Annual report 2004 (English) - PDF 3546K - Imperial Tobacco

ANTONIO VÁZQUEZ
ROMERO
Co-Chairman
JEAN-DOMINIQUE
COMOLLI
Co-Chairman
Western Europe, robust international growth momentum
outside Europe, a balanced portfolio of brands covering
all market segments, and two fl agship brands, Gauloises
Blondes, on the international level, and Fortuna, which
is now building positions outside Spain. Our price-rise
capabilities in key markets such as Spain and Morocco,
along with Régie des Tabacs’ good results in Morocco
and new development opportunities in Russia, all augur
well for the future.
Cigars:
excellent results in the United States
and for Cuban cigars, and a strong
recovery in Europe
The Cigar Division, which represents 23% of consolidated
revenues, posted very good results, particularly in the
United States. Economic sales grew 14.9% in dollars
and, taking into account the dollar’s depreciation, 7.2% in
euros. EBITDA surged 32.2%, excluding the dollar effect,
and EBITDA margin advanced 2.8 points to 26.1%. 2004
saw a strong upturn in the Premium cigar market, leading
to higher sales for our Group in our domestic markets –
the United States, Spain and France – as well as for export.
Sales in the United States grew 9.4%, with both Premium
and machine-rolled cigars in strong demand. In Europe,
the market continued to recover, fuelling a 7.3% increase
in our revenues in this region. Sales by 50%-owned
Corporación Habanos rose sharply, buoyed by excellent
performances in the Middle East, the Asia-Pacifi c region
and Europe.
In all our markets, our innovation capabilities and new
product launches continued to pay off well. With our
leadership positions in the United States – the world’s
largest market -, Spain and France, our unique brand
portfolio and our ability to adapt to conditions in each of
our markets, we are on course to further extend our lead
as the world’s number-one cigar company.
Logistics:
successful diversifi cation and an
extended international reach
Our Logistics Division, which contributes 25% of total
revenues, reported good results. Despite the sales-volume
drop in the French cigarette market, which had a knock-on
effect on tobacco-product logistics as well as on nontobacco
activities, economic revenues were up by more
than 8% overall, EBITDA rose 8.5% and EBITDA margin
held fi rm at 29.2%. Logista reported gains in both of its
sectors of activity, with non-tobacco logistics revenues up
by nearly 14% thanks to strong organic growth in Spain and
Portugal.
The acquisition of Italy’s Etinera at the end of the year
bolstered our weight in the logistics business. Following the
acquisition of Régie des Tabacs in Morocco, this new move
positions the Group as the leading player throughout the
Mediterranean basin. Moreover, these two countries will
act as springboards for the development of non-tobacco
logistics, a diversifi cation initiative that is already starting
to deliver good results in Morocco.
As evidenced by our results, we have built each of
our three businesses on strong foundations, while our
internationalization and acquisition initiatives have paid
handsome dividends. We owe our results and our stock
market performance to disciplined implementation of the
strategy that we have followed over the last fi ve years,
and we intend to pursue diligently this strategy in the
future. It has enabled us to build a solid group, capable of
successfully integrating acquisitions and of taking up the
challenges that we face in all countries and markets. This
momentum, however, has not distracted us from pursuing
our corporate social responsibility goals. We intend to
continue along a path that balances the need for ongoing
revenue and earnings growth with that of respecting the
interests of all stakeholders. Our endeavors in this area,
combined with our commitment to meeting the highest
standards of corporate governance and social responsibility,
will guarantee our Group’s continued prosperity over the
long term.
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