Imperial Brands PLC on Wednesday said it would conduct an annual share buyback for the next five years and continue to focus on its five largest markets.

The Bristol, England-based tobacco products maker set out its 2030 strategy at its capital market day, which it said builds on the ‘strong foundations’ of its current five-year plan.

Imperial Brands said to ‘drive sustainable value in combustibles’ it has chosen to continue focusing on the US, Germany, UK, Spain and Australia, which represent around 70% of adjusted tobacco operating profit.

The firm said it would also build scale in its next generation products by leveraging its differentiated and brands and developing sales capabilities.

Chief Executive Stefan Bomhard said: ‘Our 2030 strategy articulates the choices we will make to further strengthen our combustible and next generation product businesses, generating sustainable growth and long-term value for shareholders.

‘This strategy builds on the firm foundations of our current plan, which has created a better business delivering a stronger, more consistent operational and financial performance, and excellent returns for shareholders. This underpins my confidence that, during the next five years, we will unlock further value creation opportunities.’

Imperial Brands said it expects annualised savings of around £320 million from the initiatives by the end of 2030, the majority of which will be reinvested to support growth initiatives.

The anticipated cash costs of the initiatives at £600 million, with £500 million of the cost split between the 2027 and 2028 financial years.

It also expects to incur non-cash charges of around £140 million.

Imperial Brands said the strategy will support its medium-term guidance of low-single digit tobacco net revenue growth on a constant currency basis, and double-digit NGP net revenue growth.

It expects group adjusted operating profit to grow between 3% and 5% annually, while it expects adjusted earnings per share to grow at a high-single digit rate, supported by a reduction in share count through the share buyback.

Imperial Brands said surplus capital would be returned to shareholders through an ongoing ‘evergreen’ share buyback over the next five years. The scale of buybacks will be determined on an annual basis.

CEO Bomhard said: ‘We are maintaining our rigorous capital allocation framework, which has both supported investment in growth and delivered substantial, growing capital returns for shareholders... We believe this combination of sustainable growth and capital returns reinforces a compelling investment case for shareholders.’

For the coming year, the company said it was on track to deliver low-single-digit tobacco and NGP net revenue growth at constant currency.

It expects group adjusted operating profit close to the middle of its mid-single-digit range, a similar growth rate to 2024 when it increased by 4.6%.

Imperial Brands expects to deliver ‘at least’ high-single-digit adjusted EPS growth for 2025, supported by the share buyback and partly offset by higher adjusted finance and tax costs.

The company said its performance in 2025 will be weighted to the second half of the year, due to the phasing of combustible pricing and investment.

It sees a 2% to 3% headwind due to foreign exchange rates for the first-half, falling to between 1% and 2% for the full-year.

Shares in Imperial Brands were down 2.8% to 2,663.00 pence in London around midday on Wednesday.

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