Annual report 2010 - Imperial Tobacco Group

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Measuring Our Performance“We take a proactive approach toregulatory engagement and tacklingthe illicit trade in tobacco products.”Matthew Phillips, Group Corporate and Legal Affairs DirectorSee examples overleaf offuture foundations in practiceGrowth Drivers and Key Performance IndicatorsLink to StrategyStrategy Performance Governance FinancialsOur StrategyTotal Shareholder Return15012510075Imperial Tobacco50FTSE All-Share2007 2008 2009 2010Adjusted Earnings per Share136.9p2008161.8p2009178.8p2010KPIKPIWe create value for our shareholdersby delivering sustainable organic salesgrowth, complemented by our focuson cost optimisation and effectivecash utilisation.PerformanceIn 2010, we underperformed theFTSE All-Share Index by 3 per cent.However over three years we haveoutperformed by 11 per cent.With dividends reinvested£100 invested in Imperial Tobacco10 years ago would now be worth£603 compared to just £138 investedin the FTSE All-Share Index.PerformanceOur organic sales growth performancecomplemented by our focus oncost optimisation and effective cashutilisation has enabled us to deliver11 per cent growth in adjustedearnings per share.We measure the success of ourstrategy with our KPIs of totalshareholder return and adjustedearnings per share.DefinitionTotal Shareholder Return is the totalinvestment gain to shareholdersresulting from the movement in theshare price and assuming dividendsare immediately reinvested in shares.DefinitionAdjusted earnings per share isadjusted profit after tax attributableto the equity holders of the Companydivided by the weighted averagenumber of shares in issue during theperiod, excluding shares held tosatisfy employee share plans andshares purchased by the Companyand held as Treasury shares.2122
Our growth drivers of sales growth, cost optimisation andcash management are directly underpinned by a set of keyperformance indicators. These are the principal measuresused by the Board to assess performance and continuousimprovement in line with our strategy. Certain of these arelinked to executive remuneration.In addition to the key performance indicators, the Boardreviews Corporate Responsibility performance measuresto continuously improve our responsible performance.These are detailed on page 53.SalesGrowthWe drive sales growth across ourbalanced operating platforms throughour focus on consumer centricity,execution excellence, combined witha strong emphasis on building solidfuture foundations for the business.We measure this element of ourstrategy through our KPIs of tobacconet revenue, cigarette volumes andwhite stick equivalent volumes.Tobacco Net Revenue£5.2bn£6.8bn2008 2009£7.1bn2010KPIPerformanceOur tobacco net revenue was up by3 per cent to £7.1 billion (2009: £6.8billion) with strong net revenue growthin the UK, Germany, Rest of WesternEurope and Rest of the World regions.Volume growth is one of the driversof revenue growth although price andsales mix are equally important.DefinitionTobacco net revenue comprisestobacco revenue less duty andsimilar items.White StickEquivalent Volumes327.4bn358.8bn348.5bnKPIPerformanceOverall our white stick equivalentvolumes were down 2.9 per centwith strong growth across our finecut tobacco portfolio of 8.7 per cent.DefinitionWhite stick equivalent volumes reflectour combined cigarette and fine cuttobacco volumes.200820092010Cigarette Volumes294.1bn322.2bn308.7bnKPIPerformanceOur cigarette volumes were down4.2 per cent to 308.7 billion cigarettes(2009: 322.2 billion), as a result ofmarket declines in Spain, USA, Russiaand Ukraine being partly offset by gainsin Central Europe and Asia Pacific.DefinitionCigarette volumes are the numberof units sold in the period.20082009201023
Page 1 and 2: Imperial Tobacco Group PLCAnnual Re
Page 3 and 4: …to deliver sustainableshareholde
Page 5 and 6: Operational HighlightsDelivering Su
Page 7 and 8: and product portfolio to evolving c
Page 9 and 10: In this section9 Strategic Review10
Page 11 and 12: Our StrategyWe are focused on deliv
Page 13 and 14: Total Tobacco5 % Our Powerful Brand
Page 15 and 16: Our global strategic cigarette bran
Page 17 and 18: Our global team is fully aligned be
Page 19 and 20: Satisfying consumers and aligning o
Page 21 and 22: We are a responsive business with s
Page 23: Operating responsibly, combined wit
Page 27 and 28: Principal Risks and UncertaintiesA
Page 29 and 30: Competition LawOverviewWe take comp
Page 31 and 32: Reconciliation of Adjusted Performa
Page 33 and 34: Key Performance Indicators (KPIs) 1
Page 35 and 36: Lambert & Butler and Richmond remai
Page 37 and 38: Within this the travel retail marke
Page 39 and 40: OutlookThe strength of our portfoli
Page 41 and 42: Blondes. In the Middle East, we aga
Page 43 and 44: Corporate ResponsibilityOur Corpora
Page 45 and 46: Corporate Responsibility and our St
Page 47 and 48: We have revised our IMS and employe
Page 49 and 50: Environmental Performance 1Absolute
Page 51 and 52: across the business. More informati
Page 53 and 54: Supplier RelationshipsOur main supp
Page 55 and 56: Non-financial performance indicator
Page 57 and 58: “High standards of corporategover
Page 59 and 60: 5. Pierre Jungels, CBE (HON), PHD,
Page 61 and 62: Management and Corporate StructureB
Page 63 and 64: Meetings of the Board, Board Commit
Page 65 and 66: and supplemented by our Non-Executi
Page 67 and 68: 6 Performance evaluation: How do we
Page 69 and 70: The Board recognises that we operat
Page 71 and 72: Assurance process for financial rep
Page 73 and 74: - receiving reports from, and quest
Page 75 and 76:
Directors’ Report: Other Informat
Page 77 and 78:
- state whether IFRSs as adopted by
Page 79 and 80:
We understand that a purported coll
Page 81 and 82:
This Report covers the following:1
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2 Directors’ Emoluments for the Y
Page 85 and 86:
Directors’ Interests in Ordinary
Page 87 and 88:
Executive Directors’ Service Agre
Page 89 and 90:
When setting base salary the Remune
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First ElementFifty per cent of the
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In respect of the October 2007 - Oc
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Any annual bonus earned up to 100 p
Page 97 and 98:
Benefit Trusts have also been provi
Page 99 and 100:
Independent Auditors’ Reportto th
Page 101 and 102:
Consolidated Statement ofComprehens
Page 103 and 104:
Consolidated Statement of Changes i
Page 105 and 106:
Accounting PoliciesBasis of Prepara
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Duty and Similar ItemsDuty and simi
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InventoriesInventories are stated a
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Restructuring CostsSignificant one-
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Property, Plant and Equipment and I
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Tobacco net revenue£ million 2010
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3 Restructuring Costs£ million 201
Page 119 and 120:
Factors affecting the tax charge fo
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9 Intangible Assets2010£ million G
Page 123 and 124:
10 Property, Plant and Equipment201
Page 125 and 126:
13 Trade and Other Receivables2010
Page 127 and 128:
Sensitivity analysisIFRS 7 requires
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At 30 September 2009Balance sheetam
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(iii) Currency analysis and effecti
Page 133 and 134:
(iv) Derivative financial instrumen
Page 135 and 136:
Matures in financial year ending in
Page 137 and 138:
The following tables are provided i
Page 139 and 140:
Matures in financial year ending in
Page 141 and 142:
(vi) Hedge of net investments in fo
Page 143 and 144:
18 Retirement Benefit SchemesThe Gr
Page 145 and 146:
Assumptions regarding future mortal
Page 147 and 148:
21 Share SchemesThe Group recognise
Page 149 and 150:
Year from 1 October 2008 to 30 Sept
Page 151 and 152:
23 CommitmentsCapital commitments£
Page 153 and 154:
27 Reconciliation of Cash Flow to M
Page 155 and 156:
Imperial Tobacco Group PLC Balance
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(iii) Debtors: Amounts Falling Due
Page 159 and 160:
Principal SubsidiariesThe principal
Page 161 and 162:
Shareholder InformationRegistered O
Page 163 and 164:
IndexAAccounting Policies 103Acquis
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Annual report 2010 - Imperial Tobacco Group

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