Annual report 2010 - Imperial Tobacco Group

Key Performance Indicators (KPIs) 1 2010 2009 2008 2007Total Shareholder Return:FTSE All-Share Index 10% +11% -22% +12%Imperial Tobacco 13% +5% -5% +30%Adjusted earnings per share 178.8p 161.8p 136.9p 118.8pCigarette volumes 308.7bn 322.2bn 294.1bn 200.3bnTobacco net revenue £7.1bn £6.8bn £5.2bn £3.3bnTobacco adjusted operating margin 40.9% 40.3% 40.2% 45.0%Cash conversion rate 97% 128% 86% 81%1 A full description of our key performance indicators can be found on pages 22 to 24.At 30 September 2010, our reported net debt had reducedto £10.0 billion from £12.0 billion at 30 September 2009reflecting our strong cash generation. Eliminating accruedinterest, the fair value of derivatives providing commercialcash flow hedges and finance lease liabilities, our adjustednet debt was £9.3 billion (30 September 2009: £10.8 billion).The denomination of our closing adjusted net debt was50 per cent euro, 23 per cent US dollar and 27 per centsterling. Our all-in cost of debt was stable at 5.5 per cent(2009: 5.5 per cent).Our business remains highly cash generative and weconverted 97 per cent of our profit from operating activitiesafter net capital expenditure into cash, towards the top endof our 90 to 100 per cent target range. After a very strongworking capital inflow last year we retained our focus on thisimportant aspect of cash management. There was a workingcapital inflow of £0.2 billion, half of which was due to the timingof sales made in our logistics business which is expected tounwind in the new financial year. Managing our working capitalremains a key priority for us as we seek to maximise returnsfrom effective cash utilisation.Additions and Fixed Asset DisposalsOur cash outflows include gross capital expenditure of£283 million (2009: £253 million), reflecting our increasedinvestment in machinery and equipment across our expandedfootprint. Proceeds from disposal of fixed assets amountedto £26 million (2009: £69 million).Adjusted Net DebtReduced by £1.5 billionNet Debt30/09/09£10.8bn3.1Average level of net debt £10.9bn(FY09: £12.8bn)0.8 0.20.9ClosingNet Debt30/09/10£9.3bn0.20.3AdjustedoperatingprofitWorkingcapitalNetcapexTax andinterestDividendsFX andotherAdjusted debt figures exclude accrued interest and fair value gains and losses onderivatives providing commercial cash flow hedges and finance lease liabilities.31