Imperial Brands PLC

In the first half, group adjusted operating profit grew 0.6%, and management said the business delivered growth in tobacco and NGP net revenue. Free cash flow was GBP 2.6 billion on a 12-month basis, operating cash conversion was 98%, leverage was 2.4x, and the adjusted effective tax rate was 23.5%. Management said one-offs totaled over GBP 50 million in H1, including around GBP 13 million from U.S. promotional timing in NGP. For the full year, the company reaffirmed guidance for low-single-digit tobacco net revenue growth, double-digit NGP net revenue growth, adjusted operating profit growth of 3% to 5%, at least high-single-digit EPS growth, and at least GBP 2.2 billion of free cash flow, all at constant currency. It also expects FX to be a 0% to 1% headwind to operating profit and EPS growth.

Lukas Paravicini framed the quarter as evidence that the company is “performing and transforming” at the same time. He stressed a challenger strategy focused on consumer insight, pricing discipline, and selective participation in segments where gross margins are higher, rather than chasing volume share for its own sake. His tone was confident and repetitive on execution, repeatedly saying the company is on track for the full year and that the second half should improve as temporary drags roll off.

Murray McGowan emphasized broad-based growth, noting tobacco and NGP net revenue growth, adjusted operating profit growth of 0.6%, and GBP 2.6 billion of free cash flow over the last 12 months. He said leverage was 2.4x, flat year-on-year and within target range, and that operating cash conversion was 98%. He also highlighted a 4% ordinary dividend increase, the GBP 1.45 billion buyback, and total capital returned to investors since the program began reaching GBP 4.8 billion. On costs, he said the Delaware settlement includes GBP 150 million cash in H1 and GBP 162 million remaining over roughly three years, while 2030 strategy charges cover factory rationalization and transformation costs.

Analysts pressed management on whether full-year AOP growth would land near the top or bottom of the 3% to 5% range, but Lukas declined to narrow it, saying the company will deliver within guidance and that H2 should benefit from easier comparisons and unwinding one-offs. Questions also focused on market share, U.S. NGP strategy after new FDA guidance, and the Middle East conflict; management said it is prioritizing value over low-return volume, has enough A&P for U.S. NGP, is exiting the loss-making legacy blu vape business, and has not seen a material Middle East impact yet. On Germany, Murray said any tax change looks unlikely to affect FY '26 and would more likely matter from FY '27 onward.