- Bomhard to retire after five-years
- Finance chief Paravicini to take over
- Shares up 44% over the past year
Shares in Imperial Brands (IMB) fell over 6% to £27.09 in morning trading after the multi-national tobacco company announced the retirement of chief executive Stefan Bomhard after five years at the helm.
Bomhard will be replaced by the company’s chief finance officer Lukas Paravicini in a straightforward transition on 1 October.
The news of Bomhard’s departure sent shares lower, even though the move was announced at a recent Imperial Brand’s investor event.
Imperial’s chair Therese Esperdy will stay on in her role through the transition.
ON TRACK FOR FULL YEAR
Over the past year, the multi-national tobacco’s shares have put in a robust performance gaining 44% and shrugging off various government crackdowns on smoking and vaping.
For the six months to the end of march 2025, the FTSE 100 company - which owns several tobacco brands including Davidoff, West, Golden Virginia and JPS - reported a 3.1% fall in revenue to £14.6 billion.
In tobacco, Imperial grew its aggregate market share in its five priority markets, whereas its strategic objective was just to hold share, and at the same time it delivered strong price mix of 5.9% across its overall combustible footprint.
However, it was NGP (next generation products), which the market is more focused on, which proved to be a strong area of growth for the multi-national tobacco giant with net revenue up 15.4% across its categories.
Bomhard said the company’s modern oral portfolio had grown strongly with further market share gains from the successful roll-out of Zone in the US.
Imperial’s balance sheet remains strong with 12-month free cash flow of £2.4 billion ‘reflecting strong cash conversion at 99% on 12-month basis.’
The company said it was on track to deliver full year results in line with guidance despite a more uncertain global economic environment.
‘We expect to deliver low-single digit growth tobacco and NGP net revenue and to grow group adjusted operating profit close to the middle of our mid-single-digit range,’ said the company.
BOMHARD BOWS OUT
Rae Maile, research analyst at Panmure Liberum, said: ‘There is no doubting the disappointment in Stefan Bomhard announcing his retirement from Imperial after an exceptional five year run.
‘Lukas Paravicini is in no way second best. We have seen consistently that Lukas has considerable skills beyond being finance director and the promotion is well deserved.
‘Equally, the promotion of Murray McGowan to chief financial officer from Strategy & Development is seamless and underpins that the plans laid out by the company very recently at the Investor Day remain firmly in place.
‘Therese Esperdy will remain as chair to oversee the transition, and that is excellent news.’
Russ Mould, investment director at AJ Bell, said: ‘Shares in Imperial Brands have been in demand with investors thanks to its generous buybacks and its relatively defensive qualities at a time when the economic backcloth has been unpredictable.
‘However, news that Stefan Bomhard is set to retire has given the shares a jolt, along with slightly more modest profit growth than expected in the first half.
‘Bomhard, who took charge in July 2020, has focused the business on its core strengths in traditional tobacco and leaned into the company’s ability to generate substantial cash flow from these activities.
‘This, in turn, has helped drive big returns of capital to shareholders, with the company achieving a total return of more than 100% since Bomhard took the helm.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.