Our investment case

1. A sustainable, cash-generative tobacco business

Our challenger approach has enabled us to revitalise our tobacco business. Selective investments in brands and sales execution in priority markets have driven growing aggregate market share, alongside strong pricing, and improving profitability and cash generation. In the majority of our larger markets, tobacco remains affordable and we see opportunities to create even greater value in the future.

2. A targeted and fast-growing next generation nicotine business

We are committed to building a growing and profitable next generation product business through disciplined prioritisation and investment. We innovate working in collaboration with partners and enter markets where there is proven demand and we have established routes to market.

This way of working has enabled us to build strong offerings in all categories since 2020.

As we build scale and become even more targeted in our consumer propositions, we see opportunities to continue to increase gross margins and grow NGP at an annual double-digit pace.

3. Our success is underpinned by a transformation to become more consumer-centric, performance led and data driven

We are five years into a highly structured change programme which has delivered enhanced consumer capabilities, a culture of high performance, and improving tech and data.

The full benefits of these investments will emerge during the next five-year strategic period as we further improve insights, innovation and marketing, continue to develop our people and ways of working, and complete long-term digital programmes.  

4. Our decisions are framed by a rigorous capital framework, delivering consistent value

We carefully prioritise how we use your capital.

First, we invest in our strategy. Our strategy is largely organic, and our capital expenditure needs are relatively light. 

Second, we maintain leverage at the lower end of 2.0-2.5 times adjusted net debt/EBITDA, ensuring our investment grade credit rating.

Third we have a progressive dividend policy growing payments annually, considering the underlying business performance. 

Finally, we return surplus cash to shareholders through ongoing buybacks. 

5. We maintain a long-term commitment to a healthier future

Our business model is aligned to a long-term consumer trend towards potentially less harmful smoke-free nicotine products. All our products are for adults who already smoke or consume nicotine and we are committed to playing a material role in reducing the harm caused by tobacco. 

We also have clear plans to make material progress across a full range of environmental and social priorities, including by becoming fully carbon neutral by 2040. 

Our well embedded purpose – to forge a healthier future for moments of relaxation and pleasure – continues to guide our business.