery indicators to human rights leading indicators (HRLI)

covering a wide range of topics including employment

contracts, training, recruitment, and speaking up, which go

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wording of these indicators, added extra guidance for each

one, and included examples of how to meet them.

Using HRLI is helping us to achieve a more consistent

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Modern slavery audits

A key tool for understanding human rights risks and preventing

violations is our ongoing programme of modern slavery audits.

During FY24 we conducted audits at factories in the Ivory Coast,

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into the local context and allowed us to work with factory teams

to mitigate the risk of modern slavery. In addition, we piloted

additional lighter-touch audits conducted online. These targeted

sites which consistently reported 100% compliance with leading

indicators and helped identify potential inconsistencies and

share best practices.

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locations to assess their exposure to human rights risks and

develop action plans to address these issues.

Raising awareness

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enables us to better identify potential or actual violations.

Human rights training is mandatory for a large proportion of

our management population. This learning covers definitions

of human rights and our role as a company in protecting

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service. Over 2,000 employees have completed the training.

In addition, more than 900 colleagues participated in 19 human

rights webinars, sharing our work and commitments.

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resources and ensure all sites have communication plans

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5VCVGOGPVCXCKNCDNGQPour website.

2024

Baseline Year (2021)

98%

76%

Status: On track

FY24 Performance

98% of our factory sites self-assessments are compliant

with our human rights leading indicators. There are two

sites that will address gaps to reach compliance with

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www.imperialbrandsplc.com 73

SAFE & INCLUSIVE WORKPLACE: EMPLOYEE HEALTH, SAFETY & WELLBEING

EMPLOYEE

HEALTH, SAFETY

& WELLBEING

COMMITMENT:

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health, safety & wellbeing for all our employees.

Links to SDGs

Behaviours

• 5&))QQFJGCNVJ

CPFǭYGNNDGKPI

• 5&)&GEGPVYQTM

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Our )TQWR*GCNVJ5CHGV[CPF9GNNDGKPI2QNKE[ sets out our

commitment to provide a safe, healthy, and supportive

working environment for our employees and everyone

involved in our business.

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and action plans, focusing on systematically identifying

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improvement cycle. Our commitment includes seeking

improvement opportunities, providing necessary resources

and training, fostering effective communication, and ensuring

compliance with local health, safety, and wellbeing regulations.

1WT<GTQ+PLWT[CURKTCVKQPKURCTVQHQWT

Triple Zero campaign

Developing a stronger safety culture

Our integrated approach is underpinned by a long-term

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This seeks to build awareness, develop strong accountability

and give people confidence to speak up in unsafe situations.

This campaign has included both global events and targeted

local initiatives.

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standards to all office locations, ensuring a more consistent

approach across the organisation.

Improving processes

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which highlighted good practices and made recommendations

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ǭQHǭVJGUGǭXKUKVU

To enhance data-driven decision-making and implement

effective control measures, we strengthened our existing

process of incident investigation by incorporating additional

data fields to identify correlations and trends.

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standardises information capture, providing a clearer view

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Additionally, a real-time dashboard was implemented,

allowing leaders to monitor trends and gain insights,

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investigations by further incorporating behavioural

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Developing capabilities and positive behaviours

During 2024 we continued to take initiatives to improve

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Programme for safety leadership, a course certified by the

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please see our '5)2GTHQTOCPEG5WOOCT[.

TARGET

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METRIC

Lost time accidents

per 200,000 hours worked

1,2

Status: Requires focus

KPI

Reduction in total number

of accidents each year

METRIC

Absolute total

number of accidents

1,2

Status: On track

TARGET

60% Reduction in fleet

EQNNKUKQPTCVGD[

METRIC

Fleet collisions

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Status: Achieved

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Assurance Opinion is available on our website. Our reporting scope and definitions

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1. Our health and safety data is for the full 2024 financial year.

2. Accidents reported do not include commuting to or from work, or those

sustained by third parties such as distributors.

2024

Baseline Year (2019)

0.3

0.4

2024

Baseline Year (2019)

318

850

2024

Baseline Year (2022)

1.82

5.03

FY24 Performance

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compared to the 2019 baseline year.

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This aimed to improve understanding of the role of

conversations with peers and team members and identifying

and influencing safe behaviours. In addition, we have established

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in FY24, we will continue to roll this out to more colleagues

across Imperial to promote a safer work environment.

Performance to date has shown an improvement.

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business, we know we need to do more to build awareness,

drive consistency through our organisation and improve

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Wellbeing

The wellbeing of our employees is of great importance.

Our employee wellbeing support is locally managed and

encompasses a variety of initiatives, including resilience

training, employee assistance programmes, health checks,

awareness campaigns, flexible working arrangements,

family-friendly policies and facilities, as well as workplace

celebrations and social events.

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a campaign focused on empowering leaders and employees

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“Let’s care for each other”. Our goal was to inform employees

that conversations about mental health are essential skills

everyone should have, and to foster a sense of comfort and

acceptance around these discussions. The campaign included

educational and awareness materials such as briefings for

People Leaders on how to lead on check-in conversations

YKVJǭGORNQ[GGUVGCODWKNFKPICEVKXKVKGUNGCHNGVURQUVGTU

CPFǭECTFUYKVJOGPVCNJGCNVJEQPXGTUCVKQPUVCTVGTU

OUR WELLBEING PLAN

• Foster a mentally healthy culture by incorporating

these principles into People Leader training.

• Run regular initiatives to raise awareness of mental

health issues at work.

• 'PCDNGNQECNUKVGUVQVCKNQTKPKVKCVKXGUCFFTGUUKPINQECN

wellbeing needs.

HEALTH AND SAFETY PERFORMANCE

Performance indicator Unit 2019

(base year)

2022 2023 2024 Commentary

Employee fatalities

Number

200

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employees did pass away during commuting in one of our vehicles

following a road accident.

Contractor

fatalities

Number

00 1

There have been no work-related fatalities to contractors.

Members of the

public fatalities

involving Imperial

Brands vehicles

Number

100

Road safety remains a priority across all our operations.

Lost time accidents

(LTAs)

Number

101 57 57

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compared to last year and by 47% compared to the 2019 baseline year.

LTA rate

LTAs per

200,000 hours

worked

0.40 0.24 0.30

0.30

Although we have reduced the number of lost time accidents, the lost

time accident rate has remained unchanged from last year due to a

corresponding reduction in hours worked.

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baseline year.

Total number

of accidents

Number

850 522 420

318

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Accident rate

Total accidents

per 200,000

hours worked

3.39 2.24 2.24

1.75

The accident rate reduced by 22% compared to last year and by 48%

compared to the 2019 baseline year.

Fleet collision rate

Accidents per

million

kilometres

5.03 2.80 2.29

1.82

There has been a 21% decrease in our vehicle accident rate compared

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influence behaviour.

Fleet vehicles fitted

with an in-vehicle

monitoring system

(IVMS)

– 57.3 46.9

60.3

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reduction and improved safety performance and we will continue to test

and extend coverage.

Compliance with

the Health and

Safety Framework

(Manufacturing)

–8793

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Compliance with the

Health and Safety

Framework (Sales)

–9394

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ISO 45001

certification

79 71 72

Of the factories in scope, 79% have certification for the international

standard for health and safety at work.

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 2024 financial year.

2. Accidents reported do not include commuting to or from work, or those sustained by third parties such as distributors.

www.imperialbrandsplc.com 75

DIVERSITY, EQUITY

& INCLUSION

SAFE & INCLUSIVE WORKPLACE: DIVERSITY, EQUITY & INCLUSION

COMMITMENT:

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organisation renowned for celebrating difference, enabling

our people to feel that they belong and be their authentic

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consumers and reflect the communities in which we operate.

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please see our '5)2GTHQTOCPEG5WOOCT[.

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of our performance-based culture. An important focus is to

drive positive commercial outcomes by creating a more diverse

and inclusive workforce. It is also important that our employee

base mirrors the varied global communities where we operate

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serve our consumers.

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working relationships, and eliminate harassment. It ensures

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on gender, race, disability, marital status, nationality,

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ensuring fair performance management. Formal grievance

procedures protect employees from harassment.

Improving gender balance in senior management

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These commitments extend to setting global and local gender

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defined local targets in each region and function to monitor

progress, review attrition, recruitment and promotion levels,

and create action plans.

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talent attraction plans, provided inclusive interview skills

training for line managers, and developed the “Accelerating

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I Belong campaign

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campaign called “I Belong”, enabling employees to confidentially

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especially regarding ethnicity representation in key markets.

Obtaining employee self-identification data has been

challenging due to the diverse markets and complex legal

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limited information, such as nationality or disability,

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KPI

Female representation

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METRIC

Percentage of

females at ELT level

KPI

Female representation

QPǭVJG$QCTF

METRIC

Percentage of

female Board members

Status: On Track

A. 5GNGEVFCVCJCUDGGPKPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2';

WPFGTVJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG+5#'UVCPFCTF

';ũUǭ#UUWTCPEG1RKPKQPKUCXCKNCDNGQPQWTwebsite. Our reporting scope

CPFǭFGHKPKVKQPUCTGFGVCKNGFKPVJG4GRQTVKPI%TKVGTKCFQEWOGPVRWDNKUJGF

QPǭQWTǭwebsite.

Links to SDGs

Behaviours

• 5&)9GCKOVQCEJKGXG

IGPFGTGSWCNKV[CPFCOQTG

inclusive organisation

2024'

Baseline Year (2021)

33%

45%

2024'

Baseline Year (2021)

22%

45%

FY24 Performance

6YQHGOCNG'.6OGODGTUYGTGCRRQKPVGFKP(;

One female Board member was appointed in FY24.

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Raising awareness and accountability for DEI

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CNNGORNQ[GGU+VGORJCUKUGUQWTEQNNGEVKXGTQNGKPOCMKPI&'+

a reality by fostering an inclusive culture and respecting our

differences. All employees, including new hires, are expected

to complete this module as part of their mandatory learning

and development or induction.

Additionally, we have developed and implemented an

CNN[UJKRǭVTCKPKPIRTQITCOOGVQGPJCPEGWPFGTUVCPFKPI

CPFǭDWKNFCNN[UJKRUMKNNUHQTGPJCPEGFYQTMRNCEGKPENWUKXKV[

6JKUKPKVKCVKXGDGICPKPCPFYKNNEQPVKPWGKP

9GCNUQEQPFWEVVCTIGVGF&'+YQTMUJQRUYGDKPCTUCPFURGCMGT

UGUUKQPUQP.)$63PGWTQFKXGTUKV[TCEGGVJPKEKV[IGPFGT

CPFKPENWUKXGNGCFGTUJKR1WTINQDCN$WUKPGUU'ORNQ[GG

4GUQWTEG)TQWRU$'4)UEQPVKPWGVQRNC[CMG[TQNGKP

EJCORKQPKPI&'+RTQITGUU6JKU[GCTYGKPKVKCVGFC

FGXGNQROGPVRTQITCOOGVQUWRRQTV$'4)GZGEWVKXG

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OUR FOUR GLOBAL BUSINESS EMPLOYEE

RESOURCE GROUPS COVERING:

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Are important sources of expertise and enthusiastic

champions of our agenda.

DIVERSITY, EQUITY AND INCLUSION PERFORMANC

Per

ormance indicator

nit

202

2022

202

ommentary

Fema

e emp

ees

ema

e representat

as rema

roa

dly

ons

stent across t

ast t

ree

ears.

Y24: 7,653

emale, 11,112 male, 82 not declared.

ale

mana

emen

–

eted talent attraction and development

lans have seen an increase in female

epresentation at senior mana

ement level.

Y24: 218 female

430 male

3 not declared.

ecut

eadershi

Team

(

ELT

)

member

emale representation on the ELT has

ncreased in FY24,

ollowin

the appointments

Deborah Binks-Moore and Pri

ali Kamath.

Y24: 5

emale, 6 male.

oar

mem

ers

emale representation on the Board has

ncreased followin

the appointment of

Gǭ*CO

VQP

P,CPWCT[



Y24: 5 female

6 male.

thnic minorit

ack

round on

our Board

n 30 September 2024

(

end of FY24

)

, 18% of

he Board members identified as bein

from

n ethnic minorit

back

round.

TSE Women Leaders

xecutive Leadershi

Team & Direct Re

orts

1.4

4.3

2.1

e FTSE Women Lea

ers Rev

s t

UWEEGUUQTVQV

G*CORVQP#

GZCP

GT4GX

GY

s t

e UK

’

epen

ent, vo

untar

imed at increasin

the representation o

omen on FTSE 350

oar

s an

ers

eams. T

e report

ate

s 31 Octo

er 2024.

ee turnover rat

Turnover has fallen sli

htl

compared

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

[

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GNGEVFCVCJCUDGGPKPFGRGPFGPVN[CUUWTGFD['TPUV;QWPI..2';WPFGTVJGNKOKVGFCUUWTCPEGTGSWKTGOGPVUQHVJG+5#'UVCPFCTF

U#UUWTCPEG1R

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ebsite

ur reportin

scope and definitions are detailed in the Reportin

Criteria document published on our w

ebs

e reco

nise the need to

ain more comprehensive emplo

ee demo

raphic data in order to understand the diversit

of our emplo

ee base and drive inclusion.

This will form a key part of our new DEI strategy and will help us measure

(

where appropriate

)

ethnic minority, disability, LGBTQ+ and other key DEI dimensions.

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QTOCVKQP5[UVGOUGZENWFKPI.QIKUVCEQPVTCEVQTUCPFECUWCNNCDQWT



JGRTQRQTVKQPQHUGPKQTOCPCIGOGPVGORNQ[GGU)NQDCN)TCFGUTGEQTFGFCUHGOCNGCETQUU+ORGTKCN$TCPFU)TQWRGZENWFKPI.QIKUVC



JKUTG

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uss

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www.imperialbrandsplc.com 77

ESG REVIEW continued

TASK FORCE

ON CLIMATE-RELATED

FINANCIAL DISCLOSURES

After conducting our first double materiality

CUUGUUOGPVKPENKOCVGǭEJCPIG

continues to be a critical focus area for us,

DQVJYKVJKPQWTQTICPKUCVKQPCPFKPQWT

external engagements. Our ESG strategy,

YKVJENKOCVGEJCPIGCUCMG[RTKQTKV[KU

KPVGITCNVQVJGFGNKXGT[QHQWTDWUKPGUU

UVTCVGI[CPFQWTCRRTQCEJVQVJG6%(&TGRQTV

9JKNGRTGRCTKPIVJKUTGRQTVYGJCXGVCMGPKPVQCEEQWPV

VJGǭ6%(&HTCOGYQTMYJKEJEQXGTU)QXGTPCPEG5VTCVGI[

4KUMǭ/CPCIGOGPVCPF/GVTKEUCPF6CTIGVU#FFKVKQPCNN[

YGǭJCXGEQPUKFGTGFOQTGTGEGPVHTCOGYQTMUKPENWFKPI

VJGǭ+PVGTPCVKQPCN5WUVCKPCDKNKV[5VCPFCTFU$QCTF+55$+(45

5ǭCPFǭ5CPFVJG'WTQRGCP5WUVCKPCDKNKV[4GRQTVKPI

5VCPFCTFU'545CURCTVQHǭQWTEQOOKVOGPVVQEQORN[KPI

YKVJHWVWTGTGSWKTGOGPVU

9GRTQXKFGHWTVJGTFGVCKNUCDQWVQWTǭENKOCVGUVTCVGI[KPQWT

%NKOCVG6TCPUKVKQP2NCPCPF'5)2GQRNGCPF2NCPGV2GTHQTOCPEG

5WOOCT[+PCFFKVKQPQWTRGTHQTOCPEGTGNCVGFVQENKOCVG

EJCPIGKUQWVNKPGFKPVJGENKOCVGǭEJCPIGRCIGUQHVJKU#PPWCN

4GRQTV9GDGNKGXGYGCTGǭQPVTCEMVQCEJKGXGQWT0GV<GTQ

VCTIGVCUURGEKHKGFKPOQTGǭFGVCKNQPRCIG

CLIMATE-RELATED GOVERNANCE

1WTENKOCVGTGNCVGFIQXGTPCPEGTKUM

OCPCIGOGPVǭUVTWEVWTG

CLIMATE-RELATED RISKS AND

OPPORTUNITIES STRATEGY

1WTCRRTQCEJ

1WTUEQRG

+ORCEVTKUMOKVKICVKQPCPFCUUQEKCVGF

OGVTKEUǭCPFVCTIGVU

Physical risks

%JTQPKEFTQWIJVTKUM

%JCPIGUKPVQDCEEQETQR[KGNF

+PETGCUGFHTGSWGPE[CPFUGXGTKV[QH

GZVTGOGǭYGCVJGTGXGPVU

5GXGTGJWTTKECPGTKUM

Transition risks

2QNKE[CPFNGICNKORCEV

/CTMGVKORCEV

Climate-related opportunities

4GPGYCDNGGPGTI[UQWTEKPIKORCEV

+ORCEVQHTKUMUKPHKPCPEKCNǭTGRQTVKPI

#UUWORVKQPU

(WVWTGTGSWKTGOGPVU

CLIMATE-RELATED RISK MANAGEMENT

Logista

.QIKUVCũUTKUMUCPFQRRQTVWPKVKGU

METRICS AND TARGETS

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JCXGOCFGFKUENQUWTGUKPVJKU6%(&TGRQTVVJCVCTGHWNN[

EQPUKUVGPVYKVJGCEJQHVJG6%(&4GEQOOGPFCVKQPU

CPF4GEQOOGPFGF&KUENQUWTGU5RGEKHKECNN[YGJCXG

OCFGENKOCVGTGNCVGFHKPCPEKCNFKUENQUWTGUHQTVJG[GCT

ending 30

5GRVGODGTTGNCVGFVQIQXGTPCPEG

UVTCVGI[TKUMOCPCIGOGPVCPFOGVTKEUCPFVCTIGVU

For more information on our double materiality assessment,

please see page 60

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU78

CLIMATE-RELATED

GOVERNANCE

'5)QXGTUKIJVCPFOCPCIGOGPVCTG

KPVGITCVGFVJTQWIJQWVQWTQTICPKUCVKQP

6JG$QCTFTGXKGYURGTHQTOCPEGCICKPUVENKOCVGTGNCVGFVCTIGVU

CPFQWT%NKOCVG6TCPUKVKQP2NCPYJKEJGPEQORCUUGUHKPCPEKCN

TKUMUCPFQRRQTVWPKVKGU&WTKPIVJG[GCTVJG$QCTFGZRCPFGF

VJGTQNGQHVJG2GQRNG)QXGTPCPEG%QOOKVVGGVQGPJCPEG

VJGKTQXGTUKIJVQHUWUVCKPCDKNKV[CPF'5)6JG%QOOKVVGG

OGGVUǭSWCTVGTN[KUCVVGPFGFD[CNN0QP'ZGEWVKXG&KTGEVQTU

CPFTGEGKXGFHQWTWRFCVGUQPENKOCVGTGNCVGFTKUMUCPF

QRRQTVWPKVKGUKP(;+VTGXKGYU'5)RTQITGUUCPFQXGTUGGU

JQY'5)TKUMUCTGOCPCIGF+VCNUQTGXKGYUVJG)TQWRũU

PQPHKPCPEKCNTGRQTVKPIKPVGTPCNXGTKHKECVKQPCPFGZVGTPCN

CUUWTCPEGKPEQPLWPEVKQPYKVJVJG#WFKV%QOOKVVGG

&KTGEVQTUǭUVC[KPHQTOGFCDQWVENKOCVGTGNCVGFTKUMU

QRRQTVWPKVKGUCPFRGTHQTOCPEGVJTQWIJVJGSWCTVGTN[

'5)ǭTGRQTVGPUWTKPIQXGTUKIJVCPFOQPKVQTKPICUPGGFGF

9GJCXGVYQ0QP'ZGEWVKXG&KTGEVQTUYKVJENKOCVGTGNCVGF

OCVVGTGZRGTKGPEG&KCPGFG5CKPV8KEVQTUGTXGFCUCP

GZGEWVKXGEQOOKVVGGOGODGTCVCNGCFKPIVGEJPQNQI[

UQNWVKQPURTQXKFGTJGNRKPIKPFWUVTKGUTGFWEGVJGKTGPGTI[

EQPUWORVKQP#NCP,QJPUQPUGTXGFCUVJGRTGUKFGPVCPFEJCKT

QHVJG$QCTFCVVJG+PVGTPCVKQPCN(GFGTCVKQPQH#EEQWPVCPVU

+(#%YJKEJUWEEGUUHWNN[CFXQECVGFHQTVJGGUVCDNKUJOGPV

QHǭVJG+PVGTPCVKQPCN5WUVCKPCDKNKV[5VCPFCTFU$QCTF+55$

#UǭEJCKTQHVJG5VCMGJQNFGT#FXKUQT[%QWPEKNQHVJG#WFKV

CPFǭ'VJKEU5VCPFCTF5GVVKPIU$QCTFJGEQPVKPWGUVQUWRRQTV

VJGCUUWTCPEGQHENKOCVGTGNCVGFFKUENQUWTGU+P(;YG

KPVTQFWEGF'5)5RQPUQTFC[UNGFD[#NKUQP%NCTMG%JKGH2GQRNG

CPF%WNVWTG1HHKEGTCPF'ZGEWVKXG.GCFGTUJKR6GCO'.6

NGCFǭHQT'5)6JGUGTGXKGYUGPEQORCUUCNNGKIJV'5)VQRKEU

KPENWFKPIENKOCVGEJCPIGUGGRCIGYKVJVQRKEQYPGTUCPF

QVJGTUWDLGEVOCVVGTGZRGTVUUJCTKPIRTQITGUURGTHQTOCPEG

CPFTGSWGUVUHQTUWRRQTVYKVJGCEJQVJGT9GJCXGCNUQ

GUVCDNKUJGFC6%(&UVGGTKPIITQWR6JKUITQWRQXGTUGGUQWT

CPPWCNENKOCVGTKUMCPFQRRQTVWPKV[UVTCVGI[CPFCEVKQP

RNCPǭKPVGITCVKPIGHHQTVUHTQODQVJ'5)CPF(KPCPEGVGCOU

1WT&KTGEVQTQH%QTRQTCVG(KPCPEKCN2NCPPKPI#PCN[UKUQXGTUGGU

NQPIVGTOHKPCPEKCNRNCPPKPICPFVCMGUENKOCVGTGNCVGFTKUMU

CPFQRRQTVWPKVKGUKPVQCEEQWPV6JG[CTGCEVKXGN[KPXQNXGFKP

VJG6%(&UVGGTKPIITQWRFGFKECVGFVQOCPCIKPICEVKQPUCPF

FKUENQUWTGUQPENKOCVGTGNCVGFTKUMUCPFQRRQTVWPKVKGU

(QTHWTVJGTFGVCKNUQPQWTENKOCVGOCPCIGOGPVGHHQTVU

RNGCUGǭUGGQWT%NKOCVG6TCPUKVKQP2NCPCPF'PXKTQPOGPV

2QNKE[ǭCXCKNCDNGQPQWTwebsite.

People, Governance &

Sustainability Committee

A Board-level committee chaired by a NED

Remuneration Committee

A Board-level committee chaired by a NED

Audit Committee

A Board-level committee chaired by a NED

TGRQTVGFKPVQD[+PVGTPCN#WFKV

QWTVJKTFNKPGQHFGHGPEG

Second line

of defence

KUGKVJGTOCPCIGFCV

VJGǭ'.6QTHWPEVKQPCN

NGCFGTUJKRNGXGN

FGRGPFKPIQPVJG

OCVGTKCNKV[QHVJGTKUM

%NKOCVGTKUMCPF

QRRQTVWPKV[TGRQTVKPI

are integrated into

business functions,

CPFǭOWNVKRNGHQTWOU

RTQXKFGWRFCVGUQPVJGUG

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ESG Committee

CHAIRED BY CEO

6JG'5)%QOOKVVGGTGEGKXGUSWCTVGTN[WRFCVGUQPVJG

RGTHQTOCPEGCPFRTQITGUUQHQWTUVTCVGI[HTQOVJG

'5)ǭVGCOCPFQVJGTKPVGTPCNUWDLGEVOCVVGTGZRGTVU

6JGǭ%QOOKVVGGKPENWFGUCNNOGODGTUQHVJG'ZGEWVKXG

.GCFGTUJKR6GCO'.6CPFCFFKVKQPCNUGPKQTOCPCIGOGPV

HTQOCETQUUVJGQTICPKUCVKQP6JG%JKGH(KPCPEKCN1HHKEGT

%(1UGTXGUCUVJGGZGEWVKXGNGXGNURQPUQTHQTENKOCVG

EJCPIG#FFKVKQPCNN[VJG)NQDCN'5)&KTGEVQTTGRQTVKPIVQ

VJG%JKGH2GQRNGCPF%WNVWTG1HHKEGTNGCFUVJG)NQDCN'5)

VGCOCPFCEVUCUVJGUGETGVCTKCVHQTVJG'5)%QOOKVVGG

Group Risk Committee

CHAIRED BY CEO

1WT)TQWR4KUM%QOOKVVGGQXGTUGGUQWT

TKUMǭOCPCIGOGPVCRRTQCEJCPFTGRQTVKPI

+VǭEQPXGPGUCVNGCUVVJTGGVKOGUC[GCTVQ

RTQXKFGŬVQRFQYPŭKPUKIJVUKPVQVJGRGTKQFKE

TKUMCUUGUUOGPVRTQEGUUYJKEJKPENWFGU

CUUGUUOGPVUQHENKOCVGTGNCVGFTKUMU

For additional details on our enterprise

TKUMOCPCIGOGPVRNGCUGǭUGGRCIG

First line

of defence

KUCUUKIPGFGKVJGTVQ

OGODGTUQHVJG2NCPGV

5VTCVGI[)TQWRQTVQ

OGODGTUQHVJGITQWRU

VJCVEQPVTKDWVGVQKV

FGRGPFKPIQPYJQ

OCPCIGUVJGVQRKE

QRGTCVKQPCNN[

Planet Strategy Group

1XGTUGGUCNNRNCPGVTGNCVGFCEVKXKVKGUCETQUUQWT'5)

RKNNCTU+VǭEQORTKUGUFKTGEVQTUCPFǭHWPEVKQPJGCFUHTQO

CETQUUVJGǭDWUKPGUUCPFKUTWPD[VJG)NQDCN'5)VGCO

Global Risk & Internal Control

%QQTFKPCVGUTKUMCPFEQPVTQNHTCOGYQTM

KORTQXGOGPVCPFOCPCIGUVJGRGTKQFKETKUM

CUUGUUOGPVVQRTQXKFGCEQPUQNKFCVGFXKGY

QHǭTKUMOQXGOGPVOKVKICVKQPCPFICRU

Environment Compliance Working Group

1YPUVJG'PXKTQPOGPV2QNKE[

Individual working groups covering material areas

of activity, including TCFD, factories and fleet.

Board of Directors

6JG$QCTFQH&KTGEVQTURTQXKFGUQXGTUKIJVQHQWTENKOCVGTGNCVGFTKUMU

CPFQRRQTVWPKVKGURTQITCOOG+VJCUGPFQTUGFCNNENKOCVGTGNCVGF

VCTIGVUKPENWFKPIVJGPGEGUUCT[KPXGUVOGPVUHQTKORNGOGPVKPI

RTQITCOOGUCKOGFCVTGFWEKPIECTDQPGOKUUKQPUCPFCEJKGXKPIQWT

ENKOCVGCEVKQPIQCNU#FFKVKQPCNN[VJG$QCTFTGXKGYUDWUKPGUURNCPU

CPFOCLQTRNCPUQHCEVKQPKPENWFKPIGZRGPFKVWTGUWEJCUENKOCVGTGNCVGF

ECRKVCNGZRGPFKVWTG+VQXGTUGGUGPVGTRTKUGTKUMCRRGVKVGCUUGUUOGPV

CPFOCPCIGOGPVNQPIGTVGTOUVTCVGI[CPFVJGCPPWCNDWFIGVRNCP

YJKEJKPENWFGURTQXKUKQPHQTENKOCVGEJCPIGCEVKXKVKGU+VCNUQOQPKVQTU

KORNGOGPVCVKQPCPFRGTHQTOCPEGCICKPUVQDLGEVKXGUCPFQXGTUGGU

CESWKUKVKQPUCPFFKXGUVKVWTGU

+P#RTKNVJG$QCTFGZRCPFGFVJGTQNGQHVJG

2GQRNGǭǭ)QXGTPCPEG%QOOKVVGGVQGPJCPEGVJGKT

QXGTUKIJVQHUWUVCKPCDKNKV[CPF'5)6JG2GQRNG

)QXGTPCPEG5WUVCKPCDKNKV[%QOOKVVGGOGGVU

SWCTVGTN[CVVGPFGFD[CNN0QP'ZGEWVKXG&KTGEVQTU

+VTGXKGYU'5)RTQITGUUCPFQXGTUGGUJQY'5)

TKUMUCTGOCPCIGF+VCNUQTGXKGYUCNNCURGEVUQH

VJGǭ)TQWRũUPQPHKPCPEKCNTGRQTVKPIKVUǭKPVGTPCN

XGTKHKECVKQPCPFGZVGTPCNCUUWTCPEGKPǭEQPLWPEVKQP

YKVJVJG#WFKV%QOOKVVGG

+PHQTOKPI+PHQTOKPI

+PHQTOKPI4GRQTVKPI

4GRQTVKPI

+PHQTOKPI

+PHQTOKPI4GRQTVKPI

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ESG REVIEW continued

1WTENKOCVGEJCPIGUVTCVGI[KUYGNNFGHKPGF

6QUWRRQTVKVYGKPVGITCVGENKOCVGTGNCVGF

TKUMUCPFQRRQTVWPKVKGUOCPCIGOGPVKPVQ

DWUKPGUUHWPEVKQPU6JGUVTCVGI[KUGUVCDNKUJGF

CPFQXGTUGGPD[VJG)NQDCN'5)VGCO

YKVJǭVGCOUCETQUUVJGDWUKPGUUVCMKPI

QRGTCVKQPCNTGURQPUKDKNKV[CUQWTHKTUVNKPG

QHǭFGHGPEG#FFKVKQPCNN[YGTGIWNCTN[

EQPFWEVENKOCVGUEGPCTKQCPCN[UGUVQMGGR

QWTCRRTQCEJWRVQFCVG

OUR APPROACH

+PNKPGYKVJVJG6%(&TGEQOOGPFCVKQPUQWTENKOCVGTGNCVGF

HKPCPEKCNCPCN[UGUEQXGTVJGRGTKQFHTQOVQ9G

EQPFWEVGFCPKPKVKCNCPCN[UKUKPWRFCVGFKP6JGUG

CPCN[UGUEQXGTGFVYQVGORGTCVWTGUEGPCTKQU4GRTGUGPVCVKXG

%QPEGPVTCVKQP2CVJYC[4%2EQTTGURQPFKPIVQC

%

UEGPCTKQCPF4%2TGRTGUGPVKPIC

%UEGPCTKQ4%2

CNKIPUENQUGN[YKVJQWT0GV<GTQCODKVKQPYJKNG4%2

TGRTGUGPVUCYQTUVECUGUEGPCTKQ6JGTGUWNVKPITKUMUJCXGDGGP

KPVGITCVGFKPVQQWTDTQCFGT)TQWRTKUMOCPCIGOGPVHTCOGYQTM

9JGPFGHKPKPIVJGUEQRGQHVJGRJ[UKECNCPFVTCPUKVKQPCN

UEGPCTKQCPCN[UGUYGEQPUKFGTGFCTCPIGQHRQVGPVKCN

JC\CTFUǭKPENWFKPIRJ[UKECNKORCEVUCPFEJCPIGUKPNQECN

QTǭINQDCNRQNKEKGUTGNCVGFVQVTCPUKVKQP$CUGFQPVJKUCPCN[UKU

YGǭJCXGGZRNQTGFXCTKQWUQRVKQPUHQTQWTQRGTCVKQPCNCPF

HKPCPEKCNRNCPPKPI6QGUVCDNKUJVJGUEQRGQHCUUGVUHQTVJG

CPCN[UKUQWTINQDCNCUUGVDCUGYCUCPCN[UGFHQTITGCVGUVXCNWG

CNQPIUKFGQWTVQDCEEQCPF0)2UWRRN[EJCKPUGUVCDNKUJKPIC

NKUVQHUKVGUCPFNQECVKQPU6JGTKUMUCPFQRRQTVWPKVKGUKP

VCDNGUCTGVJGTGUWNVUQHVJGCPCN[UKUCPFRTKQTKVKUCVKQP

+P(;YGGXCNWCVGFQWTINQDCNENKOCVGTGNCVGFKPUWTCPEG

QWVNQQMKPEQPLWPEVKQPYKVJVJKTFRCTV[UEGPCTKQCPCN[UGU

1WTǭEQNNCDQTCVKQPYKVJ(/)NQDCNGPUWTGUKPUWTCPEGEQXGTCIG

HQTCNNQWTUKVGUKPENWFKPIENKOCVGTGNCVGFTKUMU9GCEEQWPV

HQTDQVJRJ[UKECNCPFVTCPUKVKQPTKUMUCUUQEKCVGFYKVJENKOCVG

EJCPIGYKVJKPQWTUWRRN[EJCKPCPFFKTGEVQRGTCVKQPU

KPEQTRQTCVKPIVJGOKPVQ+ORGTKCNũURTKPEKRCNTKUMEQPUKFGTCVKQPU

6JGUGCUUGUUOGPVUIWKFGQWTOCPCIGOGPVCPFOQPKVQTKPI

QHǭENKOCVGTKUMUHQTETKVKECNDWUKPGUUFGEKUKQPU

6JGVJKTFRCTV[UEGPCTKQTKUMCPCN[UKUKFGPVKHKGFHQWTFKUVKPEV

TKUMUCPFQPGQRRQTVWPKV[CNKIPGFYKVJ+ORGTKCN$TCPFUũTKUM

HTCOGYQTMKNNWUVTCVGFKP6CDNG6JGUGCTGCUUQEKCVGFYKVJ

VJGOCZKOWOHKPCPEKCNKORCEV/(+YJKEJTGNCVGUVQVJG

ITQUUTKUMCPFCUUWOGUPQOKVKICVKQPQTCFCRVCVKQPCEVKXKVKGU

6JGCPCN[UKUEQXGTUDQVJVGORGTCVWTGUEGPCTKQUCETQUUVJG

%QORCP[ũUCUUGVDCUGHTQOVQ9GFKUENQUGVJG

HKPCPEKCNKORCEVKP6CDNGHQTVJGRGTKQFHTQOVQ

HQNNQYKPIQWTVKOGJQTK\QPUCUUQEKCVGFYKVJHKPCPEKCNCPF

TKUMǭCUUGUUOGPVCNUQWUGFKP%&26CDNG6JGGUVKOCVGF

CEEWOWNCVGFHKPCPEKCNKORCEVJCUDGGPHCEVQTGFKPVQQWT

HKPCPEKCNOQFGNUHQTIQQFYKNNKORCKTOGPVFGHGTTGFVCZCUUGVU

PQVGUCPFTGURGEVKXGN[IQKPIEQPEGTPCPFXKCDKNKV[

RCIG6JG/(+ECNEWNCVKQPGZENWFGUKPHNCVKQPCPFECPPQV

RTGFKEVVJGKORCEVUQHHWVWTGIQXGTPOGPVRQNKEKGU4KUMUCPF

QRRQTVWPKVKGUJCXGDGGPRTKQTKVKUGFDCUGFQPVJGHKPFKPIUQH

VJGUEGPCTKQCPCN[UGU

9GGORNQ[GFCVJKTFNKPGQHFGHGPEGQWTKPVGTPCNCWFKVVGCOŦ

VJTQWIJQWVVJGFKUENQUWTGRTQEGUUCPFJCXGEQPVTCEVGFCP

KPFGRGPFGPVVJKTFRCTV[YKVJ6%(&GZRGTVKUGVQCUUWTGQWT

FKUENQUWTGCICKPUVVJGNKUVKPITWNG6JKUIKXGUWUEQPHKFGPEG

KPǭQWTCUUGUUOGPVCPFTGUWNVKPIOKVKICVKQPCPF

CFCRVCVKQPǭUVTCVGI[

CLIMATE-RELATED RISKS

AND OPPORTUNITIES STRATEGY

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU80

OUR SCOPE

+ORGTKCN$TCPFU2.%JCUCPCN[UGFCNNKVUCUUGVUKPVJG/(+CPCN[UKUGZEGRVHQT.QIKUVCYJKEJQRGTCVGUKPFGRGPFGPVN[VQRTQVGEV

EQOOGTEKCNUGPUKVKXKVKGU+PVJKUTGRQTVYGCNUQUWOOCTKUG.QIKUVCũUUGRCTCVGHKPFKPIUQPRCIG

TABLE 1:

THE ESTIMATED FINANCIAL IMPACT OF CLIMATE-RELATED RISKS AND OPPORTUNITIES OVER

THE NEXT 10 YEARS

Estimated accumulated

maximum financial impact

(MFI) over 10 years (£m)

Impact

Impact predicted as a

result of our climate

change strategy

1.5-2

PHYSICAL RISKS

Chronic weather

Acute weather

TRANSITION RISKS

Policy and legal

Market

311

CLIMATE-RELATED OPPORTUNITIES

Energy sourcing

Lower impact Lower impact is considered to be at <0.2% of asset value.

Medium impact Medium impact is considered to be at 0.2-1% of asset value.

High impact High or significant impact is considered to be >1% of asset value.

9GJCXGCFQRVGFCTKUMDCUGFCRRTQCEJVQCFFTGUU

ENKOCVGTGNCVGFTKUMUD[CPCN[UKPIKFGPVKHKGFTKUMUCPF

QRRQTVWPKVKGUCPFKPVGITCVKPIVJGKTOCPCIGOGPVKPVQQWT

%NKOCVG%JCPIGUVTCVGI[4GEQIPKUKPIVJGETKVKECNTQNGQH

ENKOCVGǭTKUMCPFQRRQTVWPKV[OCPCIGOGPVVJGUGEQPUKFGTCVKQPU

JCXGKPHQTOGFQWT(;DWUKPGUURNCPU+VũUKORQTVCPV

VQǭPQVGVJCVCRCTVHTQOOCTMGVVJGTKUMUOGPVKQPGFCDQXG

CTGǭPQVFGGOGFHKPCPEKCNN[UKIPKHKECPVCUFGHKPGFKP6CDNG

YJGTGǭUKIPKHKECPEGKUOGCUWTGFCUOQTGVJCPQHCUUGVXCNWG

#HVGTEQPFWEVKPIVJKUCPCN[UKUYGCFLWUVGFQWT%NKOCVG

%JCPIGUVTCVGI[VQGPUWTGEQORTGJGPUKXGEQPUKFGTCVKQPQH

VJGUGTKUMUCPFQRRQTVWPKVKGU9GJCXGKORNGOGPVGFCEVKQP

RNCPUCKOGFCVOKPKOKUKPIVJGKTRQVGPVKCNKORCEV

+PQWTTKUMOCVTKZHQWPFQPRCIG'PXKTQPOGPV

KPENWFKPIVJGTGRWVCVKQPCNTKUMUQHPQVFGNKXGTKPIQWTENKOCVG

EJCPIGUVTCVGI[KUHNCIIGFCUCRTKPEKRCNTKUM)QKPIHQTYCTF

YGYKNNENQUGN[OQPKVQTVJGUGHCEVQTUKPVGITCVKPIVJGOKPVQ

QWTDWUKPGUUTKUMOCPCIGOGPVRTCEVKEGU

IMPACT, RISK MITIGATION, AND ASSOCIATED

METRICS AND TARGETS

#OQPIVJGHQWTTKUMUKFGPVKHKGFKP6CDNGURGEKHKEEQPVTKDWVKPI

TKUMUJCXGDGGPFGGOGFOQUVOCVGTKCNEQPVTKDWVKPIVQVJG

GUVKOCVGFHKPCPEKCNKORCEV9GFGVCKNVJGUGKPVJGHQNNQYKPI

HQWTRCIGUVCDNGUCPFCURCTVQHQWTDWUKPGUURNCPPKPI

CPFENKOCVGUVTCVGI[CEVKXKVKGU

#NVJQWIJVJGCPCN[UGUEQXGTVJGRGTKQFWRVQYGDGNKGXG

VJCVCOQTGFGVCKNGFGZCOKPCVKQPQXGTC[GCTJQTK\QPDGVVGT

CNKIPUYKVJQWTDWUKPGUURNCPPKPICPFTKUMOCPCIGOGPV

JQTK\QPUCUKNNWUVTCVGFKP6CDNG

TABLE 2: ALL RISKS ARE CONSIDERED WITHIN A 10-YEAR TIME

HORIZON

Our timeframe

used in CDP

Short Medium .QPI

0-1 years 1-3 years 3-10 years

Alignment to

our business

planning

5JQTVVGTO

business

RNCPPKPIE[ENG

3-year business

RNCPPKPIE[ENG

)QQFYKNN

KORCKTOGPV

TKUMJQTK\QP

1. /CZKOWOHKPCPEKCNKORCEVVCMGPHQTVJGUEGPCTKQOQUVNKMGN[VQRTQFWEGCJKIJGTHKPCPEKCNKORCEV

2. #UUWOKPIPQFGECTDQPKUCVKQPOGCUWTGUCTGVCMGPD[+ORGTKCN$TCPFU

3. +PCEEQTFCPEGYKVJ+ORGTKCN$TCPFUũTKUMCUUGUUOGPVQWTENKOCVGEJCPIGUVTCVGI[KPENWFGUCEVKQPVQOKVKICVGVJGUGTKUMUYJKEJKHVCMGPUJQWNFCHHGEVVJGNKMGN[HKPCPEKCN

KORCEVCUCRTQRQTVKQPQHCUUGVXCNWGCUYGNNCUECRKVCNKUGQPQRRQTVWPKVKGU

4. %QUVCXQKFCPEGCUCTGUWNVQHGPGTI[VTCPUKVKQP

YYYKORGTKCNDTCPFURNEEQO 81

$CUGFQPVJGUEGPCTKQCPCN[UKUWPFGTVCMGPKPYGJCXG

CUUGUUGFPKPGRJ[UKECNTKUMUKPENWFKPIEQCUVCNKPWPFCVKQP

UQKNUWDUKFGPEGUWTHCEGYCVGTHNQQFKPITKXGTKPGHNQQFKPI

GZVTGOGYKPFHQTGUVHKTGCPFYCVGTUVTGUU6JGUGTKUMUCRRN[

VQDQVJQWTFKTGEVQRGTCVKQPUCPFQWTVQDCEEQRWTEJCUKPI

TGIKQPU(TQOVJKUCPCN[UKUYGJCXGKFGPVKHKGFHQWTETKVKECN

RJ[UKECNTKUMU+P6CDNGYGQWVNKPGVJGRQVGPVKCNHKPCPEKCN

KORCEVQHEJTQPKECPFCEWVGYGCVJGTGXGPVU6JGURGEKHKETKUMU

EQPVTKDWVKPIVQVJKUKORCEVCTGQWVNKPGFKP6CDNGUVQ

TABLE 3

CHRONIC DROUGHT RISK

Short Medium Long

Scenario materiality

o%

o%

+ORCEVRTGFKEVGFCUCTGUWNVQHQWT

ENKOCVGEJCPIGUVTCVGI[

Predicted impact

&TQWIJVRQUGUCTKUMVQQWTVQDCEEQHCTOUCPFDTQCFGTUWRRN[

EJCKPYKVJCRQVGPVKCNKORCEVQPTGXGPWGU

&GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV

Associated opportunity

2TQLGEVUTGICTFKPICFCRVCVKQPYCVGTCPFFGEGPVUVCPFCTF

QHǭNKXKPIHQTHCTOGTUCUUGVQWVYKVJKPVJGHCTOGTNKXGNKJQQFU

RKNNCTQHQWT'5)UVTCVGI[RCIG

5WUVCKPCDNGUQWTEKPIQHYQQFHKDTGHQTQWTRCEMCIKPI

CPFǭRTQFWEVUYJKEJJGNRUVQUVCDKNKUGNQECNTKUMUQHFTQWIJV

Mitigating actions

1WTVQDCEEQNGCHRTQEWTGOGPVUVTCVGI[TGNKGUQPCPQWVUQWTEGF

OQFGNYKVJQHVJGNGCHUQWTEGFHTQOVJKTFRCTVKGUKP

9GJCXGKFGPVKHKGFKPVGTEJCPIGCDNGVQDCEEQUCETQUUUWRRNKGTU

CPFNQECVKQPUGPCDNKPIWUVQGUVCDNKUJEQPVKPIGPE[UQWTEKPI

QRVKQPUHQTQWTVQDCEEQNGCHUWRRN[%QNNCDQTCVKPIENQUGN[

YKVJǭUWRRNKGTUKUGUUGPVKCNHQTKORNGOGPVKPIGHHGEVKXG

OKVKICVKQPCPFCFCRVCVKQP1WTINQDCNTKUMDCUGFCRRTQCEJ

KPXQNXGUCPCN[UKPIMG[VQDCEEQUQWTEKPINQECVKQPUCVTKUM

KPǭQTFGTVQCFFTGUURQVGPVKCNEJCNNGPIGU

+P(;YGKORNGOGPVGFYCVGTCEEGUURTQLGEVUKPEQNNCDQTCVKQP

YKVJHCTOGTUCETQUU$TC\KN/Q\CODKSWGCPF+PFKC#FFKVKQPCNN[

YKVJKPQWTDTQCFGTUWRRN[EJCKPYGRTQEWTGYQQFHKDTGRTQFWEVU

HQTPQPVQDCEEQOCVGTKCNU06/UCPFRCEMCIKPICKOKPIHQT

UWUVCKPCDNGYQQFHKDTGUQWTEKPID[1WTQPIQKPI

GHHQTVUKPXQNXGYQTMKPIENQUGN[YKVJUWRRNKGTUVQCEJKGXG

UWUVCKPCDN[UQWTEGFYQQFHKDTGHQTQWTRCEMCIKPICPFYGCTG

GZRNQTKPIYC[UVQGZVGPFVJKUKPKVKCVKXGVQKPENWFG06/U

For further details,

please refer to page 68.

Related metrics and targets

• cURGPVQPYCVGTCEEGUURTQLGEVUKP(;

• QHQWTRCEMCIKPIKUHTQOUWUVCKPCDN[UQWTEGFYQQFHKDTG

LINKS TO OUR ESG STRATEGY

TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE

2TQFWEVUWRRN[

 2NGCUGTGHGTVQVJG4GRQTVKPI%TKVGTKCFQEWOGPVHQTOGVJQFFGHKPKVKQPCPFUEQRG

TABLE 4

CHANGES IN TOBACCO CROP YIELD

Short Medium Long

Scenario materiality

o%

o%

+ORCEVRTGFKEVGFCUCTGUWNVQHQWT

ENKOCVGEJCPIGUVTCVGI[

Predicted impact

6JGTGKUCTKUMVJCVNGCHUWRRN[KUFKUTWRVGFFWGVQVJGUGGXGPVU

YJKEJOC[CHHGEVQWTCDKNKV[VQIGPGTCVGTGXGPWGU-G[HCEVQTU

EQPVTKDWVKPIVQVJKUUKVWCVKQPKPENWFGYCVGTCEEGUUEJCNNGPIGU

HQTVQDCEEQHCTOGTUCUYGNNCUEQPEGTPUTGNCVGFVQUQKNJGCNVJ

CPFDKQFKXGTUKV[

&GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV

Associated opportunity

2TQLGEVUTGICTFKPICFCRVCVKQPYCVGTCPFFGEGPVUVCPFCTFQH

NKXKPIHQTHCTOGTUCUUGVQWVYKVJKPVJGHCTOGTNKXGNKJQQFU

RKNNCTQHQWT'5)UVTCVGI[RCIG

Mitigating actions

9JKNGYGCPVKEKRCVGUQOGTGXGPWGFGENKPGFWGVQFKUTWRVKQPU

KPVJGCITKEWNVWTCNUWRRN[EJCKPVJGTGKUCRQVGPVKCNQHHUGV

HTQOǭKPETGCUGFVQDCEEQ[KGNFUKPEGTVCKPTGIKQPUFWGVQTKUKPI

VGORGTCVWTGU1WTVQDCEEQNGCHRTQEWTGOGPVUVTCVGI[NGXGTCIGU

UWRRNKGTGZRGTVKUGKPVQDCEEQEWNVKXCVKQPGPUWTKPIEQPVKPIGPE[

UQWTEKPIQRVKQPUCTGCXCKNCDNG#FFKVKQPCNN[YKVJKPQWTNGCH

UWRRN[EJCKPYGOCKPVCKPCRRTQZKOCVGN[OQPVJUũYQTVJ

QHǭNGCHUVQEMVQOKVKICVGENKOCVGTGNCVGFKPVGTTWRVKQPUCPF

OKPKOKUGVJGTKUMQHUJQTVCIGU

#URCTVQHQWTVQDCEEQNGCHGPICIGOGPVGHHQTVUYGEQNNCDQTCVG

YKVJUWRRNKGTUVQGPEQWTCIGHCTOGTUVQEWNVKXCVGEQORNGOGPVCT[

QTUGEQPFCT[ETQRU

For further details,

please refer to page 70.

Related metrics and targets

• QHQWTVQDCEEQNGCHUWRRNKGTUD[URGPFCTGGPICIGF

KPǭYCVGTTKUMRTQLGEVU

• QHQWTFKTGEVN[EQPVTCEVGFHCTOGTUITQY

EQORNGOGPVCT[ǭETQRU

LINKS TO OUR ESG STRATEGY

TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE

2TQFWEVUWRRN[

PHYSICAL RISKS:

CHRONIC WEATHER

4GHGTVQRCIGHQTOQTGFGVCKNUQPNKPMUVQQWT

'5)UVTCVGI[CPFRCIGHQTJQYYGOCPCIGTKUM

Lower impact

Medium impact

High impact

ESG REVIEW continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU82

TABLE 5

INCREASED FREQUENCY AND SEVERITY OF

EXTREME WEATHER EVENTS

Short Medium Long

Scenario materiality

o%

o%

+ORCEVRTGFKEVGFCUCTGUWNVQHQWT

ENKOCVGEJCPIGUVTCVGI[

Predicted impact

+PQWTVQDCEEQNGCHUWRRN[EJCKPYGCPVKEKRCVGCFGENKPGKP

TGXGPWGUFWGVQUWRRN[EJCKPFKUTWRVKQPUKORCEVKPIRTQFWEVKQP

ECRCEKV[*QYGXGTVJGCPCN[UGUKPFKECVGVJCVVJGDWUKPGUU

TGOCKPUTGNCVKXGN[WPCHHGEVGFD[DQVJEJTQPKECPFCEWVG

RJ[UKECNTKUMUKPVJGUJQTVVGTO

4GICTFKPIQWTOCPWHCEVWTKPIQRGTCVKQPUQWTNGCUGFHCEVQT[

KPǭVJG&QOKPKECP4GRWDNKEKUGZRGEVGFVQDGOQUVCHHGEVGF

RTKOCTKN[FWGVQUWTHCEGYCVGTHNQQFKPI2J[UKECNTKUMUKP

QVJGTǭNQECVKQPUYGTGFGGOGFKOOCVGTKCN

&GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV

Associated opportunity

+ORTQXGFCFCRVCVKQPCPFOKVKICVKQPCVUKVGUFKTGEVN[KORCEVU

QPKPUWTCPEGRTGOKWOU

Mitigating actions

6QGPUWTGQRGTCVKQPCNEQPVKPWKV[YGJCXGCRQNKE[HQTCNN

QWTǭOCPWHCEVWTKPIUKVGUVQRWVTQDWUVDWUKPGUUEQPVKPWKV[

RNCPUKPǭRNCEG

#FFKVKQPCNN[YGJCXGINQDCNRTQRGTV[FCOCIGCPFDWUKPGUU

KPVGTTWRVKQPKPUWTCPEGVJTQWIJ(/)NQDCNYJKEJEQXGTU

RQVGPVKCNRTQRGTV[FCOCIGTGUWNVKPIHTQOYGCVJGTTGNCVGFGXGPVU

(/)NQDCNEQPFWEVUVJQTQWIJTKUMCUUGUUOGPVUCVGCEJUKVG

RGTHQTOKPICRRTQZKOCVGN[VQUKVGXKUKVUCPPWCNN[

6JGKTǭHQEWUKPENWFGUGXCNWCVKPIHKTGTKUMUCPFPCVWTCN

ECVCUVTQRJGU9JGPICRUCTGKFGPVKHKGFTGEQOOGPFCVKQPU

CTGǭRTKQTKVKUGFDCUGFQPGZRGEVGFNQUUGU1XGTVJGRCUVHKXG

[GCTU+ORGTKCNJCUUWEEGUUHWNN[KORNGOGPVGFOQTGVJCP

ǭ(/)NQDCNPCVWTCNJC\CTFTGEQOOGPFCVKQPU

+PQWTVQDCEEQUWRRN[EJCKPYGCEVKXGN[RCTVKEKRCVGKPTGNKGH

CPFEQOOWPKV[UWRRQTVFWTKPIGZVTGOGYGCVJGTGXGPVU

CUǭRCTVQHQWTEQOOKVOGPVVQJGNRVQDCEEQHCTOGTUCEJKGXG

CǭFGEGPVUVCPFCTFQHNKXKPI+P(;YGEQNNCDQTCVGFYKVJ

UWRRNKGTUVQRTQXKFGTGNKGHKPVJGVQDCEEQITQYKPITGIKQPU

CHHGEVGFD[E[ENQPG(TGFFKGKP/Q\CODKSWG1WTGHHQTVU

HQEWUGFQPKORTQXKPICEEGUURTQXKFKPIHQQFTGNKGH

CPFǭGPJCPEKPIHCTOKPIKPHTCUVTWEVWTG

Related metrics and targets

• 9GJCXGCRQNKE[HQTQHQWTOCPWHCEVWTKPIUKVGUVQJCXG

DWUKPGUUEQPVKPWKV[RNCPUKPRNCEGVQOKVKICVGCP[RQVGPVKCN

KPVGTTWRVKQPVQQRGTCVKQPU

LINKS TO OUR ESG STRATEGY

TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE

2TQFWEVUWRRN[

 01##

TABLE 6

SEVERE HURRICANE RISK

Short Medium Long

Scenario materiality

o%

o%

+ORCEVRTGFKEVGFCUCTGUWNVQHQWT

ENKOCVGEJCPIGUVTCVGI[

Predicted impact

9JKNGUWRRN[EJCKPFKUTWRVKQPUCPFVJGKTKORCEVQPRTQFWEVKQP

ECRCEKV[EQWNFRQVGPVKCNN[NGCFVQFGETGCUGFTGXGPWGU

VJGǭCPCN[UKUKPFKECVGUVJCVUVQTOUCTGNKMGN[VQKPETGCUGKP

UGXGTKV[D[CRRTQZKOCVGN[QXGTVJG

century



9GJCXGUQOGUKVGUUWEJCUQWTHCEVQTKGUKP2WGTVQ4KEQ

&QOKPKECP4GRWDNKECPFVJG2JKNKRRKPGUYJKEJCTGURGEKHKECNN[

GZRQUGFVQCPKPETGCUKPITKUMQHUGXGTGJWTTKECPGU

&GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV

Associated opportunity

+ORTQXGFCFCRVCVKQPCPFOKVKICVKQPCVUKVGUFKTGEVN[KORCEV

KPUWTCPEGRTGOKWOU

Mitigating actions

9KVJKPQWTFKTGEVQRGTCVKQPUVJG)TQWROCKPVCKPUUWRRN[

EJCKPEQPVKPIGPE[RNCPUCPFKPUWTCPEGEQXGTCIGVQCFFTGUU

VJKUTKUM#FFKVKQPCNN[YGGZRNQTGCNVGTPCVKXGUQWTEKPIQRVKQPU

HQTQWTDTQCFGTVQDCEEQUWRRN[EJCKP

1WTKPUWTGT(/)NQDCNEQPFWEVUQPUKVGXKUKVUVQCPCN[UG

YKPFǭGZRQUWTGUYKVJCURGEKHKEHQEWUQPUKVGUNQECVGFKP

MPQYPJKIJYKPF\QPGU&WTKPIVJGUGGXCNWCVKQPU(/)NQDCN

CUUGUUGUVJGTGUKNKGPEGQHDWKNFKPIGPXGNQRGU6JKUKPENWFGU

GZCOKPKPIWRNKHVRTGUUWTGUQPTQQHU[UVGOUFGDTKUKORCEV

QPǭDWKNFKPIYCNNUCPFVJGGHHGEVUQHJKIJYKPFUQPQVJGT

GNGOGPVUUWEJCUFQEMFQQTU(/)NQDCNRTQXKFGURTCEVKECN

TGEQOOGPFCVKQPUVQGPJCPEGTGUKNKGPEGGPEQORCUUKPIDQVJ

RJ[UKECNKORTQXGOGPVUCPFJWOCPGNGOGPVRTQEGFWTGU

UWEJǭCUGOGTIGPE[TGURQPUGRNCPPKPI

Related metrics and targets

• 9GJCXGCRQNKE[HQTQHQWTOCPWHCEVWTKPIUKVGUVQ

JCXGDWUKPGUUEQPVKPWKV[RNCPUKPRNCEGVQOKVKICVGCP[

RQVGPVKCNKPVGTTWRVKQPVQQRGTCVKQPU

• 9GYKNNOGCUWTGVJGRGTEGPVCIGQHVQDCEEQNGCHRTQFWEGF

KPǭJKIJTKUMNQECVKQPUYKVJCNVGTPCVGUQWTEKPIQRVKQPU

LINKS TO OUR ESG STRATEGY

TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE

2TQFWEVUWRRN[

PHYSICAL RISKS:

ACUTE WEATHER

YYYKORGTKCNDTCPFURNEEQO 83

TABLE 7

POLICY AND LEGAL

Short Medium Long

Scenario materiality

o%

o%

+ORCEVRTGFKEVGFCUCTGUWNVQHQWT

ENKOCVGEJCPIGUVTCVGI[

Predicted impact

6JGGOGTIGPEGQHTGIWNCVKQPUNKMGECTDQPVCZCVKQPCPFECTDQP

RTKEKPIOGEJCPKUOUOC[NGCFVQKPETGCUGFEQUVU

&GURKVGVJKUVJGUGTKUMUCTGPQVFGGOGFHKPCPEKCNN[UKIPKHKECPV

Associated opportunity

#VTCPUKVKQPVQTGPGYCDNGGPGTI[ECPCXQKFVJGUGEQUVU

UGGǭQWTENKOCVGTGNCVGFQRRQTVWPKV[TGPGYCDNGGPGTI[UQWTEKPI

Mitigating actions

6QCFFTGUUVJGKORCEVQHECTDQPRTKEKPICPFGOGTIKPITGIWNCVKQPU

YGTGN[QPQWTENKOCVGEJCPIGUVTCVGI[URGEKHKECNN[ǭCKOKPI

VQǭCEJKGXG0GV<GTQKPQWTFKTGEVQRGTCVKQPUD[+Pǭ

YGǭTGGXCNWCVGFVJGKORCEVQHECTDQPRTKEKPIEQPUKFGTKPI

VJGǭINQDCNGEQPQO[ũUKORTQXGFCDKNKV[VQVTCPUKVKQPKPENWFKPI

CǭJKIJGTUJCTGQHTGPGYCDNGGPGTI[KPVJGǭGPGTI[OKZ

+P(;QWTHCEVQT[KP$GNIKWOTGURQPFGFVQNQECNTGIWNCVKQPU

D[KPUVCNNKPIUQNCTRCPGNUQPKVUTQQH6JGHCEVQT[RTQRQUGFVJKU

KPKVKCVKXGYKVJUWRRQTVHTQO)NQDCNGPIKPGGTKPI6JGUQNCTRCPGNU

PGEGUUCT[VQOGGVVJGTGIWNCVKQPJCXGDGGPCRRTQXGF

VJTQWIJQWTDWUKPGUUCRRTQXCNRNCPU[UVGO

Related metrics and targets

• VTCEGCDNGTGPGYCDNGRWTEJCUGFITKFGNGEVTKEKV[

• TGPGYCDNGGPGTI[

LINKS TO OUR ESG STRATEGY

TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE

'PXKTQPOGPV

 2NGCUGTGHGTVQVJG4GRQTVKPI%TKVGTKCFQEWOGPVHQTOGVJQFFGHKPKVKQPCPFUEQRG

TABLE 8

MARKET

Short Medium Long

Scenario materiality

o%

o%

+ORCEVRTGFKEVGFCUCTGUWNVQHQWT

ENKOCVGEJCPIGUVTCVGI[

Predicted impact

6JGCPVKEKRCVGFKPETGCUGKPQWTUWRRNKGTUũEQUVDCUGFWGVQ

ECTDQPVCZCVKQPCPFRJ[UKECNTKUMUOC[KORCEVOCVGTKCNU

EQUVUǭHQTDQVJPQPVQDCEEQOCVGTKCNU06/CPFVQDCEEQNGCH

6JGUGEQUVKPETGCUGUEQWNFCTKUGHTQOJKIJGTQRGTCVKPI

GZRGPUGUHQTTCYOCVGTKCNUWRRNKGTU

While the absolute risk related to increased materials cost

KUǭUKIPKHKECPVVJGCEEWOWNCVGFXCNWGQXGTVJGPGZVFGECFG

KUǭRTQLGEVGFVQTGOCKPDGNQYQHQWT06/CPFVQDCEEQ

NGCHǭGZRGPFKVWTGKHPQCFFKVKQPCNOKVKICVKPIOGCUWTGU

CTGǭKORNGOGPVGF

Associated opportunity

6JGRTGUGPEGQH0GV<GTQIQCNUVJTQWIJQWVQWTUWRRN[EJCKP

QHHGTUCPQRRQTVWPKV[HQTEQUVCXQKFCPEGKPOCVGTKCNUQWTEKPI

#FFKVKQPCNN[KP(;QWTTGXGPWGHTQORTQFWEVURTQFWEGFCV

TGPGYCDNGGPGTI[UKVGUTGCEJGF

Mitigating actions

$[GZGEWVKPIQWTENKOCVGEJCPIGUVTCVGI[VQDG0GV<GTQ

D[ǭYGGZRGEVVQUKIPKHKECPVN[TGFWEGOCVGTKCNEQUVU

GZRQUWTGVQECTDQPRTKEKPI1WTEQNNCDQTCVKQPYKVJRCTVPGTU

VQǭCFFTGUU5EQRGGOKUUKQPURNC[UCETWEKCNTQNGKPCEJKGXKPI

VJKUIQCN+P(;YGHQEWUGFQPCEJKGXKPIQWTUWRRNKGT

GPICIGOGPVVCTIGVVQGPICIGQHQWT2WTEJCUGF)QQFU

CPFǭ5GTXKEGUUWRRNKGTUD[URGPFVQEQOOKVVQUEKGPEGDCUGF

VCTIGVU9GCNUQKPFGRGPFGPVN[CUUWTGFQWT2WTEJCUGF)QQFU

CPF5GTXKEGUGOKUUKQPUCEEQWPVKPIOGVJQFQNQI[KP(;

RNGCUGUGGQWTENKOCVGEJCPIGRCIGUVQHQTOQTGFGVCKN

9GJCXGRWDNKUJGFCEQORTGJGPUKXG%NKOCVG6TCPUKVKQP

2NCP



VJCVGPEQORCUUGURQNKE[GPGTI[VGEJPQNQI[CPFQVJGT

RCVJYC[UCURCTVQHQWTENKOCVGEJCPIGUVTCVGI[CPFKPENWFGU

QWT5EQRGGOKUUKQPU

9GJCXGGZRCPFGFVJGPWODGTQHUWRRNKGTUKPXKVGFVQTGURQPF

VQVJG%&2UWRRN[EJCKPUWTXG[HTQOVQKP(;

Related metrics and targets

• QHQWT2WTEJCUGF)QQFUCPF5GTXKEGUUWRRNKGTUD[URGPF

YKNNEQOOKVVQUEKGPEGDCUGFVCTIGVU

• UWRRNKGTUKPXKVGFVQ%&2UWRRN[EJCKP

• QHQWTPGVTGXGPWGKUHTQORTQFWEVURTQFWEGFKP

CǭTGPGYCDNGGPGTI[UKVG

• +P(;YGYKNNGZRNQTGJQYVQCFF0GV<GTQENCWUGUKPVQ

QWTǭPGYǭEQPVTCEVU

LINKS TO OUR ESG STRATEGY

TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE

'PXKTQPOGPV

 2NGCUGTGHGTVQQWT%NKOCVG6TCPUKVKQP2NCPCXCKNCDNGQPVJGJGCNVJKGTHWVWTGU

RCIGQHQWTYGDUKVG

TRANSITION

RISKS

6JGVTCPUKVKQPTKUMUKFGPVKHKGFKPQWTENKOCVGUEGPCTKQ

CPCN[UKUǭCTGKPVGITCVGFKPVQQWTTKUMHTCOGYQTMCPFGHHGEVKXGN[

EQOOWPKECVGFYKVJVJGTGNGXCPVUKVGUCPFHWPEVKQPU1WTENKOCVG

EJCPIGUVTCVGI[KUENQUGN[NKPMGFVQVJGUGVTCPUKVKQPTKUMU

RCTVKEWNCTN[HQEWUKPIQPVYQRTKOCT[CTGCUECTDQPVCZCVKQPHQT

QWTQRGTCVKQPUCPFOCVGTKCNEQUVUCUUQEKCVGFYKVJQWTRTQFWEVU

RCEMCIKPICPFNGCHUWRRN[EJCKP+P6CDNGYGQWVNKPGVJG

RQVGPVKCNHKPCPEKCNKORCEVQHVJGUGVTCPUKVKQPCNTKUMU

YKVJǭHWTVJGTFGVCKNURTQXKFGFKP6CDNGUCPF

ESG REVIEW continued

4GHGTVQRCIGHQTOQTGFGVCKNUQPNKPMUVQQWT

'5)UVTCVGI[CPFRCIGHQTJQYYGOCPCIGTKUM

Lower impact

Medium impact

High impact

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU84

TABLE 9

ENERGY SOURCING

Short Medium Long

Scenario materiality

o%

o%

+ORCEVRTGFKEVGFCUCTGUWNVQHQWT

ENKOCVGEJCPIGUVTCVGI[

Predicted impact

$[NGXGTCIKPIQWTENKOCVGEJCPIGUVTCVGI[YGECPOKVKICVG

EQUVUCUUQEKCVGFYKVJECTDQPVCZYKVJKPQWTQRGTCVKQPU

+P(;DQVJVJG7-CPF)GTOCP[KORNGOGPVGFECTDQP

VCZGUǭQPGPGTI[UQWTEGU6JGUGEQWPVTKGUCTG6KGTOCTMGVU

YJGTGYGJCXGUKVGUKPENWFKPICHCEVQT[KP)GTOCP[

6JGVQVCNGZRQUWTGVQECTDQPVCZKP(;COQWPVUVQ

QHǭQWTGPGTI[ǭGZRGPFKVWTG

Actions

5WEEGUUHWNN[KORNGOGPVKPIQWTENKOCVGEJCPIGUVTCVGI[CNNQYU

WUVQOCZKOKUGVJGDGPGHKVUQHVJGITGGPGPGTI[VTCPUKVKQP

CPFǭCXQKFECTDQPEQUVUKPVJGo%ENKOCVGUEGPCTKQ

9GJCXGFGXGNQRGFCFGECTDQPKUCVKQPINKFGRCVJCPF

VTCPUKVKQPRNCPVJCVOCRUQWTGOKUUKQPUTGFWEVKQPGHHQTVU

VQYCTFUCEJKGXKPI0GV<GTQ

(QTHWTVJGTFGVCKNUTGHGTVQQWT'5)4GXKGYRCIGCPF

GZRNQTGVJG'5)2GQRNGCPF2NCPGV2GTHQTOCPEG5WOOCT[

QPQWTYGDUKVG

+PDQVJUEGPCTKQUQWTUVTCVGIKECRRTQCEJVQTGPGYCDNGGPGTI[

RTQEWTGOGPVKUGZRGEVGFVQRQUKVKXGN[KORCEVEQUVOCPCIGOGPV

*QYGXGTYGTGOCKPXKIKNCPVCDQWVVJGRQVGPVKCNKORCEVQH

ECTDQPRTKEGUCPFGXCNWCVGVJGDWUKPGUUũUCDKNKV[VQOCPCIG

QTǭRCUUVJTQWIJVJGUGEQUVU

%WTTGPVN[CNNUKVGUGZEGRV6CKYCPCTGRWTEJCUKPIVTCEGCDNG

TGPGYCDNGITKFGNGEVTKEKV[1WTRTQCEVKXGCRRTQCEJCKOUVQ

NKOKVEQUVUCPFOKVKICVGKORCEVCUGXKFGPEGFD[VJG

UKIPKHKECPVKPETGCUGKPVTCEGCDNGTGPGYCDNGITKFGNGEVTKEKV[

.QQMKPICJGCFKP(;YGRNCPVQEQPFWEVCRKNQVVQGPJCPEG

QWTWPFGTUVCPFKPICPFECRCDKNKVKGUTGNCVGFVQRQYGTRWTEJCUG

CITGGOGPVUHWTVJGTUVTGPIVJGPKPIQWTTGPGYCDNGGPGTI[

RTQEWTGOGPVGHHQTVU

Related metrics and targets

• %CTDQPVCZEQUVGZRQUWTGYKVJKP(;KUQHINQDCN

GPGTI[ǭURGPF

LINKS TO OUR ESG STRATEGY

TYPE OF RISK ACCORDING TO OUR GLOBAL RISK STRUCTURE

'PXKTQPOGPV

CLIMATE-RELATED

OPPORTUNITIES

+P6CDNGYGUGVQWVVJGRQVGPVKCNHKPCPEKCNKORCEV

QHǭCǭENKOCVGTGNCVGFQRRQTVWPKV[GPGTI[UQWTEKPI

6JKUǭKUǭGZRCPFGFOQTGKPǭ6CDNG

IMPACT OF RISKS IN FINANCIAL REPORTING

+ORGTKCN$TCPFUũNQPIVGTOHKPCPEKCNRNCPPKPIURCPUC

VJTGG[GCTRGTKQF1HVJGOQUVOCVGTKCNTKUMUKFGPVKHKGF

6CDNGUǭQPN[/CTMGVJCUDGGPKFGPVKHKGFCUUKIPKHKECPV

9GǭCPVKEKRCVGVJCVENKOCVGTGNCVGFTKUMUYKNNPQVOCVGTKCNN[

KORCEVVJG)TQWRYKVJVJGNCTIGUVTKUMRTQLGEVGFVQTGOCKP

DGNQYǭcOKNNKQPHQTCPFcOKNNKQPQXGTVJGVJTGG[GCT

RGTKQF6JKUTKUMRTKOCTKN[RGTVCKPUVQKPETGCUGFQRGTCVKPI

EQUVUCUUQEKCVGFYKVJ06/CPFVQDCEEQNGCHECNEWNCVGFDCUGF

QPVJGOCZKOWOHKPCPEKCNKORCEV/(+TGUWNVKPIHTQOVJG

o%UEGPCTKQ

9GEWTTGPVN[JCXGPQEQOOKVVGFNKCDKNKVKGUYKVJVJKTF

RCTVKGUǭTGNCVGFVQENKOCVGKORCEVVJCVUJQWNFDGRTQXKFGFHQT

*QYGXGTHQTHKPCPEKCNUVCVGOGPVCTGCUEQXGTKPIRGTKQFU

DG[QPFQWTVJTGG[GCTHKPCPEKCNRNCPPKPICPF+ORGTKCN$TCPFUũ

ENKOCVGTGNCVGFTKUMJQTK\QPQH[GCTUYGJCXGEQPUKFGTGF

VJG/(+QHOCVGTKCNENKOCVGTGNCVGFTKUMUURGEKHKEVQVJQUGCTGCU

9GCUUGUUQWTOCTMGV/(+KPIQQFYKNNCPFKPVCPIKDNGCUUGVU

KORCKTOGPVPQVGCUYGNNCUKPQWTGXCNWCVKQPQHVJG

TGEQXGTCDKNKV[QHFGHGTTGFVCZCUUGVUPQVGUWOOCTKUGF

QPǭRCIG6JG&KTGEVQTUũCUUGUUOGPVQHENKOCVGEJCPIG

KORCEVKUKPENWFGFKPVJGIQKPIEQPEGTPUGEVKQPCPFXKCDKNKV[

FKUENQUWTGURCIG+P(;YGKPEQTRQTCVGFVJGUG

EQPUKFGTCVKQPUKPVQQWTDWUKPGUURNCPUGPUWTKPIENKOCVGTGNCVGF

TKUMUCPFQRRQTVWPKVKGUCTGDCNCPEGFCNQPIUKFGQVJGTGNGOGPVU

+HPGYENKOCVGTGNCVGFTKUMUQTQRRQTVWPKVKGUGOGTIGYGTGOCKP

committed to adjusting our strategy accordingly and

KPVGITCVKPITGNGXCPVEQUVUKPVQQWTRTQHKVCPFNQUU

ASSUMPTIONS

6JGCPCN[UGUCUUWOGPQCEVKQPKUVCMGPVQFGECTDQPKUGYKVJKP

QWTUWRRN[EJCKPQTQRGTCVKQPU#FFKVKQPCNN[VJG[FQPQVCEEQWPV

HQTKPHNCVKQPHWVWTGIQXGTPOGPVRQNKEKGUQTUWDUKFKGUQTǭGZKUVKPI

OKVKICVKQPGHHQTVU/CVGTKCNEQUVUKPENWFGVJGGZRGPUGU

CUUQEKCVGFYKVJRJ[UKECNTKUMUOCVGTKCNKUKPIKPVJGǭUWRRN[EJCKP

/QXKPIHQTYCTFYGYKNNENQUGN[OQPKVQTVJGGXQNXKPIKORCEV

QHENKOCVGTGNCVGFTKUMUCPFQRRQTVWPKVKGU1WTRNCPKPENWFGU

WRFCVKPIVJKUCPCN[UKUKP#UYGJCXGFQPGRTGXKQWUN[

YGǭYKNNTGXKGYVJGQWVEQOGUCPFKPEQTRQTCVGVJGOKPVQ

QWTǭENKOCVGEJCPIGUVTCVGI[CPFFGECTDQPKUCVKQPRNCPPKPI

CUǭPGGFGF

FUTURE REQUIREMENTS

6JGNCPFUECRGQHTGIWNCVQT[TGSWKTGOGPVUCPFCXCKNCDNG

UVCPFCTFUHQTENKOCVGTGNCVGFTKUMUCPFQRRQTVWPKVKGUKU

EQPVKPWCNN[GXQNXKPI#UCNCTIG7-NKUVGFEQORCP[YKVJ

'WTQRGCPUWDUKFKCTKGUYGCTGEQOOKVVGFVQCEJKGXKPI%54&

%QTRQTCVG5WUVCKPCDKNKV[4GRQTVKPI&KTGEVKXGEQORNKCPEG

6JKUOGCPUYGYKNNTGRQTVCICKPUVVJG'545'WTQRGCP

5WUVCKPCDKNKV[4GRQTVKPI5VCPFCTFUKPVJGEQOKPI[GCTU

#FFKVKQPCNN[YGENQUGN[OQPKVQTVJGFGXGNQROGPVQHQVJGT

ENKOCVGTGNCVGFFKUENQUWTGTGSWKTGOGPVUUWEJCU+(455CPF5

1WTKPVGPVKQPKUVQYQTMVQYCTFUOGGVKPIVJGUGUVCPFCTFUCUYGNN

+VKUCUCTGUWNVQHVJKUVJCVVJGKORCEVHQTVTCPUKVKQPYKVJKPC

ǭFGITGGUEGPCTKQKUJKIJGT

6JG7-ũU6TCPUKVKQP2NCP6CUMHQTEGJCUDGGPKPUVTWOGPVCN

KPǭQWVNKPKPIVJGTGSWKTGOGPVUHQTCVTCPUKVKQPRNCP9GJCXG

RWDNKUJGFQWTHKTUVECTDQPVTCPUKVKQPRNCPVJKU[GCTCJGCFQH

OCPFCVQT[TGRQTVKPICPFCKOVQYQTMVQYCTFUHWNN[EQORN[KPI

YKVJVJGTGEQOOGPFCVKQPU9KVJCNN'5)TGNCVGFTGIWNCVKQPU

CPFTGSWKTGOGPVUYGTGOCKPXKIKNCPVHQNNQYKPIKPVGTPCVKQPCN

UVCPFCTFUFGXGNQROGPVENQUGN[VQGPJCPEGQWTCEVKQPU

CPFǭFKUENQUWTGU

(QTRJ[UKECNTKUMUYGCPVKEKRCVGCJKIJGTKORCEVYKVJKPVJG

ǭFGITGGUEGPCTKQCUOQTGGZVTGOGYGCVJGTKURTGFKEVGF

9GǭYKNNEQPVKPWGVQOQPKVQTVJKUKPHWVWTG[GCTU

YYYKORGTKCNDTCPFURNEEQO 85

+PQWTRTKPEKRCNTKUMUVTWEVWTGYGCEMPQYNGFIG

TKUMUTGNCVGFVQVJGKORCEVQHDWUKPGUU

QRGTCVKQPUQPVJGPCVWTCNGPXKTQPOGPVYJGTG

YGQRGTCVGCUHWPFCOGPVCNVQQRGTCVKQPU

9GCNUQGPUWTGVJCVQVJGTRTKPEKRCNTKUMUCNUQVCMGKPVQ

CEEQWPVVJGTKUMUCPFQRRQTVWPKVKGUCUUQEKCVGFYKVJENKOCVG

EJCPIGCUCRRTQRTKCVG

#UUGUUOGPVD[GCEJTKUMQYPGTGPUWTGUVJCVYGCEEWTCVGN[

FGVGTOKPGOCVGTKCNKV[CPFKPVGITCVGQYPGTUJKRQHCUUQEKCVGF

ENKOCVGTGNCVGFTKUMUCPFQRRQTVWPKVKGUKPVQVJGDTQCFGTDWUKPGUU

9KVJUWRRQTVHTQOVJGINQDCN'5)VGCOTKUMQYPGTUTGXKGY

VJGǭRQVGPVKCNECWUGUCPFNKMGNKJQQFQHCP[ENKOCVGTGNCVGF

TKUMUOCVGTKCNKUKPI(QTHWTVJGTFGVCKNUQPQWTTKUMOCPCIGOGPV

RTCEVKEGUCPFJQYTKUMUCTGYGKIJGFCICKPUVGCEJQVJGT

RNGCUGTGHGTVQVJGFGFKECVGFTKUMUGEVKQPQPRCIGU

6JG)TQWRũUHQTOCNCRRTQCEJVQTKUMOCPCIGOGPVKPENWFGU

DKCPPWCNWRFCVGUVQVJG$QCTFTGICTFKPIVJGTGUWNVUQHVJG

)TQWRTKUMCUUGUUOGPVKPENWFKPIQWTRTKPEKRCNTKUMU

1WTTKUMOCPCIGOGPVHTCOGYQTMURGEKHKGUCEEQWPVCDKNKV[

HQTǭKFGPVKH[KPICUUGUUKPICPFOKVKICVKPITKUMUVJTQWIJQWV

VJGǭQTICPKUCVKQP6JKUHTCOGYQTMCNKIPUYKVJVJGŬVJTGGNKPGU

QHFGHGPEGŭOQFGNCUQWVNKPGFHQTENKOCVGEJCPIGKPVJG

IQXGTPCPEGFKCITCOQPRCIG

#UVJGUGEQPFNKPGVJG)NQDCN'5)VGCOJCUCEEQWPVCDKNKV[

VQǭCUUGUUENKOCVGTGNCVGFTKUMUKFGPVKHKGFD[VJGHKTUVNKPG

&WTKPIVJKURTQEGUUVJGHKTUVNKPGCNUQRTQRQUGVQOKVKICVG

VTCPUHGTCEEGRVQTEQPVTQNENKOCVGTGNCVGFTKUMUCRTQEGUU

VJCVǭKUTGXKGYGFCPFIQXGTPGFD[DQVJVJGUGEQPFCPFVJKTF

NKPGCUCRRTQRTKCVG9GUGVQWVQWTRTQEGUUHQTKFGPVKH[KPI

CUUGUUKPICPFOCPCIKPIENKOCVGTGNCVGFTKUMUQPRCIG

+P(;)TQWR+PVGTPCN#WFKVEQPFWEVGFCEQORTGJGPUKXG

CWFKVǭQHQWTENKOCVGEJCPIGUVTCVGI[6JGKTCUUGUUOGPV

EQXGTGFEQORNGVGPGUUIQXGTPCPEGRTQITGUUCPFKPVGITCVKQP

KPVQDWUKPGUUHWPEVKQPU6JGCWFKVTGEGKXGFVJGJKIJGUV

CUUWTCPEGTCVKPIQHŬUWDUVCPVKCNŭ#FFKVKQPCNN[YGRGTKQFKECNN[

GPICIGCǭVJKTFRCTV[VQKPFGRGPFGPVN[XCNKFCVGVJGTKUMU

KFGPVKHKGFD[ǭVJGDWUKPGUU

(QTVJKU6%(&TGRQTVYGJCXGKPVTQFWEGFCHQWTVJNKPGQH

FGHGPEGD[UGGMKPICUUWTCPEGCICKPUVVJG7-.KUVKPI4WNGU

HTQOCVJKTFRCTV[+PHQTOWNCVKPIVJKUTGRQTVYGJCXGCNUQ

HCEVQTGFENKOCVGTGNCVGFTKUMUCPFQRRQTVWPKVKGUKPVQQWT

DWUKPGUURNCPUYKVJCHQEWUQPVJGKTGZRGEVGFKORCEVHTQO

(;VQ(;

Principal risk

Product supply

4KUMRTQHKNG

5VTCVGIKEKORCEV

• (QEWUKPIQPQWTRTKQTKV[OCTMGVU

• $WKNFKPICVCTIGVGF0)2DWUKPGUU

• &TKXKPIXCNWGHTQOQWTDTQCFGTRQTVHQNKQ

Environment

4KUMRTQHKNG

5VTCVGIKEKORCEV

• (QEWUKPIQPQWTRTKQTKV[OCTMGVU

• 5KORNKHKGFCPFGHHKEKGPVQRGTCVKQPU

Climate change is considered within our risk

management structure 47-49

2TQFWEVUWRRN[

'PXKTQPOGPV

ESG REVIEW continued

#VQWTHCEVQT[KP)TGGPUDQTQ0QTVJ%CTQNKPC75#

NQECVGFǭKPǭCPCTGCYJGTGJWTTKECPGUTGRTGUGPVCTKUM

YGǭJCXGGPJCPEGFQWTGOGTIGPE[RTQEGFWTGUVQKPENWFGC

URGEKHKERTQVQEQNHQTGZVGTPCNENKOCVGTGNCVGFGOGTIGPEKGU

6JKURTQVQEQNKFGPVKHKGUVJGUCHGUVNQECVKQPUHQTGORNQ[GGU

CPFXKUKVQTUVQUGGMUJGNVGT#FFKVKQPCNN[YGEQPFWEV

DKCPPWCNRTCEVKEGUGUUKQPUVQGPUWTGVJCVGXGT[QPGECP

HQNNQYVJGRTQVQEQNUYKHVN[CPFUCHGN[

1WT)TQWRTKUMCUUGUUOGPVUVCPFCTFTGKPHQTEGUVJG

KORQTVCPEGQHEQPUKFGTKPIENKOCVGTGNCVGFGXGPV

RTQVQEQNUCETQUUCNNUKVGUCUCRRTQRTKCVG

4GHGTVQRCIGHQTOQTGFGVCKNUQP

TKUMRTQHKNGCPFUVTCVGIKEKORCEV

CLIMATE-RELATED

RISK

MANAGEMENT

Risk profile change

4KUMRTQHKNGKPETGCUKPI

4KUMRTQHKNGWPEJCPIGF

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU86

LOGISTA

+ORGTKCN$TCPFU2.%JCUCPCN[UGFCNNKVUCUUGVUKPVJG/(+

CPCN[UKUGZEGRVHQT.QIKUVCYJKEJQRGTCVGUKPFGRGPFGPVN[

VQǭRTQVGEVEQOOGTEKCNUGPUKVKXKVKGU#UUWEJYGEQPUKFGT

.QIKUVCũUUGRCTCVGCPCN[UKUFKUENQUKPICUWOOCT[JGTG

.QIKUVCũUUWUVCKPCDKNKV[RQNKE[UGVUVJGRKNNCTUHQTVJG

OCPCIGOGPVQHUWUVCKPCDKNKV[KPENWFKPIENKOCVGTGNCVGFTKUMU

CPFQRRQTVWPKVKGU6JKUUVTWEVWTGUGVQWVDGNQYECPCNUQGZRNCKP

VJGTGNCVKQPUJKRDGVYGGP+ORGTKCN$TCPFUCPF.QIKUVCCUTGICTFU

VQ'5)KPENWFKPIENKOCVGTGNCVGFOCVVGTU

6JG$QCTFQH&KTGEVQTUCRRTQXGFVJGUWUVCKPCDKNKV[RQNKE[

6JKUǭDQF[KUWNVKOCVGN[TGURQPUKDNGHQTUWRGTXKUKPIVJG

QDUGTXCPEGQHVJGRQNKE[VJTQWIJVJG#WFKV%QPVTQNCPF

5WUVCKPCDKNKV[%QOOKVVGG

6JG$QCTFQH&KTGEVQTUVCMGUKPVQEQPUKFGTCVKQPUWUVCKPCDKNKV[

KUUWGUYKVJTGICTFVQVJGFGVGTOKPCVKQPQHVJGTKUMEQPVTQNCPF

OCPCIGOGPVRQNKE[CPFVJGUWRGTXKUKQPQHVJGKPVGTPCN

information and control systems.

(KXGGORNQ[GGUQH+ORGTKCN$TCPFUUKVQPVJG.QIKUVCDQCTF

VJG%JKGH5VTCVGI[CPF&GXGNQROGPV1HHKEGTVJG%QTRQTCVG

&GXGNQROGPV&KTGEVQTVJG)TQWR(KPCPEG&KTGEVQTVJG&KTGEVQT

QH5VTCVGI[HQT)NQDCN5WRRN[%JCKPCPFVJG5GPKQT+PXGUVQT

4GNCVKQPU/CPCIGTCNNQHYJQOJCXGTGICTFVQ+ORGTKCNũU

ENKOCVGEJCPIGUVTCVGI[

6JG&KTGEVQTQH5VTCVGI[HQT)NQDCN5WRRN[%JCKPKUCNUQCVQRKE

QYPGTHQTENKOCVGEJCPIGCV+ORGTKCN#P[ENKOCVGTGNCVGF

TKUMUTCKUGFVQVJGDQCTFQH.QIKUVCCTGTGRQTVGFVQVJG

QXGTCTEJKPI+ORGTKCN$QCTFVJTQWIJVJGUGTGRTGUGPVCVKXGU

HQNNQYKPIVJGUVTWEVWTGUGVQWVCDQXG

6JG+ORGTKCN$TCPFU)NQDCN'5)VGCOTGURQPUKDNGHQTOCPCIKPI

ENKOCVGTKUMCPFQRRQTVWPKV[CPFVJG)TQWRNGXGN6%(&TGRQTV

JCURTGRCTGFVJKUFKUENQUWTGYKVJVJGVGCOUTGURQPUKDNGHQT

VJGOCPCIGOGPVQHENKOCVGTKUMYKVJKP.QIKUVC

.QIKUVCOCKPVCKPUENQUGNKPMUDGVYGGPKVUKPXGUVQTTGNCVKQPU

VGCOCPFVJQUGCV+ORGTKCN$TCPFU1WTINQDCNKPUWTCPEG

RTQXKFGT(/)NQDCNCNUQUGTXGU.QIKUVCKPCOCPPGTEQPUKUVGPV

YKVJVJGFKUENQUWTGOGPVKQPGFCDQXG#FFKVKQPCNN[.QIKUVC

QWVNKPGUKVUOGVJQFUHQTOCPCIKPIENKOCVGTGNCVGFTKUM

VJTQWIJKVUUWUVCKPCDKNKV[RQNKE[

6JG5WUVCKPCDKNKV[%QOOKVVGGCV.QIKUVCKUTGURQPUKDNGHQT

RTGRCTKPICPFEQQTFKPCVKPIUWUVCKPCDKNKV[UVTCVGI[RNCPUKP

EQNNCDQTCVKQPYKVJ.QIKUVCũUDWUKPGUUGU6JG5WUVCKPCDKNKV[

%QOOKVVGGTGRQTVUCVNGCUVVYKEGC[GCTQPRTQITGUUQH

ENKOCVGTGNCVGFIQCNUCPFCUUQEKCVGF-2+UVQVJG'ZGEWVKXG

%QOOKVVGGCPFVJG#WFKV%QPVTQNCPF5WUVCKPCDKNKV[%QOOKVVGG

(WTVJGTOQTGVJG%QTRQTCVG(KPCPEGHWPEVKQPGPUWTGUVJG

KPVGITKV[QHHKPCPEKCNCPFPQPHKPCPEKCNKPHQTOCVKQPHQTDQVJ

VJG%QORCP[CPFKVUUWDUKFKCTKGU+VCNUQOCPCIGUTKUMU

CUUQEKCVGFYKVJHKPCPEKCNCPFPQPHKPCPEKCNCURGEVU

LOGISTA’S RISKS AND OPPORTUNITIES

.QIKUVCEQPFWEVGFCUGRCTCVGUEGPCTKQCPCN[UKUHQTo%CPF

o%RCVJYC[UCNKIPGFYKVJ4%2CPF4%2KPCEEQTFCPEG

YKVJVJG6%(&TGEQOOGPFCVKQPU6JKUCPCN[UKUGXCNWCVGU

ENKOCVGTGNCVGFRJ[UKECNCPFVTCPUKVKQPCNTKUMUCUYGNNCU

QRRQTVWPKVKGUCETQUUUJQTVVGTO[GCTUOGFKWOVGTO

[GCTUCPFNQPIVGTOOQTGVJCP[GCTUJQTK\QPU

.QIKUVCũUCPCN[UKUKPEQTRQTCVGURJ[UKECNUEGPCTKQUHTQO

VJGǭ+PVGTIQXGTPOGPVCN2CPGNQP%NKOCVG%JCPIG+2%%

4%2ǭCPF4%2CPFVTCPUKVKQPUEGPCTKQU56'25CPF#25

HTQOVJG+PVGTPCVKQPCN'PGTI[#IGPE[ũU9QTNF'PGTI[1WVNQQM

+'#ǭ9'16JG[GXCNWCVGVJGKTENKOCVGTGNCVGFTKUMUHQNNQYKPI

CTKUMOGVJQFQNQI[YJKEJVCMGUKPVQCEEQWPVUGXGTCNYGKIJVGF

ETKVGTKCVQTGCEJCHKPCNTKUMKORCEV9KVJKPVJGETKVGTKCVJG[

KPENWFGGEQPQOKECNOGVTKEUTGRWVCVKQPCNNGICNCPFUVTCVGIKE

ETKVGTKCCOQPIQVJGTU6JGTGUWNVKPITKUMUHQT.QIKUVCCTG

PQVǭKPENWFGFKP6CDNGQPRCIGDWVCTGKP.QIKUVCũUQYP

#PPWCN4GRQTVU0QPGQHVJGUGTKUMUCTGEQPUKFGTGFHKPCPEKCNN[

UKIPKHKECPVCV+ORGTKCN$TCPFUNGXGNCUVJGTKUMXCNWGKUUOCNN

EQORCTGFVQVJG)TQWRUTGXGPWG

Significance

over 0-3 years

Risk 2

2J[UKECNTKUMU *GCX[RTGEKRKVCVKQP

6TCPUKVKQPCNTKUMU Emerging regulation

6GEJPQNQI[

Significant High impact on financial value, Legal and Compliance,

Processes, Health and Safety, Reputational and Strategic

and a high probability of occurrence

Very significant Very high impact on financial value, Legal and Compliance,

Processes, Health and Safety, Reputational and Strategic

and a high probability of occurrence

YYYKORGTKCNDTCPFURNEEQO 87

METRICS AND TARGETS

1WTENKOCVGEJCPIGVCTIGVURTGUGPV

DWUKPGUUǭQRRQTVWPKVKGUGPGTI[UCXKPI

KPKVKCVKXGUCPFGHHKEKGPE[RTQITCOOGU

ECPǭJCXGDQVJGPXKTQPOGPVCNDGPGHKVU

CPFǭTGUWNVKPEQUVUCXKPIU

5KPEGYGJCXGJCF5EQRGCPFVCTIGVUCNKIPGFYKVJ

VJGPGEGUUCT[TGFWEVKQPUVQNKOKVENKOCVGYCTOKPIVQo%

CRRTQXGFD[VJG5EKGPEG$CUGF6CTIGVUKPKVKCVKXG5$6K

+P(;YGTCKUGFQWTCODKVKQPUD[LQKPKPIVJG$WUKPGUU

#ODKVKQPHQTo%4CEGVQ<GTQKPKVKCVKXGNGFD[VJG5$6K

+Pǭ(;VJG5$6KXCNKFCVGFQWTPGYVCTIGVU

YJKEJCNKIP

YKVJǭVJGo%2CTKU#ITGGOGPV9GTGRQTVQPRGTHQTOCPEG

CICKPUVVJGUGCPFQVJGTENKOCVGEJCPIGVCTIGVUKPQWT'5)

RCIGU0QVCDN[QWTUVTCVGI[HQEWUGUQPCEJKGXKPICDUQNWVG

TGFWEVKQPUTCVJGTVJCPTGN[KPIQPECTDQPETGFKVU

$G[QPFVJGFKUENQUGFOGVTKEUCPFVCTIGVUTGNCVGFVQURGEKHKETKUMU

YGCNUQHQEWUQPQXGTCTEJKPICTGCUVJCVUWRRQTVQWTENKOCVG

EJCPIGUVTCVGI[CPFVJGOCPCIGOGPVQHENKOCVGTGNCVGFTKUMU

CPFQRRQTVWPKVKGU

9GJCXGEQPUKUVGPVN[FKUENQUGFGOKUUKQPUKPVGPUKV[CPFVTCEMGF

GPGTI[KPVGPUKV[CUMG[OGVTKEUVQOGCUWTGQWTENKOCVG

RGTHQTOCPEG1WTQPIQKPIOQPKVQTKPICNNQYUHQTCDCNCPEGF

TGXKGYQHQWTRTQITGUUCUYGUVTKXGHQTCDUQNWVGGOKUUKQPU

TGFWEVKQP(QTCFFKVKQPCNENKOCVGTGNCVGFOGVTKEUCPFVCTIGVU

related to our climate strategy, including intensity metrics,

GOKUUKQPUGPGTI[YCUVGCPFYCVGTRNGCUGUGGQWTENKOCVG

EJCPIGRCIGUVQQWT'5)2GQRNGCPF2NCPGV2GTHQTOCPEG

Summary 2024

QTQWT%NKOCVG6TCPUKVKQP2NCP

ESG REVIEW continued

2017 2018 2019 2020 2021 2022 2023 2024

Relative energy consumption (MWh/net revenue in million £)

Relative Scope 1 & 2 Market-based emissions (tCO

e/net revenue in million £)

XXX

105

120

MWh/net revenue in million £

tCO

e/net revenue in million £

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU88

Metric/Aim Target/Action Start date Performance in 2023 Performance in 2024 Climate-related risk or

opportunity linked to

Energy intensity

6TCEMGPGTI[KPVGPUKV[  /9JOc

PGVTGXGPWG

/9JOc

PGVTGXGPWG

Energy sourcing

RQNKE[NGICN

OCTMGV

Proportion of renewables

in energy mix

9GCKOVQTGCEJ

TGPGYCDNGGPGTI[D[

2021   Energy sourcing

ǭECTDQPVCZ

Fleet energy mix

2TQRQTVKQPQHGNGEVTKE

QTJ[DTKFXGJKENGUKP

QWTHNGGV

,WPG   Energy sourcing,

RQNKE[CPFNGICN

Scope 3 categories

assured and disclosed

#UUWTGKPETGCUGFEQXGTCIG

QH5EQRGGOKUUKQPUVQ

include our most material

VQRKEUD[

October 2024 $WUKPGUUVTCXGN

assured and disclosed

QH5EQRG

GOKUUKQPU

%CVGIQT[

assured and

disclosed

QH5EQRG

GOKUUKQPU

/CTMGVRQNKE[

CPFǭNGICN

Climate change targets

linked to executive

remuneration

+PENWFGCNNQECVKQPHQT

ENKOCVGEJCPIGKP

.QPI6GTO+PEGPVKXG2NCP

October 2023 KP[GCTRNCP KP[GCTRNCP

2QNKE[CPFNGICN

energy sourcing

Internal carbon pricing

mechanism integrated

into decision-making

framework

+PVGITCVGKPVQINQDCN

UWRRN[ǭEJCKPFGEKUKQP

OCMKPIHTCOGYQTM

D[ǭ

/CTEJ 5JCFQYRTKEG

GUVCDNKUJGFHQTWUGKP

FGEKUKQPOCMKPI

+PVGITCVGUJCFQY

RTKEGKPVQ

manufacturing

FGEKUKQPHTCOGYQTM

Energy sourcing,

OCTMGVRQNKE[

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Emily Carey

Company Secretary

YYYKORGTKCNDTCPFURNEEQO 89

GOVERNANCE AT A GLANCE

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. The Code is

publicly available at www.frc.org.uk. The Board has reviewed

GOVERNANCE

Board and Committee membership and attendance as at 30 September 2024

Board

Audit

Committee

Remuneration

Committee

People,

Governance &

Sustainability

Committee

Non-Executive Directors

Thérèse Esperdy 7/7

– – 4/4

Sue Clark

7/7 5/5 3/3

4/4

Diane de Saint Victor 7/7 – 3/3 4/4

Ngozi Edozien

7/7 1/1 2/2 4/4

Andrew Gilchrist 7/7 5/5 – 4/4

Julie Hamilton

5/5 – – 3/3

Alan Johnson

7/7 5/5 – 3/4

Bob Kunze-Concewitz 7/7 – 3/3 4/4

Jon Stanton

6/7 5/5

3/3 3/4

Executive Directors

Stefan Bomhard (CEO) 7/7 – – –

Lukas Paravicini (CFO) 7/7 – – –

1. Denotes Chair.

2. Senior Independent Director.

3. Appointed to Remuneration Committee and stepped down from Audit Committee on 31 December 2023.

4. Appointed as a Director on 31 January 2024.

5. Unable to attend Board and/or Committee meeting due to rescheduling. Any Director unable to attend a meeting receives the Board/Committee papers in advance,

with the opportunity to provide comments to the Chair.

Board nationality

British*

American

German

French

Italian*

Swiss

Nigerian

Austrian

* Alan Johnson has dual British-Italian nationality.

Structure and content of the Governance Report

Governance at a Glance 90

Board Leadership 92

Section 172 102

Board Statements 103

People, Governance & Sustainability Committee 104

Audit Committee 108

Remuneration Report 115

Directors’ Report 130

Statement of Directors’ Responsibilities 134

and is considering the changes to be introduced by the UK

Corporate Governance Code 2024 (which will begin applying

to the Company from 1 October 2025), and will report on

preparation and implementation at the appropriate time.

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As at 30 September 2024 and the date of this report, 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.

Board and executive management gender diversity as at 30 September 2024

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 655 2 655

Women 545 2 545

Prefer not to say 00 000

Board and executive management ethnic diversity as at 30 September 2024

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) 982 4 655

Mixed/Multiple Ethnic Groups 00 000

Asian/Asian British 00 000

Black/African/Caribbean/Black British 218 0 1 9

Other ethnic group, including Arab 00 000

Not specified/prefer not to say 00 0436

* 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.

Non-Executive Director skills,

experience and knowledge

<1 year

1-2 years

2-3 years

4-5 years

3-4 years

5-6 years

6-7 years

7-8 years

8-9 years

Board Ethnicity as at

30 September 2024

Board gender as at 30 September

2024

Male 55%

Female 45%

Senior management and

direct reports

gender as

at 30 September 2024

White British 82%

Black/African/Caribbean

/Black British

18%

Fast moving consumer

goods (FMCG)

Innovation and

product development

Global business leadership

Finance and risk

Corporate & regulatory affairs

Business transformation

& change programmes

Environment & sustainability

Consumer health

6/9

4/9

6/9

5/9

6/9

3/9

6/9

4/9

Technology & digital

5/9

Non-Executive Director tenure

Male 62%

Female 38%

1. Senior management as defined by the Code

YYYKORGTKCNDTCPFURNEEQO 91

GOVERNANCE BOARD LEADERSHIP

A SKILLED AND EXPERIENCED BOARD

Stefan Bomhard

Chief Executive Officer

Tenure: Appointed July 2020.

Nationality: German

Biography

Stefan joined Imperial from Inchcape

plc, a global distribution and retail leader

in the premium and luxury automotive

sectors, 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

and was also responsible for Bacardi’s

Global commercial organisation and

Global Travel Retail. Previous roles have

included chief commercial officer of

Cadbury plc and chief operating officer

of Unilever Food Solutions Europe.

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sales and marketing positions at Diageo

(Burger King) and Procter & Gamble.

Skills and experience

Stefan brings to the Board a wealth

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change and brand leadership in retail

and consumer companies. His deep

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challenger businesses makes him

ideally suited to provide insight and

direction as Imperial delivers its strategy.

Outside interests

Non-executive director of Compass

Group plc.

Thérèse Esperdy

Chair

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

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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

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Thérèse was previously senior

independent director of National Grid plc.

Skills and experience

Thérèse has enjoyed a pre-eminent

career as a leader in the financial sector,

with deep knowledge of banking and

business. She is an experienced board

member of international corporates,

with valuable experience in highly

regulated industries. Thérèse continues

to drive engagement and debate within

the Board and constructive challenge of

Imperial’s strategy.

Outside interests

Non-executive director of Moody’s

Corporation.

BOARD OF DIRECTORS AS AT 30 SEPTEMBER 2024

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Lukas Paravicini

Chief Financial Officer

Tenure: Appointed May 2021.

Nationality: Swiss

Biography

Lukas has a proven track record in

multinational consumer goods companies

around the world. He joined Imperial

from agricultural commodities and

brokerage group ED&F Man Holdings,

where he was chief financial officer.

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Fonterra, a New Zealand and Australia

listed co-operative and the world’s

largest dairy exporter, with sales in 130

countries. He was 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 is an experienced finance

professional, having delivered global

shared services and major technology

transformation across a variety of

multinational companies. He brings a

breadth of financial and commercial

insight to the Board and extensive

knowledge of digital, cyber and IT

security matters from his career in

consumer-focused companies.

Outside interests

Member of The 100 Group of finance

directors of the FTSE 100.

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Sue Clark

Senior Independent Director

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 held the role of

managing director of SABMiller Europe

and was an executive committee

member of SABMiller plc. She joined

SABMiller in 2003 as corporate affairs

director and was part of the executive

team that built the business into a

top-five FTSE company.

Sue was previously a non-executive

director at Britvic plc.

Skills and experience

Sue has vast executive and non-executive

experience, gained in a variety of senior

roles spanning commercial, regulatory

and government affairs within

multinational companies. Her wide-

ranging board, regulatory and FMCG

knowledge has been invaluable during

discussions on performance and ESG.

Sue’s insight of corporate governance

practice and stakeholder views creates

a strong fit to her roles as Remuneration

Committee Chair and Senior

Independent Director.

Outside interests

Senior independent director of Mondi

plc (where she chairs the remuneration

committee) and easyJet plc.

Diane de Saint Victor

Non-Executive Director

Tenure: Appointed November 2021.

Nationality: French

Biography

Diane has strong legal, regulatory,

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experience, having held a number of

general counsel, company secretary

and other key roles in an international

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executive committee, as general

counsel & company secretary, of ABB,

the global technology company.

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senior vice president and general counsel

of Airbus Group and as vice president

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Products. Diane spent a decade working

at Honeywell, ultimately holding the

post of vice president and general

counsel international. She started

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government relations positions at GE.

Previous non-executive director

positions include Barclays plc,

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Skills and experience

Diane brings over 30 years’ experience

of broad international legal, governance

and regulatory expertise gained from

a range of senior executive and

non-executive positions in multinational

organisations, as well as experience of

transforming organisations in sectors

undergoing change.

Outside interests

Non-executive director of WNS

(Holdings) Limited and C&A BV.

Member of the Global Centre for Risk

and Innovation – Industry Leadership

Europe board.

Ngozi Edozien

Non-Executive Director

Tenure: Appointed November 2021.

Nationality: Nigerian

Biography

Ngozi has over 35 years’ experience

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management and strategy/business

development functions with

multinational companies in Europe,

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Previous non-executive director

positions include PZ Cussons, Barloworld,

Stanbic IBTC Holdings and Vlisco Group.

Skills and experience

Ngozi has enjoyed a wide-ranging career,

with extensive experience in corporate

finance, strategy and leading change. Her

knowledge gained through a career in

international, regulated and consumer-

focused companies allows her to share

deep insight during Board discussions on

performance, sustainability matters and

transformation. Ngozi’s skill set makes

her invaluable as the Board considers its

future strategic direction.

Outside interests

Non-executive director of Guinness

Nigeria PLC (until November 2024),

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Nigeria PLC, Bank of Africa –

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Committee membership

Audit Committee

People, Governance & Sustainability Committee

Remuneration Committee

Committee Chair

1. Diane de Saint Victor will retire from

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YYYKORGTKCNDTCPFURNEEQO 93

GOVERNANCE BOARD LEADERSHIP continued

Andrew Gilchrist

Non-Executive Director

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

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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,

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Skills and experience

Andrew has detailed understanding

and experience of the tobacco sector,

allowing him to provide deep insight

into Imperial’s businesses and brands.

His lengthy career in leadership

positions of peer companies has proved

invaluable across diverse performance,

financial and strategic topics at the

Board and its Committees.

Outside interests

None.

Alan Johnson CMG

Non-Executive Director

Tenure: Appointed January 2021.

Nationality: British and Italian

Biography

Alan has a financial background

following a 30+ year 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

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Development, president and chair of

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of Accountants and chair of the audit

committee of the International

Valuation Standards Council.

Skills and experience

Alan has a breadth and depth of

knowledge and insight into financial,

accounting and FMCG issues following

a distinguished career in senior roles

across the commercial and regulatory

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challenge and debate at both the Audit

Committee and Board.

Outside interests

Non-executive director of DS Smith plc

and William Grant & Sons Ltd (where he

chairs the audit committee), chair of

the Stakeholder Advisory Council to the

Audit and Ethics Standards

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Julie Hamilton

Non-Executive Director

Tenure: Appointed January 2024.

Nationality: American

Biography

Julie, who was Chief Commercial

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experience in marketing, strategy

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Commercial Leadership Officer.

Skills and experience

Julie is an experienced global leader

who brings deep knowledge of delivering

commercial change in multinational

consumer businesses. Her understanding

of digital transformation and global

brands is invaluable to the Board as it

continues to oversee Imperial’s strategy

and transformation.

Outside interests

None.

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Bob Kunze-Concewitz

Non-Executive Director

Tenure: Appointed November 2020.

Nationality: Austrian

Biography

Bob is an experienced marketing

professional and has held a number

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companies. In April 2024 he retired

after 17 years as chief executive

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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

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Skills and experience

Bob has extensive and deep knowledge

of the global fast-moving consumer

goods sector following a lengthy career

in marketing and brand management

in multinational companies. His long

and distinguished tenure as CEO of

Campari Group provides unparalleled

insight and experience to draw on

during different aspects of Board

discussions.

Outside interests

Non-executive director of the

supervisory board of Carlsberg A/S,

Campari Group and Luigi Lavazza S.p.A.

(where he chairs the remuneration

committee).

Jon Stanton

Non-Executive Director

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,

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Prior to that he spent 22 years at

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board-level relationships. Jon is a

Chartered Accountant and a member

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in England and Wales.

Skills and experience

Jon has enjoyed a lengthy and

illustrious career with over 30 years’

experience in international business

and accountancy. As the CEO of a FTSE

100 listed company, he brings wide-

ranging board, financial and regulatory

experience to Imperial, lending his deep

knowledge and insight into our

strategic and financial discussions.

Outside interests

Chief Executive of The Weir Group plc.

Emily Carey

Company Secretary

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

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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.

Committee membership

Audit Committee

People, Governance & Sustainability Committee

Remuneration Committee

Committee Chair

YYYKORGTKCNDTCPFURNEEQO 95

GOVERNANCE BOARD LEADERSHIP continued

ROLE AND PURPOSE OF BOARD AND ITS COMMITTEES

EXECUTIVE

LEADERSHIP TEAM

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BOARD

Audit

Committee

5GGRCIG

People,

Governance &

Sustainability

Committee

5GGRCIG

Remuneration

Committee

5GGRCIG

Group

Ethics &

Compliance

Committee

5GGRCIG

Group Risk

Committee

5GGRCIG

Group ESG

Committee

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Management working groups, including treasury, pensions

and other functional and operational forums

Management

Committees

Executive

Committees

Board

Committees

Delegation

IMPERIAL BRANDS GOVERNANCE STRUCTURE

Chief Financial Officer

Provides financial leadership and supports

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Non-Executive Directors

Provide constructive challenge and monitor

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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.

Company Secretary

Advises the Board on corporate governance

matters and compliance with Board procedures

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1. Standing committees shown; ad hoc committees

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Monitoring

Board roles and composition

While the Board shares collective responsibility

for its activities, some roles have been defined

in greater depth below.

Chair

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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.

Chief Executive Officer

Delegated responsibility for overall performance

and day-to-day management of the Group,

together with implementation of the

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Senior Independent Director

Supports the Chair on governance issues and

acts as an intermediary for other Directors,

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the performance of the Chair.

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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

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scheduled meetings to consider time-sensitive matters.

The Board is responsible to shareholders and stakeholders

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performance of the Group and evaluating and monitoring

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promote the Company’s long-term success.

The Board has adopted a schedule of matters on which it

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Group’s strategy, business plans, dividend, major financial

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defined thresholds.

Board members have access, collectively and individually,

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independent professional advice at the Company’s expense,

should they decide it is necessary in order to fulfil their

responsibilities as Directors.

EXECUTIVE LEADERSHIP TEAM

The Board delegates responsibility for developing and

implementing strategy, and for the day-to-day running of

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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

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considerations; ESG initiatives; and risk assessment

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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,

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2. Division of responsibilities

The Chair and the Chief Executive Officer have clearly

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appropriate combination of Executive and independent

Non-Executive Directors.

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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

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Committees is undertaken annually, in line with the Code.

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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

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5. Remuneration

The Company has remuneration policies and practices

designed to support its strategy and promote long-term

sustainable success. Executive remuneration is aligned

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YYYKORGTKCNDTCPFURNEEQO 97

HIGHLIGHTS

OF THE YEAR

GOVERNANCE BOARD LEADERSHIP continued

BOARD IN ACTION

March 2024

SITE VISIT: PRAGUE,

CZECH REPUBLIC

In March 2024, Board members spent three days

visiting Imperial’s operations in the Czech Republic

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Central & Eastern Europe cluster. The visit included:

• A briefing from our sales and operations team

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• A tour of different store and trade outlets

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• To complement the deep dive on HTP,

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• Lunch with local colleagues and dinner with cluster

leadership to hear about Imperial’s culture in action

March 2024

PRAGUE, CZECH REPUBLIC

• Site visit: Central & Eastern Europe

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• Deep dive: Heated Tobacco products

• Stakeholder engagement: Consumer connection

• Employee engagement: “Meet the Board” lunch

• Strategy discussion: Macroeconomic outlook

2023

2024

November 2023

LONDON, UK

• Deep dive: Non-financial reporting

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• Strategy discussion: Logista

• NGP outlook

VIRTUAL MEETING

• Approval of Imperial Brands plc full year

results and Annual Report and Accounts

October 2023

VIRTUAL MEETINGS

• Review of Imperial’s risk management

programme, including risk appetite

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• Stakeholder engagement: Remuneration

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January 2024

BRISTOL, UK

• Imperial Brands plc AGM: Attended

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• Strategy discussion: Spain

• Deep dive: Cyber and technology

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• Analysts’ insights: outlook for the

combustible and NGP markets

• Employee engagement: Audit Committee

break-out with the Finance function

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August 2024

VIRTUAL MEETING

• Deep dive: NGP – science

and harm reduction

September 2024

LONDON, UK

• Strategy working session

• Investor perception study

• Business Plan 2025

• Capital allocation

• Board and Committees’ effectiveness reviews

VIRTUAL MEETING

• Stakeholder engagement: ESG Investor webinar

May 2024

LONDON, UK

• Strategy discussion: Manufacturing,

UK and Germany

• Brokers’ perspective on Imperial Brands

VIRTUAL MEETING

• Approval of Imperial Brands PLC

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• Employee engagement: Discussion with

employees on Executive and wider

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July 2024

VIRTUAL MEETING

• Deep dive: AI and audit

LIVERPOOL, UK

• Site visit: Innovation Centre

• Strategy discussions: NGP, US market

• Deep dive: Innovation pipeline,

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• Employee engagement: “Meet the Board” lunch

June 2024

VIRTUAL MEETINGS

• Strategy interviews with each Non-Executive

Director and management

July 2024

SITE VISIT: LIVERPOOL

In July 2024, the Board visited Imperial’s Innovation Hub in

Liverpool and undertook a review of the Group’s NGP business.

The Board met a cross-section of colleagues involved in

merging technology and science with consumer insight.

Directors spent time in each of the key workstreams of our

Innovation Hub – including:

• Participating in consumer engagement sessions on NGP

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• Observing how consumer preference shapes the look and feel

of products in the Design Studio

• Exploring the role of technology in our Device Lab

• Considering the role of smell and taste in our NGP products

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• Reflecting on testing and data collection in our Analytical

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Board

Audit Committee

People, Governance & Sustainability Committee

Remuneration Committee

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ENGAGEMENT WITH COLLEAGUES

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.

Our “Meet the Board” engagement sessions continue to provide

an integrated listening experience between our colleagues and

NEDs that is authentic and inclusive, enabling the Board to gain

insights from a representative cross-section of our global

employee population. These open and honest sessions have

been positively received, and are considered by colleagues to

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Specific engagement activity can be seen on pages 98 to 101.

ENGAGEMENT WITH INVESTORS

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influence our ability to access capital. Our aim is to provide

balanced, clear and transparent communications enabling

investors to understand how we see our prospects and the

market environments in which we operate. Over the course

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investors, and research analysts through the following:

• results presentations and trading updates;

• CEO and CFO participation at investment banking conferences;

• investor roadshows in the UK, North America and Asia with

private client brokers and wealth managers and with debt

investors in support of a US dollar bond issue;

• a virtual ESG investor webinar to provide an update

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• our AGM, providing an opportunity for the Board to meet

with shareholders, particularly our retail investors;

• ad hoc events such as the sell-side analyst Board debate,

where two sector analysts presented opposing perspectives

and outlook for the sector; and

• ad hoc meetings to maintain an ongoing dialogue with

existing holders and to meet prospective investors.

To monitor the effectiveness of investor engagement,

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gathering feedback from investors and non-shareholders

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were that shareholders are pleased with the delivery and

successful implementation of the plan. They appreciate the

revitalisation of the combustible business, realistic and

disciplined approach to NGP, deleveraging of the balance

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reinforced the credibility of the management team.

Imperial’s Chair maintained her ongoing engagement with

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The Board is kept informed of investor engagement throughout

the year, through the IR Board Report which is presented at

every Board meeting. Investor perception is assessed on an

ongoing basis through feedback on meetings, our events and

our conference presentations. This feedback is shared with the

Board in the IR Board Report.

BOARD IN ACTION continued

January

Engagement:

• Chair roadshow; AGM; Sell-side

analyst Board discussion

GOVERNANCE BOARD LEADERSHIP continued

March

Conferences:

• 0GY;QTM

April

Results:

• Pre-close trading update

September

Conferences:

• Boston

Engagement:

• ESG investor webinar

June

Conferences:

• Paris

July – August

Conferences:

• London

May

Results:

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Roadshows:

• UK; North America

Conferences:

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October

Results:

• Pre-close trading update

November

Results:

• (;4GUWNVU

Roadshows:

• UK; North America; Private

Client/Wealth Management

December

Engagement:

• Executive Leadership Team

investor event

Roadshows:

• Asia

Conferences:

• Virtual

INVESTOR ENGAGEMENT DURING FY24

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GOVERNANCE BOARD AND CULTUREGOVERNANCE BOARD AND CULTURE

HOW THE BOARD

MONITORS CULTURE

Workforce policies and

practices

The Board monitors wider

workforce policies and

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Imperial’s values and support

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success of the Company.

Engagement survey

The Board reviews results of the

annual employee engagement

survey, together with data on

how engaged our workforce is

compared to peer companies.

Actions from the engagement

survey are monitored by the

Board through to completion.

Site visits

Regular site visits are scheduled

as part of the Board’s annual

programme in order 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 to deliver performance.

Employee engagement

programme

Directors participate in an

employee engagement

programme designed to allow the

Board to receive employees’

perspectives on Imperial’s culture

and better inform Board

decisions.

People topic updates

Directors receive updates on key

People topics. The Board further

monitors the work of the Group’s

business employee resource

groups (BERGs) which helps

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concerns of diverse groups

within the workforce.

Code of Conduct

The Code of Conduct sets out

what Imperial stands for and how

it operates. The Board reviews

the Code and its engagement

programme, including training

and communication.

Employee concerns

programme

Directors regularly

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employee concerns processes,

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Reward engagement

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.

YYYKORGTKCNDTCPFURNEEQO 101

GOVERNANCE SECTION 172

Effective engagement with a wide range

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colleagues, governments and regulators,

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is key to the successful delivery of our

strategy and vision in the long term.

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:

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• 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

Across our business we have a regular and ongoing dialogue

with stakeholders and their views are taken into account,

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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

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How the Board considers stakeholder views and inputs,

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Report on pages 54 to 57.

STATEMENT ON SECTION 172

OF THE COMPANIES ACT 2006

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discussions.

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Secretary and Chief Executive, with input from other key

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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

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stakeholder interests are identified in the Board papers.

The Board is responsible for setting the strategic direction of

the Company, as outlined on page 97, 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.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU102

BOARD GOVERNANCE STATEMENTS

Section 172 of the Companies Act 2006

The Board seeks to consider the interests of all relevant

stakeholders when making decisions. Our formal statement is

disclosed on page 102. Throughout this Annual Report we have

included information on how the Board operates and considers

the interests of stakeholders when making its decisions.

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RCIGUVQ

Viability statement

On the basis of a robust assessment of the emerging and

principal risks facing the Group, and the assumption that

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other matters considered and reviewed during the year,

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RCIG

Going concern basis

Having assessed the principal risks facing the Group,

including the global economic environment, as well as

realisation of other key risks, including climate change

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opinion that the Group as a whole and Imperial Brands PLC

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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.

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RCIG

Principal risks and uncertainties

The processes and related reporting described in the Principal

Risks and Uncertainties section on pages 42 to 53 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.

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RCIGUVQ

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.

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RCIG

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.

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website. As part of these commitments, together with

Slave-Free Alliance, of which Imperial Brands is a founding

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colleagues to enhance their knowledge about modern slavery,

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Champions Community to ensure our local champions had

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Slavery Manufacturing Standard.

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RCIG

YYYKORGTKCNDTCPFURNEEQO 103

GOVERNANCE PEOPLE, GOVERNANCE & SUSTAINABILITY COMMITTEE

REPORT OF THE PEOPLE, GOVERNANCE

& SUSTAINABILITY COMMITTEE

REGULAR ATTENDEES AT PEOPLE,

GOVERNANCE & SUSTAINABILITY COMMITTEE

MEETINGS DURING FY24

Information on Committee members and their

attendance at meetings is on page 90. Other regular

attendees during the year (by invitation and where

appropriate) included:

• Chief Executive Officer

• Chief Financial Officer

• Chief People and Culture Officer

• Global ESG Director

• Director of Internal Audit

• Deputy Group General Counsel – Legal Compliance

DEAR SHAREHOLDER,

I am pleased to introduce this year’s report for the recently

expanded People, Governance & Sustainability Committee.

An area of key focus for the Committee has continued to

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non-executive succession planning and overseeing

management’s implementation of the operating model

transformation. Executive succession plans were reviewed

over the year, covering Imperial’s leadership team and

emerging talent within the organisation.

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ESG and E&C matters (including any appropriate ESG-related

performance objectives for Executive Director remuneration),

employee concerns and speak-up programmes and the integrity

of Imperial’s non-financial reporting (in tandem with the Audit

Committee). With an expanded role, it was felt the Committee’s

name should be changed to People, Governance & Sustainability

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With the Committee’s remit broadening to include sustainability

matters, it received reports on ethical misconduct and

non-compliance, and ESG performance against our

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Code of Conduct, including its launch and communications

plan, and recommended the approval of the Code to the Board.

The Committee further considered the proposed process for

the external auditor’s limited assurance exercise over

Imperial’s sustainability reporting and metrics.

We welcomed Julie Hamilton to the Committee when she

joined the Board on 31 January 2024.

Looking ahead to 2025, the Committee’s focus will remain

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QRGTCVKPIǭOQFGN

It is further planned that the Committee will build on its

review of sustainability matters and non-financial reporting,

working with the Executive-level Group ESG and Group Ethics

& Compliance Committees to oversee these activities.

Thérèse Esperdy

Chair of the People, Governance & Sustainability

Committee

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.

STRUCTURE AND CONTENT

OF THE PEOPLE, GOVERNANCE &

SUSTAINABILITY COMMITTEE REPORT

Committee Chair introduction 104

Committee activities in 2023/24 105

Sustainability 106

Succession planning 106

Employee engagement 106

AGM and reappointment of Directors 107

Board evaluation 107

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+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU104

2023

2024

PEOPLE,

GOVERNANCE &

SUSTAINABILITY

COMMITTEE’S

ACTIVITIES 2023/24

A summary of topics covered by the

People, Governance & Sustainability

Committee in its meetings during the

financial year is provided below.

July 2024

• Review of the updated Code of Conduct

and roll out, and its recommendation

to the Board for approval

April 2024

• Operating model transformation update

• &KXGTUKV['SWKV[+PENWUKQPFGGRFKXGť

including Parker Review targets and progress

• Talent programme review

• Executive succession

• Proposed expansion to remit of

People & Governance Committee

• Ethics & compliance reporting update

• Quarterly ESG report

• Non-financial reporting assurance and

approach for 2024 Annual Report and Accounts

• Updates to the UK Corporate Governance Code

• Proposal for 2024 evaluation of the Board and

its Committees

September 2024

• Executive succession, including external talent mapping

• Executive Leadership Team performance review

• Review of Non-Executive Directors’ skills, tenure,

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HQTǭTGGNGEVKQP

November 2023

• Results of the Employee Experience survey

• Update on a Non-Executive Director search

• Composition, rotation and succession

planning for Board Committees

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• Non-Executive Director induction

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YYYKORGTKCNDTCPFURNEEQO 105

ACTIVITIES DURING THE YEAR

Sustainability

During the year, the Committee agreed to expand its

responsibilities to include monitoring of the Group’s ESG

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6JGǭ%QOOKVVGGTGEGKXGF'5)CPF'%WRFCVGUHTQO

management, using a reporting framework of the Group’s

sustainability strategy pillars and Code of Conduct categories.

The Committee held a deep dive on the updated Code of

Conduct, including the Code’s roll-out programme across

different regions and businesses and its alignment to our

strategy, behaviours and Group policies.

Non-financial reporting assurance

The expanded remit of the Committee includes review of

non-financial materials intended for disclosure or publication

and their associated assurance, including the Modern

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During the year, the Committee reviewed assurance processes

for Imperial’s non-financial reporting, including proposals to

strengthen readiness for the upcoming Corporate

Sustainability Reporting Directive (CSRD).

Succession planning

Executive

The Committee reviewed succession planning scenarios

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considered skills and capabilities needed to undertake these

roles and implement Imperial’s strategy and operating

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As part of these activities, the Committee undertook a talent

mapping exercise of external candidates for Executive roles

and identified areas of focus and coaching for internal

candidates as part of the succession pathway.

Underpinning Executive succession planning was a review

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Non-Executive

During the year the Committee remained active in its

consideration of NED succession, reviewing the tenure,

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and succession plans for the chairs and membership of the

Committees. Following these reviews, the Committee agreed

that Ngozi Edozien would move from the Audit to the

Remuneration Committee and that Julie Hamilton would join

the Remuneration Committee.

For the process that led to Julie Hamilton's Board appointment,

external search consultancy Lygon Group was appointed.

Lygon Group is a signatory to the Executive Search Firms’

Voluntary Code of Conduct and had no other connection

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provided a long list of candidates who were considered

against an agreed role profile and balance from a diversity

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and Chief Financial Officer interviewed short-listed candidates,

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appointment to the Board.

The Committee concluded that Julie Hamilton would be a

strong addition as a Non-Executive Director given her deep

knowledge of delivering commercial change in multinational

consumer businesses. Julie joined the Board following the

conclusion of the AGM in January 2024.

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.

In 2024, employee engagement sessions were aligned with

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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

offices, the Central & Eastern Europe cluster in Prague and

NGP business in Liverpool. Members of the Remuneration

Committee met colleagues from different businesses and

locations to understand views on reward. Participants shared

their insights on Imperial’s organisational transformation,

strategy, market challenges and regulatory developments.

Feedback and themes from each session were discussed

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As part of its annual evaluation, the Committee concluded

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effective and was appropriate for Imperial, given its structure

and business model. The evaluation asked that consideration

be given to different formats for the programme in 2025.

Diversity

The Committee continued to appraise appointments to the

Board from the perspective of its commitment to diversity,

including with respect to gender and ethnicity, in its

composition and succession plans. The proportion of women

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RTQRQTVKQPQHǭYQOGPKPQWT'ZGEWVKXG.GCFGTUJKR6GCO

Female representation on the Board thus exceeds the UK

Listing Rules and the FTSE Women Leaders Review diversity

benchmark target of 40%, and we also meet the UK Listing

Rules and FTSE Women Leaders Review target for at least

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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

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During the year, the Committee monitored progress against

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five-year strategy, including work undertaken by management

to support progression of under-represented groups and

reviewing the Parker Review objective for companies to set

targets for ethnic minority representation. The Committee

considered employee data to inform priority areas for policy

and practice improvement, notably on ethnicity. Information

on Board and executive management diversity is on page 91.

Independence

The independence of NEDs is reviewed and confirmed annually

by the Committee. In accordance with the provisions of the

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independent at the time of appointment to the Board and role,

and the Board considers all other NEDs to be independent,

including Julie Hamilton who joined Imperial Brands

FWTKPIǭVJG[GCT

GOVERNANCE PEOPLE, GOVERNANCE & SUSTAINABILITY COMMITTEE continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU106

Conflicts of interest

The Company’s Articles of Association allow the Board

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Secretary informs the Committee’s assessment of a

Non-Executive Director’s independence when proposing

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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.

If any Director wishes to take on an additional external

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Board. The Board will take into consideration the additional

time commitments, independence and any potential conflicts

of interest in relation to the Directors’ current roles and

responsibilities before any permission is given. During the

year, the Board approved the appointments of Ngozi Edozien

as a non-executive director of Unilever Nigeria plc, Bob Kunze-

Concewitz as a non-executive director of Carlsberg A/S and

Diane de Saint Victor as a member of the Global Center for Risk

and Innovation - Industry Europe Board, having concluded

that each would continue to have sufficient time to dedicate

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AGM and reappointment of Directors

With the exception of Diane de Saint Victor, all Directors are

being submitted by the Company for re-election at the 2025

Annual General Meeting. Prior to making recommendations

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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. In January 2024,

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Director to the Board. She undertook a formal induction,

including one-to-one meetings with our Executive Leadership

Team, business and functional leaders, internal and external

auditors and a visit to our US operations in Greensboro.

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covered our Audit and Remuneration Committees and attended

meetings of both Committees as an observer prior to formally

joining the Remuneration Committee.

Feedback is sought from Directors undertaking their induction

programme and in the Committee’s evaluation to ensure the

programme is effective.

Board training

Beyond initial induction, Directors receive ongoing training

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Board visits, such as the Board’s visit to our Innovation Centre in

Liverpool where members learned first-hand about our product

development process. Training is also delivered through targeted

“NEDucation” sessions with external and internal subject matter

experts. During 2024, NEDucation sessions were given by

external legal counsel on developments in non-financial

reporting regulations, by the external auditors on the use of AI

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team on the science of harm reduction in NGP.

Review of the People, Governance

& Sustainability Committee

For its 2024 evaluation, the Committee undertook an internally

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The evaluation confirmed that the Committee was operating

effectively, with positive feedback on people and culture topics.

It was agreed that executive succession planning would remain

an area of focus for 2025, including consideration of talent,

capability and the broader diversity agenda. The broad remit

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Committee’s expanded sustainability responsibilities.

BOARD EVALUATION

An evaluation of the Board, its Committees, the Chair and

individual Directors is undertaken on an annual basis.

Actions from the 2023 Board review

The Board undertook an externally facilitated review, with the

outcomes and agreed actions being focused on by the Board

throughout the year. Progress against these actions include:

2023 Action Actions taken during the year

Board agenda and

focus

Co-ordination across

the Board and its

Committees to ensure

that strategic and

operational priorities

are linked

• The Chair, CEO, Committee Chairs

and Company Secretary reviewed

the forward agendas for each forum

to ensure key topics were covered

• The remit of the People

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Adding value and

optimising challenge

Meeting structure and

exploring different

styles of discussion to

allow Board members

to bring their

experience to the

decision-making

process

• The forward Board calendar

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and structure, to optimise Board

members’ time commitment

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• Different formats for discussions

were utilised during the year,

including NED-only breakfasts

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Strategy

Optimising the

methods for engaging

the Board on the

development of the

next five-year strategy

• Holding a series of strategy

“building block” sessions

throughout the year on key

elements of a future strategy

• 1:1 interviews with each NED

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strategic themes and check in

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2024 Board review

An internally facilitated Board review was held in 2024,

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

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with each NED which covered their individual performance.

Feedback from the review was consolidated and presented

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Committees continued to operate effectively, with the right

balance of skills, experience and diversity to oversee the

Group’s strategy. Several actions were highlighted to further

enhance the Board’s effectiveness during 2025, including

further refinement of meeting and agenda logistics to create

more space for reflection, continued oversight of the ongoing

development of the risk management and controls programme

and consideration of how to pull the different “strands” of the

next five-year strategy together.

YYYKORGTKCNDTCPFURNEEQO 107

GOVERNANCE AUDIT COMMITTEE

AUDIT

COMMITTEE

DEAR SHAREHOLDER

During the year the Audit Committee has provided assurance

over the integrity of the Group’s financial statements and related

announcements, providing a high level of scrutiny over

judgements made by management in key accounting matters,

particularly at the year-end. The Committee also supported

the Board at year-end with the assessment of the Company’s

Annual Report as being fair, balanced and understandable.

The Company’s risk management and internal control

framework has undergone a series of enhancements to

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$QCTFǭYKVJVJG)TQWRũUYKFGTTKUMOCPCIGOGPVCIGPFC

The Committee received updates from regional finance

directors during the year, as well as across central functions.

Time was also spent with members of the Head Office Central

Finance team, providing Committee members a much-valued

opportunity to hear first-hand about life at Imperial from a

broad cross-section of employees as well as gaining an insight

on their views of the Company and, amongst other things,

personal ambitions.

The Internal Audit function and the Company’s external

auditor are critical relationships overseen by the Committee;

ensuring the independence and objectivity of the external

auditor is a key matter for the Committee. The Committee has

regular private meetings separately with both internal and

external audit across the year.

The area of non-financial reporting will be very much in focus,

and the Committee’s interaction with other Board Committees

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continue to expand. Similarly, risk will remain a critical focus,

particularly as we prepare for implementation of the UK

Corporate Governance Code 2024 and, looking forward, where

we can provide assurance around material internal controls.

The Company will have a new external audit partner next

year, as part of the mandatory rotation, and I will be keen to

maintain the open and productive level of engagement I have

enjoyed with the incumbent, to whom I would like to express

my thanks for the strong and constructive challenge provided

during their tenure.

The following pages provide further insight into the range of

activities and deliberations of the Audit Committee during the

financial year.

Jon Stanton

Chair of the Audit Committee

COMMITTEE MEMBERS AND OTHER REGULAR

ATTENDEES AT AUDIT COMMITTEE MEETINGS

DURING FY24

Information on Committee members and

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(by invitation and where appropriate) included:

• Board Chair

• Chief Executive Officer

• Chief Financial Officer

• Company Secretary

• Global Finance Director

• Director of Internal Audit

• Deputy Company Secretary, as Secretary

to the Audit Committee

• Group Financial Controller

• Global Tax Director

• 4GRTGUGPVCVKXGUHTQO';QWTGZVGTPCNCWFKVQT

STRUCTURE AND CONTENT OF THE AUDIT

COMMITTEE REPORT

Audit Committee Chair introduction 108

Role of the Audit Committee 109

About the Audit Committee 109

Audit Committee’s activities 110

Significant financial reporting judgements 111

Governance, risk management

and internal control 113

Internal audit 113

External audit 113

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+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU108

The insight on the following pages into the range of activities

and deliberations of the Audit Committee during the financial

year is supported by a fuller list of key matters considered by the

Audit Committee set out on pages 110 to 112.

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 audit.

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 2024, 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

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to each of the key matters detailed on pages 111 to 112

• 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

• Monitors and evaluates the effectiveness of Imperial’s

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• 4GXKGYUVJGCFGSWCE[CPFUGEWTKV[QHVJG%QORCP[ũU

procedures for detecting fraud, and its systems and

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• Scrutinises the independence, approach, objectivity,

effectiveness, compliance and remuneration of the

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• Assesses the going concern status and medium-term

viability of the Group

• Assists the Board in confirming that, taken as a whole,

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model and strategy (see page 112)

ABOUT THE AUDIT COMMITTEE

Membership

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ECPDGHQWPFQPRCIG

Biographical details of the current members of the Audit

Committee are set out on pages 92 to 95. Members of the

#WFKVǭ%QOOKVVGGCTGCRRQKPVGFD[VJG$QCTFHQNNQYKPI

recommendation by the People, Governance & Sustainability

Committee. Ngozi Edozien stepped down as a member of the

Audit Committee during the year following her appointment

as a member of the Remuneration Committee.

In addition to the members of the Committee, other regular

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Governance

The Audit Committee consists entirely of independent

Non-Executive Directors as defined by the Code. The Audit

Committee chair, and both Alan Johnson 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

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the Company operates, supported by the FMCG experience

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The Audit Committee’s terms of reference state it must meet

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At each meeting, both the Director of Group Internal Audit

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without management present.

The Audit Committee is authorised to seek external legal advice

and other independent professional advice as it sees fit.

Audit Committee evaluation

An internal evaluation of the Board and Committees

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The evaluation found members to believe the Audit Committee

functions well and maintains a constructive and healthy

relationship with the external auditor. Risk and internal

control remain focus areas for the Committee, particularly

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Governance Code 2024 and the Committee’s role supporting

the Board attesting the Group’s material internal controls in

the coming years.

YYYKORGTKCNDTCPFURNEEQO 109

AUDIT COMMITTEE’S

ACTIVITIES 2023/24

GOVERNANCE AUDIT COMMITTEE continued

A summary of the topics covered by

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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 members

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April/May 2024

• 4GXKGYQH*;4GUWNVUKPENWFKPIIQKPIEQPEGTP

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• *;CVVGUVCVKQPU

• Recommended half-year reporting to the Board

• Distributable reserves and interim dividend review

• Update on alternative performance measures (APMs)

• Regional Finance Review

• 'ZVGTPCN#WFKV*;4GXKGY4GRQTV

• Group Treasury update, including risk management

• Insurance Update

• Internal control and risk management update

• Audit/Non-Audit Services and Independence review

2023

2024

January 2024

• Finance update

• Finance Transformation update

• External audit effectiveness review

• Regional Finance Review

• Tax review including strategy confirmation

• Group Internal Audit update

• (;CWFKVRNCPWRFCVG

• Non-audit services pre-concurrence review

• Internal control and risk management update

• Ethics and compliance report

• “Meet the Committee” lunch session with

Group Finance teams

• Updates to the UK Corporate Governance Code

September 2024

• (;(KPCPEKCNTGUWNVUCPFCWFKVQXGTXKGY

and accounting estimates and judgements

initial review

• Audit/Non-Audit Services review

• Distributable Reserves overview and

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• 'ZVGTPCN#WFKV(;7RFCVG4GRQTV

• Compliance Review

• )TQWR+PVGTPCN#WFKVWRFCVGKPENWFKPI(;

plan and approval of Charter

• Cybersecurity report

• Internal control and risk management update

• Fraud and Financial whistleblowing review

• Committee evaluation and independence

review of Audit Committee members

November 2023

• (;(KPCPEKCNTGUWNVUCPFCWFKVQXGTXKGY

and accounting estimates and judgements

update and recommendations to the Board

• Recommended final dividend to the Board

• Audit/Non-Audit Services

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• Recommended reappointment

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• Financial controls self-certification

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• Group Internal Audit annual review

• Pensions review

• 7RFCVGQP(;#WFKV%QOOKVVGGRNCPPGT

• Confirmed audit/non-audit service fees

• Internal controls and risk management

• Recommended preliminary announcement

and Annual Report and Accounts to Board,

including the Audit Committee report and

risk management disclosure

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU110

SIGNIFICANT FINANCIAL

REPORTING JUDGEMENTS

The Audit Committee considered the appropriateness of the following areas of significant judgement, complexity or estimation

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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

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sensitivities was appropriate and on this basis the Committee

approved the note disclosure in the financial statements.

Taxation

(See notes 8 and 23 to the financial statements

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The Group is subject to taxation in a number of international

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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

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German branch capital structure; German transfer pricing;

and a French tax authority challenge in respect of an

intra-Group disposal.

The Audit Committee received a detailed update from management

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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, including the third-party counsel received in developing

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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 recognition of the Maltese tax credits;

ongoing French tax litigation; a German tax authority audit into

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financing. In addition, following the conclusion in prior years of

transfer pricing audits (excluding financing), including settlement

on UK, German and French transfer pricing audits, ongoing mutual

agreement procedures impacting provisions and reporting disclosures

were further discussed. The Audit Committee continued to consider

the appropriateness of items treated as adjusting and concluded

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The Audit Committee reviewed the status of each material

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CPFǭFKUENQUWTGUYCUCRRTQRTKCVG

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 remain, as well as NGP-related

product litigation in the US only. A claim arising from specific

US legislation (Helms Burton) remains ongoing, one element

of the US state settlement agreements remains unresolved,

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). Three decisions by national

Competition Authorities in the EU are under appeal and

judgments of the national courts are awaited by the Group.

The Audit Committee 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 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.

YYYKORGTKCNDTCPFURNEEQO 111

GOVERNANCE AUDIT COMMITTEE continued

Matter considered How the Committee addressed this

Going concern and viability statement

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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 52. 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

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The Audit Committee reviewed these tests on operating cash flows,

the ongoing resilience of demand and supply, disruption to global

supply chains and the impact of the war in Ukraine on the business.

The Audit Committee noted the Group’s ability to raise funds,

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offers, even in challenging markets.

Together, these points allowed the Audit Committee to form an

opinion as to the ability of the Group to remain a going concern

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statements, and make its recommendation to the Board. The Audit

Committee determined this was appropriate given the Group’s

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UVCVWVQT[ǭTGSWKTGOGPVU

The Audit Committee also considered management’s view of

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period, following the forecast realisation of a number of key risks,

including the possible impacts of climate change, 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

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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 and that the

central monitoring of trade weight at period ends ensured any

material breaches to the Group’s revenue recognition policy

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The Audit Committee is satisfied that the Group’s policy was

operating effectively. No breaches were found during the year.

Fair, balanced and understandable

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reporting is fair, balanced and understandable. The Audit

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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

internal and external subject matter experts and content owners

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Group Corporate Communications, Group Finance, Group Internal

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Secretariat; (iii) input and advice from appropriate external

advisers, including the Company’s brokers, legal advisers, and

external audit challenge and scrutiny; (iv) regular research to

identify 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

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During the year the Audit Committee has continued its review of

the use of APMs, including ensuring the appropriate balance of

reported and adjusted measures in the Annual Report, which

included the addition of “Distribution gross profit”, and the removal,

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disposal of the Russia business. 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.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU112

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

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The Group’s risk management approach is described in the

Principal Risks and Uncertainties section on pages 42 to 45

and is designed to manage, rather than eliminate, the significant

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can only provide reasonable, and not absolute, assurance

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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 42 to 53.

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.

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.

The Board and Audit Committee have been informed of,

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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.

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.

INTERNAL AUDIT

Group Internal Audit (GIA) is responsible for providing objective

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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

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management responses to the audit matters raised.

The Audit Committee also met independently with the

Director of Internal Audit to discuss additional insights.

The Audit Committee reviews the effectiveness of GIA

routinely through post-audit surveys and KPI reporting,

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through updates provided.

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GIA plan, including the scope, risk coverage and resourcing

model to deliver it.

EXTERNAL AUDIT

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audit plan for the year, which continued to build on its previous

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feedback it received from management, the Board and the

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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,

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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

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considered and approved in a prior year.

The Audit Committee has had regular private meetings with

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complete transparency by management throughout the year.

YYYKORGTKCNDTCPFURNEEQO 113

GOVERNANCE AUDIT COMMITTEE continued

Independence of our external auditor

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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.

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represents the fifth year for Marcus Butler, our signing Audit

Partner. Accordingly, a new Group Audit Partner, Kath Barrow,

has been identified for the coming years (subject to the

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where those services do not conflict with its independence.

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tendering for individual non-audit services expected to

generate fees in excess of £100,000, and prior approval by the

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pre-concurrence processes under the International Ethics

Standards Board for Accountants (IESBA) Code. Guidelines

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in the AIP.

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and/or assurance or attestation-related. This non-audit work

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being deemed best placed to provide effectively the services

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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 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,

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for audit services, audit-related services and non-audit work.

The Audit Committee also considered reports by both

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appropriate internal safeguards to ensure its independence

and objectivity. The outcome of these reviews was that

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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.

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and Group continue to receive an independent audit service.

AUDIT FEES

In the current year audit fees were £10.5 million

(2023: £10.1 million) (see note 4).

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 re-appoint the

auditor is based on continuing satisfactory performance.

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communication, and independence, and is completed by

members of the Audit Committee, Logista’s Audit Committee

and senior managers and finance executives from across the

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and effective audit, with no pervasive Group-wide concerns

identified. Based on its consideration of the responses,

together with its own ongoing assessment, for example through

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Committee’s interaction with the Group Audit Partner, the

Audit Committee remains satisfied with the efficiency and

effectiveness of the audit.

The FRC Audit Quality review team also carried out a review

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as part of their routine review process. The Audit Committee

has received a full copy of the findings and recognises that

there were no significant findings resulting from the review

and that a number of areas of good practice were highlighted.

The Committee also noted that the FRC rated the majority

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Audit tender

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the audit in February 2019, with a 1 October 2019 start date.

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to assess whether a tender should be undertaken in advance

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is that the current proposed timing is in the best interests of

shareholders since, with the upcoming rotation of the external

audit partner, the Group will receive fresh challenge from a

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Companies Market Investigation (Mandatory Use of

Competitive Tender Processes and Audit Committee

Responsibilities) Order 2014.

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should be reappointed as external auditor at the next AGM.

STATEMENT OF AUDITORS’ RESPONSIBILITIES

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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

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opinions start on page 135.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU114

DEAR SHAREHOLDER

On behalf of the Board, I am pleased to present the Directors’

Remuneration Report for the financial year ended

30 September 2024. Our Report shows how the Policy has been

implemented during FY24 and implementation for FY25.

Shareholders approved our Directors’ Remuneration Policy at

the 2024 AGM with a vote of 95.51%. On behalf of the

Committee I would again like to thank our shareholders and

wider stakeholders for their engagement and support during

the process.

PERFORMANCE CONTEXT

FY24 was the fourth year of the Company’s five-year strategy

launched in 2021. During that period Imperial Brands has been

transformed into a demonstrably stronger business, delivering

returns to shareholders over this period of 78.7%. Investment

in consumer capabilities, simplified and more efficient

operations, and a transformed performance culture, have

translated into strong financial results and capital returns to

shareholders.

2024 marked another year of strong operational and financial

delivery. Aggregate weighted market share grew across our

five priority markets in line with the Group’s strategic

objective while achieving strong pricing and net revenue

growth. In next generation products, net revenue increased

26% at constant currency with growth across all regions and

categories to build scale and improve gross margins. This

supported full year adjusted operating profit growth and cash

generation in line with the Group’s medium-term guidance.

The Company’s disciplined approach to capital allocation over

the past three years has underpinned investment in the

business, a strong and efficient balance sheet and a track

record of capital returns with three-year cumulative returns of

£6 billion including share buybacks and dividends. Total

shareholder return since the strategy was launched in

January 2021 was 78.7% as of 30 September 2024, significantly

outperforming the FTSE 100 market, up 42.7% as at the same

date.

The Board looks forward to continuing its work on the next

phase of the strategy in the coming months.

TOTAL SHAREHOLDER RETURN PERFORMANCE

SINCE FIVE-YEAR STRATEGY LAUNCHED

ANNUAL STATEMENT FROM

REMUNERATION COMMITTEE CHAIR

Committee focus in 2024

• Ensuring remuneration continues to support the

Group’s strategy and performance metrics operate as

intended

• Attraction and retention of high-performing

individuals in a competitive global marketplace

• Remuneration and terms for new members of the

Executive Leadership Team

• Review of wider workforce reward considerations

Looking ahead to 2025

• Ensure remuneration continues to support delivery of

the final year of the Group’s existing five-year strategy

and alignment with the next strategic phase

• Review wider workforce reward strategy to ensure

alignment with strategy, purpose, values and overall

people strategies

• Retention and incentivisation of our international

Executive Leadership Team

• Impact of forthcoming EU Pay Transparency

regulations on remuneration

Key sections of this report are as follows:

Annual Statement

115

Remuneration at a glance

118

Summary of Directors’ Remuneration Policy and

implementation in FY25

119

Annual Report on Remuneration

120

Remuneration earned for FY24

120

Determination of FY24 Annual Bonus and LTIP

121

Executive share ownership and Directors’ interests

123

Comparison with employees’ remuneration

125

CEO pay ratio

126

Remuneration Committee membership and duties

128

GOVERNANCE REMUNERATION REPORT

200

2021 2022 2023 2024

1. Shows value of £100 invested in the Company from the launch of our five year

strategy up to financial year end 30 September 2024.

www.imperialbrandsplc.com 115

GOVERNANCE REMUNERATION REPORT continued

SUPPORTING OUR COLLEAGUES

While there continues to be macroeconomic volatility across

the globe, during FY24 we did see a slowing down of the

inflationary environment. The Committee has continued to

monitor the impact of a landscape that remains very

challenging on our workforce in certain locations, with a

number of targeted actions taken in FY24 to support our

colleagues in these countries.

Annual salary budgets for FY25 have been determined taking

both wage and price inflation into account. Across the

countries we operate in, this year salary increases will

typically range from 2% to 7% (excluding higher increases

made in countries experiencing hyperinflation), with average

increases in the UK at 3.4% for FY25.

REMUNERATION OUTCOMES FOR FY24

Annual Bonus plan

The FY24 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 tobacco and NGP and growth in

Distribution. Working capital improvements contributed to an

adjusted operating cash conversion of 100%. Our cash flow

position has supported the business in maintaining

investment and shareholder returns. Our aggregate market

share in our priority markets was +5bps higher than FY23,

with four out of our five priority markets having grown with

strong pricing continuing to support our financial delivery.

NGP net revenue delivered strong growth of +26.4%, driven by

growth across all categories and geographies with the US

region back to growth.

The cash conversion and market share targets were met in

full, while NGP net revenue and adjusted operating profit

targets were achieved in part.

The Executive Directors performed exceptionally well against

specific and quantifiable strategic objectives. For Stefan

Bomhard, achievements included strong progress in building

a sustainable NGP business and outperformance of targets in

all global markets including in Europe and AAACE; successful

launch of the Zone brand in the US; continuing company

transformation including improved global processes and

digital strategies; and progressing the strategic plan

preparation for FY26-30. Lukas Paravicini’s achievements

against objectives included significant progress in driving

working capital reductions, delivery of effective risk

adjustment funding and continuing company transformation

through developing our internal finance talent and business

resilience and productivity.

In aggregate, as a percentage of maximum, Stefan received a

bonus of 83.8% and Lukas received a bonus of 83.8%. Further

details on performance measures and achievements against

targets are shown on page 121. Stefan Bomhard has met his

shareholding guideline in full and therefore the Committee

determined 25% of his bonus will be deferred into Imperial

Brands shares for three years. For Lukas Paravicini, 50% of his

bonus will be deferred for three years.

The Committee believes this outcome reflects fairly the

performance of the business during the year. No discretion has

been applied by the Committee.

Long-Term Incentive Plan

The LTIP awards made in February 2022 were subject to EPS

(40%), net debt/EBITDA (20%), ROIC (20%), and TSR (20%)

performance conditions.

The Committee considered the performance outturns against

the targets set.

As a Committee we believe it is appropriate to exercise

judgement in certain circumstances, to ensure that

performance metrics operate as originally intended and

deliver out-turns that are fair to both shareholders and

management. In line with the original terms of the award, the

Committee considers potential adjustments in respect of

significant events that could not have been anticipated at the

time the targets were set and which have a distorting impact

on out-turns. The intention is to ensure that vesting outcomes

reflect genuine underlying business performance.

The UK Mini Budget on 23 September 2022 significantly

disrupted foreign currency markets, impacting the year-end

valuation of intangible assets as at 30 September, which are

determined on a spot price basis. For a short number of days,

the £:EUR and £:$ rates fell sharply and subsequently recovered.

This unforeseen volatility event had a very significant impact

on ROIC due to the proximity of timing to our September year

end, negatively impacting the ROIC measure. The Committee

therefore determined that it would be appropriate to measure

ROIC based on average FX rate in the calculation of the out-turn.

This also aligns to the methodology under our financial gearing

covenants which allow for the use of average FX rates where the

impact of extreme events has a distorting impact on spot rate

calculations. The impact of this decision was to increase vesting

for the ROIC element from 0% to 13.0%, out of an overall weighting

of 20% of the award. The Committee is satisfied that this partial

vesting is a fair reflection of performance over the period.

Overall three-year average ROIC was 19.13% which was an

improvement of over 100 basis points (on both the spot and

average FX basis) versus the prior three-year average out-turn,

reflecting Imperial Brands strong performance against this

measure.

In line with the Committee’s approach since the

announcement of the share buyback programme and

consistent with best practice, 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 to exclude the impact of

certain acquisitions and disposals during the period, including

the Logista and US OND acquisitions and disposal of our

Russian operations. The approach taken was in line with the

Committee’s agreed principles of consideration of acquisitions

and disposals on a case-by-case basis, to ensure out-turns are

a fair reflection of performance and strategy delivery to date.

The treatment of cash flows, which has an impact on net debt,

was aligned to our auditor approved policy on the adjustment

of certain material, non-recurring items, which in this case

related to inherited, historic tax litigations. Further details of

all adjustments and methodology are provided on page 122.

The EPS elements vested at 28.6% out of 40% weighting, and

the net debt/EBITDA vested at 12.9% out of the 20% weighting.

Under the TSR element, Imperial was ranked 2/24 against the

FMCG peer group, therefore this element vested in full.

The Committee confirmed that 74.5% of the overall maximum

award will vest. The Committee is satisfied that the overall

vesting fairly reflects the Company’s performance during the

three-year period and the wider experience of our stakeholders.

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IMPLEMENTATION FOR FY25

The annual salary review is effective from 1 October 2024.

Salary increases awarded to employees for FY25 will typically

range from 2% to 7% across the markets we operate in

(excluding higher increases made in countries experiencing

hyperinflation). Our budgeted average increase for the UK

workforce is 3.4% for FY25.

In setting the salary for the Executive Directors, the

Committee took into consideration the approach taken for

colleagues, performance and contribution, and the impact

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After careful consideration, the Committee decided to award a

salary increase of 3.4% to both Stefan and Lukas, aligned to our

average UK workforce increase. The increases reflect the

strong performance and contribution from both our Executive

Directors during the year. Stefan’s new salary is £1,447,637 pa

and Lukas’ new salary is £816,413 pa.

The Committee considers carefully the measures and targets

for FY25 across both the Annual Bonus and LTIP, and has

sought to ensure a set of metrics that balance 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 FY25 will be:

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 individual/strategic objectives (20% weighting).

The FY25 LTIP will be granted in February 2025. The measures

for the FY25 award will be: 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%).

FY25 is the last year of our five-year strategy. In the coming

months the Board will therefore be developing and approving

the plan for the next strategic phase. For the forthcoming FY25

award, in order to allow targets to be aligned to our new strategy,

these will be set following finalisation of the strategic plans.

We will be announcing our strategy for the next five years on

26 March 2025 and that LTIP targets for the FY25 award will be

published on our website shortly thereafter.

CHAIR FEES

The Committee reviewed and approved a 3.4% fee increase for

the Company Chair. Thérèse Esperdy’s fee will be £686,866 pa

from 1 October 2024.

WORKFORCE ENGAGEMENT DURING THE YEAR

The Committee was directly involved in the Board’s employee

engagement programme which is described in more detail on

pages 101 and 106. Our employee engagement sessions are a

valuable way of having open conversations on the themes of

the Board’s agenda for the year, which have included

Imperial’s organisational transformation, our strategy, market

challenges, and regulatory developments. As we have done in

previous years, we also specifically explored the topic of

reward, hearing participants’ views on a range of reward

topics covering the alignment of performance and reward,

executive pay principles, rewarding ethical and responsible

behaviours, DEI and ESG in reward and the approach taken in

locations where there are ongoing social and economic

challenges. I have been encouraged by, and appreciate, the

continued level of openness, engagement and interest shown

by our colleagues in these regular sessions and would like to

thank them for their valued contribution.

CONCLUSION

As Imperial Brands enters the final year of our current

strategy, we are proud of the progress we have made and the

value created for our stakeholders. As we look to develop the

next phase of our strategy, the Committee will continue to

monitor the effectiveness of our policy in retaining and

incentivising a world-class Executive Leadership Team.

Finally, I should like to thank my fellow Committee members

for their support throughout the year and to welcome Julie

Hamilton who joined the Committee from 1 October 2024.

Should you have any questions or feedback, please get in

touch with me at RemcoChair@impbrands.com. We hope that

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AGM.

Sue Clark

Chair of the Remuneration Committee

www.imperialbrandsplc.com 117

Stefan Bomhard

Lukas Paravicini

Fixed pay Annual Bonus LTIP

21%

18%

31%

26%

48%

56%

62.7%

100.0%

86.7%

100.0%

83.8%

71.6%

64.6%

65.0%

100.0%

74.5%

GOVERNANCE REMUNERATION REPORT continued

REMUNERATION AT A GLANCE

EXECUTIVE DIRECTORS’ VARIABLE REMUNERATION OUTCOMES FOR 2024

Maximum %

of bonus/

LTIP

Out-turn as a %

of maximum

bonus/LTIP % of weighting achieved

Annual

Bonus

Adjusted operating profit growth at constant currency 40% 25.1%

Adjusted operating cash conversion 15% 15.0%

Weighted market share growth 15% 15.0%

ESG – Consumer health/NGP revenue 10% 8.7%

Strategic/individual – Stefan Bomhard 20% 20.0%

Strategic/individual – Lukas Paravicini 20% 20.0%

Total

Stefan Bomhard 100% 83.8%

Lukas Paravicini 100% 83.8%

Long-Term

Incentive

Plan

Adjusted EPS growth at constant currency 40% 28.6%

Adjusted net debt/EBITDA 20% 12.9%

Return on invested capital (ROIC) 20% 13.0%

Relative TSR 20% 20.0%

Total

100% 74.5%

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

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“ownership” mindset

• To balance restraint with fair reward for contribution, in the way we reward executives, as we do for the wider workforce

(£,000) Stefan Bomhard Lukas Paravicini

Base salary £1,400 £790

Benefits and pension £213 £113

Total fixed pay £1,613 £903

Annual Bonus £2,346 £1,323

LTIP

£5,123 £2,051

Total remuneration £9,082 £4,277

TOTAL SINGLE FIGURE IN 20242024 PERFORMANCE HIGHLIGHTS

ADJUSTED

EPS

+10.9%

NGP NET

REVENUE

+26.4%

£1.0BN

BUYBACK IN

2024

INCREASED

DIVIDEND

+4.5%

CASH

CONVERSION

OF 100%

ADJUSTED

NET DEBT

TO EBITDA

OF 1.8X

1. The LTIP figure in the table includes the gain made under the Sharesave Plan during the year for Stefan Bomhard.

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SUMMARY OF DIRECTORS’ REMUNERATION POLICY AND IMPLEMENTATION IN FY25

Our Directors’ Remuneration Policy was approved by shareholders at our AGM held on 31 January 2024 with a vote of 95.51%.

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Element Implementation for FY25

Salary

Increases generally effective from 1 October.

Set considering Company and individual performance, role

and responsibility changes, peer market data and general

increases for wider workforce.

Base salary as at

Oct 23

Oct 24 base

increase %

Base salary as at

Oct 24

Stefan Bomhard

£1,400,036 3.4% £1,447,637

Lukas Paravicini

£789,568 3.4% £816,413

Increases for the workforce typically ranged from 2% to 7%, with

average increases for the UK workforce at 3.4%.

Pension

Provision in line with other employees.

The maximum pension contribution or allowance for Executive

Directors will be aligned with the workforce (currently 14% of salary).

Benefits

Car (or cash allowance in lieu), health insurance, life

insurance and income protection insurance. Other benefits

may be provided on the basis they are also available to the

wider workforce.

Implementation 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

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40%

Adjusted operating cash conversion

15%

Weighted market share growth

15%

ESG – Consumer health/NGP revenue

10%

Strategic/individual

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.

Retention of net-of-tax number of vested LTIP award shares

for two years post vesting.

Malus and clawback provisions are in place.

Measures and weightings

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40%

Return on invested capital (ROIC)

15%

Cumulative free cash flow (CFCF)

15%

Relative TSR

20%

ESG – Climate change

10%

FY25 is the last year of our five-year strategy and as such the

three-year performance period for the FY25 award will extend

beyond the current strategy. In order to align targets to our new

strategy, these will be set following strategy announcement on

26 March 2025. Targets will be published on the Company’s

website.

Shareholding requirement

Expected to build a holding in the Company’s shares to a

minimum value of 300% of base salary.

Requirement to hold shares after cessation of employment

to the value of the shareholding guideline (or the 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.

Implementation in line with policy.

TIME HORIZONS FOR REMUNERATION

Year 1 Year 2 Year 3 Year 4 Year 5

Fixed pay

Annual Bonus plan

One-year performance

Portion deferred into shares for three years

Long-Term Incentive Plan Three-year performance period Two-year holding period

www.imperialbrandsplc.com 119

GOVERNANCE REMUNERATION REPORT continued

Chair and Non-Executive Directors’ fees

Increases generally effective from 1 October.

Reimbursement of business-related

expenses and reasonable benefits. An

allowance may be paid when regular

intercontinental travel is required.

With effect from 1 October 2024

Chair’s fee will increase from £664,280 to £686,866 pa.

The Board, excluding Non-Executive Directors, reviewed NED fees during the year,

taking into account increasing time commitments and responsibilities of

Non-Executive Directors, and ensuring that fees are at an appropriate level for a

large, multinational company with a diverse and international board.

NED base fee will increase from £87,305 to £90,000 pa.

Senior Independent Director fee will increase from £28,500 to £30,000 and chairs

of the Remuneration and Audit Committees’ fees will increase from £28,500 to

£37,500 pa reflecting increased time commitment and responsibility.

Committee membership fees will increase from £5,500 to £10,000 pa and a

membership fee will be introduced for the expanded People, Governance &

Sustainability (PGS) Committee (Page 104 for further details on the PGS

Committee).

ANNUAL REPORT ON REMUNERATION

The Annual Report on Remuneration has been split into the following sections:

1. The remuneration earned by our Directors for the financial year ended 30 September 2024

Details of share awards granted, share interests held and historical CEO total single figure versus shareholder returns

3. 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 2024

Single Total Figure of Remuneration for each Director (Audited)

Executive Directors Year Salary £’000

Benefits

£’000

Pension

£’000

Total fixed pay

Annual Bonus

£’000

LTIP £’000

Other £’000

Total variable

pay Total pay

Stefan Bomhard 2024 1,400 17 196 1,613 2,346 5,117 6 7,469 9,082

2023 1,340 16 188 1,544 1,919 5,437 – 7,356 8,900

Lukas Paravicini 2024 790 2 111 903 1,323 2,051 – 3,374 4,277

2023 752 4 105 861 1,062 2,226 – 3,288 4,149

Total 2024 2,190 19 307 2,516 3,669 7,168 6 10,843 13,359

Total 2023 2,092 20 293 2,405 2,981 7,663 – 10,644 13,049

1. Stefan Bomhard received an annual car allowance of £15,000. Lukas Paravicini received a company car; Stefan Bomhard received private medical insurance and Lukas

Paravicini received a health cash plan.

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 2024. As the CEO has met his shareholding guideline, the Committee determined that 25% of his bonus earned for FY24 will

be deferred into shares for three years. 50% of the CFO’s bonus for FY24 will be deferred into shares for three years.

4. LTIP represents the value of the FY22-24 LTIP awards with a performance period ended on 30 September 2024. As these awards do not vest until February 2025 they are

based on a share price of £21.45, being the three-month average to 30 September 2024, and an estimate of dividend roll-up based on announced dividend payable on

31 December 2024. Of the FY22-24 LTIP value shown, £868k and £348k relates to share price appreciation for Stefan Bomhard and Lukas Paravicini respectively. The LTIP

value for FY23 has been restated to reflect the actual vesting value as at 15 February 2024.

5. For Stefan Bomhard “Other” represents the gain from the FY21 Sharesave which matured on 1 August 2024.

Non-Executive Directors

Fees £’000 Taxable benefits

Total

2024 2023 2024 2023

2024 2023

Thérèse Esperdy 664 639 61 50 725 689

Sue Clark

150 144 2 2 152 146

Diane de Saint Victor 93 89 2 3 95 92

Ngozi Edozien

105 101 13 – 118 101

Andrew Gilchrist

105 59 20 – 125 59

Alan Johnson 93 89 6 3 99 92

Bob Kunze-Concewitz 93 89 3 3 96 92

Julie Hamilton

3, 4

67 – 19 – 86 –

Jon Stanton

121 117 1 1 122 118

Total 1,491 1,327 127 62 1,618 1,389

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. Includes payments in respect of Senior Independent Director of £28,500 and Chair of the Remuneration Committee fees of £28,500 pa respectively.

3. Ngozi Edozien and Andrew Gilchrist’s amounts include a payment of £12,000 (full year) and Julie Hamilton’s amount includes a payment of £7,000 (February to September)

in respect of a non-European travel allowance in recognition of the extra time commitment required for travel.

4. Julie Hamilton was appointed to the Board on 31 January 2024.

5. Includes payment in respect of chair of the Audit Committee fees of £28,500 pa.

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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 £14,977k (2023 restated: £14,438k).

No Director is eligible to participate in the closed defined benefit pension fund. Each Director eligible for membership of the

defined contribution pension fund has opted to receive a cash supplement in lieu and therefore, no pension disclosure is required.

Determination of 2024 Annual Bonus (Audited)

The 2024 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 Target Max Achievement Payout

Adjusted operating profit at constant currency 40% 1.0% 4.5% 6.0% 4.6% 25.1%

Adjusted operating cash conversion 15% 90% 93% 100% 100.0% 15.0%

Weighted market share 15% -3bps +1bps +5bps +5bps 15.0%

Consumer health – NGP net revenue (£m)

10% 283 311 347 335m 8.7%

Strategic/individual – Stefan Bomhard 20%–––100% 20.0%

Strategic/individual – Lukas Paravicini 20%–––100% 20.0%

Total bonus Stefan Bomhard 100% 83.8% of max

Total bonus Lukas Paravicini 100% 83.8% of max

1. At constant currency.

The Committee set the following strategic goals for the Executive Directors:

Strategic/individual measures and targets Performance assessment highlighting key achievements

Stefan Bomhard • Build a sustainable NGP

business (10%)

• Growth metrics achieved across all NGP categories and regions, delivering

market leading performance

• Global NGP net revenue targets exceeded, with strong achievement in Europe

and AAACE markets

• Exceeded total vape share target for FY24 in our largest vapour market (UK)

• Significant increase in heated tobacco sales versus FY23, including achievement

of market share objectives in largest markets

• Successful launch of Zone, with net revenue and operating profit targets exceeded

• Continue company and

culture transformation

(5%)

• Unify programme successfully launched in the UK and Ireland

• Sales force excellency programmes successfully implemented, including in the US

• Enhancement of global processes and digital strategies with technology, Global

Business Services and ERP delivered in line with budget

• Meaningful progress made in DE&I KPIs

• Progress on next

strategic plan preparation

(FY26-30) (5%)

• Completion of 10-year strategic market development assessment and

progression of the next phase of the strategic plan

• Acceleration options for next phase of NGP strategy developed in July 2024

Total payout as a % of maximum bonus: 83.8%

Lukas Paravicini • Drive shareholder

value (10%)

• Average working capital reduction of £180 million across Australia, USA, UK,

Germany and Morocco achieved, significantly exceeding the target reduction

• Global IT and Unify operating expenditure and capex delivered in line with targets

• Cost of risk adjusted funding achieved below the maximum cost of funding target

• Delivery of profitable NGP growth, with Group growth in line with target, and

outperformance in our largest market (Europe)

• Continue company

transformation (10%)

• Sustained strong Finance, IT (FIT) engagement against evolved operating model,

with PL Index rising to 84% (+8pp vs FY23)

• Completed the build of refreshed FIT leadership team to drive the business forward

• FIT Business Partner impact on-market stakeholders strengthened with a 7+/10

score in all areas

• Successfully rolled out Unify transformation initiative, with UK & Ireland go live

of Unify on track

• Improved productivity across FIT with 5% productivity gains vs FY21

• Improved business resilience and effective risk management framework in

place, with Chief Information Security Officer (CISO) organisation and

cybersecurity training performed

Total payout as a % of maximum bonus: 83.8%

www.imperialbrandsplc.com 121

GOVERNANCE REMUNERATION REPORT continued

Individual Annual Bonus payments:

Executive Directors

Total Annual Bonus £’000

Maximum Actual

Stefan Bomhard £2,800 £2,346

Lukas Paravicini £1,579 £1,323

1. As the CEO has met his shareholding guideline, the Committee determined that only 25% of his bonus earned for FY24 will be deferred into shares for three years. 50% of

the CFO’s bonus for FY24 will be deferred into shares for three years.

Long-Term Incentive Plan awards vesting (Audited)

Performance awards vesting in February 2025 are based on performance measured over the three-year period ended

30 September 2024.

The Committee considers it appropriate to exercise judgement in certain circumstances to ensure that performance metrics

operate as originally intended. The UK Mini Budget on 23 September 2022 significantly disrupted foreign currency markets,

impacting the year-end valuation of intangible assets as at 30 September, which are determined on a spot price basis. For a short

number of days, the £:EUR and £:$ rates fell sharply and subsequently recovered. This unforeseen volatility event had a very

significant impact on ROIC due to the proximity of timing to our year end, negatively impacting the ROIC measure. The Committee

therefore determined that it would be appropriate to measure ROIC based on an average FX rate in the calculation of the out-turn.

This also aligns to the methodology under our financial gearing covenant which allow for the use of average FX rates where the

impact of extreme events has a distorting impact on spot rate calculations.

In line with best practice, the methodology excludes the benefit of share buybacks on vesting of the EPS element. 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 auditor-approved Alternative Performance Measures (APM) policy in relation to

certain material, non-recurring items.

Measure Weighting

Cut-in

(25% vesting)

Target

(60% vesting)

Maximum

(100% vesting)

Actual

performance

Percentage of

award vesting

Adjusted EPS growth at constant currency

(average annual growth) 40% 3.7% 4.6% 5.6% 4.9% 28.6%

Adjusted net debt/EBITDA (for FY24) 20% 1.46 1.37 1.28 1.36 12.9%

Return on invested capital (ROIC) (average annual) 20% 18.7% 19.1% 19.5% 19.13% 13.0%

Relative TSR (return over three financial years) 20% Median n/a Upper quartile 2/24 20.0%

Achievement 74.5%

Adjusted EPS excludes the impact of share buybacks and associated financing costs.

Due to the impact of the UK Mini Budget on 23 September 2022, which significantly disrupted foreign currency markets and

impacted the year-end valuation of intangible assets as at 30 September 2022 which are determined on a spot price basis, an

average FX rate was used in the calculation of the out-turn. This aligns to the methodology under our financial gearing covenants

which allow for the use of average FX rates where the impact of extreme events have a distorting impact on spot rate calculations.

The impact of this decision was to increase vesting for the ROIC element from 0% to 13.0%, out of an overall weighting of 20% of the

award.

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 and net debt/EBITDA 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 auditor approved 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 PLC.

Vested awards are subject to a two-year holding period.

Payments for loss of office and payments to former Directors (Audited)

No payments to report.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU122

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

Number of

nil-cost options Face value

Amount of

base salary End of performance period

Stefan Bomhard 15 February 2024 £18.92 258,991 £4,900,110 350% 30 September 2026

Lukas Paravicini 15 February 2024 £18.92 104,329 £1,973,905 250% 30 September 2026

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) Maximum performance (100% vesting)

Cut-in Max

Adjusted EPS growth at constant currency 40% 3.9% 5.8% or higher

Return on invested capital (ROIC) (average annual) 15% 19.1% 21.9% or higher

Cumulative free cash flow (CFCF) (£m) 15% 5.9bn 7.5bn or higher

Relative TSR 20% Median Upper quartile

ESG – Scope 1 & 2 emissions reduction 5% 70% 75%

ESG – Energy reduction 5% 4.5% 7.5%

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’Oreal,

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

CǭPWODGTQHHCEVQTUKPENWFKPIRGTUQPCNQTEQTRQTCVGRGTHQTOCPEGCPFEKTEWOUVCPEGUVJCVYGTGWPHQTGUGGPCVVJGFCVGQHITCPV

SHARE INTERESTS AND INCENTIVES (AUDITED)

Shares held at

30 September

2023

Shares held at earlier of

30 September 2024 and

leaving date

Dividends

reinvested post

year end

Conditional awards and options held at earlier of

30 September 2024 and leaving date

Options

exercised during

the year

Owned

outright

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 134,955 244,772 201,688 627 746,511 158,517 581 – 297,683

Lukas Paravicini 21,618 64,887 64,185 670 297,056 70,150 – – 121,592

Non-Executive Directors

Thérèse Esperdy

61,729 61,861 – 21 – – – – –

Sue Clark 8,040 8,628 – 22 – – – – –

Diane de Saint Victor 625 6,737 – 68 –––––

Ngozi Edozien

621644–3 –––––

Andrew Gilchrist

3,238 6,238 – 0 – – – – –

Alan Johnson 984 1,061 – 0 –––––

Bob Kunze-Concewitz 50,974 50,974 – 0 –––––

Julie Hamilton

0 500 – 0 – – – – –

Jon Stanton 3,260 3,402 – 20 – – – – –

1. The number of shares owned outright includes those shares subject to a holding period.

2. Thérèse Esperdy’s shares are in the form of American Depositary Receipts.

3. Ngozi Edozien’s share amount of 644 includes 353 American Depositary Receipts.

4. Andrew Gilchrist’s shares are in the form of American Depositary Receipts.

5. Julie Hamilton was appointed to the Board on 31 January 2024. Julie’s shares are in the form of American Depositary Receipts.

6. There have been no changes in Director share figures reported in the table above, between 30 September 2024 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 2024, being the last trading day of the financial year, was

£21.73 and the range of the middle market price during the year was £15.80 to £22.57.

Full details of the Directors’ share interests are available for inspection in the Register of Directors’ Interests at our registered office.

www.imperialbrandsplc.com 123

30-Sep-2430-Sep-2330-Sep-2230-Sep-2130-Sep-2030-Sep-1930-Sep-1830-Sep-1730-Sep-1630-Sep-1530-Sep-14

Imperial Brands FTSE 100 Return Index

Index value

100

120

140

160

180

200

GOVERNANCE REMUNERATION REPORT continued

EXECUTIVE SHAREHOLDINGS (AUDITED)

Shares held at

start of year

Shares held at

end of year

1, 2

Increase in

shares held

during year

Value of shares

held at start of

year

£’000

Value of shares

held at end of

year

£’000

Difference in

value £’000

Shareholding

required

(% salary)

Current

shareholding

(% salary/fees)

Requirement

met – pro

rata basis

5, 6

Requirement

met – in full

5, 6

Executive Directors

Stefan Bomhard

134,955 328,786 193,831 2,250 7,145 4,895 300 510 Yes Yes

Lukas Paravicini

21,618 102,067 80,449 360 2,218 1,858 300 281 Yes No

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. Or date of leaving if earlier.

3. Based on a share price of £16.67, being the closing price on 29 September 2023.

4. Based on a share price of £21.73, being the closing price on 30 September 2024.

5. Stefan Bomhard joined the Board on 1 July 2020 and has satisfied his obligation to build his shareholding to 300% of his salary within five years.

6. Lukas Paravicini joined the Board on 1 May 2021 and has five years to build to his shareholding requirement.

REVIEW OF PAST PERFORMANCE

The chart below shows the value of £100 invested in the Company on 1 October 2014 compared with the value of £100 invested in

the FTSE 100 Index for each of our financial year-ends to 30 September 2024. 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

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU124

CHANGE IN CHIEF EXECUTIVE OFFICER REMUNERATION

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

2015

Alison

Cooper

Total remuneration

£’000 9,082 8,900 5,432 3,421 1,104 963 943 448 2,137 3,935 4,657 5,404 3,637

Annual Bonus

CUǭCǭRGTEGPVCIG

QHǭOCZKOWO 83.8 71.6 84 64.1 40

87 60 72 80

Shares vesting

CUǭCǭRGTEGPVCIG

QHǭOCZKOWO 74.5 85 19.8

30.8

nil nil nil nil nil 20 44.4 45.7 15.8

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.

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 3.4% for FY25

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 contributions 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 are at the core of our business, and during the year the Board continued its employee engagement sessions which

gave us an opportunity to hear feedback from colleagues on a variety of topics including our organisational transformation,

strategy, market challenges and regulatory developments. We also explored the topic of reward, giving participants the

opportunity to discuss how the Committee aligns executive reward with the approach to pay for all employees, and to understand

their views on reward at Imperial Brands. This is the fourth year that the Board has held this reward session and the level of

engagement was extremely high with a constructive discussion covering:

• The alignment of performance and reward, following the transformation undertaken in the last four years to a more inclusive

and performance-based culture

• Our executive pay principles and how they are achieving their goals

• Aligning reward with our DEI and ESG agendas

• Encouraging and rewarding ethical and responsible behaviours

• Reward challenges in locations experiencing ongoing social and economic challenges

The Board continues its commitment to listening to colleagues and appreciates the opportunity this forum provides them with in

understanding what is important to the Group’s employees and how their priorities evolve with each year of our employee

engagement programme. These views are considered in decision-making and actions taken in the year.

We look forward to continuing our employee engagement session on reward in FY25 to ensure that we stay close to the evolving

priorities of our diverse workforce.

www.imperialbrandsplc.com 125

GOVERNANCE REMUNERATION REPORT continued

PERCENTAGE CHANGE IN BOARD REMUNERATION

The table below shows the percentage change in the salary, benefits and Annual Bonus for the Directors, between FY24 and FY23,

as well as the disclosures for FY23, FY22, FY21 and FY20.

Year-on-year change in pay for Directors compared with UK employees

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

(%)

Executive

Director

Stefan Bomhard

(from 1 Jul 20)

4.5 6.3 22.3 3.0 (5.9) (12.2) 2.5 0.0 34.3 58.6

183.3

540.6

–– –

Lukas Paravicini

(from 1 May 21)

5.1 (50.0) 24.6 3.0 (73.3) (11.9) 140.1

150.0

241.4

–– – –– –

Non-

Executive

Directors

Thérèse Esperdy 3.9 22.0 - 3.1 22.0 - 2.5 – – 24.7 (100) – 353.3

(41.3) –

Sue Clark 4.2 0.0 - 2.1 (50.0) - 2.2 – – 7.0 (100) – 55.4 (50.0) –

Alan Johnson

(from 1 Jan 21)

4.5 100.0 - 2.3 (40.0) - – – – – – – – – –

Andrew

Gilchrist

(from 1 Mar 23)

78.0 – – ––– ––– –– – –– –

Bob Kunze-

Concewitz

(from 1 Nov 20)

4.5 0.0 - 2.3 (40.0) - 11.5

–– –– – –– –

Jon Stanton 3.4 0.0 - 2.6 (50.0) - 1.8 – – 17.9 (100) – 187.9

0 . 0 –

Ngozi Edozien

(from 15 Nov 21)

4.0 - - 16.1

(100.0) - – – – – – – – – –

Diane de Saint

Victor

(from 15 Nov 21)

4.5 (33.3) - 15.6

(40.0) - – – – – – – – – –

Julie Hamilton

(from

31 January

2024)

---

All UK

employees

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. A year-on-year comparison is not possible in the year that a Director joins the Board.

2. Increase reflects first full year.

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

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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 2024.

Financial year Calculation methodology P25 (lower quartile) x:1 P50 (median) x:1 P75 (upper quartile) x:1

2024 A 154.6 102.3 67.5

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 £9,082,022 154.6 102.3 67.5

Base salary £1,400,036 31.3 24.5 16.0

1. 2023 CEO pay ratios have been updated to reflect the value of the updated 2023 CEO single figure which incorporates long-term incentives based on actual vesting, rather

than the estimate used for the 2023 disclosure.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU126

The CEO total remuneration pay ratio has decreased across all percentiles, despite a small increase in CEO total remuneration. The

decrease in pay ratio is driven largely by a lower LTIP vesting percentage compared to last year and by one-off payments made to

certain employees in respect of the closure of the UK Defined Benefit pension plan, increasing the total remuneration figures for

the P25, P50 and P75 comparison employees. The CEO base salary ratio has remained static.

The salary component for FY24 at each quartile is £44,688 (P25), £57,041 (P50) and £87,500 (P75). The equivalent total pay numbers

are £58,762 (P25), £88,774 (P50) and £134,532 (P75).

The Committee is satisfied that the overall picture presented by the 2024 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

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£ million unless otherwise stated 2024 2023

Percentage

change

Executive Directors’ total remuneration

1, 2

13 13 -

Overall expenditure on pay

923 882 4.6

Dividend paid in the year 1,299 1,312 (1.0)

Share buybacks in the year

1,020 1,006 13.9

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 FY24, expenditure includes £1.014 billion of share buybacks and £6 million of fees and stamp duty.

EMPLOYEE BENEFIT TRUSTS

Our policy remains to satisfy options and awards under our employee share plans either from market-purchased ordinary shares

or ordinary shares held in treasury, distributed through our employee benefit trusts: the Imperial Tobacco Group PLC Employee

and Executive Benefit Trust (the Executive Trust) and the Imperial Tobacco Group PLC 2001 Employee Benefit Trust (the 2001

Trust) (together the Employee Benefit Trusts).

As at 30 September 2024, we held 68,289,137 ordinary shares in treasury which can be used to satisfy options and awards under our

employee share plans either directly or by gifting them to the Employee Benefit Trusts.

Options and awards may also be satisfied by the issue of new ordinary shares.

Details of the ordinary shares held by the Employee Benefit Trusts are as follows:

Balance at

01/10/2023

Acquired during

year

Distributed

during year

Balance at

30/09/2024

Ordinary shares

under award at

30/09/2024 Surplus/(shortfall)

Executive Trust 1,393,103 2,000,000 (3,157,871) 235,232 9,275,996 (9,040,764)

2001 Trust 176,301 0 (176,301) 0 0 0

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

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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 3.3 0.5

5% in 5 years 2.2 0.5

5% in 10 years (executive plans) 2.7 0.4

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.

Stefan Bomhard is a non-executive director of Compass Group PLC and was permitted to retain the £99,575 fee received from this

position in the financial year.

www.imperialbrandsplc.com 127

EXECUTIVE DIRECTORS’ SERVICE AGREEMENTS

Executive Director Date of contract Expiry date Compensation on termination following a

change of control

Stefan Bomhard 31 January 2020 Terminable on 12 months’ notice No provisions

Lukas Paravicini 11 April 2021 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,

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management’s remuneration is set by those who have no personal financial interest, other than as shareholders, in the

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without any Executive Director or other manager being present.

Biographical details of the current members of the Remuneration Committee are set out at pages 92 to 95. Members of the

Committee are appointed by the Board following recommendation by the People, Governance & Sustainability Committee

(formerly known as the People & Governance 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 118 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:

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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

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• 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

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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.

Predictability – The Committee regularly reviews the performance of in-flight awards so it understands the likely outcomes.

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.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU128

GOVERNANCE REMUNERATION REPORT continued

Remuneration Committee meetings 2023/24

The Remuneration Committee met for three scheduled meetings during the year. Details of the main activities covered in the

meetings are set out below.

Nov-23 Jun-24 Sep-24

Approval of Bonus (FY23) and LTIP (2021-2023) out-turns

Review of Executive Directors' remuneration dashboard

Review of CEO pay ratio and approval of DRR (FY23)

Approval of Bonus (FY24) and LTIP (2024-2026) targets and weightings

Discussion on workforce remuneration

Review of forecasts for in-flight Bonus and LTIP out-turns

Discussion of Bonus (FY25) and LTIP (2025-2027)

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 2023 meeting were Sue Clark (Chair), Bob Kunze-Concewitz, Diane de

Saint Victor and Jon Stanton with all attending the November meeting. Ngozi Edozien joined the Committee on 1 January 2024

and all Committee members attended the June and September 2024 meetings. Other regular attendees include the CEO, 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 2023/24

The Board and its Committees undertook an internally facilitated review of its effectiveness during FY24. 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 include the format of meetings and deep dives on the

forthcoming EU regulations on remuneration and gender pay comparisons across the Group.

Further information on the Board evaluation is on page 107.

Advice provided to the Remuneration Committee

Deloitte LLP was appointed as the independent adviser to the Committee throughout FY24. Deloitte was paid fees of £251,280 for

its services during the year.

Deloitte is a member of the Remuneration Consultants Group and complies with its Code of Conduct which sets out guidelines

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corporate tax and employee mobility advice, employee engagement and technology consulting services.

The Committee is satisfied that advice received by Deloitte during the year was independent and objective and that all individuals

who provided remuneration advice to the Committee have no connections with Imperial Brands that may impair their

independence.

Other companies which provided advice to the Remuneration Committee are as follows:

Alithos Limited undertook total shareholder return (TSR) calculations and provided advice on all TSR-related matters. During the

year it was paid £23,400 and provided no other services to the Company. Willis Towers Watson provided market pay data and was

paid £9,600 for these services. Willis Towers Watson also provided actuarial and wider reward-related services to the Company.

Both advisers were appointed by the Committee, which remains satisfied that the provision of those other services in no way

compromises their independence. They are all paid on the basis of actual work performed rather than on a fixed fee basis.

VOTING ON THE REMUNERATION REPORT AT THE 2024 AGM

At the 2024 AGM there was a vote to approve the Directors’ Remuneration Report and our Directors’ Remuneration Policy.

Resolution

Votes for including

discretionary votes Percentage for Votes against Percentage against

Total votes cast

excluding votes

withheld Votes withheld

Total votes cast

including votes

withheld

Directors’ Remuneration

Report 678,661,665 97.72 15,835,705 2.28 694,497,370 10,855,174 705,352,544

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.

The strong support received for the Directors’ Remuneration Report and Directors’ Remuneration Policy followed engagement with

our largest shareholders during 2022 and 2023. The input we received from shareholders was extremely helpful. At the 2025 AGM,

shareholders will be invited to vote on the 2024 Directors’ Remuneration Report (advisory vote).

Sue Clark

Chair of the Remuneration Committee

www.imperialbrandsplc.com 129

DIRECTORS’ REPORT

GOVERNANCE DIRECTORS’ REPORT

The Directors present their report and audited financial

statements for the year ended 30 September 2024. 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,

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2006, to include certain matters in the Strategic Report that

would otherwise be required to be disclosed in the Directors’

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Company’s business model and strategy. The Corporate

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the Directors’ Report by reference. The Directors’ Report,

including the information incorporated by reference,

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Statement for the purposes of the DGTR.

Specifically, the following disclosures and those referred to

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Disclosure Page

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Going concern statement 52

Viability statement 52

Disclosure of greenhouse gas emissions,

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Statement of Directors’ responsibilities 134

Disclosure of information to the auditor 134

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Shareholder information 230

EQUAL OPPORTUNITIES

We regard equality and fairness as a fundamental right of all

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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

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or mental health, age, race, origin, gender, sexual orientation,

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protected status.

CHARITABLE AND POLITICAL DONATIONS

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Foundation and our support of Hope for Justice. In addition,

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No political donations were made to UK political parties,

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contributions programme. No corporate contributions were

made to federal candidates or party committees and all

contributions were made in accordance with applicable laws.

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accordance with ITG Brands’ policies and procedures and to

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laws. No other political contributions were reported during the

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POWERS OF DIRECTORS AND SHARE CAPITAL

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Meeting to grant the Directors powers, in line with institutional

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Details of our share capital are shown in note 26 to the

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which represented approximately 7.46% of the Company’s

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shareholders’ funds.

Repurchases of own shares

On 6 October 2022, we announced a commitment to return

surplus capital to shareholders through regular annual share

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share capital of the Company as at 30 September 2024), of which

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The aggregate amount of consideration paid by Imperial in FY24

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The Board continues to regard the ability to repurchase

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continue to exercise this power only when, in the light of

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Company for the benefit of its members as a whole,

representing an appropriate mechanism to return capital to

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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

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INSURANCE AND INDEMNITIES

Imperial maintains directors’ and officers’ liability insurance

YJKEJRTQXKFGUCRRTQRTKCVGEQXGTHQTNGICNCEVKQPDTQWIJVCICKPUV

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

VJGǭTGSWKTGOGPVUQHVJG7-%QORCPKGU#EVYGTGKPHQTEG

VJTQWIJQWVVJG[GCTCPFWRVQVJGFCVGQHVJKU#PPWCN4GRQTV

INTEREST IN VOTING RIGHTS

#UCV5GRVGODGTVJG%QORCP[JCUDGGPPQVKHKGF

KPǭCEEQTFCPEGYKVJ%JCRVGTQHVJG&)64QHVJGHQNNQYKPI

interests in its shares. Other than as described in the footnote

to the table, the Company has not been notified of any

changes to these interests since the year-end and up to

0QXGODGTDGKPICFCVGPQVOQTGVJCPQPGOQPVJ

RTKQTVQVJGFCVGQHVJG#)/0QVKEGQH/GGVKPI

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

95 10.92

5RTKPI/QWPVCKP+PXGUVOGPVU.VF 61 7.04

$NCEM4QEM 53 5.25

(+..KOKVGF 47 4.98

 Direct holding.

2. Indirect holding.

3. 1P1EVQDGTVJG%CRKVCN)TQWRPQVKHKGFVJG%QORCP[VJCVKVUKPVGTGUVJCF

KPETGCUGFVQ

+PHQTOCVKQPRTQXKFGFVQVJG%QORCP[WPFGTVJG&)64UKU

RWDNKEN[CXCKNCDNGXKCVJGTGIWNCVQT[KPHQTOCVKQPUGTXKEGU

CPFǭQPQWTYGDUKVGCVJVVRUYYYKORGTKCNDTCPFURNEEQO

ETGCVKPIUJCTGJQNFGTXCNWGUVQEMGZEJCPIGCPPQWPEGOGPVU.

RESULTS AND DIVIDENDS

9GKPENWFGCTGXKGYQHQWTQRGTCVKQPCNCPFHKPCPEKCN

RGTHQTOCPEGQPRCIGUVQ

The profit attributable to equity holders of the Company

HQTǭVJGHKPCPEKCN[GCTYCUcOKNNKQPCUUJQYPKPQWT

consolidated income statement. Note 3 to the financial

UVCVGOGPVUIKXGUCPCPCN[UKUQHTGXGPWGCPFQRGTCVKPIRTQHKV

#PCPCN[UKUQHPGVCUUGVUKURTQXKFGFKPVJGEQPUQNKFCVGF

balance sheet and the related notes to the financial statements.

9GRC[SWCTVGTN[FKXKFGPFU6JGHKTUVCPFUGEQPFFKXKFGPFU

HQTǭHKPCPEKCN[GCTYGTGRCKFQP,WPGCPF

5GRVGODGTTGURGEVKXGN[6JGVJKTFFKXKFGPFYKNNDG

RCKFQP&GEGODGTCPFUWDLGEVVQ#)/CRRTQXCN

VJGǭHKPCNFKXKFGPFYKNNDGRCKFQP/CTEJVQQWT

shareholders on the Register of Members at the close of

DWUKPGUUQP(GDTWCT[6JGCUUQEKCVGFGZFKXKFGPF

FCVGǭYKNNDG(GDTWCT[

(QNNQYKPICTGXKGYD[VJG#WFKV%QOOKVVGGCVKVUOGGVKPIKP

September 2024, which confirmed the accounts showed

FKUVTKDWVCDNGTGUGTXGUUWHHKEKGPVVQUWRRQTVVJGGZRGEVGFVJKTF

KPVGTKOCPFHKPCNFKXKFGPFUCPFVJGKPVGTKOFKXKFGPFUKP

HKPCPEKCN[GCTVJG&KTGEVQTUJCXGFGENCTGFCPFRTQRQUG

FKXKFGPFUKPTGURGEVQH(;CUHQNNQYU

Ordinary shares

2024

£ million

2023

£ million

Interim paid – June 2024

RRGTǭUJCTG 193 196

Interim paid – September 2024

22.45p per share 192 195

Declared interim – December 2024

54.26p per share 459 461

Proposed final – March 2025

54.26p per share 459 453

6QVCNQTFKPCT[FKXKFGPFU

RRGTǭUJCTGR 1,303 1,305

1P1EVQDGTVJG%QORCP[CPPQWPEGFCEJCPIGVQKVU

HWVWTGFKXKFGPFRC[OGPVRTQHKNGVQHQWTGSWCNSWCTVGTN[

FKXKFGPFRC[OGPVUHQT(;QPYCTFU6JKUYKNNTGUWNVKPOQTG

consistent cash returns to shareholders throughout the year,

EQORCTGFVQVJGEWTTGPVURNKV6JKUJCUDGGPGPCDNGFD[

VJGUVTQPIXKUKDKNKV[QHECUJHNQYUHTQOQWTRQTVHQNKQHQNNQYKPI

the successful execution of the Company’s strategy. The change

YKNNCNUQJGNRVQTGFWEGVJG%QORCP[ũUNGXGTCIGXCTKCPEGYKVJKP

the year, particularly around the half year, which is partly a

TGUWNVQHVJGEWTTGPVFKXKFGPFRJCUKPI

To create the base for future quarterly payments, the Company

CPPQWPEGFVYQKPVGTKOECUJFKXKFGPFUQHRGPEGRGT

share payable in June and September 2025. These payments

YKNNDGJKIJGTVJCPYQWNFQVJGTYKUGJCXGDGGPVJGECUGCPF

also include a further 4.5% year-on-year increase.

PENSION FUND

6JG)NQDCN2GPUKQPU%QOOKVVGGRTQXKFGUINQDCNQXGTUKIJV

QPǭDQVJTKUMCPFTGYCTFGNGOGPVUQHVJG)TQWRũURGPUKQP

arrangements.

6JG%QOOKVVGGũUQDLGEVKXGUKPENWFGVCEMNKPIVJGTKUMUKPJGTGPV

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

EQPUKUVUQHHKXG&KTGEVQTUPQOKPCVGFD[VJG%QORCP[QPG

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

RWTRQUG6JG%QORCP[OCKPVCKPU2GPUKQP6TWUVGG.KCDKNKV[

insurance, for action resulting from a pension related claim.

YYYKORGTKCNDTCPFURNEEQO 131

ARTICLES

6JG%QORCP[ũU#TVKENGUQH#UUQEKCVKQPFQPQVEQPVCKPCP[

GPVTGPEJOGPVRTQXKUKQPUCPFVJGTGHQTGOC[DGCNVGTGFQT

CFFGFVQQTEQORNGVGN[PGY#TVKENGUOC[DGCFQRVGFD[URGEKCN

TGUQNWVKQPUWDLGEVVQVJGRTQXKUKQPUQHVJG%QORCPKGU#EV

SIGNIFICANT AGREEMENTS

The agreements summarised below are those which we

consider to be significant to the Group as a whole and which

EQPVCKPRTQXKUKQPUVJCVVCMGGHHGEVQTIKXGVJGQVJGTRCTV[QT

parties a specific right to alter or terminate them if we are

UWDLGEVVQCEJCPIGQHEQPVTQNHQNNQYKPICVCMGQXGTDKF

6JG)TQWRJCUUGXGPETGFKVHCEKNKV[CITGGOGPVUVJCVRTQXKFG

that, unless the lenders (as defined within each agreement)

otherwise agree, if any person or group of associated persons

CPFQTCP[EQPPGEVGFRGTUQPUCESWKTGUVJGTKIJVVQGZGTEKUG

OQTGVJCPQHVJGXQVGUGZGTEKUCDNGCVCIGPGTCNOGGVKPI

QHǭVJG%QORCP[VJGTGURGEVKXGDQTTQYGTUCUFGHKPGFYKVJKP

GCEJǭCITGGOGPVOWUVTGRC[CP[QWVUVCPFKPIWVKNKUCVKQP

QYGFǭD[VJGOWPFGTVJGHCEKNKV[CITGGOGPVCPFVJGVQVCN

commitments under that facility agreement will be cancelled.

6JGUGXGPETGFKVCITGGOGPVUCTG

• a credit facilities agreement dated March 2020 under which

EGTVCKPDCPMUCPFQTHKPCPEKCNKPUVKVWVKQPUOCMGCXCKNCDNGVQ

+ORGTKCN$TCPFU(KPCPEG2.%CPF+ORGTKCN6QDCEEQ)GTOCP[

(KPCPEG)OD*PQY4GGOVUOC%KICTGVVGPHCDTKMGP)OD*

EQOOKVVGFETGFKVHCEKNKVKGUQHżOKNNKQPHQTCRGTKQFQHWR

to three years with bi-annual six-month auto-extensions;

• a credit facility agreement dated July 2024 under which a

EGTVCKPDCPMOCMGUCXCKNCDNGVQ+ORGTKCN$TCPFU(KPCPEG2.%

EQOOKVVGFETGFKVHCEKNKVKGUQHcOKNNKQPHTQO1EVQDGT

until September 2025;

• a credit facility agreement dated September 2024 under

YJKEJCEGTVCKPDCPMOCMGUCXCKNCDNGVQ+ORGTKCN$TCPFU

(KPCPEG2.%EQOOKVVGFETGFKVHCEKNKVKGUQHcOKNNKQP

WPVKNǭ5GRVGODGT

• four credit facility agreements dated September 2024 under

GCEJQHYJKEJCEGTVCKPDCPMOCMGUCXCKNCDNGVQ+ORGTKCN

$TCPFU(KPCPEG2.%EQOOKVVGFETGFKVHCEKNKVKGUQH

cOKNNKQPWPVKN5GRVGODGT

6JG%QORCP[CEVUCUIWCTCPVQTHQTCNNVJGCDQXGETGFKVHCEKNKVKGU

+PCFFKVKQPVJTGGKPUWTCPEGEQORCPKGUVJG5WTGVKGUJCXG

GCEJǭOCFGCXCKNCDNGVQ+ORGTKCN6QDCEEQ2GPUKQP6TWUVGGU

.KOKVGFCUWTGV[DQPFKPGCEJECUGKUUWGFQPCUVCPFCNQPG

DCUKUDWVKPCIITGICVGHQTOKPICPCOQWPVQHcOKNNKQP

WPVKNǭ&GEGODGT6JGUGUWTGV[DQPFUCTGUWDLGEVVQFGGFU

QHEQWPVGTKPFGOPKV[GCEJFCVGF#RTKNCPFOCFGQP

UWDUVCPVKCNN[VJGUCOGVGTOURTQXKFGFD[VJG%QORCP[

+ORGTKCN$TCPFU(KPCPEG2.%CPF+ORGTKCN6QDCEEQ.KOKVGF

If any person or group of associated persons (as defined within

each agreement) acquires the right to exercise more than 50%

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VJG5WTGVKGUOC[FGOCPFVJCV+ORGTKCN6QDCEEQ.KOKVGF

amongst other things, pay a sum to a cash collateral account

equal to but not exceeding the aggregate amount outstanding

under each guarantee.

+ORGTKCN$TCPFU(KPCPEG2.%JCUKUUWGFDQPFUWPFGTC)NQDCN

Medium Term Notes (GMTN) Debt Issuance Programme. The

Company acts as guarantor.

The final terms of these series of notes contain change of

EQPVTQNRTQXKUKQPUWPFGTYJKEJVJGJQNFGTQHGCEJPQVGYKNN

UWDLGEVVQCP[GCTNKGTGZGTEKUGD[VJG+UUWGTJCXGVJGQRVKQPVQ

require the Issuer to redeem or, at the Issuer’s option, purchase

VJCVPQVGCVKVUPQOKPCNXCNWGKHCCP[RGTUQPQTRGTUQPU

acting in concert or on behalf of any such person(s),

DGEQOGUǭKPVGTGUVGFKPKOQTGVJCPQHVJGKUUWGFQT

allotted ordinary share capital of the Company; or (ii) such

number of shares in the capital of the Company carrying more

VJCPQHVJGXQVKPITKIJVUPQTOCNN[GZGTEKUCDNGCVCIGPGTCN

meeting of the Company; and (b) as a result of the change of

EQPVTQNVJGTGKUGKVJGTKCTGFWEVKQPVQCPQPKPXGUVOGPVITCFG

TCVKPIQTYKVJFTCYCNQHVJGKPXGUVOGPVITCFGTCVKPIQHVJGPQVGU

YJKEJKUǭPQVTCKUGFCICKPTGKPUVCVGFVQQTTGRNCEGFD[CP

KPXGUVOGPVITCFGTCVKPIFWTKPIVJGEJCPIGQHEQPVTQNRGTKQF

URGEKHKGFKPVJGǭHKPCNVGTOUQTKKVQVJGGZVGPVVJCVVJGPQVGU

are not rated at the time of the change of control, the Issuer fails

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the change of control period as a result of the change of control.

6JGDQPFU+ORGTKCN$TCPFU(KPCPEG2.%KUUWGFKPUWEJ

OCPPGTǭCPFYJKEJCTGUVKNNQWVUVCPFKPICUQH5GRVGODGT

CTGCUHQNNQYU

• ,WN[75OIWCTCPVGGFPQVGUFWGCPF

• ,WN[75OIWCTCPVGGFPQVGUFWG

+ORGTKCN$TCPFU(KPCPEG2.%CPF+ORGTKCN$TCPFU(KPCPEG

0GVJGTNCPFU$8JCXGCNUQKUUWGFDQPFUWPFGT'WTQ/GFKWO

6GTO0QVGU'/60&GDV+UUWCPEG2TQITCOOGU6JG%QORCP[

acts as guarantor.

The final terms of these series of notes contain change of

EQPVTQNRTQXKUKQPUWPFGTYJKEJVJGJQNFGTQHGCEJPQVGYKNN

UWDLGEVVQCP[GCTNKGTGZGTEKUGD[VJG+UUWGTJCXGVJGQRVKQPVQ

require the Issuer to redeem or, at the Issuer’s option, purchase

VJCVPQVGCVKVUPQOKPCNXCNWGKHCCP[RGTUQPQTRGTUQPU

acting in concert or on behalf of any such person(s), becomes

KPVGTGUVGFKPKOQTGVJCPQHVJGKUUWGFQTCNNQVVGFQTFKPCT[

share capital of the Company; or (ii) such number of shares in

VJGECRKVCNQHVJG%QORCP[ECTT[KPIOQTGVJCPQHVJGXQVKPI

rights normally exercisable at a general meeting of the Company;

CPFDCUCTGUWNVQHVJGEJCPIGQHEQPVTQNVJGTGKUGKVJGT

KCTGFWEVKQPVQCPQPKPXGUVOGPVITCFGTCVKPIQTYKVJFTCYCN

QHVJGKPXGUVOGPVITCFGTCVKPIQHVJGPQVGUYJKEJKUPQVTCKUGF

CICKPTGKPUVCVGFVQQTTGRNCEGFD[CPKPXGUVOGPVITCFGTCVKPI

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

EJCPIGQHEQPVTQNVJG+UUWGTHCKNUVQQDVCKPCPKPXGUVOGPVITCFG

credit rating of the notes within the change of control period as

a result of the change of control.

6JGDQPFU+ORGTKCN$TCPFU(KPCPEG2.%KUUWGFKPUWEJ

manner and which are still outstanding as of 30 September

CTGCUHQNNQYU

• 5GRVGODGTcOKNNKQPIWCTCPVGGF

notes due 2026;

• (GDTWCT[żOKNNKQPIWCTCPVGGF

PQVGUFWGǭ

• (GDTWCT[cOKNNKQPIWCTCPVGGF

PQVGUFWGǭ

• ,CPWCT[żOKNNKQPIWCTCPVGGF

PQVGUFWGǭCPF

• (GDTWCT[żOKNNKQPIWCTCPVGGF

PQVGUFWGǭŜ

The bonds Imperial Brands Finance Netherlands B.V. issued

KPǭUWEJOCPPGTCPFYJKEJCTGUVKNNQWVUVCPFKPICUQH

5GRVGODGTCTGCUHQNNQYU

• /CTEJżOKNNKQPIWCTCPVGGFPQVGUFWG

• (GDTWCT[żOKNNKQPIWCTCPVGGFPQVGUFWG

• 5GRVGODGTżOKNNKQPIWCTCPVGGFPQVGU

FWGǭ

; and

• #RTKNżOKNNKQPIWCTCPVGGFPQVGUFWG

* Subsequent to the issuance dates, these notes became fungible with the original

żOKNNKQPKUUWGVQHQTOCUKPINGVTCPEJGQHżOKNNKQPIWCTCPVGGF

PQVGUFWG

GOVERNANCE DIRECTORS’ REPORT continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU132

+ORGTKCN$TCPFU(KPCPEG2.%JCUCNUQKUUWGFDQPFUKPVJG

75ǭWPFGTVJGRTQXKUKQPUQH5GEVKQPCCPF4GIWNCVKQP5

TGURGEVKXGN[QHVJG755GEWTKVKGU#EV6JG%QORCP[

CEVUǭCUIWCTCPVQT

The final terms of this series of notes contain change of control

RTQXKUKQPUWPFGTYJKEJVJGJQNFGTQHGCEJPQVGYKNNUWDLGEVVQ

CP[GCTNKGTGZGTEKUGD[VJG+UUWGTJCXGVJGQRVKQPVQTGSWKTG

the Issuer to redeem or, at the Issuer’s option, purchase that

PQVGCVQHKVUPQOKPCNXCNWGKHCKCP[RGTUQPCUUWEJ

VGTOKUWUGFKPVJG755GEWTKVKGU'ZEJCPIG#EVQH

VJGǭ'ZEJCPIG#EVDGEQOGUVJGDGPGHKEKCNQYPGTQHOQTG

VJCPQHVJG%QORCP[ũUXQVKPIUVQEMQTKKVJGTGKUCVTCPUHGT

QVJGTVJCPD[ǭOGTIGTEQPUQNKFCVKQPCOCNICOCVKQPQTQVJGT

EQODKPCVKQPQHǭCNNQTUWDUVCPVKCNN[CNNQHVJG%QORCP[ũUCUUGVU

and those of its subsidiaries to any person (as such term is

WUGFKPVJG'ZEJCPIG#EVQTKKKCOCLQTKV[QHVJGOGODGTU

QHǭVJG%QORCP[ũU$QCTFQH&KTGEVQTUKUPQVEQPVKPWKPIKPUWEJ

capacity; and (b) as a result of the change of control, there is a

TGFWEVKQPVQCPQPKPXGUVOGPVITCFGTCVKPIQTYKVJFTCYCNQH

VJGKPXGUVOGPVITCFGTCVKPIQHVJGPQVGUYJKEJKUPQVTCKUGF

CICKPTGKPUVCVGFVQQTTGRNCEGFD[CPKPXGUVOGPVITCFGTCVKPI

during the change of control period specified in the final terms.

The bonds issued in such manner and which are still

QWVUVCPFKPICUQH5GRVGODGTCTGCUHQNNQYU

• ,WN[75OKNNKQPIWCTCPVGGFPQVGUFWG

• ,WN[75OKNNKQPIWCTCPVGGFPQVGUFWG

• ,WN[75OKNNKQPIWCTCPVGGFPQVGU

FWGǭCPF

• ,WN[75OKNNKQPIWCTCPVGGFPQVGU

FWGǭ

WAIVER OF DIVIDENDS

+PTGURGEVQH7-.44CPFVJGVTWUVGGQHVJG

+ORGTKCN6QDCEEQ)TQWR2.%'ORNQ[GGCPF'ZGEWVKXG$GPGHKV

6TWUVCPFVJG+ORGTKCN6QDCEEQ)TQWR2.%'ORNQ[GG

$GPGHKV6TWUVCITGGUVQYCKXGFKXKFGPFURC[CDNGQPVJG)TQWRũU

UJCTGUKVJQNFUHQTUCVKUH[KPICYCTFUWPFGTXCTKQWU+ORGTKCN

$TCPFU2.%UJCTGRNCPU

2024 ANNUAL GENERAL MEETING VOTE

#VVJG#PPWCN)GPGTCN/GGVKPIKPVJG%QORCP[TGEGKXGF

strong support for all its resolutions.

POST-YEAR-END EVENTS

Share buybacks

#UPQVGFCDQXGQP1EVQDGTVJG%QORCP[CPPQWPEGF

CǭHWTVJGTUJCTGDW[DCEMRTQITCOOGQHWRVQcDKNNKQPQH

UJCTGUKPVJGRGTKQFVQ1EVQDGT

2025 ANNUAL GENERAL MEETING

6JKU[GCTũU#)/YKNNDGJGNFCVVJG$TKUVQN/CTTKQVV4Q[CN*QVGN

QP,CPWCT[CVCO

Details of the resolutions to be put to the meeting can be found

KPVJG0QVKEGQH#PPWCN)GPGTCN/GGVKPIUGPVVQUJCTGJQNFGTU

CPFOCFGCXCKNCDNGQPVJG%QORCP[ũUwebsite.

UK LISTING RULES 6.6.1

(QTVJGRWTRQUGUQHVJG7-.KUVKPI4WNGUVJGKPHQTOCVKQP

TGSWKTGFVQDGFKUENQUGFD[7-.44ECPDGHQWPFQPVJG

RCIGUUGVQWVDGNQY

Section Information Page

(1) Interest capitalised

n/a

(2) Publication of unaudited financial information

n/a

(3) &GVCKNUQHNQPIVGTOKPEGPVKXGUEJGOGU

n/a

(4) 9CKXGTQHGOQNWOGPVUD[C&KTGEVQT

n/a

(5) 9CKXGTQHHWVWTGGOQNWOGPVUD[C&KTGEVQT

n/a

(6) 0QPRTGGORVKXGKUUWGUQHGSWKV[HQTECUJ

n/a

(7) 0QPRTGGORVKXGKUUWGD[OCLQT

UWDUKFKCT[ǭWPFGTVCMKPIU

n/a

(8) .KUVGFUWDUKFKCT[

n/a

(9) Contracts of significance

132

(10) 2TQXKUKQPQHUGTXKEGUD[CEQPVTQNNKPIUJCTGJQNFGT

n/a

(11) 5JCTGJQNFGTYCKXGTUQHFKXKFGPFU

See left

(12) 5JCTGJQNFGTYCKXGTUQHHWVWTGFKXKFGPFU

See left

(13) Compliance with controlling shareholder rules

n/a

OTHER INFORMATION

+PCEEQTFCPEGYKVJVJG%QORCPKGU#EVVJGHQNNQYKPIKVGOU

JCXGDGGPKPENWFGFKPQVJGTUGEVKQPUQHVJKU#PPWCN4GRQTV

• CHCKTTGXKGYQHVJGDWUKPGUUCUTGSWKTGFD[VJG%QORCPKGU

#EVKUKPENWFGFKPVJG5VTCVGIKE4GRQTV

• VJGKPHQTOCVKQPKPQWT)QXGTPCPEG4GRQTVKPENWFKPI

information on our Directors and rules around their

appointment and replacement, is included in this Directors’

Report by reference;

• HWVWTGFGXGNQROGPVUKPVJGDWUKPGUUCTGKPENWFGFKPVJG

KPXGUVOGPVECUGEQOOGPEKPIQPRCIG

• information relating to our people, including colleague

GPICIGOGPVKUKPENWFGFKPVJG5VCMGJQNFGT'PICIGOGPV

UGEVKQPQPRCIGQWT2GQRNGCPF2NCPGVCIGPFCQPRCIG

5CHGCPF+PENWUKXGYQTMRNCEGQPRCIGCPFQPRCIGU

CPFKPQWT)QXGTPCPEG4GRQTV

• QWTRTKPEKRCNTKUMUCTGFGVCKNGFQPRCIGUVQ

• information relating to our sustainability approach that

UWRRQTVUQWTGPXKTQPOGPVCNUQEKCNCPFIQXGTPCPEGCIGPFC

KUKPENWFGFQPRCIGUVQ

• TGURQPUKDKNKVKGUVQCDTQCFGTUVCMGJQNFGTITQWRKPENWFKPI

suppliers, consumers and customers, are included on pages

VQCPF

• information on our greenhouse gas emissions is included

on page 66; and

• VJG&KTGEVQTUQHVJG%QORCP[CTGNKUVGFQPRCIGUVQ

1WTTGRQTVWPFGTVJG5VTGCONKPGF'PGTI[CPF%CTDQP

Reporting requirements can be found on page 67.

6JG5VTCVGIKE4GRQTVCPFVJKU&KTGEVQTUũ4GRQTVYGTGCRRTQXGF

and signed by order of the Board.

Emily Carey

Company Secretary

0QXGODGT

+ORGTKCN$TCPFU2.%

+PEQTRQTCVGFCPFFQOKEKNGFKP'PINCPFCPF9CNGU0Q

YYYKORGTKCNDTCPFURNEEQO 133

STATEMENT OF DIRECTORS’

RESPONSIBILITIES

6JG&KTGEVQTUCTGTGURQPUKDNGHQTRTGRCTKPIVJG#PPWCN4GRQTV

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

CEEQTFCPEGYKVJ7-ťCFQRVGF+PVGTPCVKQPCN#EEQWPVKPI

5VCPFCTFU+PCFFKVKQPVJG&KTGEVQTUJCXGGNGEVGFVQRTGRCTG

the Parent Company financial statements in accordance with

7PKVGF-KPIFQO)GPGTCNN[#EEGRVGF#EEQWPVKPI2TCEVKEG

7PKVGF-KPIFQO#EEQWPVKPI5VCPFCTFUCPFCRRNKECDNGNCY

KPENWFKPI(45Ŭ4GFWEGF&KUENQUWTG(TCOGYQTMŭ7PFGT

EQORCP[NCYVJG&KTGEVQTUOWUVPQVCRRTQXGVJGHKPCPEKCN

UVCVGOGPVUWPNGUUVJG[CTGUCVKUHKGFVJCVVJG[IKXGCVTWGCPF

HCKTXKGYQHVJGUVCVGQHCHHCKTUQHVJG)TQWRCPF2CTGPV

Company and of the profit or loss of the Group and Parent

Company for that period.

In preparing the Group financial statements, International

#EEQWPVKPI5VCPFCTFTGSWKTGUVJCV&KTGEVQTU

• properly select and consistently apply suitable

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specific requirements in IFRS accounting standards are

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disclosed and explained in the financial statements; and

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basis unless it is inappropriate to presume that the Group

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reasonable and prudent;

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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.

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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

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to enable them to ensure that the Group financial statements

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for safeguarding the assets of the Parent Company and its

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Under applicable law and regulations, the Directors are also

responsible for preparing a Strategic Report, Directors’ Report,

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that comply with the law and those regulations.

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of financial statements may differ from legislation in

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• the Group and Parent Company financial statements,

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financial position and profit of the Group and Parent

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• the Strategic Report and the Directors’ Report contained in

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of the Group and Parent Company, together with a description

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the Group and the Parent Company’s position and

performance, business model and strategy.

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by the Board and signed on its behalf.

By order of the Board.

Emily Carey

Company Secretary

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GOVERNANCE DIRECTORS’ REPORT continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU134

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 2024 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’)

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Group Parent company

Consolidated balance sheet as at 30 September 2024 Balance sheet as at 30 September 2024

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

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The financial reporting framework that has been applied in their preparation 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.

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 2024;

• 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 only two financial covenants in relation to the

revolving credit facility;

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC

www.imperialbrandsplc.com 135

• 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

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• 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 or financial covenants and whether the reduction in EBITDA that result in breaches to liquidity or financial

covenants has no more than a remote possibility of occurring;

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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 and will not breach banking covenants. 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 £0.6bn in March 2025.

• a reverse stress test scenario corresponding to a permanent reduction in EBITDA of 37% which would result in liquidity being

eroded in August 2025. This scenario is not considered plausible.

We have not identified any climate-related risks that would 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 twelve 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.

OVERVIEW OF OUR AUDIT APPROACH

Audit scope

• We performed an audit of the complete financial information of 5 components and audit procedures

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• The components where we performed full or specific audit procedures accounted for 83% of Profit before

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Key audit matters

• Revenue recognition, including management override of controls

• Management override of controls or errors related to KPIs

• Uncertain tax positions

• Litigation

Materiality

• Overall group materiality of £156m which represents 5% of Profit before tax.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU136

AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit

scope for each company within the group. Taken together, this enables us to form an opinion on the consolidated financial

statements. We take into account the level of revenue, assets, profit before tax, risk profile (including country risk, management’s

assessment of control effectiveness, internal audit findings and the extent of changes in the business environment), and other

known factors when assessing the level of work to be performed at each component.

In assessing the risk of material misstatement to the group financial statements, and to ensure we had adequate quantitative

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components covering entities within Australia, Czech Republic, the Dominican Republic, Germany, Morocco, Poland, Spain,

the UK and the USA, which represent the principal business units within the group.

Of the 17 components selected, we performed an audit of the complete financial information of 5 components (“full scope components”)

which were selected based on their size or risk characteristics. For the remaining 12 components (“specific scope components”),

we performed audit procedures on specific accounts within that component that we considered had the potential for the greatest

impact on the significant accounts in the financial statements either because of the size of these accounts or their risk profile.

The audit scope of specific scope components may not have included testing of all significant accounts of the component but will

have contributed to the coverage of significant accounts tested for the group. We increased our coverage of the total group cash

balance as at 30 September 2024 by performing specified procedures over cash balances by obtaining bank confirmation letters

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The table below illustrate the coverage obtained from the work performed by our audit teams.

Reporting components

2024 2023

Number

% of

group PBT (on

absolute basis)

% of group

Revenue

% of group

Assets Number

% of

group PBT (on

absolute basis)

% of group

Revenue

% of group

Assets

Full scope 5 68% 63% 80% 5 70% 63% 79%

Specific scope 12 15% 18% 10% 13 14% 18% 13%

Specified procedures 28 0% 0% 1% 22 0% 0% 1%

Full, specific, and specified

procedures coverage 45 83% 81% 91% 40 84% 81% 93%

Remaining components 349 17% 19% 8% 354 16% 19% 7%

Total reporting components 394 100% 100% 100% 394 100% 100% 100%

1. Coverage of profit before tax measured on an absolute basis for each component (components with a loss would be added to both the numerator and denominator).

CHANGES FROM THE PRIOR YEAR

The approach to audit scoping is similar to the prior year audit. Our scoping changes from the prior year arise due to changes

to incorporate unpredictability and include a rotation of component audits involved. As a result, one component in Spain moved

from specific scope to review scope and two components in the Czech Republic and Ivory Coast have moved from review scope

to specific scope and specified procedures respectively.

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 primary audit engagement team, or by component auditors from other EY global network firms

operating under our instruction. Of the 5 full scope components, audit procedures were performed on one of these directly by the

primary audit team and four by the component audit teams. For the 12 specific scope components, where the work was performed

by component auditors, we determined the appropriate level of involvement to enable us to determine that sufficient audit

evidence had been obtained as a basis for our opinion on the group as a whole.

Imperial Brands has centralised processes and controls in relation to certain accounts managed by its Finance Shared Services

(“FSS”) centres in Manila and Krakow. Members of the group engagement team provided direct oversight, review, and coordination

of the EY FSS audit teams. The EY FSS audit teams performed centralised testing for certain accounts covered at the Imperial

Brands’ FSS locations, including revenue, receivables, purchases and payables. In establishing our overall approach to the group

audit, we determined the work that needed to be undertaken at each of the locations by the group engagement team or by auditors

from local EY teams.

The group audit team continued to follow a programme of planned visits that has been designed to ensure that the Senior Statutory

Auditor, and other group Partners, visit all full scope and other key locations. During the current year’s audit cycle, visits were

undertaken by the primary audit team to the component teams in the Czech Republic, the Dominican Republic, Germany, Morocco,

Spain and the USA. 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 relating to risk areas. The primary team

interacted regularly with the component teams, where appropriate, during various stages of the audit, reviewed relevant working

www.imperialbrandsplc.com 137

papers and were responsible for the scope and direction of the audit process. At critical periods of the audit, we increased the

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component teams. We requested more detailed deliverables from component teams, and we utilised fully the interactive capability

of EY Canvas, our global audit workflow tool, to review remotely the relevant underlying work performed. For the UK components,

communication has been maintained throughout the audit with the Senior Statutory Auditor covering the same areas described

above applicable to all non-UK component teams. This, together with the additional procedures performed at group level,

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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.

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their climate commitments on pages 66 to 67. 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

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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, that governmental and societal responses to climate

change risks are still developing, and are interdependent upon each other, and consequently the financial statements cannot

capture all possible future outcomes as these are not yet known. 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 80 to 85 and the significant judgements and estimates disclosed in note 2 and whether these have been

appropriately reflected in asset values and associated disclosures 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

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Whilst the group have stated their commitment to the aspirations of the Paris Agreement to achieve net zero emissions by 2040,

the group are currently unable to determine the full future economic impact on their business model, operational plans and

customers to achieve this and therefore as set out above the potential impacts are not fully incorporated in these financial

statements.

Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU138

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, 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.

Risk Our response to the risk

Revenue recognition, including management

override of controls (2024: £32,411m,

2023: £32,475m)

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

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*QYGXGTǭVJGTGǭKUCTKUMVJCVOCPCIGOGPVOC[

override controls to intentionally misstate revenue

transactions by recording fictitious manual journals

to revenue (e.g. inappropriate rebate accounting).

There is also a risk of error relating to the accounting

for non-routine transactions (e.g. sales returns).

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representing a relatively small proportion could

lead to material misstatement of profit.

In addition, the impact of promotional activity

around period ends leading to trade loading can

have a material impact on performance in the

following period. This anticipated impact, if material,

should be described in the front half of the annual

report to provide investors with a fair and balanced

understanding of the drivers of business performance.

Refer to the audit committee report (page 112);

accounting policies (note 1); accounting estimates

and judgements (note 2); and segmental information

(note 3) of the consolidated financial statements.

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 controls 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 discussed and reviewed key contractual arrangements with

management and obtained relevant documentation, including those

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As part of our overall revenue recognition testing, for Tobacco & NGP

components with revenue in scope, we used data analytics techniques.

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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

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recognised by the group.

For the Distribution component, we performed a combination of tests of

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(83%) of Distribution revenue recognised by the group.

We performed detailed, disaggregated, analytical review to identify

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customers rebates/discounts at period ends, which could represent

inventory being ‘pushed’ into the channel.

We reviewed external factors for indicators of trade pull factors with a focus

on full scope and high-risk markets.

We made inquiries outside of finance to identify instances of late or unusual

requests for shipments or extensions of credit terms.

On a sample basis, we obtained third party confirmations of trade terms

from customers to assess for indicators of trade loading, where relevant,

such as unusual sales patterns, rebates/discounts or increased receivable

days at period-ends. We performed appropriate alternative procedures

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contracts and recalculating rebates, validating the inputs of management’s

calculations, and tracing rebate provision amounts to post year end settlements.

Our remaining procedures, applicable to all full and specific scope

components included the following:

• Cut-off testing for a sample of revenue transactions near the period end

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• Targeted manual journal entry testing in response to the risk of fraud; and,

• Review of disclosures against the requirements of IFRS 15

The audit procedures performed to address this risk were performed by

component and shared service centre teams and reviewed by the group team.

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.

www.imperialbrandsplc.com 139

Risk Our response to the risk

Management override of controls or errors related

to KPIs impacting executive remuneration

There is a risk that management could override

controls in order to manipulate KPIs which have

a bearing on remuneration. In the current year

we have identified the following items as areas

of focus:

• Manipulation of reported margins to overstate

operating profits;

• Incorrect classification of items as adjusting

costs in order to manipulate the adjusted

operating profit metric;

• Errors relating to working capital metrics,

particularly focused on inappropriate cash cut-off

to manipulate working capital and therefore the

adjusted operating cash conversion metric;

• Incorrect reporting of ESG metrics on which

aspects of executive remuneration are based.

Refer to the audit committee report (page 112);

accounting policies (note 1); accounting

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consolidated financial statements; and the

supplementary information.

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

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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 finance, 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 ESG metrics linked to executive remuneration,

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• Conducted in-person and remote site visits to understand local level ESG

performance and data collection processes;

• Obtained an understanding of the process for collecting, collating and

reporting the ESG metrics during the reporting period;

• Performed analytical review procedures to understand the

appropriateness of the data.

• Performed testing, on a sample basis, against underlying source information

to check the accuracy and completeness of the data and the appropriate

application of the ESG criteria.

We reviewed the annual report disclosures, including Imperial’s management

rationale for treating as adjusting, whether equal prominence had been

given with statutory measures and the transparency of the reconciliation

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The audit procedures were designed and led by the group audit team,

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ITQWRǭCWFKVVGCO

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 with regards the completeness, accuracy or appropriateness of data used in the application of ESG

criteria related to executive remuneration.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC continued

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Risk Our response to the risk

Uncertain tax positions (Provision for uncertain

tax positions – 2024: £180m, 2023: £189m)

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.

Refer to the audit committee report (page 111);

accounting policies (note 1); accounting estimates

and judgements (note 2); and tax disclosure (note 8)

of the consolidated financial statements.

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 transactions undertaken 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.

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.

The audit procedures were designed and led by the group audit team,

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ITQWRǭCWFKVVGCO

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

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CTGǭCNUQCRRTQRTKCVG

Litigation

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. The group’s

assessment includes evaluating the relevant law,

historical and pending court rulings with the

support of legal counsel.

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.

Refer to the audit committee report (page 111);

accounting policies (note 1); accounting estimates

and judgements (note 2), and contingent liabilities

(note 30) of the consolidated financial statements.

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

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We inspected Imperial’s litigation log and communications to the Executive

Leadership Team and met with group Finance and group General 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

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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.

The audit procedures were designed and led by the group audit team,

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ITQWRǭCWFKVVGCO

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.

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.

www.imperialbrandsplc.com 141

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 £156 million

(2023: £156 million), which is 5% (2023: 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

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assets. In performing our procedures, materiality was capped

at the group allocated materiality of £35 million

(2023: £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

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On the basis of our risk assessments, together with our

assessment of the group’s overall control environment,

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ǭQHQWTRNCPPKPIOCVGTKCNKV[PCOGN[

£117 million (2023: £117 million).

Audit work at component locations for the purpose of obtaining

audit coverage over significant financial statement accounts

is undertaken based on a percentage of total performance

materiality. 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 £23 million to

£35 million (2023: £23 million to £35 million).

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 £8 million

(2023: £8 million), which is set at 5% of planning materiality,

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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 134, 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,

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materially inconsistent with the financial statements or our

knowledge obtained in the course of the audit, or otherwise

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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.

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

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• the parent company financial statements and the part of

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agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified

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• we have not received all the information and explanations

we require for our audit

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC continued

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU142

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

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• 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 52;

• Director’s 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 52;

• Directors’ statement on fair, balanced and understandable

set out on page 103;

• Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out

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• The section of the annual report that describes the review

of effectiveness of risk management and internal control

systems set out on pages 42 to 44; and;

• The section describing the work of the audit committee

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RESPONSIBILITIES OF DIRECTORS

As explained more fully in the directors’ responsibilities

statement set out on page 134, the directors are responsible

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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

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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,

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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,

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employee matters and country-specific regulations on

tobacco and nicotine alternatives control.

• We understood how the group 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.

www.imperialbrandsplc.com 143

• 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

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perceptions of analysts. We considered the programmes

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identified, or that otherwise prevent, deter and detect fraud;

and how senior management monitors those programs

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YGǭRGTHQTOGFCWFKVRTQEGFWTGUVQCFFTGUUGCEJKFGPVKHKGF

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.

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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

VQǭRC[CPFKPXGPVQT[RTQEGUUGUVQCUUKUVKPKFGPVKH[KPI

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.

1WTǭRTQEGFWTGUKPXQNXGFWPFGTUVCPFKPIVJGRTQEGUUCPF

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

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OTHER MATTERS WE ARE REQUIRED TO ADDRESS

• Following the recommendation from the audit committee,

we were appointed by the shareholders at the AGM

on 31 January 2024 to audit the financial statements

for the year ending 30 September 2024 and subsequent

financial periods.

The period of total uninterrupted engagement including

previous renewals and reappointments is five years, covering

the years ending 2020 to 2024.

• 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.

Marcus Butler (Senior statutory auditor)

For and on behalf of Ernst & Young LLP, Statutory Auditor

London

18 November 2024

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMPERIAL BRANDS PLC continued

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CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

for the year ended 30 September 2024

£ million unless otherwise indicated		Notes	2024	2023
R evenue		3	32,411	32,475
Duty and similar items			(13,925)	(14,398)
Other cost of sales			(11,707)	(11,397)
Cost of sales			(25,632)	(25,795)
G ross profit			6,779	6,680
Distribution, advertising and selling costs			(2,383)	(2,338)
Administrative and other expenses			(842)	(940)
O perating profit		4	3,554	3,402
Investment income		5	560	772
Finance costs		5	(1,094)	(1,070)
Net finance costs			(534)	(298)
Share of profit of investments accounted for using the equity method		15	9	7
P rofit before tax			3,029	3,111
Tax		8	(282)	(655)
P rofit for the year			2,747	2,456
Attributable to:
Owners of the parent			2,613	2,328
Non-controlling interests			134	128
E arnings per ordinary share (pence)
•	Basic	10	300.7	252.4
•	Diluted	10	299.0	250.8

Investment income and finance costs for 2023 have been reclassified with no impact to net finance costs. See note 5 for more

information.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30 September 2024

£ million	Notes	2024	2023
P rofit for the year		2,747	2,456
O ther comprehensive income
Exchange movements		(602)	(508)
Hyperinflation adjustment in the year	1	6	5
Current tax on hedge of net investments and quasi-equity loans		(197)	(115)
Items that may be reclassified to profit and loss		(793)	(618)
Net actuarial losses on retirement benefits	24	(99)	(376)
Deferred tax relating to net actuarial losses on retirement benefits		37	135
Items that will not be reclassified to profit and loss		(62)	(241)
O ther comprehensive expense for the year, ne t of tax		(855)	(859)
T otal comprehensive income for the year		1,892	1,597
Attributable to:
Owners of the parent		1,783	1,484
Non-controlling interests		109	113
T otal comprehensive income for the year		1,892	1,597



www.imperialbrandsplc.com 145

CONSOLIDATED FINANCIAL STATEMENTS continued

CONSOLIDATED BALANCE SHEET

at 30 September 2024

£ million	Notes	2024	2023
N on - current assets
Intangible assets	12	15,938	16,944
Property, plant and equipment	13	1,561	1,617
Right of use assets	14	362	326
Investments accounted for using the equity method	15	56	55
Retirement benefit assets	24	376	414
Trade and other receivables	17	118	63
Derivative financial instruments	21/22	330	824
Deferred tax assets	23	889	653
		19,630	20,896
C urrent assets
Inventories	16	4,080	4,522
Trade and other receivables	17	2,645	2,490
Current tax assets	8	249	112
Cash and cash equivalents	18	1,078	1,345
Derivative financial instruments	21/22	144	126
		8,196	8,595
T otal assets		27,826	29,491
C urrent liabilities
Borrowings	20	(1,191)	(1,499)
Derivative financial instruments	21/22	(187)	(174)
Lease liabilities	14	(86)	(81)
Trade and other payables	19	(9,497)	(9,579)
Current tax liabilities	8	(412)	(418)
Provisions	25	(89)	(148)
		(11,462)	(11,899)
N on - current liabilities
Borrowings	20	(7,506)	(7,882)
Derivative financial instruments	21/22	(622)	(829)
Lease liabilities	14	(300)	(268)
Trade and other payables	19	(86)	(27)
Deferred tax liabilities	23	(780)	(871)
Retirement benefit liabilities	24	(819)	(807)
Provisions	25	(222)	(266)
		(10,335)	(10,950)
T otal liabilities		(21,797)	(22,849)
N et assets		6,029	6,642
E quity
Share capital	26	91	97
Share premium and capital redemption	26	5,849	5,843
Retained earnings		(479)	(674)
Exchange translation reserve		(19)	755
E quity attributable to owners of the parent		5,442	6,021
Non-controlling interests		587	621
T otal equity		6,029	6,642



The financial statements on pages 145 to 229 were approved by the Board of Directors on 18 November 2024 and signed on its behalf by:

Lukas Paravicini

Director

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 30 September 2024

					Equity
		Share			attributable
		premium		Exchange	to owners	Non-
	Share	and capital	Retained	translation	of the	controlling	Total
£ million	capital	redemption	earnings	reserve	parent	interests	equity
A t 1 O ctober 2023	97	5,843	(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)
T otal comprehensive income/(expense)	–	–	2,557	(774)	1,783	109	1,892
T ransactions 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)	(1,435)
A t 30 September 2024	91	5,849	(479)	(19)	5,442	587	6,029
A t 1 October 2022	103	5,837	(443)	1,363	6,860	613	7,473
Profit for the year	–	–	2,328	–	2,328	128	2,456
Exchange movements on retranslation of net assets	–	–	–	(942)	(942)	(15)	(957)
Exchange movements on net investment hedges	–	–	–	427	427	–	427
Exchange movements on quasi-equity loans	–	–	–	22	22	–	22
Hyperinflation adjustment in the year	–	–	5	–	5	–	5
Current tax on hedge of net investments and quasi-equity
loans	–	–	–	(115)	(115)	–	(115)
Net actuarial gains on retirement benefits	–	–	(376)	–	(376)	–	(376)
Deferred tax relating to net actuarial gains on retirement
benefits	–	–	135	–	135	–	135
Other comprehensive expense	–	–	(236)	(608)	(844)	(15)	(859)
T otal c omprehensive income/(expense)	–	–	2,092	(608)	1,484	113	1,597
T ransactions with owners
Costs of employees' services compensated by share
schemes	–	–	41	–	41	–	41
Repurchase of shares	(6)	6	(1,006)	–	(1,006)	–	(1,006)
Changes in non-controlling interests	–	–	1	–	1	(1)	–
Deferred tax on share-based payments	–	–	1	–	1	–	1
Registration of put/call option	–	–	(48)	–	(48)	–	(48)
Dividends paid	–	–	(1,312)	–	(1,312)	(104)	(1,416)
A t 30 September 2023	97	5,843	(674)	755	6,021	621	6,642

www.imperialbrandsplc.com 147

CONSOLIDATED FINANCIAL STATEMENTS continued

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 30 September 2024

£ million	2024	2023
C ash flows from operating activities
Operating profit	3,554	3,402
Dividends received from investments accounted for using the equity method	9	7
Depreciation, amortisation and impairment	647	632
Profit on disposal of non-current assets	(13)	(39)
Loss on disposal of subsidiaries	–	1
Post-employment benefits	(45)	(29)
Share-based payments	46	31
Other non-cash items	(1)	40
Movement in provisions	(102)	21
Operating cash flows before movement in working capital	4,095	4,066
Decrease/(increase) in inventories	205	(551)
(Increase)/decrease in trade and other receivables	(318)	46
Increase in trade and other payables	213	158
Movement in working capital	100	(347)
Tax paid	(888)	(590)
N et cash generated from operating activities	3,307	3,129
C ash flows from investing ac t ivities
Interest received	15	10
Proceeds from the sale of non-current assets	50	71
Purchase of non-current assets	(371)	(325)
Purchase of brands and operations	(42)	(183)
N et cash used in investing activities	(348)	(427)
C ash flows from financing ac t ivities
Acquisition of non-controlling interests	(49)	–
Interest paid	(431)	(417)
Lease liabilities paid	(93)	(92)
Increase in borrowings	3,848	1,462
Repayment of borrowings	(3,948)	(1,518)
Cash flows relating to derivative financial instruments	(34)	(64)
Repurchase of shares	(1,020)	(1,006)
Dividends paid to non-controlling interests	(136)	(104)
Dividends paid to owners of the parent	(1,299)	(1,312)
N et cash used in financing activities	(3,162)	(3,051)
N e t d e c r e a s e i n c a s h a n d c a s h e q u i v a l e n t s	(203)	(349)
C ash and cash equ i valents at start of year	1,345	1,850
Effect of foreign exchange rates on cash and cash equivalents	(64)	(156)
C ash and cash equ i valents at end of year	1,078	1,345

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU148

NOTES TO THE FINANCIAL STATEMENTS

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 (e.g.

COVID-19, political uncertainty in Russia, Ukraine and the

Middle East), 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 concern 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

such as unexpected duty and tax payments; and/or other

legal and regulatory risks materialising of c.£500 million

• 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 2024

The scenario planning also considered mitigation actions

including reductions to capital expenditure, dividend payments

and 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 share buyback programme, we have

modelled that a 37% EBITDA reduction would lead the Group to

have sufficient headroom until 30 November 2025.

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. In this scenario the Group would implement a number

of mitigating actions including revoking the uncommitted

dividend, pausing the share buyback and reducing

discretionary spend such as capital expenditure.

Based on its review of future cash flows covering the period

through to 30 November 2025, 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 from the date of this

report 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 2024. See note VIII Guarantees of the Imperial

Brands PLC financial statements for further details.

An amendment to 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.

www.imperialbrandsplc.com 149

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

The material accounting policies, which have been applied

consistently other than where new policies (detailed below)

have been adopted, are set out below.

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.

		2024		2023
	Closing rate	Average rate	Closing rate	Average rate
Euro	1.1985	1.1694	1.1545	1.1487
US dollar	1.3384	1.2681	1.2214	1.2264

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.

Typically, there is a high degree of certainty over the amount of

retrospective rebates/discounts paid due to relatively low year-

on-year variations in the volume and pattern of product sales.

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.

+ORGTKCN$TCPFU2.%ś^ś#PPWCN4GRQTVCPF#EEQWPVU150

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 are recognised in other cost of sales; for further

disclosure see note 30 contingent liabilities.

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.

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 as approved by the Board of Directors 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.

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.

www.imperialbrandsplc.com 151

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

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 - 10 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 an unconditional right to defer

settlement of the liability for at least 12 months after the

balance sheet date.

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.

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.

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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 an 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,

or where a disclosure would seriously prejudice the position of

the Group.

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. Prior year amounts have been restated having

previously presented gross.

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.

www.imperialbrandsplc.com 153

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

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.

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. In accordance with IAS 21 The

Effects of Changes in Foreign Exchange Rates, the comparative

figures for the year ended 30 September 2023 have not been

modified. 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 (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 2024.

• 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 2526.16 at 30 September 2024

(1,691.04 at 30 September 2023 and 1,046.89 at 30 September

2022). The inflation index for the year is therefore 1.4939 (2023:

1.6153). 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 2024.

New accounting standards that are effective after the

year ended 30 September 2024

There are a number of amendments and clarifications to IFRS,

effective in future years and, with the exception of IFRS 18

Presentation and Disclosure in Financial Statements, none of

these are expected to significantly impact the Group’s

consolidated results or financial position.

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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.

Therefore, no significant estimates are required to be disclosed.

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.

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.

www.imperialbrandsplc.com 155

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

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").

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.

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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, Luxembourg, France, Italy, Greece, Sweden, Norway, Belgium and the Netherlands.

Americas – United States.

AAACE – Australia, Saudi Arabia, Taiwan, Poland, Czech Republic, Ukraine, Slovakia, Hungary, Slovenia and African markets including

Algeria and Morocco.

Tobacco & NGP

			2024			2023
			Tobacco &			Tobacco &
£ million unless otherwise indicated	Tobacco	NGP	NGP	Tobacco	NGP	NGP
Revenue	21,708	376	22,084	22,114	299	22,413
Net revenue	7,828	329	8,157	7,747	265	8,012
Operating profit/(loss)	3,321	(83)	3,238	3,262	(156)	3,106
Adjusted operating profit			3,587			3,583
Adjusted operating margin %			44.0			44.7

Distribution

£ million unless otherwise indicated	2024	2023
Revenue	11,104	10,819
Distribution gross profit	1,503	1,466
Operating profit	322	298
Adjusted operating profit	330	306
Adjusted operating margin %	22.0	20.9

Revenue

		2024		2023
	Total	External	Total	External
£ million	revenue	revenue	revenue	revenue
Tobacco & NGP
Europe	12,037	11,260	11,749	10,992
Americas	3,657	3,657	3,700	3,700
AAACE	6,390	6,390	6,964	6,964
Total Tobacco & NGP	22,084	21,307	22,413	21,656
Distribution	11,104	11,104	10,819	10,819
Eliminations	(777)	–	(757)	–
Total Group	32,411	32,411	32,475	32,475

The eliminations all relate to Tobacco & NGP sales to Distribution.

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CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Tobacco & NGP net revenue

			2024			2023
£ million	Tobacco	NGP	Total	Tobacco	NGP	Total
Europe	3,106	260	3,366	3,020	220	3,240
Americas	2,793	43	2,836	2,778	34	2,812
AAACE	1,929	26	1,955	1,949	11	1,960
Total Tobacco & NGP	7,828	329	8,157	7,747	265	8,012

Adjusted operating profit and reconciliation to profit before tax

£ million	2024	2023
Tobacco & NGP
Europe	1,541	1,482
Americas	1,235	1,257
AAACE	811	844
Total Tobacco & NGP	3,587	3,583
Distribution	330	306
Eliminations	(6)	(2)
Adjusted operating profit	3,911	3,887
Russia, Ukraine and associated markets - Tobacco & NGP	–	(4)
Amortisation and impairment of acquired intangibles - Tobacco & NGP	(345)	(339)
Amortisation of acquired intangibles - Distribution	(8)	(8)
Fair value adjustment and impairment of other financial assets - Tobacco & NGP	–	(36)
Loss on disposal of subsidiaries - Tobacco & NGP	–	(1)
Charges related to legal provisions - Tobacco & NGP	–	(85)
Structural changes to defined benefit pension schemes - Tobacco & NGP	(4)	(12)
Operating profit	3,554	3,402
Net finance costs	(534)	(298)
Share of profit of investments accounted for using the equity method	9	7
Profit before tax	3,029	3,111

Other information

				2024
	Additions to	Depreciation	Other
	property, plant	and software	intangible asset	Inventory
£ million	and equipment	amortisation	amortisation	impairments
Tobacco & NGP
Europe	60	88	7	16
Americas	30	27	1	4
AAACE	51	40	–	11
Total Tobacco & NGP	141	155	8	31
Distribution	38	37	–	–
Total Group	179	192	8	31

				2023
	Additions to	Depreciation	Other
	property, plant	and software	intangible asset	Inventory
£ million	and equipment	amortisation	amortisation	impairments
Tobacco & NGP
Europe	69	79	10	30
Americas	36	20	1	3
AAACE	46	41	–	13
Total Tobacco & NGP	151	140	11	46
Distribution	40	41	–	–
Total Group	191	181	11	46

The above tables include items that have been recognised within segment. Materiality has been assessed on both a qualitative and

quantitative basis.

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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.

		2024		2023
	External	Non-current	External	Non-current
£ million	revenue	assets	revenue	assets
UK	3,781	161	3,926	148
Germany	4,501	3,156	4,142	3,245
France	3,374	2,282	3,428	2,350
USA	3,648	4,968	3,657	5,646
Other	17,107	7,350	17,322	7,553
Total Group	32,411	17,917	32,475	18,942

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	2024	2023
Raw materials and consumables used	950	773
Changes in inventories of finished goods - Tobacco & NGP	2,516	2,630
Changes in inventories of finished goods - Distribution	8,243	7,994
Depreciation and impairment of fixed assets	153	153
Amortisation and impairment of intangible assets and investments accounted for using the equity method	399	394
Expenses relating to short-term leases	10	4
Expenses relating to low value asset leases	2	1
Depreciation and impairment of right of use assets	95	85
Net foreign exchange gains	(3)	(11)
Write down of inventories	28	40
Profit on disposal of non-current assets	13	39
Write back of trade receivables	(3)	(5)

Analysis of fees payable to Ernst & Young LLP and its associates

£ million	2024	2023
Parent Company and consolidated financial statements	3.2	3.1
The Company's subsidiaries	6.8	6.5
T otal audit fees	10.0	9.6
Audit-related assurance services	0.5	0.5
T o t a l a u d i t - r e l a t e d f e e s	10.5	10.1
Other assurance services	1.2	0.5
T otal non - audit fees	1.2	0.5
T otal auditor's remuneration	11.7	10.6

Audit fees for the year ended 30 September 2023 reflect the final amounts paid.



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CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

5. INVESTMENT INCOME AND FINANCE COSTS

£ million	2024	2023
I nvestment income
Fair value gains on derivative financial instruments	513	707
Net exchange gains on financing activities	9	10
Interest income on net defined benefit assets	22	43
Interest income on bank deposits	16	12
T otal investment income	560	772
F inance costs
Fair value losses on derivative financial instruments	(632)	(568)
Interest cost on net defined benefit liabilities	(33)	(30)
Tax interest cost	(10)	(50)
Interest cost on lease liabilities	(14)	(10)
Interest cost on bank and other loans	(404)	(412)
Effect of discounting on long-term provisions	(1)	–
T otal finance costs	(1,094)	(1,070)
N et finance costs	(534)	(298)

Prior year amounts for interest income/(cost) on net defined benefit assets/(liabilities) have been reclassified to be in accordance with IAS

19 to show the net amounts per defined benefit scheme, having previously been presented gross. Total investment income and total

finance costs have been reclassified accordingly. The effect is offsetting in nature and reduces both amounts by £135 million. There is no

impact to net finance costs or the other primary statements.

6. RESTRUCTURING COSTS

			2024		2023
£ million		Costs	Cash spend	Costs	Cash spend
2021	Strategic review programme	–	25	–	61
Other		–	18	–	37
		–	43	–	98

Restructuring projects involve significant one-off costs 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.

No accounting charges have been recognised in the current period in relation to historic restructuring programmes, however there

remain some ongoing cash costs to be incurred which are not expected to be in excess of existing provisions.

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7. DIRECTORS AND EMPLOYEES

Employment costs

£ million	2024	2023
Wages and salaries	923	882
Social security costs	202	186
Other pension costs (note 24)	29	41
	1,154	1,109
Share-based payments (note 27)	32	31
	1,186	1,140

Operating executive (excluding executive directors)

£ million	2024	2023
Base salary	4.6	4.7
Benefits	0.7	0.9
Pension salary supplement	0.6	0.7
Bonus	4.9	4.8
Termination payments	0.2	2.1
LTIP annual vesting 1	7.2	7.8
	18.2	21.0

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 £37,049,852 (2023: £39,323,966).

Key management compensation

£ million	2024	2023
Short-term employee benefits	17.7	17.0
Termination payments	0.2	2.1
Share-based payments (in accordance with IAS 24)	14.4	15.0
	32.3	34.1

1. Key management includes Directors, members of the Executive Committee and the Company Secretary.

Details of Directors' emoluments and interests, and of key management compensation which represent related-party transactions

requiring disclosure under IAS 24, are provided within the Directors' Remuneration Report. The Directors' Remuneration Report includes

details on salary, benefits, pension and share plans. These disclosures form part of the financial statements.

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CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Number of people employed by the Group during the year

		2024		2023
	At 30		At 30
	September	Average	September	Average
Tobacco & NGP	18,900	18,400	18,800	19,100
Distribution	6,700	6,500	6,400	6,400
	25,600	24,900	25,200	25,500

Number of people employed by the Group by location during the year

		2024		2023
	At 30		At 30
	September	Average	September	Average
UK and European Union	12,400	12,100	12,200	11,900
Americas	4,900	4,700	4,700	5,100
Rest of the World	8,300	8,100	8,300	8,500
	25,600	24,900	25,200	25,500

8. TAX

The major components of income tax expense for the years ended 30 September 2024 and 2023:

	2024	2023
UK current tax
Current year credited to the consolidated income statement	(95)	(55)
Current year charged to consolidated other comprehensive income	197	115
Total current year UK current tax	102	60
Adjustments in respect of prior years (credited)/charged to the consolidated income statement	(80)	15
Total UK current tax	22	75
Overseas current tax
Current year charged to the consolidated income statement	704	620
Total current year overseas current tax	704	620
Adjustments in respect of prior years charged to the consolidated income statement	40	233
Total overseas current tax	744	853
Total current tax charged to the consolidated statement of other comprehensive income	766	928
£ million	2024	2023
UK current tax
Current year	(95)	(55)
Adjustments in respect of prior years	80	15
Overseas current tax
Current year	704	620
Adjustments in respect of prior years	40	233
Total current tax	569	813
Deferred tax
Relating to origination and reversal of temporary differences	(287)	(158)
T otal tax charged to the c o nsolidated income statement	282	655

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£ million	2024	2023
Tax related to items recognised in consolidated other comprehensive income during the year:
Current tax on hedge of net investment and quasi-equity loans	197	115
Total current tax	197	115
Deferred tax on actuarial gains and losses	(37)	(135)
Deferred tax on hyperinflation adjustment	2	1
Total deferred tax	(35)	(134)
Total tax credited to consolidated other comprehensive income	162	(19)
£ million	2024	2023
Tax related to items recognised in equity during the year:
Current tax on share-based payments	(4)	–
Deferred tax on share-based payments	(2)	(1)
Total tax credited to equity	(6)	(1)

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% (2023: 22.0%) as follows:

£ million	2024	2023
Profit before tax	3,029	3,111
Tax at the UK corporation tax rate of 25.0% (2023: 22.0%)	757	684
Tax effects of:
Differences in effective tax rates on overseas earnings	(56)	24
Movement in provision for uncertain tax positions	170	211
Remeasurement of deferred tax balances arising from changes in tax rates	5	–
Recognition of deferred tax assets for tax credits	(293)	–
Remeasurement of previously recognised deferred tax assets	(2)	(6)
Increase in previously unrecognised deferred tax assets	–	1
Deferred tax on unremitted earnings	12	5
Share of profit of investments accounted for using the equity method	(2)	(2)
Non-deductible expenses	24	24
Non-taxable gains on net foreign exchange on financial instruments	(198)	(122)
Recognition of deferred tax assets	–	(212)
Provision for state aid tax recoverable	(101)	–
Adjustments in respect of prior years	(34)	48
Total tax charged to the consolidated income statement	282	655

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 £5 million (2023: £nil).

During the year the Group has increased the provision for deferred tax on unremitted earnings by £7 million (2023: £5 million increase).

The tax will arise on the distribution of profits through the Group and on planned Group simplification.



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CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Movement on the current tax account

£ million	2024	2023
At 1 October	(306)	27
Charged to the consolidated income statement	(569)	(813)
Charged to other comprehensive income	(197)	(115)
Credited to equity	4	–
Cash paid	888	590
Exchange movements	17	6
Balance sheet reclassification	–	(1)
At 30 September	(163)	(306)

The cash tax paid in the year is £303 million higher than the current tax charge (2023: £223 million lower). 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	2024	2023
State aid tax recoverable	101	–
Current tax assets	148	112
Current tax liabilities	(412)	(418)
	(163)	(306)

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 2024 the total value of these provisions excluding offsetting assets under mutual agreement

procedure was £365 million (2023: £261 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.

French tax litigation

The Group has an ongoing challenge from the French tax authorities, which is now in litigation, and could lead to total liabilities of £254

million including tax, interest, and penalties. The challenge concerns 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 is 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. In July 2023 the Group appealed to the Administrative Court of Appeal of Paris, with any

hearing not expected until December 2024 at the earliest. Whilst the Group has appealed, in the light of the Administrative Tribunal of

Montreuil’s decision, and having subsequently reassessed the probability of a successful appeal, the Group determined it was appropriate

to maintain the provision for uncertain tax positions, of which £64 million was paid in September 2024, at £111 million (30 September 2023:

£180 million).

State aid UK CFC

In April 2019, the EU Commission’s final decision regarding its investigation into the UK’s Controlled Foreign Company (CFC) 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 19 September 2024, annulling the EU Commission decision and setting aside the

judgment of the General Court, ruling that the taxation of a CFC regime did not constitute state aid. In light of the CJEU decision, the

Group has now reversed a provision in order to recognise a receivable for c.£101 million state aid (and c.£9 million of interest) previously

paid. Noting the recovery of the receivable is pending a change in UK regulations which is required to facilitate the repayment of the

previously collected state aid.

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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 £245 million excluding offsetting assets (2023: £68 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. In September 2023 an additional separate transfer pricing audit was opened

by the German tax authorities. Due to new regulations introduced in FY24 in Germany which could be considered to be of a clarifying

nature rather than any new principle, the Group has made additional provision of £155 million considering the range of potential

outcomes and the balance of probabilities associated with each potential outcome, the maximum potential exposure being £213 million.

The Group believes the total transfer pricing provision held appropriately provides for this and other transfer pricing issues.

9. DIVIDENDS

Distributions to ordinary equity holders

			Pence per share			£ million
	2024	2023	2022	2024	2023	2022
C ash:
D ecember	51.82	49.31	48.47	461	464	458
M arch	51.82	49.32	48.49	453	457	458
J une	22.45	21.59	21.27	193	196	202
S eptember	22.45	21.59	21.27	192	195	202
T otal	148.54	141.81	139.50	1,299	1,312	1,320

The dividends note, which previously contained details of both paid and proposed distributions, has been reformatted. The table now

aligns the paid dividends with the equivalent amount recorded as a payment to equity shareholders of the Parent Company shown within

the Consolidated Statement of Changes in Equity. Details of proposed dividends are given in narrative form below. The change in the

format of this note does not constitute a restatement within the requirements of IAS 8 Accounting Policies, Changes in Accounting

Estimates and Errors.

The declared third interim dividend for the year ended 30 September 2024 of 54.26 pence per share amounts to a proposed dividend of

£459 million, which will be paid in December 2024. The proposed final dividend for the year ended 30 September 2024 of 54.26 pence per

share amounts to a proposed dividend payment of £459 million in March 2025 based on the number of shares ranking for dividend at 30

September 2024, and is subject to shareholder approval. If approved, the total dividend paid in respect of 2024 will be £1,303 million (2023:

£1,305 million). The dividend paid during 2024 is £1,299 million (2023: £1,312 million).

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	2024	2023
Earnings: basic and diluted - attributable to owners of the Parent Company	2,613	2,328
Millions of shares
Weighted average number of shares:
Shares for basic earnings per share	869.0	922.5
Potentially dilutive share options	4.9	5.7
Shares for diluted earnings per share	873.9	928.2
Pence
Basic earnings per share	300.7	252.4
Diluted earnings per share	299.0	250.8

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CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

11. ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES

Logista

Acquisition of 3 For One SA (Belgium Parcels Service SRL)

In December 2023, Logista Group reached an agreement to acquire 100% ownership of “3 for one SA”, the parent company of Belgium

Parcels Service SRL. Belgium Parcels Service SRL is a company that offers 24-hour courier services in Belgium and Luxembourg, and 24

to 48 hours delivery in the Netherlands, France and Germany. The Belgian company specialises in the distribution of temperature

sensitive products, mainly pharmaceuticals to hospitals and pharmacies.

The total purchase price of these shares amounted to approximately 8 million (£7 million).

As of 30 September 2024, the company had a goodwill of 4 million (£3 million). The valuation of the assets at fair value has been carried

out by an independent expert assessing the acquired intangible assets, which include customer relationships of 2 million (£2 million)

and trademarks for 1 million (£1 million). Cash of 2 million (£2 million), property, plant and equipment of 1 million (£1 million), and non-

current financial liabilities of 2 million (£2 million) were also acquired.

Acquisition of Speedlink Worldwide Express B.V.

On 16 February 2022, the Group’s subsidiary Logista acquired 70% of the share capital of Speedlink Worldwide Express B.V. for a purchase

consideration of 20 million (£16 million) which has been paid in cash. In May 2024, the remaining 30% of the share capital was acquired

for an amount of 10 million (£8 million).

Acquisition of Herinvemol, S.L. (Transportes El Mosca)

On 17 June 2022, the Group's subsidiary Logista announced the acquisition of 60% of the shares of Herinvemol S.L. Herinvemol S.L. is the parent

company of a group of companies over which it holds control, trading as “Transportes El Mosca”. This acquisition completed on 28 October 2022.

Transportes El Mosca offers national and international intermodal transport services by road, sea and air, as well as frozen or refrigerated

transport. The main destination markets for the international road transport activity are the United Kingdom, Germany, Portugal, France,

the Netherlands, and Italy, and its clients are mainly producers and large distribution chains in the food sector.

On 3 August 2023, Logista announced the acquisition of an additional 13.33% of equity for a consideration of 23 million (£20 million),

increasing its total ownership to 73.33%.

At 30 September 2023, Logista had a purchase option for the remaining 26.67%, which was recorded at fair value as a non-current liability

for an amount of 25 million (£22 million) and a current liability for an amount of 25 million (£22 million), with a corresponding

adjustment taken to equity reserves.

In July 2024, Logista announced the increase of its stake to 100%, with an additional payment of 44 million (£37 million). The movement,

recorded under the heading "Remeasurement of put/call option", amounting to 6 million (£5 million) corresponds to the difference

between the payment of the purchase option and its valuation as at 30 September 2023.

Acquisition of Carbó Collbatallé S. L.

In April 2022, the Group's subsidiary Logista reached an agreement for the acquisition of 100% of the shares of Carbó Collbatallé, a

company that offers transport and logistics services for refrigerated and frozen foods, which carries out its commercial activity mainly in

the Spanish market. This acquisition was completed in October 2022.

The total consideration of the shares acquired was 55 million (£46 million). The valuation of the assets at fair value has been carried out

by an independent expert. This valuation includes, as intangible assets, customer relationships for 20 million (£17 million) and

trademarks for 1 million (£1 million).

Acquisition of Gramma Farmaceutici, S.R.L.

In July 2023, the Group’s subsidiary Logista acquired 100% of the equity shares of Gramma Farmaceutici, S.R.L., a company specialised in

logistics services for the pharmaceutical industry in Italy. The total purchase price of these shares amounted to 3 million (£3 million), paid in

cash at the time of purchase. As at 30 September 2023, the company had a goodwill of 1 million (£1 million) in the Distribution segment.

The valuation of the assets at fair value has been carried out by an independent expert. This valuation includes, as intangible assets,

customer relationships for 2 million (£2 million), property plant and equipment of 2 million (£2 million), trade and other receivables of

4 million (£3 million) and trade and other payables of 5 million (£4 million).

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12. INTANGIBLE ASSETS

					2024
		Intellectual
		property and
		product	Supply
£ million	Goodwill	development	agreements	Software	Total
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
A mortisation 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
N et book value
At 30 September 2024	11,684	3,864	61	329	15,938

Cost

					2023
		Intellectual
		property and
		product	Supply
£ million	Goodwill	development	agreements	Software	Total
At 1 October 2022	14,228	13,871	1,433	522	30,054
Additions	–	136	1	119	256
Acquisitions	67	5	54	2	128
Disposals	–	(115)	–	(3)	(118)
Reclassifications	–	(2)	–	2	–
Exchange movements	(510)	(853)	(31)	(12)	(1,406)
At 30 September 2023	13,785	13,042	1,457	630	28,914
A mortisation and impairment
At 1 October 2022	1,587	8,925	1,414	351	12,277
Amortisation charge for the year	–	352	6	34	392
Disposals	–	(109)	–	(3)	(112)
Reclassifications	–	(1)	–	1	–
Exchange movements	(31)	(517)	(31)	(8)	(587)
Accumulated amortisation	–	8,111	1,389	374	9,874
Accumulated impairment	1,556	539	–	1	2,096
At 30 September 2023	1,556	8,650	1,389	375	11,970
N et b ook value
At 30 September 2023	12,229	4,392	68	255	16,944
A ssets under construction included above:
At 30 September 2024					261
At 30 September 2023					1 6 0

Cost

Amortisation and impairment of acquired intangibles excluded from adjusted operating profit amounted to £353 million (2023:

£347 million); this comprises amortisation on intellectual property of £346 million (2023: £341 million) and amortisation on supply

agreements of £7 million (2023: £6 million).

www.imperialbrandsplc.com 167

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

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 ending 30 September 2023, the Group purchased intellectual property relating to tobacco pouches to be marketed within

the United States. The purchase consideration was US$ 130 million (£106 million) comprising US$ 50 million (£41 million) which was paid

in cash on completion, deferred consideration of US$ 31 million (£25 million) paid in December 2023 and contingent consideration

estimated at US$ 49 million (£40 million) payable over a five-year period up until 2028. All deferred and contingent consideration has

been discounted at a rate of 13% and a corresponding consideration liability of US$ 81 million (£66 million) has been recognised. The total

initial intangible asset value recognised was US$ 130 million (£106 million). During the period additional contingent consideration of

US$ 56 million (£41 million) was recognised to reflect the latest sales forecast. As at 30 September 2024, the total intangible asset value

recognised was US$ 186 million (£139 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.

		2024		2023
		Intangible		Intangible
		assets with		assets with
		indefinite		indefinite
£ million	Goodwill	lives	Goodwill	lives
Europe	3,919	296	4,123	307
Americas	3,945	–	4,147	–
AAACE	2,076	156	2,181	162
Tobacco & NGP	9,940	452	10,451	469
Distribution	1,744	–	1,778	–
	11,684	452	12,229	469

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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Growth rates and discount rates used

The compound annual growth rates implicit in these value in use calculations are shown below.

			2024			2023
	Pre-tax	Initial growth	Long-term	Pre-tax	Initial growth	Long-term
%	discount rate	rate	growth rate	discount rate	rate	growth rate
Europe	9.9	4.1	0.2	10.4	4.5	1.0
Americas	8.7	6.5	1.9	8.9	5.8	2.1
AAACE	13.3	2.0	1.9	12.5	4.3	2.2
Distribution	12.1	4.1	1.6	12.3	5.0	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 which can

differ from our internal plans.

Nominal cash flows from the business plan period are used for years 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.

Europe's long-term growth rate reduced by 0.8%. This is primarily a reflection of a reduction in the long-term growth outlook for the

UK market.

Americas was broadly in line with the prior year growth assumptions for the initial and long-term growth rate. The key change was a 0.7%

increase in the initial growth rate driven by improved expectations for product growth, particularly related to NGP.

AAACE had a 2.3% reduction in the initial growth rate primarily driven by the lower expectation for the Australia market with other

reductions related to Morocco and Kuwait.

The Distribution initial growth rate reduced by 0.9% compared to prior year reflecting the fact that significant growth has now been

delivered in the current financial year.

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 2024. 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.

www.imperialbrandsplc.com 169

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 being

relating to NTM 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. The modelled impact for the Group was £504 million (2023: £338 million). This concluded that there continues to be sufficient

headroom. 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 2024 was £452 million (2023: £469 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 (2023: £nil) have been recognised for brand intangibles.

Intellectual property and product development intangible assets have also been reviewed to identify potential impairment triggers.

No such impairment triggers were noted in the year ended 30 September 2024 and hence no impairment charge has been incurred

(2023: £nil).

No impairment charge (2023: £nil) was incurred in the year relating to software.



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13. PROPERTY, PLANT AND EQUIPMENT

				2024
			Fixtures
		Plant and	and motor
£ million	Property	equipment	vehicles	Total
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 (note 1)	1	10	1	12
Reclassifications	18	(5)	(13)	–
Exchange movements	(25)	(81)	(15)	(121)
At 30 September 2024	736	2,048	450	3,234
D epreciation 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
N et book value
At 30 September 2024	568	826	167	1,561

Cost

				2023
			Fixtures
		Plant and	and motor
£ million	Property	equipment	vehicles	Total
At 1 October 2022	806	2,080	455	3,341
Additions	3	130	58	191
Acquisitions	–	5	9	14
Disposals	(22)	(74)	(24)	(120)
Hyperinflation adjustment (note 1)	–	5	–	5
Exchange movements	(31)	(81)	(14)	(126)
At 30 September 2023	756	2,065	484	3,305
D epreciation and impairment
At 1 October 2022	181	1,200	301	1,682
Depreciation charge for the year	17	98	32	147
Impairment	–	6	–	6
Disposals	(11)	(60)	(15)	(86)
Exchange movements	(10)	(41)	(10)	(61)
At 30 September 2023	177	1,203	308	1,688
N et book value
At 30 September 2023	579	862	176	1,617
A ssets under construction included above:
At 30 September 2024				122
At 30 September 2023				107

Cost

www.imperialbrandsplc.com 171

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

14. RIGHT OF USE ASSETS AND LEASE LIABILITIES

The movements in right of use assets in the year were as follows:

				2024
			Fixtures
		Plant and	and motor
£ million	Property	equipment	vehicles	Total
N et book value
At 1 October 2023	256	2	68	326
Additions and modifications	82	4	69	155
Terminations	(4)	(1)	(5)	(10)
Depreciation and impairment	(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 were as follows:

	Lease
£ million	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 2024 are disclosed in Note 21.

The following are the amounts recognised in the consolidated income statement:

£ million	2024	2023
Expenses relating to short-term leases	10	4
Expenses relating to low value asset leases	2	1
Depreciation and impairment expense of right of use assets	95	85
Interest on lease liabilities	14	10

The movements in right of use assets in the year ending 30 September 2023 were as follows:

				2023
			Fixtures
		Plant and	and motor
£ million	Property	equipment	vehicles	Total
N et book v alue
At 1 October 2022	194	3	31	228
Additions and modifications	74	3	35	112
Acquisitions	50	–	34	84
Terminations	(3)	–	(2)	(5)
Depreciation	(53)	(4)	(28)	(85)
Exchange movements	(6)	–	(2)	(8)
At 30 September 2023	256	2	68	326

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The movements in lease liabilities in the year ending 30 September 2023 were as follows:

	Lease
£ million	Liabilities
At 1 October 2022	248
Cash flow	(92)
Accretion of interest	10
New leases, terminations and modifications	106
Acquisitions	84
Exchange movements	(7)
At 30 September 2023	349

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 2023 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:

			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

			2023
	Global
	Horizon
£ million	Ventures	Others	Total
Revenue	19	28	47
Profit after tax	13	4	17
Non-current assets	–	7	7
Current assets	56	49	105
Total assets	56	56	112
Current liabilities	(7)	(41)	(48)
Non-current liabilities	–	(14)	(14)
Total liabilities	(7)	(55)	(62)
Net assets	49	1	50
Transactions and balances with joint ventures
£ million		2024	2023
Purchases from		9	4
Accounts payable to		(4)	(2)

www.imperialbrandsplc.com 173

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Movement on investments accounted for using the equity method

£ million	2024	2023
At 1 October	55	56
Share of profit for the year from joint ventures	9	7
Share of profit for the year from associates	1	2
Impairment of investment in associates	–	(2)
Dividends	(9)	(7)
Foreign exchange losses	–	(1)
At 30 September	56	55

16. INVENTORIES

£ million	2024	2023
Raw materials	960	1,159
Work in progress	84	81
Finished inventories	2,887	3,106
Other inventories	149	176
	4,080	4,522

Other inventories mainly comprise duty-paid tax stamps.

Within finished inventories of £2,887 million (2023: £3,106 million) there is excise duty of £1,118 million (2023: £1,192 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 £204 million (2023:

£337 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

		2024		2023
£ million	Current	Non-current	Current	Non-current
Trade receivables	2,395	1	2,211	3
Less: loss allowance	(64)	(1)	(63)	(3)
Net trade receivables	2,331	–	2,148	–
Other receivables	156	37	149	26
Prepayments	158	81	193	37
	2,645	118	2,490	63

Trade receivables may be analysed as follows:

		2024		2023
£ million	Current	Non-current	Current	Non-current
Within credit terms	2,194	–	1,996	–
Past due by less than 3 months	111	–	121	–
Past due by more than 3 months	26	–	31	–
Amounts that are impaired	64	1	63	3
	2,395	1	2,211	3

£ million	2024	2023
At 1 October	66	79
Net decrease in provision	(1)	(13)
At 30 September	65	66

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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18. CASH AND CASH EQUIVALENTS

£ million	2024	2023
Cash at bank and in hand	607	683
Short-term deposits and other liquid assets	471	662
	1,078	1,345

£217 million (2023: £135 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

		2024		2023
£ million	Current	Non-current	Current	Non-current
Trade payables	1,499	–	1,507	–
Duties payable	5,156	–	5,297	–
Other taxes and social security contributions	1,381	–	1,375	–
Other payables	623	–	526	–
Accruals	838	86	874	27
	9,497	86	9,579	27

20. BORROWINGS

The Group’s borrowings, held at amortised cost, are as follows:

£ million	2024	2023
Current borrowings
Bank loans and overdrafts	34	49
Capital market issuance:
European commercial paper (ECP)	21	–
£600m 8.125% notes due March 2024	–	627
US$ 1,000m 3.125% notes due July 2024	–	823
500m 1.375% notes due January 2025	421	–
US$ 950m 4.25% notes due July 2025	715	–
Total current borrowings	1,191	1,499
Non-current borrowings
Bank loans	–	2
Capital market issuance:
500m 1.375% notes due January 2025	–	437
US$ 1,500m 4.25% notes due July 2025	–	1,236
650m 3.375% notes due February 2026	553	574
US$ 750m 3.5% notes due July 2026	563	617
£500m 5.5% notes due September 2026	500	500
750m 2.125% notes due February 2027	634	657
US$ 1,000m 6.125% notes due July 2027	752	822
US$ 1,000m 3.875% notes due July 2029	751	822
US$ 1,250m 5.5% notes due February 2030	944	–
1,050m 5.25% notes due February 2031	898	838
£500m 4.875% notes due June 2032	505	505
1,000m 1.75% notes due March 2033	840	872
US$ 750m 5.875% notes due July 2034	566	–
Total non-current borrowings	7,506	7,882
Total borrowings	8,697	9,381
Analysed as:
Capital market issuance	8,663	9,330
Bank loans and overdrafts	34	51

www.imperialbrandsplc.com 175

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Current and non-current borrowings include interest payable of £10 million (2023: £33 million) and £102 million (2023: £96 million)

respectively as at the balance sheet date.

Interest payable on capital market issuances are at fixed rates of interest and interest payable on bank loans and overdrafts are at floating

rates of interest.

On 15 March 2024, £600 million 8.125% notes were repaid. On 5 April 2024, 100 million (£86 million equivalent) 5.25% notes were issued,

supplementary to the 15 February 2023 600 million, and 12 September 2023 350 million combined issues, listed as 1,050 million 5.25%

notes due February 2031 in the above table. On 1 July 2024, US$ 1,250 million (£984 million equivalent) 5.5% notes were issued. On 1 July

2024, US$ 750 million (£591 million equivalent) 5.875% notes were issued. On 11 July 2024, a partial repayment of the US$ 1,500 million

4.25% notes was made; US$ 550 million (£425 million equivalent) was repaid with the remaining US$ 950 million due July 2025.

On 26 July 2024, US$ 1,000 million (£777 million equivalent) 3.125% notes were repaid.

All borrowings are unsecured and the Group has not defaulted on any borrowings during the year (2023: no defaults).

The maturity profile of the Group's bonds and the contractual cash flows as at September 2024 are disclosed in note 21.

Fair value of borrowings

The fair value of borrowings as at 30 September 2024 is estimated to be £8,567 million (2023: £8,669 million). £8,533 million (2023: £8,617

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.

		2024		2023
	Balance		Balance
	sheet		sheet
£ million	amount	Fair value	amount	Fair value
GBP	1,006	985	1,632	1,524
EUR	3,367	3,245	3,378	2,996
USD	4,290	4,303	4,320	4,097
Total capital market issuance	8,663	8,533	9,330	8,617

Undrawn revolving credit facilities

At 30 September the Group had the following undrawn committed facilities:

£ million	2024	2023
Amounts maturing:
In less than one year	853	550
Between one and two years	153	159
Between two and five years	2,608	2,866
	3,614	3,575

During the year the maturity of 3,125 million of the Group's syndicated multicurrency facility of 3,493 million (2023: 3,493 million) was

extended to 30 September 2027. One existing syndicate member's participation of 184 million has a maturity date of 30 September 2025.

At 30 September another syndicate member's participation of 184 million had a maturity date of 30 March 2026; in October 2024 this

participation was sold to a new financial institution, who therefore became a syndicate member, and the maturity date was extended to

30 September 2027.

During the year six new bilateral facilities for a total £700 million were arranged, all maturing in September 2025.

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 programmes. 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 per year and comprises the Chief

Financial Officer, the Director of Treasury, the Group Finance Director, the Group General Counsel, the Chief Strategy and Development

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.

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The Board reviews and approves all major treasury decisions.

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 2024. 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.

	2024	2023
	Increase/	Increase/
	(decrease)	(decrease)
£ million	in income	in income
Income statement impact of non-functional currency foreign exchange exposures:
10% appreciation of sterling against euro (2023: 10%)	87	33
10% appreciation of sterling against US dollar (2023: 10%)	(17)	(9)
10% depreciation of sterling against euro (2023: 10%)	(106)	(41)
10% depreciation of sterling against US dollar (2023: 10%)	20	11

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.

	2024	2023
	Change in	Change in
£ million	equity	equity
Equity impact of non-functional currency foreign exchange exposures:
10% appreciation of sterling against euro (2023: 10%)	928	1,035
10% appreciation of sterling against US dollar (2023: 10%)	272	205
10% depreciation of sterling against euro (2023: 10%)	(1,134)	(1,265)
10% depreciation of sterling against US dollar (2023: 10%)	(332)	(250)

At 30 September 2024, after the effect of derivative financial instruments, approximately 102% of the Group’s net debt was denominated in

euro and non US dollar currencies (2023: 111%) and (2)% in US dollars (2023: (11)%).

www.imperialbrandsplc.com 177

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 2024, after adjusting for the effect of derivative financial instruments detailed in note 22, approximately 109% (2023:

107%) of reported net debt was at fixed rates of interest and (9)% (2023: (7)%) 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 97% (2023: 94%) of debt

was at fixed rates of interest and 3% (2023: 6%) 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 2024, 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.

	2024	2023
	Change in	Change in
£ million	income	income
Income statement impact of interest rate movements:
+/- 1% increase in euro interest rates (2023: 1%)	1	12
+/- 1% increase in US dollar interest rates (2023: 1%)	(2)	(9)

(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

£3,947 million at 30 September 2024 (2023: £4,507 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 2024 the level of trade receivables that were

sold to a financial institution under a non-recourse factoring arrangement, and subsequently derecognised, totalled £570 million (2023:

£570 million). The total value of trade receivables reclassified as fair value was £53 million at 30 September 2024 (2023: £22 million). There

was no valuation difference between amortised cost and fair value. Analysis of trade and other receivables is provided in note 17.

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 2024. At the balance sheet date

management does not expect these counterparties to default on their current obligations.

	2024	2023
	Maximum	Maximum
	exposure to	exposure to
	credit risk	credit risk
Counterparty exposure	£ million	£ million
Highest	253	311
2nd highest	134	104
3rd highest	50	84
4th highest	27	83
5th highest	10	80

These exposures are held with counterparties with investment grade credit ratings or in money market funds with a AAA rating.

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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 and European 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 2024, the Group held liquid assets of £1,078 million

(2023: £1,345 million).

The table below summarises the Group’s non-derivative financial liabilities by maturity based on their contractual cash flows as at

30 September 2024. 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.

						2024
		Contractual
	Balance sheet	cash flows		Between 1 and	Between 2 and
£ million	amount	total	<1 year	2 years	5 years	> 5 years
Non-derivative financial liabilities:
Bank loans	34	34	34	–	–	–
Capital market issuance	8,663	10,218	1,497	1,911	2,752	4,058
Trade payables	1,499	1,499	1,499	–	–	–
Lease liabilities	386	435	96	82	144	113
Total non-derivative financial liabilities	10,582	12,186	3,126	1,993	2,896	4,171

						2023
		Contractual
	Balance sheet	cash flows		Between 1 and	Between 2 and
£ million	amount	total	<1 year	2 years	5 years	> 5 years
Non-derivative financial liabilities:
Bank loans	51	51	49	2	–	–
Capital market issuance	9,330	10,663	1,767	1,951	3,651	3,294
Trade payables	1,507	1,507	1,507	–	–	–
Lease liabilities	349	406	82	70	114	140
Total non-derivative financial liabilities	11,237	12,627	3,405	2,023	3,765	3,434

Capital management

The Group defines capital as adjusted net debt and equity and manages its capital structure through an appropriate balance of debt and

equity in order to drive an efficient mix for the Group. Besides the minimum capitalisation rules that may apply to subsidiaries in certain

countries, the Group’s only externally imposed capital requirements are interest cover and gearing covenants contained within its core

external bank debt facilities, with which the Group was fully compliant during the current and prior periods and expects to be so going

forward. Management have assessed that the likelihood of a future covenant breach is remote.

The Group continues to manage its capital structure to maintain investment grade credit ratings which it monitors by reference to a

number of key financial ratios, including ongoing consideration of the return of capital to shareholders via regular dividend payments

and share buybacks and in on-going discussions with the relevant rating agencies.

As at 30 September 2024 the Group was rated Baa3/positive outlook by Moody’s Investor Service Ltd, BBB/A-2/stable outlook by Standard

and Poor’s Credit Market Services Europe Limited and BBB/F2/stable outlook by Fitch Ratings Limited.

The Group regards its total capital as follows.

£ million	2024	2023
Adjusted net debt	7,740	8,026
Equity attributable to the owners of the parent	5,442	6,021
Total capital	13,182	14,047

Hedge accounting

The Group has investments in foreign operations which are consolidated in its financial statements and whose functional currencies are

euros or US dollars. Where it is practicable and cost effective to do so, the foreign exchange rate exposures arising from these investments

are hedged through the use of cross-currency swaps, foreign exchange swaps and foreign currency denominated debt.

www.imperialbrandsplc.com 179

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

The Group only designates the undiscounted spot element of the cross-currency swaps, foreign exchange swaps and foreign currency

debt as hedging instruments. Changes in the fair value of the cross-currency swaps and foreign exchange swaps attributable to changes

in interest rates and the effect of discounting are recognised directly in profit or loss within the “Net finance costs” line. These amounts

are, therefore, not included in the hedge effectiveness assessment.

Net investment gains and losses are reported in exchange movements within other comprehensive income and the hedging instrument

foreign currency gains and losses deferred to the foreign currency revaluation reserve are detailed in the statement of changes in equity.

The Group establishes the hedging ratio by matching the notional balance of the hedging instruments with an equal notional balance of

the net assets of the foreign operation. Given that only the undiscounted spot element of hedging instruments is designated in the

hedging relationship, no ineffectiveness is expected unless the notional balance of the designated hedging instruments exceeds the total

balance of the foreign operation’s net assets during the reporting period. The foreign currency risk component is determined as the

change in the carrying amount of designated net assets of the foreign operation arising solely from changes in spot foreign currency

exchange rates.

All net investment hedges were fully effective at 30 September 2024.

The following table sets out the maturity profile of the hedging instruments used in the Group's net investment hedging strategies:

					2024
	Total			Maturity
	notional		Between 1 and	Between 2 and
£ million	balance	<1 year	2 years	5 years	> 5 years
Bonds	(4,595)	(438)	(1,103)	(2,120)	(934)
Cross-currency swaps	(5,501)	(1,715)	(1,099)	(1,581)	(1,106)
	(10,096)	(2,153)	(2,202)	(3,701)	(2,040)

£ million

					2023
	Total			Maturity
	notional		Between 1 and	Between 2 and
	balance	<1 year	2 years	5 years	> 5 years
Bonds	(3,897)	–	(433)	(2,645)	(819)
Cross-currency swaps	(5,986)	(1,447)	(1,214)	(1,971)	(1,354)
Foreign exchange swaps	(541)	(541)	–	–	–
	(10,424)	(1,988)	(1,647)	(4,616)	(2,173)

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The following table contains details of the hedging instruments and hedged items used in the Group's net investment hedging strategies:

					2024
			Carrying amount		Changes in fair
					value used for
	Notional				calculating hedge
£ million	balance	Assets	Liabilities	Balance sheet line item	in-effectiveness
Hedging instrument:
Bonds	4,595	–	4,584	Borrowings	321
Cross-currency swaps	5,501	118	76	Derivative financial instruments	213
Foreign exchange swaps	–	–	–	Derivative financial instruments	6
Hedged item:
Investment in a foreign operation	n/a	10,096	–		540

					2023
			Carrying amount		Changes in fair
					value used for
					calculating hedge
£ million	Notional balance	Assets	Liabilities	Balance sheet line item	in-effectiveness
Hedging instrument:
Bonds	3,897	–	3,929	Borrowings	338
Cross-currency swaps	5,986	–	249	Derivative financial instruments	75
Foreign exchange swaps	541	1	–	Derivative financial instruments	14
Hedged item:
Investment in a foreign operation	n/a	10,424	–		427

Reconciliation of changes in the value of net investment hedges:

£ million

					2024
	At the		Other
	beginning of	Income	comprehensive	Designations/(de-	At the end
	the year	statement	income	designations)	of the year
Derivatives in net investment hedges of foreign	(248)	71	219	–	42
operations
Bonds in net investment hedges of foreign operations	(3,929)	42	321	(1,018)	(4,584)
Total	(4,177)	113	540	(1,018)	(4,542)

					2023
	At the		Other
	beginning of	Income	comprehensive	Designations/(de-	At the end
£ million	the year	statement	income	designations)	of the year
Derivatives in net investment hedges of foreign	(338)	1	89	–	(248)
operations
Bonds in net investment hedges of foreign operations	(5,414)	(3)	338	1,150	(3,929)
Total	(5,752)	(2)	427	1,150	(4,177)

The Group also treats certain permanent intragroup loans that meet relevant qualifying criteria under IAS 21 as part of its net investment

in foreign operations where appropriate. Intragroup loans with a notional value of 3,714 million (£3,099 million equivalent) (2023: 3,714

million (£3,217 million equivalent)) were treated as part of the Group’s net investment in foreign operations at the balance sheet date.

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CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Fair value estimation and hierarchy

All financial assets and liabilities are carried on the balance sheet at amortised cost, other than derivative financial instruments which

are carried at fair value. Derivative fair values are determined based on observable market data such as yield curves, foreign exchange

rates and credit default swap prices to calculate the present value of future cash flows associated with each derivative at the balance

sheet date (Level 2 classification hierarchy per IFRS 7). Market data is sourced from a reputable financial data provider and valuations are

validated by reference to counterparty valuations where appropriate. Some of the Group's derivative financial instruments contain early

termination options and these have been considered when assessing the element of the fair value related to credit risk. On this basis the

reduction in reported net derivative liabilities due to credit risk is £12 million (2023: £2 million) and would have been a £15 million (2023:

£5 million) reduction without considering the early termination options. There were no changes to the valuation methods or transfers

between hierarchies during the year. With the exception of capital market issuance, the fair value of all financial assets and financial

liabilities is considered approximate to their carrying amount.

Netting arrangements of financial instruments

The following tables set out the Group's financial assets and financial liabilities that are subject to netting and set-off arrangements.

				2024
	Gross	Net financial	Related
	financial	assets/	amounts not
	assets/	(liabilities) per	set-off in the
£ million	(liabilities)	balance sheet	balance sheet	Net
Assets
Derivative financial instruments	474	474	(462)	12
Liabilities
Derivative financial instruments	(809)	(809)	462	(347)

				2023
	Gross	Net financial	Related
	financial	assets/	amounts not
	assets/	(liabilities) per	set-off in the
£ million	(liabilities)	balance sheet	balance sheet	Net
Assets
Derivative financial instruments	950	950	(817)	133
Liabilities
Derivative financial instruments	(1,003)	(1,003)	817	(186)

The table below sets out the Group's accounting classification of each class of financial assets and liabilities:

						2024
	Fair value	Fair value	Assets and
	through	through other	liabilities at
	income	comprehensive	amortised
£ million	statement	income	cost	Total	Current	Non-Current
Trade and other receivables	–	–	2,524	2,524	2,487	37
Cash and cash equivalents	–	–	1,078	1,078	1,078	–
Derivatives	356	118	–	474	144	330
Total financial assets	356	118	3,602	4,076	3,709	367
Borrowings	–	–	(8,697)	(8,697)	(1,191)	(7,506)
Trade and other payables	–	–	(8,659)	(8,659)	(8,659)	–
Derivatives	(733)	(76)	–	(809)	(187)	(622)
Lease liabilities	–	–	(386)	(386)	(86)	(300)
Total financial liabilities	(733)	(76)	(17,742)	(18,551)	(10,123)	(8,428)
Total net financial assets/(liabilities)	(377)	42	(14,140)	(14,475)	(6,414)	(8,061)

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						2023
	Fair value	Fair value	Assets and
	through	through other	liabilities at
	income	comprehensive	amortised
£ million	statement	income	cost	Total	Current	Non-current
Trade and other receivables	–	–	2,323	2,323	2,297	26
Cash and cash equivalents	–	–	1,345	1,345	1,345	–
Derivatives	949	1	–	950	126	824
Total financial assets	949	1	3,668	4,618	3,768	850
Borrowings	–	–	(9,381)	(9,381)	(1,499)	(7,882)
Trade and other payables	–	–	(8,705)	(8,705)	(8,705)	–
Derivatives	(754)	(249)	–	(1,003)	(174)	(829)
Lease liabilities	–	–	(349)	(349)	(81)	(268)
Total financial liabilities	(754)	(249)	(18,435)	(19,438)	(10,459)	(8,979)
Total net financial assets/(liabilities)	195	(248)	(14,767)	(14,820)	(6,691)	(8,129)

Derivatives classified as fair value through other comprehensive income relate to cross-currency swaps and foreign exchange swaps

designated as hedges of foreign currency denominated net investments. The Group only designates the undiscounted foreign exchange

spot element of these derivative instruments and the changes in fair value related to this element are posted to other comprehensive

income. Changes in the fair value of these derivative instruments attributable to changes in interest rates and the effect of discounting

are recognised in the income statement. The Group also designates certain external borrowings as hedges of foreign currency

denominated net investments and the foreign exchange revaluation of those external borrowings is recognised in other comprehensive

income. The carrying value at 30 September 2024 of those external borrowings included in the above table is £4,639 million (2023: £3,929

million). All of the Group's net investment hedges remain effective.

22. DERIVATIVE FINANCIAL INSTRUMENTS

The Group’s derivative financial instruments held at fair value, are as follows.

			2024			2023
£ million	Assets	Liabilities	Net fair value	Assets	Liabilities	Net fair value
Current derivative financial instruments:
Interest rate swaps	65	(54)	11	30	(66)	(36)
Foreign exchange contracts	1	(4)	(3)	12	(5)	7
Cross-currency swaps	78	(129)	(51)	84	(103)	(19)
Total current derivatives	144	(187)	(43)	126	(174)	(48)
Non-current derivative financial instruments:
Interest rate swaps	240	(365)	(125)	745	(652)	93
Cross-currency swaps	90	(257)	(167)	79	(177)	(98)
Total non-current derivatives	330	(622)	(292)	824	(829)	(5)
Total carrying value of derivative financial
instruments	474	(809)	(335)	950	(1,003)	(53)
Analysed as:
Interest rate swaps	305	(419)	(114)	775	(718)	57
Foreign exchange contracts	1	(4)	(3)	12	(5)	7
Cross-currency swaps	168	(386)	(218)	163	(280)	(117)
Total carrying value of derivative financial
instruments	474	(809)	(335)	950	(1,003)	(53)

The classification of these derivative assets and liabilities under the IFRS 7 fair value hierarchy is provided in note 21.

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CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Maturity of obligations under derivative financial instruments

Derivative financial instruments have been classified in the balance sheet as current or non-current on an undiscounted contractual

basis based on spot rates as at the balance sheet date. For the purposes of the above and following analysis, maturity dates have been

based on the likelihood of any early termination options being exercised with consideration to counterparty expectations and market

conditions prevailing as at 30 September 2024.

The table below summarises the Group's derivative financial instruments by maturity based on their remaining contractual cash flows as

at 30 September 2024. The amounts disclosed are the undiscounted cash flows calculated using interest rates and spot rates of exchange

prevailing at the relevant balance sheet date. Contractual cash flows in respect of the Group's non-derivative financial instruments are

detailed in note 21.

							2024
			Contractual
		Balance sheet	cash flows		Between 1 and	Between 2 and
£ million		amount	total	<1 year	2 years	5 years	>5 years
Net settled derivatives		(114)	194	10	1	117	66
Gross settled derivatives		(221)	–	–	–	–	–
•	receipts	–	20,719	6,490	2,730	5,762	5,737
•	payments	–	(20,770)	(6,497)	(2,719)	(5,772)	(5,782)
		(335)	143	3	12	107	21

							2023
			Contractual
		Balance sheet	cash flows		Between 1 and	Between 2 and
£ million		amount	total	<1 year	2 years	5 years	>5 years
Net settled derivatives		57	200	(3)	34	143	26
Gross settled derivatives		(110)	–	–	–	–	–
•	receipts	–	17,822	5,429	4,010	5,283	3,100
•	payments	–	(17,675)	(5,374)	(3,941)	(5,247)	(3,113)
		(53)	347	52	103	179	13

Derivatives as hedging instruments

As outlined in note 21, the Group hedges its underlying interest rate exposure and foreign currency translation exposures in an efficient,

commercial and structured manner, primarily using interest rate swaps and cross-currency swaps. Foreign exchange contracts are used

to manage the Group’s short term liquidity requirements in line with short term cash flow forecasts as appropriate.

The Group does not apply cash flow or fair value hedge accounting, as permitted under IFRS 9, which results in fair value gains and losses

attributable to derivative financial instruments being recognised in net finance costs unless they are designated as hedges of a net

investment in foreign operations, in which case they are recognised in other comprehensive income.

Interest rate swaps

To manage interest rate risk on its borrowings, the Group issues debt in the market or markets that are most appropriate at the time of

raising new finance with regard to currency, interest denomination or duration, and then uses interest rate swaps to re-base the debt into

the appropriate proportions of fixed and floating interest rates. Interest rate swaps are also transacted to manage and re-profile the

Group's interest rate risk over the short, medium and long term in accordance with the Treasury Operations Policy as approved by the

Treasury Committee. Fair value movements are recognised in net finance costs in the relevant reporting period.

As at 30 September 2024, the notional amount of interest rate swaps outstanding that were entered into to convert fixed rate borrowings

into floating rates of interest at the time of raising new finance was £6,349 million equivalent (2023: £8,111 million equivalent) with a fair

value of £339 million liability (2023: £714 million liability). The fixed interest rates vary from 1.3% to 5.4% (2023: 1.3% to 7.9%), and the

floating rates are based on EURIBOR, SONIA and SOFR.

As at 30 September 2024, the notional amount of interest rate swaps outstanding that were entered into to convert the Group's debt into

the appropriate proportion of fixed and floating rates to manage and re-profile the Group's interest rate risk was £12,119 million equivalent

(2023: £11,622 million equivalent) with a fair value of £225 million asset (2023: £771 million asset). The fixed interest rates vary from 3.1%

receivable to 4.0% payable (2023: 3.1% receivable to 4.0% payable), and the floating receivable rates reference EURIBOR and SOFR. This

includes forward starting interest rate swaps with a total notional amount of £4,719 million equivalent (2023: £4,055 million equivalent)

with tenors between 1 and 10 years, starting between October 2024 and May 2032.

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Cross-currency swaps

The Group enters into cross-currency swaps to convert the currency of debt into the appropriate currency with consideration to the

underlying assets of the Group as appropriate. Fair value movements are recognised in net finance costs in the relevant reporting period

unless the swaps are designated as hedges of a net investment in foreign operations, in which case the fair value movement attributable

to changes in foreign exchange rates are recognised in other comprehensive income.

As at 30 September 2024, the notional amount of cross-currency swaps entered into to convert sterling debt into the desired currency

was £1,000 million (2023: £1,600 million) and the fair value of these swaps was £76 million net liability (2023: £111 million net liability); the

notional amount of cross-currency swaps entered into to convert US dollar debt into the desired currency was US$ 6,950 million

(2023: US$ 5,250 million) and the fair value of these swaps was £142 million net liability (2023: £6 million net liability). This includes

forward starting cross-currency swaps with a total notional amount of US$ 1,250 million equivalent (2023: no forward starting cross-

currency swaps) with tenors of 4.5 years, starting in July 2025.

Foreign exchange contracts

The Group enters into foreign exchange contracts to manage short-term liquidity requirements in line with cash flow forecasts. As at 30

September 2024, the notional amount of these contracts was £842 million equivalent (2023: £2,020 million equivalent) and the fair value of

these contracts was a net liability of £3 million (2023: £7 million net asset).

Hedges of net investments in foreign operations

As at 30 September 2024, cross-currency swaps with a notional amount of 6,593 million (2023: 6,910 million) were designated as hedges

of net investments in foreign operations. During the year, foreign exchange translation gains amounting to £213 million (2023: £75 million

gains) were recognised within exchange movements in other comprehensive income in respect of cross-currency swaps designated as

hedges of a net investment in foreign operations. No hedging ineffectiveness occurred during the year (2023: £nil).

As at 30 September 2024, foreign exchange swaps with a notional amount of nil (2023: 624 million) were designated as hedges of net

investments in foreign operations. During the year, foreign exchange translation gains amounting to £6 million (2023: £14 million gains)

were recognised within exchange movements in other comprehensive income in respect of foreign exchange swaps that had been

designated as hedges of a net investment in foreign operations. No hedging ineffectiveness occurred during the year (2023: £nil).

The movements in other comprehensive income due to net investment hedging in the period were as follows:

£ million	2024	2023
Foreign exchange gains on borrowings	321	338
Foreign exchange gains on derivative financial instruments	219	89
	540	427

23. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax relates to the following:

	Consolidated	Consolidated	Consolidated	Consolidated
	income	income	balance	balance
	statement	statement	sheet	sheet
£ million	2024	2023	2024	2023
Temporary differences on depreciation and amortisation	(53)	164	(711)	(716)
Retirement benefits	(5)	(9)	48	30
Tax credits and losses	393	6	579	282
Accruals, provisions and other temporary differences	(48)	(3)	193	186
Deferred tax benefit	287	158
Net deferred tax assets/(liabilities)			109	(218)

Reflected in the consolidated balance sheet as follows

£ million	2024	2023
Deferred tax assets	889	653
Deferred tax liabilities	(780)	(871)
	109	(218)

www.imperialbrandsplc.com 185

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Reconciliation of net deferred tax liabilities

£ million	2024	2023
At 1 October	(218)	(522)
Credited to the income statement	287	158
Credited to other comprehensive income	36	134
Credited to equity	2	1
Acquisitions	–	(15)
Exchange movements	2	22
Other movements	(16)	4
As at 30 September	109	(218)

Unrecognised deferred tax assets

	Gross	Net	Gross	Net
£ million	2024	2024	2023	2023
Tax losses	245	64	235	62
Tax credits	806	282	15	15
Other temporary differences	77	22	84	24
	1,128	368	334	101

Analysis of unrecognised deferred tax assets by expiry date

	Gross	Net	Gross	Net
£ million	2024	2024	2023	2023
Tax losses expiring:
No expiry	245	64	235	62
	245	64	235	62
Tax credits expiring:
Within 1 year	–	–	15	15
No expiry	806	282	–	–
	806	282	15	15
Other temporary differences expiring:
No expiry	77	22	84	24
	77	22	84	24

In December 2021, the OECD issued model rules for a new global minimum tax framework (Pillar Two), applicable for multinational

enterprise groups with global revenue over 750 million. The legislation implementing the rules in the UK was substantively enacted on

20 June 2023 and will apply to the Group from the financial year ending 30 September 2025 onwards. The Group has applied the

mandatory exception under IAS 12 in relation to the accounting for deferred tax assets and liabilities arising from the implementation of

the Pillar Two model rules.

Based on the assessments carried out so far, although additional tax liabilities are expected to be incurred, the Group does not expect any

significant exposure to Pillar Two income taxes in those jurisdictions where the minimum tax requirement is not met, based

predominantly on the data for the year ended 30 September 2023. The Group is continuing to review this legislation and monitors the

status of implementation of the model rules outside of the UK to assess the potential impact.

Included within net deferred tax liabilities are deferred tax assets recognised of £213 million (2023: £257 million) for tax credits arising in

the Group's Spanish business. These tax credits have no time expiry. Utilisation of these tax credits is restricted to 50% of the Spanish

business' taxable profits arising in any given year; those tax law restrictions extend the period over which the deferred tax assets would

otherwise be recovered. The Group considers there to be forecast future taxable profits which support the recognition of these long term

deferred tax assets. The period over which these deferred tax assets are utilised is sensitive to forecasting assumptions about future

growth rates (which may be influenced by the future effects of climate change) and regulatory changes. Any material effects of climate

change in the long term could extend the period over which the deferred tax asset will be recovered but as the tax credits do not expire,

the Group considers there is positive evidence that sufficient future taxable profits would still be available. Based on a range of forecast

scenarios modelling sensitivities (including the future effects of climate change) these deferred tax assets are expected to be utilised over

a period of 16 years.

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Included within net deferred tax liabilities are deferred tax assets recognised for retirement benefits of £98 million (2023: £88 million)

arising in the Group's German business. These deferred tax assets are expected to be recovered both by way of utilisation against the

reversal of deferred tax liabilities of £49 million (2023: £40 million) arising in the Group's German business and by way of utilisation

against future taxable profits. The Group considers there to be forecast future taxable profits which support the recognition of these long

term deferred tax assets. Based on a range of forecast scenarios modelling sensitivities these deferred tax assets are expected to be

recovered over a period of 20-40 years corresponding to the life of the pension scheme. The period over which these deferred tax assets

are utilised is sensitive to forecasting assumptions about future growth rates of the underlying business (which may be influenced by the

future effects of climate change) and regulatory changes.

Included within net deferred tax liabilities are deferred tax assets recognised for intangibles of £179 million (2023: £199 million) arising in

the Group's Dutch business. These deferred tax assets are expected to be recovered by way of utilisation against future taxable profits. The

Group considers there to be forecast future taxable profits which support the recognition of these long term deferred tax assets. The

period over which these deferred tax assets are utilised is sensitive to forecasting assumptions about future growth rates (which may be

influenced by the future effects of climate change) and regulatory changes. These deferred tax assets are expected to be recovered over a

period of 15 years corresponding to the life of the intangibles.

Included within net deferred tax liabilities are deferred tax assets recognised of £293 million (2023: £0 million) in relation to tax credits

brought forward within the Group’s Maltese treasury centre, recognised as a result of clarifying tax guidance issued by the tax authorities

during FY24 and the resulting intention to utilise these brought forward tax credits against taxable income arising from long-term loans

of a fixed term tenure, which were refinanced during the financial year. The period over which these deferred tax assets are utilised is

sensitive to forecasting assumptions about future growth rates of the underlying business (which may be influenced by the future effects

of climate change) and regulatory changes. The Group considers there is positive evidence that sufficient future taxable profits would still

be available. Based on a range of forecast scenarios modelling sensitivities these deferred tax assets are expected to be utilised over a

period of 5-10 years. Tax losses arising within the Maltese group in periods prior to the formation of tax fiscal units, are kept in abeyance

and therefore unavailable for utilisation within the fiscal unit and no deferred tax asset has been recognised thereon, but amounts are

included within unrecognised deferred tax.

We have reviewed the recoverability of deferred tax assets in overseas territories in the light of forecast business performance. In 2024 we

have recognised deferred tax assets of £3 million that were previously unrecognised (2023: recognised deferred tax assets of £6 million

that were previously unrecognised) on the basis that it is more likely than not that these are recoverable.

A deferred tax liability of £46 million (2023: £43 million) is recognised in respect of taxation expected to arise on the future distribution of

unremitted earnings totalling £2.17 billion (2023: £2 billion).

The temporary differences associated with investments in the Group's subsidiaries, associates and joint ventures for which a deferred tax

liability has not been recognised in the periods presented, aggregate to £1,472 million (2023: £1,477 million) for which a deferred tax

liability of £37 million (2023: £38 million) has not been recognised. No liability has been recognised because the Group is in a position to

control the timing of the reversal of those temporary differences and it is probable that such differences will not reverse in the

foreseeable future.



www.imperialbrandsplc.com 187

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

24. RETIREMENT BENEFIT SCHEMES

The Group operates a number of retirement benefit schemes for its employees, including both defined benefit and defined contribution

schemes. The Group's three principal schemes are defined benefit schemes and are operated by Imperial Tobacco Limited (ITL) in the UK,

Reemtsma Cigarettenfabriken GmbH in Germany and ITG Brands in the USA; these schemes represent 66%, 16% and 7% of the Group's

total defined benefit obligations (2023: 64%, 15% and 9%) and 0%, 41% and 11% of the current service cost (2023: 22%, 32% and 8%)

respectively.

Imperial Tobacco Pension Fund

The UK scheme, the Imperial Tobacco Pension Fund ("ITPF"), was closed to future accrual on 30 September 2023. All active members are

now enrolled into the defined contribution scheme as of 1 October 2023 alongside all new employees that have joined since 1 October

2010. Former active members of the defined benefit section of the ITPF are now deferred members who are able to draw their pension in

the same way as an existing deferred member and are in receipt of annual inflationary increases as existing deferred members. The

impact of the closure to future accrual was reported in the 2023 consolidated income statement. A further cost of £5.6 million is reported

in the 2024 consolidated income statement due to a legal ruling in the year which has become applicable to ITL. The ruling required some

elements of the compensation paid in 2023 to be subject to income tax and national insurance which ITL agreed to cover for impacted

members if such a ruling were made. The ITPF defined benefit obligation comprises 78% in respect of pensioners and dependants, 22% in

respect of deferred members and has a weighted average maturity of 12 years.

The ITPF operates under trust law and is managed and administered by the Trustees on behalf of the members in accordance with the

terms of the Trust Deed and Rules and relevant legislation. The ITPF assets are held by the trust.

The main risk for the company in respect of the ITPF is that additional contributions are required if the assets are not expected to be

sufficient to pay for the benefits. The investment portfolio is subject to a range of risks typical of the asset classes held, such as liquidity to

manage the Liability Driven Investment (LDI) portfolio, credit exposure within investment funds and exposure to the property market. The

ITPF holds a buy-in policy with Standard Life as an asset; this covers around 61% of the pensioner defined benefit obligation. The buy-in

eliminates investment return, longevity, inflation and funding risks in respect of those benefits covered. The ITPF also has access to a

loan facility to provide short-term liquidity to support the LDI portfolio in the event of significant changes in government bond yields.

The main uncertainties affecting the level of benefits payable under the ITPF are future inflation levels, as these impact increases to

pensions, and the actual longevity of the membership.

The contributions paid to the ITPF are set by the ITPF Scheme Actuary every three years. The Scheme Actuary is an external consultant,

appointed by the Trustees. Principal factors that the Scheme Actuary will have regard to include the covenant offered by the company,

the level of risk in the ITPF, the expected return on assets, the results of the funding assessment on the Technical Provisions basis and

the expected cost of securing benefits if the ITPF were to be wound up.

The latest valuation agreed at 31 March 2022 reported a 118% funding ratio on the Technical Provisions basis. ITL and the Trustee agreed to

maintain the existing dynamic contribution schedule, which means ITL’s annual contributions will reduce or increase depending on the

ITPF valuation going forward. The level of ITL's annual contribution to the ITPF was nil for the year to 31 March 2024, although £8.4 million

was paid into an escrow account over this period. ITL does not expect to pay any contributions to the ITPF or the escrow account for the

year to 31 March 2025. Further contributions were agreed to be paid by ITL in the event of a downgrade of the Group's credit rating to non-

investment grade by either Standard & Poor's or Moody's, if a funding deficit were to exist. In addition, a surety guarantee with a total

value of £120 million and a parental guarantee from Imperial Brands PLC remains in place. In certain circumstances, surplus funds in the

defined benefit section of the ITPF may be used to finance defined contribution section contributions on ITL's behalf with company

contributions reduced accordingly.

The IAS 19 measurement of the defined benefit obligation is sensitive to the assumptions made about future inflation as well as the

assumptions made about life expectancy. It is also sensitive to the discount rate, which depends on market yields on sterling

denominated AA corporate bonds. The main differences between the Technical Provisions and IAS 19 assumptions are a more prudent

longevity assumption for Technical Provisions and a different approach to setting the discount rate. A consequence of the ITPF’s

investment strategy, with a proportion of the assets invested in return-seeking assets, is that the difference between the market value of

the assets and the IAS 19 defined benefit obligation may be relatively volatile.

The ITPF has a pension surplus on the IAS 19 measure and, in line with IFRIC 14, recognition of the net asset on the fund is only

appropriate where it can be recovered. The ITPF trust deed gives the company an ability to receive a refund of surplus assets assuming

the full settlement of liabilities in the event of a wind-up. Furthermore, in the ordinary course of business the Trustee has no rights to

unilaterally wind up the ITPF or otherwise augment the benefits due to the ITPF's members. Based on these circumstances, any net

surplus in the ITPF is recognised in full.

The Reemtsma Cigarettenfabriken Pension Plan

The German scheme, the Reemtsma Cigarettenfabriken Pension Plan (RCPP), is primarily a career average pension plan, though a small

group of members have final salary benefits. The RCPP defined benefit obligation comprises 52% in respect of pensioners and

dependants, 23% in respect of deferred members and 25% in respect of active members and has a weighted average maturity of 16 years.

The RCPP was closed to new members from 1 January 2020, but existing active members at that date continue to accrue benefits.

The RCPP is unfunded and the company pays benefits as they arise. The RCPP obligations arise under a works council agreement and are

subject to standard German legal requirements around such matters as the benefits to be provided to employees who leave service, and

pension increases in payment. Over the next year Reemtsma Cigarettenfabriken GmbH expects to pay £24 million (2023: £24 million) in

respect of benefits.

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The main uncertainties affecting the level of benefits payable under the RCPP are future inflation levels, as these impact increases to

pensions, and the actual longevity of the membership.

The IAS 19 measurement of the defined benefit obligation and the current service cost are sensitive to the assumptions made about the

above variables, as well as the discount rate, which depends on market yields on euro denominated AA corporate bonds.

ITG scheme

The main US pension scheme, the ITG Scheme held by ITG Brands, is a defined benefit pension plan that is closed to new entrants. The

ITG Scheme defined benefit obligation comprises 79% in respect of pensioners and dependants, 3% in respect of deferred members and

18% in respect of active members and has a weighted average maturity of nine years.

ITG Brands transacted a partial buy-out of some of the pensioner and dependant population during 2024. The buy-out resulted in a 2024

income statement credit of £4.8 million

The ITG Scheme is funded and benefits are paid from the ITG Scheme assets. Contributions to the plan are determined based on US

regulatory requirements. ITG Brands made no contributions this year and is not expected to make any contributions in the next year.

Annual benefits in payment are assumed not to increase from current levels. The main uncertainty affecting the level of benefits payable

under the plan is the actual longevity of the membership. Other key uncertainties impacting the plan include investment risk and

potential past service benefit changes from future union negotiations.

The IAS 19 measurement of the defined benefit obligation and the service cost are sensitive to the assumptions made about the above

variables, as well as the discount rate, which depends on market yields on US dollar denominated AA corporate bonds.

Other plans

Other plans of the Group include various pension plans, other post-employment and long-term employee benefit plans in several

countries of operation. Some of the plans are funded, with assets backing the obligations held in separate legal vehicles such as trusts,

whilst others are operated on an unfunded basis. The benefits provided, the approach to funding and the legal basis of the plans reflect

their local territories. IAS 19 requires that the discount rate for calculating the defined benefit obligation and service cost is set according

to the level of relevant market yields on corporate bonds where the market is considered "deep", or government bonds where it is not.

For the year ended 30 September 2024 the Group included one new scheme in the IAS 19 position.

In Ireland, the Company and Trustees agreed to offer a lump sum to deferred members of the plan which was completed in 2024. In the

US, the Company also agreed a partial pensioner buy-out with our smaller defined benefit plan alongside the ITG Scheme and also agreed

changes to our post retirement medical plan with the unionised population.

www.imperialbrandsplc.com 189

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

The results of the most recent available actuarial valuations for the various plans have been updated to 30 September 2024 in order to

determine the amounts to be included in the Group's consolidated financial statements. The aggregate IAS 19 position is as follows:

Defined benefit plans

£ million

			2024			2023
	DBO	Assets	Total	DBO	Assets	Total
At 1 October	(3,370)	2,977	(393)	(3,609)	3,541	(68)
Consolidated income statement expense:
Current service cost	(18)	–	(18)	(25)	–	(25)
Settlements gains/(losses)	109	(107)	2	2	(6)	(4)
Past service income	12	–	12	9	–	9
Cost of termination benefits	(2)	–	(2)	(5)	–	(5)
Net interest (expense)/income on net defined benefit
(liability)/asset	(171)	160	(11)	(165)	178	13
Administration costs paid from plan assets	–	(5)	(5)	–	(5)	(5)
Cost recognised in the income statement			(22)			(17)
Remeasurements:
Actuarial gain/(loss) due to liability experience	13	–	13	(132)	–	(132)
Actuarial (loss)/gain due to financial assumption
changes	(161)	–	(161)	234	–	234
Actuarial gain due to demographic assumption
changes	1	–	1	–	–	–
Return on plan assets excluding amounts included
in net interest income/(expense) above Remeasurement effects recognised in other	–	44	44	–	(478)	(478)
comprehensive income			(103)			(376)
Cash:
Employer contributions	–	55	55	–	59	59
Benefits paid directly by the Company	247	(247)	–	265	(265)	–
Net cash			55			59
Changes to immaterial benefit plans categorised as an IAS 19 obligation recognised in the prior year	(11)	–	(11)	(8)	–	(8)
Exchange movements	64	(33)	31	64	(47)	17
Total other			20			9
At 30 September	(3,287)	2,844	(443)	(3,370)	2,977	(393)

Retirement benefit scheme costs charged to operating profit

£ million	2024	2023
Defined benefit expense in operating profit	11	30
Defined contribution expense in operating profit	23	16
Total retirement benefit scheme cost in operating profit	34	46

Split as follows in the consolidated income statement:

£ million	2024	2023
Cost of sales	12	15
Distribution, advertising and selling costs	13	20
Administrative and other expenses	9	11
Total retirement benefit scheme costs in operating profit	34	46

Assets and liabilities recognised in the consolidated balance sheet

£ million	2024	2023
Retirement benefit assets	376	414
Retirement benefit liabilities	(819)	(807)
Net retirement benefit liability	(443)	(393)

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Key figures and assumptions used for major plans

			2024			2023
£ million unless otherwise indicated	ITPF	RCPP	ITG Scheme	ITPF	RCPP	ITG Scheme
Defined benefit obligation (DBO)	2,157	524	235	2,142	496	311
Fair value of scheme assets	(2,459)	–	(264)	(2,481)	–	(337)
Net defined benefit (asset)/liability	(302)	524	(29)	(339)	496	(26)
Current service cost	–	7	2	6	8	2
Employer contributions	–	23	–	–	23	–
Principal actuarial assumptions used (% per annum)
Discount rate	5.1	3.4	4.8	5.6	4.2	5.7
Future salary increases	n/a	3.1	n/a	n/a	3.5	n/a
Future pension increases	3.2	2.0	n/a	3.4	2.4	n/a
Inflation	3.1	2.0	2.3	3.4	2.4	2.3

						2024
		ITPF		RCPP		ITG Scheme
	Male	Female	Male	Female	Male	Female
Life expectancy at age 65 years:
Member currently aged 65	21.2	22.6	20.9	24.3	19.8	21.9
Member currently aged 50	22.0	23.9	22.9	25.9	21.0	23.0

						2023
		ITPF		RCPP		ITG Scheme
	Male	Female	Male	Female	Male	Female
Life expectancy at age 65 years:
Member currently aged 65	21.2	22.5	20.8	24.2	19.7	21.7
Member currently aged 50	21.9	23.8	22.8	25.8	20.8	22.8

Assumptions regarding future mortality experience are set based on advice that uses published statistics and experience in each

territory. In particular for the ITPF, SAPS S3 (2023: SAPS S3) tables are used with various adjustments for different groups of members,

reflecting observed experience. The largest group of members uses the SAPS S3 All Pensioner Male Amounts Middle table with a 105%

multiplier. An allowance for improvements in longevity is made using the 2021 (2023: 2021) CMI improvement rates with a long-term

trend of 1.25% per annum.

Sensitivity analysis for key assumptions at the end of the year

Sensitivity analysis is illustrative only and is provided to demonstrate the degree of sensitivity of results to key assumptions. Generally,

estimates are made by re-performing calculations with one assumption modified and all others held constant.

% increase in DBO

			2024			2023
	ITPF	RCPP	ITG Scheme	ITPF	RCPP	ITG Scheme
Discount rate: 0.5% decrease	5.7	8.1	4.9	5.6	8.1	4.5
Rate of inflation: 0.5% decrease	(4.3)	(5.6)	n/a	(4.2)	(5.7)	n/a
One-year increase in longevity for a member currently age
65, corresponding changes at other ages	3.6	4.1	4.2	3.5	4.2	4.4

The sensitivity to the inflation assumption change includes corresponding changes to the future salary increases and future pension

increases assumptions, but is assumed to be independent of any change to discount rate.

We estimate that a 0.5% decrease in the discount rate at the start of the year would have increased the consolidated income statement

pension expense by approximately £8 million (2023: £12 million).

www.imperialbrandsplc.com 191

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

An approximate split of the major categories of ITPF scheme assets is as follows:

		2024		2023
		Percentage of		Percentage of
		ITPF scheme		ITPF scheme
£ million unless otherwise indicated	Fair value	assets	Fair value	assets
Bonds - index linked government / LDI funds	487	19.8	351	14.1
Property including ground leases	446	18.1	488	19.7
Secured finance and private debt funds	463	18.8	620	25.0
Insurance contract (buy-in policy)	1,035	42.1	1,044	42.1
Other - including cash and short-term loan drawings	28	1.1	(22)	(0.9)
	2,459	100.0	2,481	100.0

The primary investment objective is to invest the ITPF's assets in an appropriate and secure manner such that members' benefit

entitlements can be paid as they fall due.

The majority of the assets are non-quoted. The ITPF holds £nil of self-invested assets (2023: £nil).

An approximate split of the major categories of ITG Scheme assets is as follows:

		2024		2023
		P e r c e n t a g e o f		Percentage of
		I TG Schem e		ITG Scheme
£ million unless otherwise indicated	F a i i r v a l u e	a s s e t s	Fair value	assets
Bonds - government, corporate and other	122	46.2	203	60.2
Other - including derivatives, commodities and cash	142	53.8	134	39.8
	264	100.0	337	100.0

The majority of the assets are non-quoted.

25. PROVISIONS

				2024
		Employment
£ million	Restructuring	related claims	Other	Total
At 1 October 2023	180	144	90	414
Additional provisions charged to the consolidated income statement	–	14	34	48
Amounts used	(46)	(36)	(22)	(104)
Unused amounts reversed	–	(3)	(30)	(33)
Exchange movements	(4)	(7)	(3)	(14)
At 30 September 2024	130	112	69	311

Analysed as:

£ million	2024	2023
Current	89	148
Non-current	222	266
	311	414

Restructuring provisions relate mainly to the 2021 Strategic Review Programme and Cost Optimisation programmes (see note 6).

The restructuring provision is split between the 2021 Strategic Review Programme of £63 million (2023: £88 million) and other

programmes of £67 million (2023: £92 million).

Employment-related claims provisions include £23 million (2023: £31 million) relating to local employment requirements including

holiday pay and £25 million (2023: £28 million) of distribution requirements relating to employment and duty. An amount of £64 million

(2023: £85 million) has been provided for employment-related claims arising from a number of legacy legal disputes. Although the

Company continues to appeal a number of these claims, in the current year the Group has resolved to engage with certain counterparties

where a valid claim has been established. There are uncertainties relating to the estimation and quantification of this provision and

amounts may change in the future, but this provision is expected to be utilised within the next two years.

Other provisions include £29 million (2023: £38 million) relating to various local tax or duty requirements, £8 million (2023: £9 million) of

market exit provisions and £12 million for factory closure provisions (2023: £30 million).

The provisions are spread throughout the Group and payment will be dependent on local statutory requirements.

Most of the provisions will also be utilised within the next two years, though certain employee-related and restructuring provisions may

be required to be held for a period of up to 10 years where they relate to requirements to provide benefits for defined periods of time after

an employee leaves employment.

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26. SHARE CAPITAL

		2024		2023
		Ordinary shares 10p each		Ordinary shares 10p each
	Number	£ million	Number	£ million
Authorised, issued and fully paid:
1 October	968,590,194	97	1,020,697,237	103
Shares cancelled	(54,087,312)	(6)	(52,107,043)	(6)
30 September	914,502,882	91	968,590,194	97

On 5 October 2023, the Board approved a £1,100 million share buyback programme in order to return capital to shareholders. The first

tranche purchased 30,317,505 shares for a cost of £550 million. Upon completion of the purchase, these shares were cancelled and

transferred to the capital redemption reserve. For the second tranche of the programme, the Group has entered into an irrevocable and

non-discretionary arrangement to buy back shares up to £550 million. The second tranche commenced on 11 March 2024 and in the

period to 30 September 2024 54,087,312 shares have been bought back and cancelled at a cost of £1,020 million. The stamp duty and other

tax costs were £12 million and the fees charged for the share repurchase were £1 million. Upon completion of the purchase, these shares

were cancelled and transferred to the capital redemption reserve. As at 30 September 2024, the Group has recognised a liability of £90

million for the remaining shares to be purchased.

For the year ended 30 September 2024 the amounts recognised in the share premium and capital redemption reserves were £5,833

million (2023: £5,833 million) and £16 million (2023: £10 million) respectively.

27. SHARE SCHEMES

The Group operates four types of share-based incentive programmes, designed to incentivise staff and to encourage them to build a stake

in the Group.

Share Matching Scheme

Awards are made to eligible employees who are invited to invest a proportion of their eligible bonus in shares for a period of three years,

after which matching shares are awarded on a 1:1 ratio, plus dividend equivalents.

Long-Term Incentive Plan (LTIP)

Awards of shares under the LTIP are made to the Executive Directors and senior executives at the discretion of the Remuneration

Committee. They vest three years after grant and are subject to performance criteria. Dividend equivalents accrue on vested shares.

Sharesave Plan

Options are granted to eligible employees who participate in a designated savings scheme for a three-year period.

Discretionary Share Awards Plan (DSAP)

Under the DSAP, one-off conditional awards are made to individuals to recognise exceptional contributions within the business. Awards,

which are not subject to performance conditions and under which vested shares do not attract dividend roll-up, will normally vest on the

third anniversary of the date of grant subject to the participant’s continued employment. The limit of an award under the DSAP is capped

at 25% of the participant’s salary at the date of grant. Shares used to settle awards under the DSAP will be market purchased.

Further details of the schemes including additional criteria applying to Directors and some senior executives are set out in the Directors'

Remuneration Report.

www.imperialbrandsplc.com 193

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Analysis of charge to the consolidated income statement

£ million	2024	2023
Share Matching Scheme	2	2
Long-Term Incentive Plan	28	27
Sharesave Plan	1	1
Discretionary Share Awards Plan	1	1
	32	31

The awards are predominantly equity settled. The balance sheet liability in respect of cash-settled schemes at 30 September 2024 was

£3.5 million (2023: £3.4 million).

Reconciliation of movements in awards/options

					2024
					Sharesave
	Share				weighted
	Matching				average
	Scheme	LTIP	Sharesave	DSAP	exercise
Thousands of shares unless otherwise indicated	awards	awards	options	awards	price £
Outstanding at 1 October 2023	453	8,502	1,686	173	13.72
Granted	172	4,341	445	73	15.96
Cancelled/forfeited/lapsed	(20)	(1,608)	(138)	(11)	13.61
Exercised	(234)	(2,670)	(453)	(24)	13.10
Outstanding at 30 September 2024	371	8,565	1,540	211	14.78
Exercisable at 30 September 2024	–	–	42	–	13.09

					2023
	Share				Sharesave
	Matching				weighted
					average
	Scheme	LTIP	Sharesave	DSAP	exercise
Thousands of shares unless otherwise indicated	awards	awards	options	awards	price £
Outstanding at 1 October 2022	486	8,120	1,934	120	13.21
Granted	161	3,853	862	67	13.24
Cancelled/forfeited/lapsed	(18)	(2,402)	(90)	(11)	12.63
Exercised	(176)	(1,069)	(1,020)	(3)	12.38
Outstanding at 30 September 2023	453	8,502	1,686	173	13.72
Exercisable at 30 September 2023	–	–	264	–	12.37

The weighted average Imperial Brands PLC share price at the date of exercise of awards and options was £20.06 (2023: £18.28). The

weighted average fair value of Sharesave options granted during the year was £3.40 (2023: £3.26).

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Summary of awards/options outstanding at 30 September 2024

		Vesting
	Number of	period	Exercise price
	awards/options	remaining	of options
Thousands of shares unless otherwise indicated	outstanding	in months	outstanding £
Share Matching Scheme
2022	128	5	n/a
2023	122	17	n/a
2024	121	29	n/a
Total awards outstanding	371
Long-Term Incentive Plan
2022	2,313	5	n/a
2023	2,675	17	n/a
2024	3,577	29	n/a
Total awards outstanding	8,565
Sharesave Plan
2021	42	–	13.09
2022	244	10	14.56
2023	815	22	14.29
2024	439	34	15.96
Total options outstanding	1,540
Discretionary Share Awards Plan
2022	74	5	n/a
2023	65	18	n/a
2024	72	29	n/a
Total options outstanding	211

The vesting period is the period between the grant of awards or options and the earliest date on which they are exercisable. The vesting

period remaining and the exercise price of options outstanding are weighted averages. Participants in the Sharesave Plan have six

months from the maturity date to exercise their options. Participants in the LTIP generally have seven years from the end of the vesting

period to exercise their options. The exercise price of the options is fixed over the life of each option.

Pricing

For the purposes of valuing options to calculate the share-based payment charge, the Black-Scholes option pricing model has been used

for the Share Matching Scheme, Sharesave Plan, Discretionary Share Awards Plan and one Long-Term Incentive Plan with no market

conditions. A summary of the assumptions used in the Black-Scholes model for 2024 and 2023 is as follows:

			2024
	Share
	Matching
	Scheme	Sharesave	DSAP
Risk-free interest rate %	4.2	4.3	4.2
Volatility (based on 3-year history) %	25.0	24.1	25.0
Expected lives of options granted years	3.0	3.0	3.0
Dividend yield %	7.6	7.6	7.6
Fair value £	14.56	3.40	14.55
Share price used to determine exercise price £	18.31	19.80	18.31
Exercise price £	n/a	15.96	n/a

www.imperialbrandsplc.com 195

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

			2023
	Share
	Matching
	Scheme	Sharesave	DSAP
Risk-free interest rate %	4.0	4.4	4.1
Volatility (based on 3-year history) %	33.1	27.7	33.2
Expected lives of options granted years	3.0	3.0	3.0
Dividend yield %	8.2	8.2	8.2
Fair value £	16.04	3.30	14.72
Share price used to determine exercise price £	20.53	17.88	18.84
Exercise price £	n/a	14.29	n/a

Market conditions were incorporated into the Monte Carlo method used in determining the fair value of LTIP awards at grant date.

Assumptions in 2024 and 2023 are given in the following table:

%	2024	2023
Future Imperial Brands share price volatility	18.1	23.3
Future Imperial Brands dividend yield	–	–
Share price volatility of the tobacco and alcohol comparator group	15.4-23.1	15.9-63.5
Correlation between Imperial Tobacco and the alcohol and tobacco comparator group	18.9	21.4

Employee Share Ownership Trusts

The Imperial Tobacco Group PLC Employee and Executive Benefit Trust and the Imperial Tobacco Group PLC 2001 Employee Benefit Trust

(the Trusts) have been established to acquire ordinary shares in the Company to satisfy rights to shares arising on the exercise and

vesting of options and awards. The purchase of shares by the Trusts has been financed by a gift of £19.2 million and an interest free loan

of £147.5 million. In addition the Group has gifted treasury shares to the Trusts. None of the Trusts' shares has been allocated to

employees or Executive Directors as at 30 September 2024. All finance costs and administration expenses connected with the Trusts are

charged to the consolidated income statement as they accrue. The Trusts have waived their rights to dividends and the shares held by

the Trusts are excluded from the calculation of basic earnings per share.

Shares held by Employee Share Ownership Trusts

Millions of shares	2024	2023
At 1 October	1.6	3.7
Gift of shares from Treasury	2.0	–
Distribution of shares held by Employee Share Ownership Trusts	(3.3)	(2.1)
At 30 September	0.3	1.6

The shares in the Trusts are accounted for on a first in first out basis and comprise nil shares acquired in the open market (2023: nil) and

0.3 million (2023: 1.6 million) treasury shares gifted to the Trusts by the Group. 2.0 million shares (2023: no shares) were gifted to the Trusts

in the financial year 2024.

28. TREASURY SHARES

Subject to authorisation by special resolution, the Group may purchase its own shares in accordance with the Companies Act. Any shares

which have been bought back may be held as treasury shares or, if not so held, must be cancelled immediately upon completion of the

purchase, thereby reducing the amount of Group’s issued share capital. Shares held in treasury do not qualify for dividends. Shares

purchased under the share buyback programme initiated on 5 October 2023 were cancelled immediately on completion of the purchase.

During the financial year 2.0 million shares were gifted to Employee Share Ownership Trusts (2023: no movements).

		2024		2023
	Millions of		Millions of
	shares	Value	shares	Value
£ million unless otherwise indicated	(number)	£	(number)	£
At 1 October	70.3	2,183	70.3	2,183
Gifted to Employee Share Ownership Trusts	(2.0)	–	–	–
At 30 September	68.3	2,183	70.3	2,183
Percentage of issued share capital	7.5	n/a	7.3	n/a

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29. COMMITMENTS

Capital commitments

£ million	2024	2023
Contracted but not provided for:
Property, plant and equipment and software	207	97

30. CONTINGENT LIABILITIES

The following summary includes updates to matters that have developed since the 2023 Annual Report and Accounts.

USA state settlement agreements

In November 1998, the major United States cigarette manufacturers, including Reynolds and Philip Morris, entered into the Master

Settlement Agreement (“MSA”) with 52 US states and territories and possessions. These cigarette manufacturers previously settled four

other cases, brought by Mississippi, Florida, Texas and Minnesota, by separate agreements with each state (collectively with the MSA, the

“State Settlement Agreements”, with Mississippi, Florida, Texas and Minnesota known collectively as the “Previously Settled States”). ITG

Brands (ITGB) is a party to the MSA and to the Mississippi, Minnesota, and Texas State Settlement Agreements.

In connection with its 12 June 2015 acquisition of four cigarette brands (Winston, Salem, Kool and Maverick, referred to as the “Acquired

Brands”) from Reynolds and Lorillard, ITGB has been involved in litigation and other disputes with the Previously Settled States, Philip

Morris, and Reynolds in their state courts.

Delaware

ITGB is involved in litigation with Reynolds in the Delaware court that has jurisdiction over disputes under the Asset Purchase Agreement

(APA) for the Acquired Brands. The current case in progress involves Reynolds’ claim to indemnity for Florida settlement payments. The

issue in this case is whether ITGB has satisfied its obligations to use “reasonable best efforts” to join the settlement with Florida under the

APA and whether regardless of that “reasonable best efforts” requirement ITGB is required to indemnify Reynolds for amounts the Florida

Court has required Reynolds to pay.

On 30 September 2022, the trial court granted summary judgment to Reynolds and denied summary judgment to ITGB. It held that the

Florida court’s determination that ITGB did not assume payments under the Florida settlement unless it agreed to do so was not binding

on the Delaware courts under principles of issue preclusion. It further held that as a matter of law the contract provisions were

unambiguous and no evidence was required, and that ITGB had assumed and was required to indemnify Reynolds for Florida settlement

payments. The Court did not determine the amount of Reynolds’ damages but left that question open for further proceedings.

On 2 October 2023 the Court issued an initial order on damages. The court rejected ITGB’s claim that no damages could be assessed but

declined to decide the amount of damages and other issues until after a trial. A trial was held on 8-9 July 2024 and a decision is now

pending. After trial court proceedings on damages are completed, ITGB will have the right to appeal (including from the court’s earlier

determinations) to the Delaware Supreme Court.

Reynolds’ claim for indemnification in Delaware is limited at most to the amounts it has been required to pay under the Florida

determination described above, plus interest and attorney’s fees. ITGB continues to deny that indemnity is appropriate and intends to

appeal that determination. ITGB further contends that Reynolds’ damages should be substantially reduced by the amount by which

Reynolds’ settlement payments have been reduced through operation of the “profit adjustment” by reason of ITGB not becoming a party to

the Florida settlement as well as by reason of Reynolds’ and third-parties’ conduct. On 31 October 2023 Philip Morris USA moved to

intervene in the damages determination on the theory that any profit adjustment gain belongs to Philip Morris, not ITGB or Reynolds. On 1

April 2024 the court denied intervention.

Amounts at issue range up to US$ 250 million through 2023, plus future payments of up to US$ 27 million annually going forward plus

interest of approximately US$ 68 million and attorney fees. Based on the current facts and circumstances it is currently unclear as to

what level of damages will become payable in this case.

MSA Previously Settled States Reduction

The MSA contains a downward adjustment, called the Previously Settled States Reduction, which reduces aggregate payments made by

Philip Morris, Reynolds, and ITGB by a specified percentage each year. The State of California, later joined by the remainder of the MSA

states and by Philip Morris, challenged the application of that Reduction to ITGB for every year from 2016 forward, claiming that it cannot

apply to ITGB since it is not making settlement payments to Florida, Minnesota, or Texas under their settlements. The Independent

Auditor to the MSA, which initially addresses disputes related to payments, has rejected that challenge every year. It is possible that one

of the parties making the challenge may seek to arbitrate the claim under the MSA. The PSS Reduction provides annual MSA payment

reductions of c.US$ 65 million.

Overall summary of liability position associated with USA state settlement agreements

The Group’s legal advice is that it has a strong position on pending claims related to the Acquired Brands and the Group therefore

considers that no provision is required for these matters.

www.imperialbrandsplc.com 197

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

Product liability investigations

The Group is currently involved in a number of legal cases in which claimants are seeking damages for alleged smoking and health

related effects. In the opinion of the Group’s lawyers, the Group has meritorious defences to these actions, all of which are being

vigorously contested. Although it is not possible to predict the outcome of the pending litigation, the Directors believe that the pending

actions will not have a material adverse effect upon the results of the operations, cash flow or financial condition of the Group. This

assessment of the probability of economic outflows at the year-end is a judgement which has been taken by management. Consequently,

the Group has not provided for any amounts in respect of these cases in the financial statements. There have been no material updates to

matters in any product liability investigations in the period since the 2023 Annual Report and Accounts.

Competition authority investigations

Spain

On 12 April 2019 the Spanish National Commission on Markets and Competition (CNMC) announced penalties against Philip Morris Spain,

Altadis, JT International Iberia and Logista. Altadis and Logista received fines of 11.4 million and 20.9 million, respectively, from the

CNMC. According to the decision, Altadis and Logista are alleged to have infringed competition law by participating in an exchange of

sales volume data between 2008 and February 2017. The CNMC considers that this conduct had the effect of restricting competition in the

Spanish tobacco market. Both companies believe that the arguments made by the CNMC that define this conduct as anti-competitive are

flawed. In June 2019, both Altadis and Logista commenced appeals to the CNMC’s decision, and the fines imposed in the Spanish High

Court where they believe they will be successful, a decision supported by external legal counsel. In September 2019 Altadis and,

separately, Logista arranged bank guarantees for the full amount of the fines with the result that payment of the fines had been

suspended pending the outcome of the appeals. Therefore, provision for these amounts is not considered appropriate.

In both the Altadis and Logista appeals, the parties have concluded their submissions to the Court and a judgment is awaited in 2024/2025

In parallel to the main proceedings against the CNMC decision, on 28 February 2023, the Supreme Court annulled the unannounced

inspection carried out by the CNMC officials on Altadis' premises in February 2017 for lack of consent by Altadis. Therefore, all the

documents and evidence seized by the CNMC during Altadis' inspection have to be returned to the company and should be struck out

from the CNMC decision. It remains to be seen the impact of this Court decision on the main proceedings.

Other litigation

US Helms-Burton litigation

Imperial Brands PLC has been named as a defendant in a civil action in federal court in Miami, Florida under Title III of the Cuban Liberty

and Democratic Solidarity Act of 1996 (“Helms-Burton”) filed on 6 August 2020. Title III provides United States nationals with a cause of

action and a claim for treble damages against persons who have “trafficked” in property expropriated by the Cuban government. Although

the filed claim is for unquantified damages, we understand the claim could potentially reach approximately US$ 365 million, based on the

claimants’ claim to own 90% of the property, which they value at US$ 135 million (and then treble based on the claimants’ interpretation of

the legislation). The claim is based on allegations that Imperial, through Corporación Habanos S.A. (a joint venture between one of

Imperial’s now former subsidiaries and the Cuban government), has “trafficked” in a factory in Havana, Cuba that the Cuban government

confiscated from the claimants’ ancestor in the early 1960s, by using the factory to manufacture, market, sell, and distribute

Habanos cigars.

At the time the claim was filed against Imperial and up until the conclusion of the Brexit “transition period” on 31 December 2020, Imperial

was subject to an EU law known as the EU Blocking Statute (Regulation (EC) No. 2271/96), which conflicts with Helms-Burton, protected

Imperial against the impact of Title III, and impacted how Imperial might respond to the threatened litigation. The EU Blocking Statute

has been transposed into domestic law with only minimal changes. Accordingly, on 10 January 2021, Imperial submitted an application to

the UK Department for International Trade for authorisation from the Secretary of State for International Trade to defend the action or, at

a minimum, to file and litigate a motion to dismiss the action and this was granted on 8 February 2021.

Following a lengthy motion to dismiss proceedings, on 28 November 2023, a magistrate issued a recommended ruling, and recommended

dismissal of the case in its entirety as against Imperial on three separate grounds. On 8 April 2024, the judge adopted the magistrate’s

recommendation that the case be dismissed for lack of personal jurisdiction and entered an order dismissing and closing the case.

The Claimants filed an appeal against the judge’s dismissal of the claim on 7 May 2024. The claimants’ appeal submissions were filed on

16 August 2024 and the Group response was submitted on 16 October 2024. The appellate court has not scheduled a hearing in the appeal,

however it is likely that a hearing will be held in spring 2025. A decision on the appeal will follow the hearing. No provision has been made

for potential liabilities related to this claim.

In June 2020, the Group responded to a claimant law firm’s allegation of human rights issues in the Malawian tobacco supply chain,

which included allegations relating to child and forced labour. In December 2020, a claim was filed in the English High Court against

Imperial Brands plc, Imperial Tobacco Limited and four of its subsidiaries (the Imperial Defendants) and two entities in the British

American Tobacco (the BAT Defendants) group by a group of Malawian tobacco farm workers. The Imperial Defendants have

acknowledged service and confirmed to the claimants that they intend to defend the claim in full.

The Imperial Defendants have not yet been required to file their defence. The deadline for the Imperial and BAT Defendants to do so has

been postponed pending other case management actions and will be determined at a subsequent case management hearing after the

completion of a matching exercise (which will seek to establish whether the claimants worked for farmers who grew tobacco purchased

by either Defendant group). That hearing is not likely to take place before 2025. The claim is unquantified and given the early stage of the

litigation a provision would not be appropriate.

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31. NET DEBT

The movements in cash and cash equivalents, borrowings, and derivative financial instruments in the year were as follows:

				Derivative	Liabilities	Cash
	Current	Lease	Non-current	financial	from financing	and cash
£ million	borrowings	liabilities	borrowings	instruments	activities	equivalents	Total
At 1 October 2023	(1,499)	(349)	(7,882)	(53)	(9,783)	1,345	(8,438)
Reallocation of current borrowings from non- current borrowings	(1,673)	–	1,673	–	–	–	–
Cash flow	1,760	107	(1,660)	34	241	(203)	38
Change in accrued interest	37	(14)	(21)	12	14	–	14
Change in fair values	–	–	–	(119)	(119)	–	(119)
New leases, terminations and modifications	–	(144)	–	–	(144)	–	(144)
Exchange movements	184	14	384	(209)	373	(64)	309
At 30 September 2024	(1,191)	(386)	(7,506)	(335)	(9,418)	1,078	(8,340)

				Derivative	Liabilities	Cash
	Current	Lease	Non-current	financial	from financing	and cash
£ million	borrowings	liabilities	borrowings	instruments	activities	equivalents	Total
At 1 October 2022	(1,011)	(248)	(8,996)	(87)	(10,342)	1,850	(8,492)
Reallocation of current borrowings from non- current borrowings	(1,536)	–	1,536	–	–	–	–
Cash flow	891	92	(835)	64	212	(349)	(137)
Change in accrued interest	2	(10)	(24)	1	(31)	–	(31)
Change in fair values	–	–	–	139	139	–	139
New leases, terminations and modifications	–	(106)	–	–	(106)	–	(106)
Acquisitions	–	(84)	–	–	(84)	–	(84)
Exchange movements	155	7	437	(170)	429	(156)	273
At 30 September 2023	(1,499)	(349)	(7,882)	(53)	(9,783)	1,345	(8,438)

Average reported net debt during the year was £10,037 million (2023: £10,072 million).

Analysis by denomination currency

					2024
£ million	GBP	EUR	USD	Other	Total
Cash and cash equivalents	356	179	129	414	1,078
Total borrowings	(1,014)	(3,383)	(4,291)	(9)	(8,697)
	(658)	(3,204)	(4,162)	405	(7,619)
Effect of cross-currency swaps	1,022	(5,532)	4,292	–	(218)
	364	(8,736)	130	405	(7,837)
Lease liabilities	(39)	(265)	(47)	(35)	(386)
Derivative financial instruments					(117)
Net debt					(8,340)

www.imperialbrandsplc.com 199

CONSOLIDATED FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS continued

					2023
£ million	GBP	EUR	USD	Other	Total
Cash and cash equivalents	177	405	324	439	1,345
Total borrowings	(1,631)	(3,417)	(4,319)	(14)	(9,381)
	(1,454)	(3,012)	(3,995)	425	(8,036)
Effect of cross-currency swaps	1,576	(6,016)	4,323	–	(117)
	122	(9,028)	328	425	(8,153)
Lease liabilities	(43)	(247)	(26)	(33)	(349)
Derivative financial instruments					64
Net debt					(8,438)

32. RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT

£ million	2024	2023
Decrease in cash and cash equivalents	(203)	(349)
Cash flows relating to derivative financial instruments	34	64
Repayment of lease liabilities	107	92
Increase in borrowings	(3,848)	(1,462)
Repayment of borrowings	3,948	1,518
Change in net debt resulting from cash flows	38	(137)
Other non-cash movements including revaluation of derivative financial instruments	(105)	108
Lease liabilities	(144)	(190)
Exchange movements	309	273
Movement in net debt during the year	98	54
Opening net debt	(8,438)	(8,492)
Closing net debt	(8,340)	(8,438)

The increase in borrowings and repayment of borrowings reflect the cash flow movements relating to borrowings outstanding at the start

and at the end of each financial year; cash flows relating to short-term borrowings drawn down and repaid within the year are not

included in this analysis.

33. NON-CONTROLLING INTERESTS

Material non-controlling interests

Detailed below is the summarised financial information of Logista, being a subsidiary where the non-controlling interest of 49.99% is

considered material to the Group.

Summarised balance sheet

at 30 September

Euro million	2024	2023
Current assets	6,290	6,246
Current liabilities	(6,990)	(6,983)
Current net liabilities	(700)	(737)
Non-current assets	1,790	1,816
Non-current liabilities	(449)	(482)
Non-current net assets	1,341	1,334
Net assets	641	597

Summarised statement of comprehensive income

for the year ended 30 September

Euro million	2024	2023
Revenue	12,986	12,428
Profit for the year	308	274
Other comprehensive income	–	3
Total comprehensive income	308	277

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Summarised cash flow statement

for the year ended 30 September

Euro million	2024	2023
Cash flows from operating activities	397	308
Cash flows from investing activities	(51)	(83)
Cash flows from financing activities	(370)	(250)
Net decrease in cash and cash equivalents	(24)	(25)

34. POST BALANCE SHEET EVENTS

Share buybacks

On 5 October 2023 Imperial Brands PLC (‘the Company’) announced a share buyback programme to repurchase up to £1.1 billion of shares.

This programme completed on 29 October 2024 with the Company having repurchased 4,010,463 million shares for a total consideration

of £90 million in the period from 1 October 2024 to 29 October 2024.

On 8 October 2024 Imperial Brands PLC ("the Company") announced the start of a new ongoing share buyback programme, to initially

repurchase up to £1.25 billion of shares in the period to 29 October 2025. On 30 October 2024, in order to execute the first tranche of this

buyback, the Company announced it had had entered into an irrevocable and non-discretionary arrangement with its broker Morgan

Stanley & Co. International Plc to buy back up to £625 million of its shares commencing from 30 October 2024 and expected to end no

later than 29 April 2025.

35. RELATED UNDERTAKINGS

In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates, and joint ventures, the

principal activity, the full registered address and the effective percentage of equity owned by Imperial Brands PLC, as at 30 September

2024, are provided in the entity financial statements of Imperial Brands PLC. There are no material related parties other than Group

companies.

www.imperialbrandsplc.com 201

SUPPLEMENTARY INFORMATION

ALTERNATIVE PERFORMANCE MEASURES

Use of alternative performance measures

Management believes that non-GAAP or alternative performance measures provide an important comparison of business performance

and reflect the way in which the business is controlled. The alternative performance measures seek to remove the distorting effects of a

number of significant gains or losses arising from transactions which are not directly related to the ongoing underlying performance of

the business and may be non-recurring events or not directly within the control of management.

Accordingly, alternative performance measures exclude, where applicable, amortisation and impairment of acquired intangibles,

profit/loss on disposal of subsidiaries, Russia, Ukraine and associated market costs, restructuring costs, business acquisition and disposal

costs, fair value adjustment and impairment of other financial assets, charges related to legal provisions, structural changes to defined

benefit pension schemes, fair value and exchange gains and losses on financial instruments, post-employment benefits net financing

cost/income, and related tax effects and tax matters. Other significant gains or losses which are not representative of the underlying

business may also be treated as adjusting items where there is appropriate justification. The alternative performance measures in this

report are not defined terms under IFRS and may not be comparable with similarly titled measures reported by other companies. The

alternative performance measures that are used by the Group are defined and reconciled back to the associated IFRS metrics as detailed

below.

Summary of key adjusting items

The items excluded from adjusted performance results are those which are one-off in nature or items which arose due to acquisitions

and are not influenced by the day-to-day operations of the Group, and the movements in the fair value of financial instruments which are

marked to market and not naturally offset. Adjusted net finance costs also excludes all post-employment benefit net finance cost/income

since pension assets and liabilities and redundancy and social plan provisions do not form part of adjusted net debt. This allows

comparison of the Group's cost of debt with adjusted net debt. The adjusted performance measures are used by management to assess

the Group's financial performance and aid comparability of results year on year.

Consolidated income statement adjusting items

The following tables summarise the key items recognised within the consolidated income statement that have been treated as

adjusting items:

Adjusting items recognised within administrative and other expenses

£ million 2024 2023

Russia, Ukraine and associated markets – (4)

Amortisation and impairment of acquired intangibles (353) (347)

Fair value adjustment and impairment of other financial assets – (36)

Loss on disposal of subsidiaries – (1)

Charges related to legal provisions – (85)

Structural changes to defined benefit pension schemes (4) (12)

Total adjusting administrative and other expenses (357) (485)

Total non-adjusting administrative and other expenses (485) (455)

Administrative and other expenses (842) (940)

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Amortisation and impairment of acquired intangibles

Acquired intangibles are amortised over their estimated useful economic lives where these are considered to be finite. Acquired

intangibles considered to have an indefinite life are not amortised. Any negative goodwill arising is recognised immediately in the

income statement. The Group excludes from adjusted performance measures the amortisation and impairment of acquired intangibles,

other than software and internally generated intangibles, and the deferred tax associated with amortisation of acquired intangibles.

It is recognised that there may be some correlation between the amortisation charges derived from the acquisition value of acquired

intangibles, and the subsequent future profit streams arising from sales of associated branded products. However, the amortisation of

intangibles is not directly related to the operating performance of the business. Conversely, the level of profitability of branded products is

directly influenced by day-to-day commercial actions, with variations in the level of profit derived from branded product sales acting as a

clear indicator of performance. Given this, the Group’s view is that amortisation and impairment charges do not clearly correlate to the

ongoing variations in the commercial results of the business and are therefore excluded to allow a clearer view of the underlying

performance of the organisation. The deferred tax arising on intangibles which are either being amortised or are fully amortised is

excluded on the basis that amortisation of intangibles is not directly related to the operating performance of the business. The related

current cash tax benefit is retained in the adjusted measure to reflect the ongoing tax benefit to the Group.

Total amortisation and impairment for the year is £399 million (2023: £392 million) of which £353 million (2023: £347 million) relates to

acquired intangibles and is adjusting and £46 million (2023: £45 million) relates to internally generated intangibles and is non adjusting.

In the year ended 30 September 2024 adjusting items all relate to amortisation. £345 million (2023: £339 million) is attributable to Tobacco

& NGP and £8 million (2023: £8 million) is attributable to Distribution.

Fair value adjustment and impairment of other financial assets

As the movement in the fair value of loan receivables associated with the investment in Auxly Cannabis Group Inc. has the potential to be

significant and does not show a fair representation of the day-to-day operational performance of the asset, it is treated as an adjusting

item. No fair value adjustments have been recognised in the year ended 30 September 2024. The fair value adjustment in the prior year

includes changes in the carrying value of certain financial assets held by ITG Brands.

Charges related to legal provisions

The adjusting item relates to legal provisions that the Group has provided for (see note 25). These are potential liabilities arising from a

number of legacy legal disputes across the Group that have been in the courts for several years and which the Group have considered as

being unrelated to ongoing business performance and therefore adjusted. The final settlement and agreement of these cases still remain

uncertain but future outflows are still expected.

Structural changes to defined benefit pension schemes

These are non-recurring pension scheme restructuring costs (see note 24). These comprise £6 million of costs following a tax legal ruling

that became applicable in relation to the closure of a defined benefit retirement scheme in the UK during the prior year, £4 million of

settlement losses in relation to a lump sum offered to deferred members of a defined benefit retirement scheme in Ireland, and £6 million

of settlement gains following the partial buy-out of some of the pensioner and dependent population of defined benefit retirement

schemes in the USA.

The prior year included £8 million of net costs related to the closure of the UK defined benefit retirement scheme to future accrual and a

£4 million settlement charge on the full closure of the New Zealand defined benefit scheme.

Adjusting items recognised within share of profit of investments accounted for using the equity method

£ million 2024 2023

Share of profit of investments accounted for using the equity method 9 7

Adjusting items recognised within tax

£ million 2024 2023

Deferred tax on amortisation of acquired intangibles – (4)

Tax on net foreign exchange and fair value gains and losses on financial instruments 224 89

Tax on post-employment benefits net financing cost 5 –

Tax on charges relating to legal provisions 2 26

Tax on structural changes to defined benefit pension schemes – 3

Tax on fair value adjustment and impairment of other financial assets – 5

Tax on interest settlements (1) 2

Recognition of deferred tax assets 293 212

Provision for state aid tax recoverable 101 –

Uncertain tax positions (164) (207)

Prior year adjustments 57 –

Total adjusting taxation charges 517 126

Other non-adjusting taxation charges (799) (781)

Reported tax (282) (655)

www.imperialbrandsplc.com 203

SUPPLEMENTARY INFORMATION continued

ALTERNATIVE PERFORMANCE MEASURES continued

Tax adjustments related to other pre-tax adjusting items

The adjusted tax charge has been calculated to include the tax effects of a number of pre-tax adjusting items including the amortisation

of acquired intangibles, net foreign exchange gains and losses, fair value movements on financial instruments, restructuring costs and

post-employment benefits net financing cost.

Significant one-off tax charges or credits

The adjusted tax charge also excludes significant one-off tax charges or credits arising from:

• prior period tax items (including re-measurement of deferred tax balances on a change in tax rates); or

• a provision for uncertain tax items not arising in the normal course of business; or

• newly enacted taxes in the year; or

• tax items that are closely related to previously recognised tax matters, and are excluded from our adjusted tax charge to aid

comparability and understanding of the Group’s performance.

The recognition and utilisation of deferred tax assets relating to tax losses and tax credits not historically generated in the normal course

of business are excluded on the same basis.

Recognition of deferred tax assets

Significant one-off tax charges or credits arising from prior period items, and arising due to a change of facts and circumstances in the

current year, are excluded from the adjusted tax charge. The recognition of a deferred tax asset in relation to tax credits brought forward

within the Group’s Maltese treasury centre, has been recognised as a result of clarifying tax guidance issued by the tax authorities during

the year ended 30 September 2024 and the resulting intention to utilise these brought forward tax credits against forecast taxable income

relating to loans refinanced for a further fixed term tenure during the financial year.

Provision for state aid tax recoverable

Significant one-off tax charges or credits arising from prior period items are excluded from the adjusted tax charge. The receivable

booked for the state aid tax recoverable is therefore excluded from the adjusted tax charge on this basis.

Uncertain tax positions

Significant one-off tax charges or credits arising from a provision for uncertain tax items not arising in the normal course of business are

excluded from the adjusted tax charge.

Prior period tax items

Significant one-off tax charges or credits arising from prior period items are excluded from the adjusted tax charge. A review of the

historic current tax position of Imperial Tobacco International GmbH was undertaken resulting in a prior year adjustment of £53 million.

In line with the policy, the relevant tax effect has been adjusted out.

Tax on unrecognised losses

The recognition and utilisation of deferred tax assets relating to losses not historically generated in the normal course of business are

excluded from the adjusted tax charge.

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DEFINITIONS AND RECONCILIATIONS OF ALTERNATIVE PERFORMANCE MEASURES

A) Tobacco & NGP net revenue

Tobacco & Next Generation Products (NGP) net revenue comprises associated revenue less duty and similar items, excluding peripheral

products. Management considers this an important measure in assessing the performance of Tobacco & NGP operations.

The Group recognises revenue on sales to Logista, a Group company, within its reported Tobacco & NGP revenue figure. As the revenue

calculation includes sales made to Logista from other Group companies but excludes Logista's external sales, this metric differs from

revenue calculated under IFRS accounting standards. For the purposes of alternative performance measures on net revenue the Group

treats Logista as an arm’s length distributor on the basis that contractual rights are in line with other Third Party suppliers to Logista.

Variations in the amount of inventory held by Logista results in a different level of revenue compared to that which is included within the

income statement. For tobacco product sales, inventory level variations are normally not significant.

Reconciliation from Tobacco & NGP revenue to Tobacco & NGP net revenue

2024 2023

£ million Tobacco NGP Total Tobacco NGP Total

Revenue 21,708 376 22,084 22,114 299 22,413

Duty and similar items (13,877) (47) (13,924) (14,364) (34) (14,398)

Sale of peripheral products (3) – (3) (3) – (3)

Net revenue 7,828 329 8,157 7,747 265 8,012

B) Distribution gross profit

Distribution gross profit comprises the Distribution segment revenue less the cost of distributed products. Management considers this an

important measure in assessing the performance of Distribution operations.

Reconciliation from Distribution revenue to Distribution gross profit

£ million 2024 2023

Distribution revenue 11,104 10,819

Distribution cost of sales (9,601) (9,353)

Distribution gross profit 1,503 1,466

C) Adjusted operating profit

Adjusted operating profit is calculated as operating profit amended for a number of adjustments; the principal changes are detailed below.

This measure is separately calculated and disclosed for Tobacco, NGP and Distribution where appropriate.

Reconciliation from profit before tax to adjusted operating profit

£ million 2024 2023

Profit before tax 3,029 3,111

Net finance costs 534 298

Share of profit of investments accounted for using the equity method (9) (7)

Operating profit 3,554 3,402

Russia, Ukraine and associated markets – 4

Amortisation and impairment of acquired intangibles 353 347

Fair value adjustment and impairment of other financial assets – 36

Loss on disposal of subsidiaries – 1

Charges related to legal provisions – 85

Structural changes to defined benefit pension schemes 4 12

Total adjustments 357 485

Adjusted operating profit 3,911 3,887

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SUPPLEMENTARY INFORMATION continued

ALTERNATIVE PERFORMANCE MEASURES continued

Reconciliation from Tobacco & NGP operating profit to adjusted operating profit

2024 2023

£ million Tobacco NGP Total Tobacco NGP Total

Operating profit/(loss) 3,321 (83) 3,238 3,262 (156) 3,106

Russian, Ukraine and associated markets – – – 4 – 4

Amortisation and impairment of acquired intangibles 341 4 345 334 5 339

Fair value adjustment and impairment of other financial

assets

– – – 20 16 36

Loss on disposal of subsidiaries – – – 1 – 1

Charges related to legal provisions – – – 85 – 85

Structural changes to defined benefit pension schemes 4 – 4 12 – 12

Adjusted operating profit/(loss) 3,666 (79) 3,587 3,718 (135) 3,583

Reconciliation from Distribution operating profit to Distribution adjusted operating profit

£ million 2024 2023

Distribution operating profit 322 298

Amortisation of acquired intangibles 8 8

Distribution adjusted operating profit 330 306

See note 12 for details on amortisation and impairment and note 24 for details on structural changes to defined benefit pension schemes.

D) Adjusted operating profit margin

Adjusted operating profit margin is adjusted operating profit divided by net revenue expressed as a percentage (see note 3). This measure

is separately calculated and disclosed for the Tobacco & NGP and Distribution businesses where appropriate. There is no reconciliation

required for this metric.

E) Adjusted net finance costs

Adjusted net finance costs excludes the movements in the fair value of financial instruments which are marked to market and not

naturally offset. This measure also excludes all post-employment benefit net finance costs since pension assets and liabilities and

redundancy and social plan provisions do not form part of adjusted net debt. This allows comparison of the Group's cost of debt with

adjusted net debt.

IFRS 9 requires that all derivative financial instruments are recognised in the consolidated balance sheet at fair value, with changes in the

fair value being recognised in the consolidated income statement unless the instrument satisfies the hedge accounting rules under IFRS

and the Group chooses to designate the derivative financial instrument as a hedge.

The Group hedges underlying exposures in an efficient, commercial and structured manner. However, the strict hedging requirements of

IFRS 9 may lead to some commercially effective hedge positions not qualifying for hedge accounting. As a result, and as permitted under

IFRS 9, the Group has decided not to apply cash flow or fair value hedge accounting for its derivative financial instruments. However, the

Group does apply net investment hedging, designating certain borrowings and derivatives as hedges of the net investment in the Group’s

foreign operations, as permitted by IFRS 9, in order to reduce income statement volatility.

The Group excludes fair value gains and losses on derivative financial instruments and exchange gains and losses on borrowings from

adjusted net finance costs. Fair value gains and losses on the interest element of derivative financial instruments are excluded as there is

no direct natural offset between the movements on derivatives and the interest charge on debt in any one period, as the derivatives and

debt instruments may be contracted over different periods, although they will reverse over time or are matched in future periods by

interest charges. The fair value gains on derivatives are excluded as they can introduce volatility in the finance charge for any given

period.

Fair value gains and losses on the currency element of derivative financial instruments and exchange gains and losses on borrowings

are excluded as the relevant foreign exchange gains and losses on the instruments in a net investment hedging relationship are

accumulated as a separate component of other comprehensive income in accordance with the Group’s policy on foreign currency.

Fair value movements arising from the revaluation of contingent consideration liabilities are adjusted out where they represent one-off

acquisition costs that are not linked to the current period underlying performance of the business. Fair value adjustments on loans

receivable measured at fair value are excluded as they arise due to counterparty credit risk changes that are not directly related to the

underlying commercial performance of the business.

The net interest on defined benefit assets or liabilities, together with the unwind of discount on redundancy, social plans and other long-

term provisions, are reported within net finance costs. These items together with their related tax effects are excluded from our adjusted

earnings measures, as they primarily represent charges associated with historic employee benefit commitments, rather than the ongoing

current period costs of operating the business.

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Reconciliation from reported net finance costs to adjusted net finance costs

£ million 2024 2023

Reported net finance costs 534 298

Fair value gains on derivative financial instruments 513 707

Fair value losses on derivative financial instruments (632) (568)

Exchange gains on financing activities 9 10

Net fair value and exchange (losses)/gains on financial instruments (110) 149

Interest income on net defined benefit assets 22 43

Interest cost on net defined benefit liabilities (33) (30)

Post-employment benefits net financing (cost)/income (11) 13

Tax interest cost (10) (50)

Effect of discounting on long-term provisions (1) –

Adjusted net finance costs 402 410

Comprising:

Interest income on bank deposits (16) (12)

Interest cost on lease liabilities 14 10

Interest cost on bank and other loans 404 412

Adjusted net finance costs 402 410

F) Adjusted tax charge

The adjusted tax charge is calculated by amending the reported tax charge for significant one-off tax charges or credits, as detailed in the

table below. The adjusted tax rate is calculated as the adjusted tax charge divided by the adjusted operating profit before tax.

Reconciliation from reported tax to adjusted tax

£ million 2024 2023

Reported tax 282 655

Deferred tax on amortisation of acquired intangibles – (4)

Tax on net foreign exchange and fair value gains and losses on financial instruments 224 89

Tax on post-employment benefits net financing cost 5 –

Tax on charges relating to legal provisions 2 26

Tax on structural changes to defined benefit pension schemes – 3

Tax on fair value adjustment and impairment of other financial assets – 5

Tax on interest settlements (1) 2

Recognition of deferred tax assets 293 212

Provision for state aid tax recoverable 101 –

Uncertain tax positions (164) (207)

Prior year adjustments 57 –

Adjusted tax charge 799 781

www.imperialbrandsplc.com 207

SUPPLEMENTARY INFORMATION continued

ALTERNATIVE PERFORMANCE MEASURES continued

G) Adjusted earnings per share

Adjusted earnings is calculated by amending the reported basic earnings for all of the adjustments recognised in the calculation of the

adjusted operating profit, adjusted finance costs and adjusted tax charge metrics as detailed above. Adjusted earnings per share is

calculated by dividing adjusted earnings by the weighted average number of shares.

Reconciliation from reported to adjusted earnings and earnings per share

2024 2023

£ million unless otherwise indicated

Earnings

per share

(pence)

Earnings

per share

(pence)

Earnings

Reported basic 300.7 2,613 252.4 2,328

Russia, Ukraine and associated markets – – 0.4 4

Amortisation and impairment of acquired intangibles 40.6 353 38.0 351

Fair value adjustment and impairment of other financial assets – – 3.4 31

Loss on disposal of subsidiaries – – 0.1 1

Charges related to legal provisions (0.2) (2) 6.4 59

Structural changes to defined benefit pension schemes 0.5 4 1.0 9

Net fair value and exchange movements on financial instruments (13.1) (114) (25.8) (238)

Post-employment benefits net financing cost/(income) 0.7 6 (1.4) (13)

Tax interest cost 1.3 11 5.2 48

Effect of discounting on long-term provisions 0.1 1 – –

Recognition of deferred tax assets (33.7) (293) (23.0) (212)

Provision for state aid tax recoverable (11.6) (101) – –

Uncertain tax positions 18.9 164 22.4 207

Prior year adjustments (6.6) (57) – –

Adjustments above attributable to non-controlling interests (0.6) (4) (0.3) (3)

Adjusted 297.0 2,581 278.8 2,572

Adjusted diluted 295.3 2,581 277.1 2,572

H) Return on invested capital (ROIC)

Return on invested capital measures the effectiveness of capital allocation and is calculated by dividing adjusted operating profit after tax

by the annual average of: intangible assets, property, plant and equipment, net assets held for sale, inventories, trade and other receivables

and trade and other payables. The equivalent tax charge is calculated by multiplying the adjusted effective tax rate for the Group by

adjusted operating profit.

The annual average is defined as the average of the opening and closing balance sheet values.

£ million unless otherwise stated 2024 2023 2022

Reported operating profit 3,554 3,402 2,683

Adjusting items (see section C) 357 485 1,011

Adjusted operating profit 3,911 3,887 3,694

Equivalent tax charge (888) (871) (827)

Net adjusted operating profit after tax 3,023 3,016 2,867





Working capital (2,772) (2,567) (2,823)

Intangibles 15,938 16,944 17,777

Property, plant and equipment 1,561 1,617 1,659

Invested capital 14,727 15,994 16,613

Average annual invested capital 15,361 16,304 16,240

Return on invested capital (%) 19.7 18.5 17.7

I) Constant currency

Constant currency removes the effect of exchange rate movements on the translation of the results of our overseas operations. The

Group translates current year results at prior year foreign exchange rates. An analysis of all key metrics can be found in the Group

Financial Review.

J) Adjusted net debt

Management monitors the Group's borrowing levels using adjusted net debt which excludes interest accruals, lease commitments and

the fair value of derivative financial instruments providing commercial hedges of interest rate risk. The adjusted net debt metric is used

in monitoring performance against various debt management obligations including covenant compliance.

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Adjusted net debt calculation

£ million 2024 2023

Reported net debt (8,340) (8,438)

Accrued interest 95 125

Lease liabilities 386 349

Fair value of interest rate derivatives 119 (62)

Adjusted net debt (7,740) (8,026)

Average adjusted net debt during the year was £9,506 million (2023: £9,574 million).

K) Adjusted net debt to earnings before interest, taxation, depreciation and amortisation (EBITDA) multiple

This is defined as adjusted net debt divided by adjusted EBITDA. Adjusted net debt is measured at balance sheet foreign exchange rates,

with a full reconciliation shown in table J above. Adjusted EBITDA is calculated as adjusted operating profit plus amortisation,

depreciation and impairments. An analysis of all key metrics can be found in the Group Financial Review. The reconciliation from

adjusted operating profit to adjusted EBITDA is shown below.

£ million 2024 2023

Adjusted operating profit (see section C above) 3,911 3,887

Depreciation, amortisation and impairments 294 270

Adjusted EBITDA 4,205 4,157

L) Adjusted operating cash conversion

Adjusted operating cash conversion is calculated as cash flow from operations pre-restructuring and before interest and tax payments

less net capital expenditure relating to property, plant and equipment, software and intellectual property rights as a percentage of

adjusted operating profit.

Adjusted operating cash conversion calculation

£ million unless otherwise stated 2024 2023

Net cash flows generated from operating activities 3,307 3,129

Tax 888 590

Net capital expenditure (321) (254)

Restructuring 43 98

Cash flow post capital expenditure pre interest and tax 3,917 3,563

Adjusted operating profit 3,911 3,887

Adjusted operating cash conversion 100% 92%

M) Free cash flow

Free cash flow is operating profit adjusted for certain cash and non-cash items. The principal adjustments are depreciation, working

capital movements, net capex, restructuring cash flows, tax cash flows, cash interest and minority interest dividends.

Net cash flows generated from operating activities to free cash flow

£ million 2024 2023

Net cash generated from operating activities 3,307 3,129

Net capital expenditure (321) (254)

Cash interest (416) (407)

Minority interest dividends (136) (104)

Free cash flow 2,434 2,364

www.imperialbrandsplc.com 209

SUPPLEMENTARY INFORMATION continued

GLOSSARY

Financial terms

Adjusted closing net debt Adjusted closing net debt is measured at balance sheet foreign exchange rates, with a full

reconciliation shown within section J of the supplementary information.

Adjusted earnings per share

This is an alternative performance measure which is defined within section G of the

supplementary information.

Adjusted EBITDA Adjusted EBITDA is calculated as adjusted operating profit plus amortisation, depreciation and

impairments.

Adjusted net debt

This is an alternative performance measure which is defined within section J of the

supplementary information.

Adjusted net debt to EBITDA

multiple

This is an alternative performance measure. Adjusted net debt is defined within section J of the

supplementary information. EBITDA is defined within section K of the supplementary information

Adjusted net finance costs This is an alternative performance measure which is defined within section E of the supplementary

information.

Adjusted (Non-GAAP) Non-GAAP measures provide a useful comparison of performance from one period to the next.

Adjusted operating cash

conversion

This is an alternative performance measure which is defined within section L of the

supplementary information.

Adjusted operating profit This is an alternative performance measure which is defined within section C of the

supplementary information.

Adjusted operating profit margin Adjusted operating profit margin is calculated as adjusted operating profit divided by net revenue.

Adjusted tax charge

This is an alternative performance measure which is defined within section F of the

supplementary information.

Aggregate priority market share Aggregate weighted market volume share, based on our five priority markets (USA, Germany, UK,

Spain and Australia). Market volume share is calculated based on a 12-month moving annual total

(MAT) volume share position from October to September. The market volume size used in the

weighting calculation is based on a constant prior year end actual market size.

All in cost of debt

Adjusted net finance costs divided by the average net debt in the year.

Cash conversion Cash conversion is calculated as cash flow from operations pre-restructuring and before interest and

tax payments less net capital expenditure relating to property, plant and equipment, software

and intellectual property rights as a percentage of adjusted operating profit.

Constant currency

Removes the effect of exchange rate movements on the translation of the results of our overseas

operations. The Group translates current year results at prior year foreign exchange rates.

Dividend per share Dividend per share represents the total annual dividends, being the sum of the paid interim dividend

and the proposed final dividend for the financial year.

DBO Dividend Benefit Obligation.

EBITDA Earnings before interest, taxation, depreciation and amortisation.

EPS Earnings per share

GAAP Generally accepted accounting principles.

Market share

Market share data is presented as a 12-month moving average weighted across the markets in

which we operate.

Net debt to EBITDA Adjusted closing net debt divided by adjusted EBITDA.

Reported (GAAP) Reported (GAAP) complies with UK-adopted International Accounting Standards and the relevant

legislation.

Return on invested capital This is an alternative performance measure which is defined within section H of the

supplementary information.

Stick equivalent volumes

Stick equivalent volumes reflect our combined cigarette, fine cut tobacco, cigar and snus volumes but

exclude any NGP volume such as heated tobacco, modern oral nicotine and vapour.

Tobacco & NGP net revenue/

Distribution gross profit

This is an alternative performance measure which is defined within sections A and B of the

supplementary information.

Total shareholder return

Total shareholder return is the total investment gain to shareholders resulting from the movement

in the share price and assuming dividends are immediately reinvested in shares.

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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

E Carbon Dioxide Equivalent

CSRD The Corporate Sustainability Reporting Directive

DEI Diversity, Equity and Inclusion

Distribution Logistics Segment

ECLT Eliminating Child Labour in Tobacco Growing Foundation

EFRAG European Financial Reporting Advisory Group

ELT Executive Leadership Team

EPR Extended Producer Responsibility Scheme

ERP Enterprise Resource Planning

ESG Environmental, Social and Governance

ESRS European Sustainability Reporting Standards

EU European Union

EVP Electronic Vape Products

EY Ernst & Young LLP

FCT Fine Cut Tobacco

FDA US Food and Drug Administration

FMC Factory Made Cigarettes

FMCG Fast Moving Consumer Goods

GHG Greenhouse Gas

GRI Global Reporting Initiative

GWh / KWh Gigawatt-Hour / Kilowatt-Hour

HRIA Human Rights Impact Assessment

HT Heated Tobacco

HTP Heated Tobacco Products

ILO International Labour Organization

IOSH Institution of Occupational Safety and Health

IPM Integrated Pest Management

ISAE International Standard for Assurance Engagements

ISO International Organization for Standardization

IVMS In Vehicle Monitoring System

KPI Key Performance Indicators

LCWG Leaf Compliance Working Group

Leaf CARE Leaf Compliance and Response Programme

LGBTQ+ Lesbian, Gay, Bisexual, Transgender, Queer or Questioning, Intersex, Asexual, and More

LTA Lost Time Accident

LTIP Long Term Incentive Plans

MMC Mass Market Cigars

MOND Modern Oral Nicotine Delivery

MPI Manufacturer’s Price Increase

MSCI Morgan Stanley Capital International index

NGOs Non-Government Organisation

NGP Next Generation Products

NTM Non-Tobacco Materials

OHSE Occupational Health Safety and Environment

OND Oral Nicotine Delivery Category

PDCA Plan Do Check Act

www.imperialbrandsplc.com 211

SUPPLEMENTARY INFORMATION continued

GLOSSARY continued

Other

continued

PG&S Purchased Goods and Services

PGS Committee People, Governance and Sustainability Committee

PPE Personal Protective Equipment

Priority markets Top 5 combustible markets USA, Germany, UK, Spain and Australia

PSHG Product Stewardship and Health Group

RECs Renewable Energy Certificates

SASB Sustainable Accounting Standards Board

SBTi Science Based Targets initiatives

SCIA Supply Chain Impact Assessments

SDGs Sustainable Development Goals

SE Stick Equivalent volumes reflect our combined cigarette, fine cut tobacco, cigar and snus volumes

SECR Streamlined Energy and Carbon Reporting

SER Supplier Engagement Rating

STP Sustainable Tobacco Programme

T&Cs Terms and Conditions

TCFD Task Force on Climate-Related Financial Disclosures

Tobacco & NGP Tobacco & Next Generation Products

UK United Kingdom

UN SDGs United Nations Sustainable Development Goals

WDI Workforce Disclosure Initiative

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IMPERIAL BRANDS PLC FINANCIALS

IMPERIAL BRANDS PLC BALANCE SHEET

at 30 September 2024

£ million Notes 2024 2023

Fixe

d assets

Investments iii 7,968 7,968

Curren

t assets

Debtors iv 1,929 2,597

Creditors

: amount

s fallin

g du

e withi

n on

e year

v (189) (74)

t curren

t assets

1,740 2,523

t assets

9,708 10,491

Capita

l an

d reserves

Called up share capital vi 91 97

Capital redemption reserve 16 10

Share premium account 5,833 5,833

Retained earnings - brought forward 4,551 6,733

Retained earnings - profit for the year 1,616 136

Retained earnings - share options reserve 14 –

Retained earnings - dividends paid (1,299) (1,312)

Retained earnings - repurchase of shares (1,114) (1,006)

Tota

l shareholders

' funds

9,708 10,491

As permitted by section 408(3) of the Companies Act 2006, the profit and loss account of the Company is not presented. The profit

attributable to shareholders, dealt with in the financial statements of the Company, is £1,616 million (2023: £136 million).

The financial statements on pages 213 to 229 were approved by the Board of Directors on 18 November 2024 and signed on its behalf by:



Director

www.imperialbrandsplc.com 213

IMPERIAL BRANDS PLC FINANCIALS continued

IMPERIAL BRANDS PLC STATEMENT OF CHANGES IN EQUITY

for the year ended 30 September 2024

£ million

premium and

capital

redemption

Retained

earnings

Share capital Total equity

At 1 October 2023 97 5,843 4,551 10,491

Profit for the year – – 1,616 1,616

Total comprehensive income – – 1,616 1,616

Transactions with owners

Share options reserve – – 14 14

Repurchase of shares (6) 6 (1,114) (1,114)

Dividends paid – – (1,299) (1,299)

At 30 September 2024 91 5,849 3,768 9,708

At 1 October 2022 103 5,837 6,733 12,673

Profit for the year – – 136 136

Total comprehensive income – – 136 136

Transactions with owners



Repurchase of shares (6) 6 (1,006) (1,006)

Dividends paid – – (1,312) (1,312)

At 30 September 2023 97 5,843 4,551 10,491

Total distributable reserves were £3,754 million (2023: £4,537 million).

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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 seven. The Directors of the Group

manage the Group's risks at a Group level, rather than at an individual entity level. These risks are detailed in note 2 Accounting

Estimates and Judgements of the Group's financial statements.

These financial statements were prepared in accordance with the Companies Act 2006 as applicable to Financial Reporting Standard 101

Reduced Disclosure Framework (FRS 101), and applicable accounting standards.

The financial statements have been prepared on the historical cost basis, and as a going concern. Historical cost is generally based on the

fair value of the consideration given in exchange for the assets.

As permitted by section 408(3) of the Companies Act 2006, no separate profit and loss account has been presented for the Company.



As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available in the preparation of the financial

statements, as detailed below:



• Paragraph 38 of IAS 1 'Presentation of financial statements' - comparative information requirements in respect of:

(i) paragraph 79(a)(iv) of IAS 1;

• The following paragraphs of IAS 1 'Presentation of financial statements':

(i) 10(d) - statement of cash flows;

(ii) 10(f) - a statement of financial position as at the beginning of the preceding period when an entity applied an accounting policy

retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial

statements;

(iii) 16 - statement of compliance with all IFRS;

(iv) 38A - requirement for minimum of two primary statements, including cash flow statements;

(v) 38B-D - additional comparative information;

(vi) 40A-D - requirements for a third statement of financial position;

(vii) 111 - cash flow information; and

(viii) 134-136 - capital management disclosures;



• IAS 7 'Statement of cash flows';

• Paragraph 30 and 31 of IAS 8 'Accounting Policies, changes in accounting estimates and errors' - requirement for the disclosure of

information when an entity has not applied a new IFRS that has been issued but is not yet effective;

• Paragraph 17 of IAS 24 'Related party disclosures' - key management compensation;

• The requirements in IAS 24 'Related party disclosures' to disclose related party transactions entered into between two or more

members of a group;

• The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 'Share-based Payment';

• IFRS 7 'Financial Instruments: Disclosures'; and

• Paragraphs 91 to 99 of IFRS 13 'Fair value measurement' - disclosure of valuation techniques and inputs used for fair value

measurement of assets and liabilities.

The material accounting policies, which have been applied consistently are set out below. The Directors do not consider there to be any

critical accounting estimates or judgements in respect of the Company; see note 2 Accounting Estimates and Judgements of the

consolidated financial statements for further detail.

Investments

Investments held as fixed assets comprise the Company's investment in subsidiaries and are shown at historic purchase cost less

any provision for impairment. An annual review of investments is performed for indicators of impairment. If indicators of impairment

are identified investments are tested for impairment to ensure that the carrying value of the investment is supported by their

recoverable amount.

Dividends

Final dividends are recognised as a liability in the period in which the dividends are approved by shareholders, whereas interim

dividends are recognised in the period in which the dividends are paid. Dividends receivable are recognised as an asset when

they are approved.

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IMPERIAL BRANDS PLC FINANCIALS continued

NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued

Financial instruments



Receivables held under a hold to collect business model are stated at amortised cost.

The calculation of impairment provisions is subject to an expected credit loss model, involving a prediction of future credit losses based

on past loss patterns. The approach involves the recognition of provisions relating to potential future impairments, in addition to

impairments that have already occurred. The expected credit loss approach involves modelling of historic loss rates, and consideration of

the level of future credit risk. Expected loss rates are then applied to the gross receivables balance to calculate the impairment provision.



Treasury shares

When the Company purchases its own equity share capital (treasury shares), the consideration paid, including any directly attributable

incremental costs (net of income taxes), is deducted from equity until the shares are reissued or disposed of. When such shares are

subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related

income tax effects, increases shareholders' funds. When such shares are cancelled they are transferred to the capital redemption reserve.



Income taxes

Judgement is involved in determining whether the Company is subject to a tax liability or not in line with tax law. Where liabilities exist,

estimation is often required to determine the potential future tax payments. The Company recognises provisions for tax based on

estimates of the taxes that are likely to become due. Where the final tax outcome is different from the amounts that were initially

recorded, such differences will impact the current income tax and deferred tax provisions in the period in which such determination is

made.



New accounting standards

There have been no changes to accounting standards that have significantly impacted the accounting or disclosures within the financial

statements for the year ended 30 September 2024.



New accounting standards that are effective after the year ended 30 September 2024

There are a number of amendments and clarifications to IFRS, effective in future years and, with the exception of IFRS 18 - Presentation

and Disclosure in Financial Statements, none of these are expected to significantly impact the Company's results or financial position.

IFRS 18 - Presentation and Disclosure in Financial Statements

This new accounting standard is effective for the year ended 30 September 2028 and will involve a change to the structure of the primary

financial statements. This requires entities to classify income and expenses into five categories - operating, investing, financing, income

tax and discontinued operations. In addition, certain ‘non-GAAP’ measures – alternative performance measures (APMs) – will now form

part of the audited financial statements, and require mandatory definitions and reconciliation to GAAP measures. The Company is

presently reviewing the impact of this standard which is expected to fundamentally change the structure of the presentation of the

Income statement. As the Company does not present an Income Statement, the impact of the standard is not expected to be significant.



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II. DIVIDENDS

Distributions to ordinary equity holders

Pence per share £ million

2024 2023 2022 2024 2023 2022

Cash:      

December 51.82 49.31 48.47 461 464 458

March 51.82 49.32 48.49 453 457 458

June 22.45 21.59 21.27 193 196 202

September 22.45 21.59 21.27 192 195 202

Total 148.54 141.81 139.50 1,299 1,312 1,320

The dividends note, which previously contained details of both paid and proposed distributions, has been reformatted. The table now

aligns the paid dividends with the equivalent amount recorded as a payment to equity shareholders of the parent company shown within

the Consolidated Statement of Changes in Equity. Details of proposed dividends are given in narrative form below. The change in the

format of this note does not constitute a restatement within the requirements of IAS 8 Accounting Policies, Changes in Accounting

Estimates and Errors.

The declared third interim dividend for the year ended 30 September 2024 of 54.26 pence per share amounts to a proposed dividend of

£459 million, which will be paid in December 2024. The proposed final dividend for the year ended 30 September 2024 of 54.26 pence per

share amounts to a proposed dividend payment of £459 million in March 2025 based on the number of shares ranking for dividend at 30

September 2024, and is subject to shareholder approval. If approved, the total dividend paid in respect of 2024 will be £1,303 million (2023:

£1,305 million). The dividend paid during 2024 is £1,299 million (2023: £1,312 million).

III. INVESTMENTS

Cost of shares in Imperial Tobacco Holdings (2007) limited

£ million 2024 2023

At 1 October 7,968 7,968

At 30 September 7,968 7,968

The Directors confirm that the carrying value of the investment is supported by the cash flows generated by the underlying assets.

A list of the subsidiaries of the Company is shown in the section on Related Undertakings below.

IV. DEBTORS

£ million 2024 2023

Amounts owed from Group undertakings 1,929 2,597

 

Amounts owed from Group undertakings are unsecured, interest bearing, have no fixed date for repayment and are repayable on demand.

V. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

£ million 2024 2023

Amounts owed by Group undertakings 35 34

Bank overdrafts 2 2

Contracted liability for share buyback 90 –

Other creditors 62 38

189 74

Amounts owed by Group undertakings are unsecured, interest bearing, have no fixed date for repayment and are repayable on demand.



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IMPERIAL BRANDS PLC FINANCIALS continued

NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued

VI. CALLED UP SHARE CAPITAL

2024 2023



Ordinary shares

10p each

Ordinary shares 10p

each

Number £ million Number £ million

Authorised, issued and fully paid:

 

1 October 968,590,194 97 1,020,697,237 103

Shares cancelled (54,087,312) (6) (52,107,043) (6)

30 September 914,502,882 91 968,590,194 97

On 5 October 2023, the Board approved a £1,100 million share buyback programme in order to return capital to shareholders. The first

tranche purchased 30,317,505 shares for a cost of £550 million. Upon completion of the purchase, these shares were cancelled and

transferred to the capital redemption reserve. For the second tranche of the programme, the Group has entered into an irrevocable and

non-discretionary arrangement to buy back shares up to £550 million. The second tranche commenced on 11 March 2024 and in the

period to 30 September 2024 54,087,312 shares have been bought back and cancelled at a cost of £1,020 million. The stamp duty and other

tax costs were £12 million and the fees charged for the share repurchase were £1 million. Upon completion of the purchase, these shares

were cancelled and transferred to the capital redemption reserve. As at 30 September 2024, the Group has recognised a liability of £90

million for the remaining shares to be purchased.

For the year ended 30 September 2024 the amounts recognised in the share premium and capital redemption reserves were £5,833

million (2023: £5,833 million) and £16 million (2023: £10 million) respectively.

VII. RESERVES

Treasury shares

Subject to authorisation by special resolution, the Group may purchase its own shares in accordance with the Companies Act. Any shares

which have been bought back may be held as treasury shares or, if not so held, must be cancelled immediately upon completion of the

purchase, thereby reducing the amount of Group’s issued share capital. Shares held in treasury do not qualify for dividends. Shares

purchased under the share buyback programme initiated on 5 October 2023 will be cancelled immediately on completion of the purchase.

During the financial year 2.0 million shares were gifted to Employee Share Ownership Trusts (2023: no movements).

£ million unless otherwise indicated

2024 2023

Millions of

(number)

Value

Millions of

(number)

Value

At 1 October 70.3 2,183 70.3 2,183

Gifted to Employee Share Ownership Trusts (2.0) – – –

At 30 September 68.3 2,183 70.3 2,183

Percentage of issued share capital 7.5 n/a 7.3 n/a



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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 2024:

• Imperial Tobacco Holdings (2007) Limited

• Imperial Tobacco Ventures Limited

• Rizla UK Limited

• Imperial Tobacco Overseas (Polska) Limited

• La Flor de Copan UK Limited

• Tabacalera de Garcia UK Limited

• Imperial Brands Ventures Limited

• Nerudia Consulting Limited

• Imperial Brands Ventures Finance Limited

• Imperial Brands Ventures Holdings (1) Limited

• Imperial Brands Ventures Holdings (2) Limited

The Company has guaranteed various committed and uncommitted borrowings facilities and liabilities of certain UK and overseas

undertakings. As at 30 September 2024, the amount guaranteed is £13,791 million (2023: £14,138 million).

Many of the committed revolving credit facilities remain undrawn as at 30 September 2024 but the maximum potential exposure under

each facility has been included due to the ongoing commitment; only drawn utilised balances have been included for facilities that are

uncommitted in nature.

The Company has also provided a parent guarantee to the Imperial Tobacco Pension Trustees Ltd (including their £300 million revolving

credit facility), the main UK pension scheme.

The Directors have assessed the fair value and expected credit loss of the above guarantees and do not consider them to be material. They

have therefore not been recognised on the balance sheet.

IX. POST BALANCE SHEET EVENTS

Share buybacks

On 5 October 2023 Imperial Brands PLC (‘the Company’) announced a share buyback programme to repurchase up to £1.1 billion of shares.

This programme completed on 29 October 2024 with the Company having repurchased 4,010,463 million shares for a total consideration

of £90 million in the period from 1 October 2024 to 29 October 2024.

On 8 October 2024 Imperial Brands PLC ("the Company") announced the start of a new ongoing share buyback programme, to initially

repurchase up to £1.25 billion of shares in the period to 29 October 2025. On 30 October 2024, in order to execute the first tranche of this

buyback, the Company announced it had had entered into an irrevocable and non-discretionary arrangement with its broker Morgan

Stanley & Co. International Plc to buy back up to £625 million of its shares commencing from 30 October 2024 and expected to end no later

than 29 April 2025.

X. RELATED PARTY DISCLOSURES

Details of Directors’ emoluments and interests are provided within the Directors’ Remuneration Report. The Directors Remuneration

Report includes details on salary, benefits, pension and share plans. These disclosures form part of the financial statements.

RELATED UNDERTAKINGS

In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates, and joint ventures, the

principal activity, the country of incorporation and the effective percentage of equity owned, as at 30 September 2024 are disclosed below.

With the exception of Imperial Tobacco Holdings (2007) Limited, which is wholly owned by the Company, none of the shares in the

subsidiaries is held directly by the Company.



www.imperialbrandsplc.com 219

IMPERIAL BRANDS PLC FINANCIALS continued

NOTES TO THE FINANCIAL STATEMENTS OF IMPERIAL BRANDS PLC continued

SUBSIDIARIES: REGISTERED IN ENGLAND AND WALES, WHOLLY OWNED

Name Principal activity and registered address 



Altadis NewCo Limited Dormant