INTRODUCTION AND CONTENTS

WE ARE TRANSFORMING INTO

  1. CONSUMER-LEDCHALLENGER BUSINESS

New capabilities, a performance culture and more effective ways of working are enabling Imperial to deliver a stronger operational performance and enhanced financial returns.

STRATEGIC REPORT

GOVERNANCE

SUPPLEMENTARY

At a Glance

2

Our Consumer Focus

4

Our Investment Case

6

Chair's Statement

8

Chief Executive's Statement

10

Our Distinct Approach

14

Our Strategy in Action

16

KPIs

30

Stakeholder Engagement

32

Non-Financial and Sustainability

37

Information Statement

ESG Review

38

TCFD

70

Market Review

82

Operating Review

84

Group Financial Review

92

Principal Risks and Uncertainties

100

Governance at a Glance

112

Chair's Introduction

114

Board Leadership

116

Section 172

126

Board Statements

128

People and

129

Governance Committee

Audit Committee

134

Remuneration Report

142

Directors' Report

164

FINANCIALS

Independent Auditor's Report

169

Consolidated Income Statement

178

Consolidated Statement

178

of Comprehensive Income

Consolidated Balance Sheet

179

Consolidated Statement

180

of Changes in Equity

INFORMATION

Alternative Performance

235

Measures

Glossary

244

IMPERIAL BRANDS PLC

FINANCIALS

Imperial Brands PLC

247

Balance Sheet

Imperial Brands PLC Statement of

247

Changes in Equity

Notes to the Financial Statements

248

of Imperial Brands PLC

SHAREHOLDER

INFORMATION

Shareholder Information

263

Consolidated Cash

181

Flow Statement

Notes to the Consolidated

182

Financial Statements

For more information see www.imperialbrandsplc.com

MEET OUR PEOPLE

Hind, Brand Manager, Morocco

Cover

Jennifer and Wen-Hsiang,Production

21

Chih-Min and Chang-Wei,Production

61

Operator and Production Team Leader,

Shift Leaders, Taiwan

Sarah Jean, Regulatory Toxicology

Cover

Coordinator, Germany

Taiwan

Marina, Machinist, Spain

62

Sara, Trade Marketing Analyst, Portugal

21

Mandjou, Insights & Intelligence

Cover

Iryna, Production Operator, Ukraine

64

Analyst, Morocco

Rafael, Process Engineer, Dominican

24

Reka, People & Culture Operations

67

Miguel, Market Manager, Portugal

1

Republic

Specialist, Germany

Matthew, Retail Development

24

Hind, Communications Manager,

3

Emmanuel, Product Characterisation

69

Morocco

Representative, UK

Specialist, UK

Christoph, OHS&E Coordinator, Germany

27

Elio, End-to-end Planner, Poland

7

Rogelio and Carmen, Tobacco

76

Assia, Accountant, Morocco

27

Operations Leader and People &

Andrea, Electronics Development

14

Manager, UK

Culture Clerk, Dominican Republic

Zineb, Production Operator, Morocco

28

Adam, Sales Representative, US

83

Thomas, Sales & Marketing Manager,

16

Omar, Production Operator, Morocco

29

Ivory Coast

Jamal, Sales Representative, US

87

Ana, People & Culture Business

33

Angelina, Production Engineer,

16

Partner, Portugal

Said, Factory Storekeeper, Morocco

91

Germany

Mykola, Factory Storekeeper, Ukraine

35

Henry, Reporting Specialist, Germany

115

Mirko, Area Sales Manager, Germany

19

Andreas, Lab Technician, Germany

44

Alanah, Supply Chain Manager,

126

Lea, Sales Representative, US

19

Dominican Republic

Mikaela, Machine Operator, Sweden

48

Adery, Regional Sales Manager, Taiwan

20

Peikerr, Retail Development Executive,

52

Taiwan

Performance measures used throughout the report

Reported (GAAP)

Complies with UK-adopted International Accounting Standards and the relevant legislation.

Adjusted (Non-GAAP)

Non-GAAP measures provide a useful comparison of performance from one period to the next. The basis of our adjusted measures is explained in the accounting policies accompanying our financial statements and the APM section within Supplementary Information.

Constant currency basis

Removes the effect of exchange rate movements on the translation of the results of our overseas operations. We translate current year results at prior year foreign exchange rates. See page 94 for more details.

Market share

Market share data is presented as a 12-month moving average weighted across the markets in which we operate.

Stick equivalent

Stick equivalent volumes reflect our combined cigarette, fine cut tobacco, cigar and snus volumes.

www.imperialbrandsplc.com 1

IMPERIAL BRANDS AT A GLANCE

ON

Three years into our strategy, we have built a

consistent track record of delivery against our

key objectives. At the same time we are making

progress on bringing to life our purpose: forging

STRATEGY

a path to a healthier future for moments of

relaxation and pleasure.

DELIVERING

OUR

OUR FOCUSED STRATEGY

OUR PASSION FOR BRANDS

STRATEGIC PILLARS

International brands

Pages 18-23

ING V

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Local jewels

CRITICAL ENABLERS

Pages 24-29

Next generation products (NGP)

Markets we operate in:

c.120

Vapour

Heated tobacco

Modern oral

2 Imperial Brands | Annual Report and Accounts 2023

ACCELERATING DELIVERY ON OUR STRATEGIC PRIORITIES

Operational improvements, enhanced capital returns to shareholders and progress on environmental, social and governance priorities

Aggregate market share of our five

NGP net revenue growth at

FY24 share repurchase announced

priority combustible markets

constant currency

£1.1bn

+10bps

+26.4%

(2023: £1.0bn)

(2022: +35bps)

(2022: +10.8%)

Tobacco & NGP net revenue

Dividend per share (pence)

Absolute CO2 equivalent emissions

(£ billion)

146.82p

Scope 1 and Scope 2 market-based

£8.0bn

(tonnes)

2022: 141.17p

99,985t

2022: £7.7bn*

2022: 175,766t

7.6bn

7.7bn*

8.0bn

139.08p

141.17p

146.82p

288,172t

175,766t

99,985t

21

22

23

21

22

23

17*

22

23

2023 Tobacco & NGP net revenue growth

2023 DPS growth +4.0%

Our target is to be Net Zero in our direct

at constant currency +1.4%

operations by 2030

* Excluding Russia

* 2017 is the baseline year

www.imperialbrandsplc.com 3

OUR CONSUMER FOCUS

Our portfolio of brands and products is designed to meet the diverse and evolving

expectations of adult consumers in

markets worldwide. We responsibly serve

those who choose to smoke and, at the

same time, we continue to develop

potentially less harmful products which

also satisfy consumer needs.

WE

START WITH

CONSUMER

THE

"I use Pulze and iD heat sticks every day, and on different occasions, like when I am waiting for the bus, having a beer, or during a break from work. Sometimes I vape too, for the flavours. I used to smoke regular cigarettes, but I haven't for more than five years now."

Karolina,

Czech Republic

"I started vaping to stop smoking, as I was worried about the effect on my health and the odours. I love the wide variety of flavours that are available with blu 2.0, the ease of use, its affordability, and the battery life. For me, these are all advantages."

Salvador,

Spain

4 Imperial Brands | Annual Report and Accounts 2023

"I switched to Davidoff about 10 years ago. It's a longer cigarette and I like its quality and taste and the less lingering smells that other brands have. As an engineer, I know that machines built in Germany are renowned for their craftsmanship and I think this is true for Davidoff too."

Chien-Hung,

Taiwan

"I smoke Golden Virginia as it's tastier than other tobacco I've used, and easier to roll. I've tried other brands but always come back to this one. Golden Virginia is part of my daily routine now. I've tried vaping but I don't think I would change anytime soon."

Mark,

UK

"A Backwoods with my crew is always in the mix. A Backwoods moment is when you are with friends, and when you need to unwind. The ritual is familiar and like nothing else. If Backwoods can continue to deliver on high quality and freshness, I will always be a consumer."

Mark,

USA

"Winston has always been my go-to brand; I enjoy the taste. Smoking is part of my daily routine - in the morning with my coffee, after a meal. There is nothing like sitting on the porch after a long day at work and taking a moment to wind down and relax with Winston."

Amy,

USA

www.imperialbrandsplc.com 5

OUR INVESTMENT CASE

INVEST

IMPERIAL?

WHY

IN

By building a more consumer-focused challenger business and following a disciplined capital allocation framework we are continuing to invest behind our strategy, while maintaining a strong, efficient balance sheet and delivering enhanced shareholder returns.

REVITALISED

TOBACCO BUSINESS

The tobacco value creation model remains resilient, with affordability and strong brand loyalty supporting sustainable pricing. By focusing on our top-five combustible markets that generate c.70% of operating profit, and through selective investment in brand equity and our sales force, we have stabilised market share, after years of sharp declines. This, combined with a more disciplined focus on our broader market portfolio, is driving improved combustible returns.

BUILDING A SUSTAINABLE NEXT GENERATION PRODUCT BUSINESS

Next generation products have growth potential as they are still a relatively nascent category in the majority of markets. We seek to build a sustainable NGP business through a consumer focus, a partnership approach to innovation and disciplined execution. As a challenger, our role is to offer consumers a choice where they have already expressed an NGP preference and where we can leverage our existing customer relationships.

SELF-HELP INITIATIVES DELIVERING OPERATIONAL IMPROVEMENT

We have identified multiple initiatives to deliver operational improvements that will enhance our decision-making and drive efficiencies. For example, we are adopting new ways of working with our enabling functions using a global business service model and implementing a new ERP system to replace our 60 legacy systems.

Aggregate priority market

NGP net revenue (£ million)

Annual cost savings from

share vs prior year (%) 

restructuring programme

£150m

23

23

10bps

£265m

22

22

35bps

£208m

21-2bps

21

£188m

COMBINED, THESE ARE GENERATING

A STRONG FINANCIAL OUTLOOK

Improving tobacco and NGP net revenue trajectory, with a compound annual growth rate of 1% to 2%.

Improving profitability through operational leverage, better geographic mix from continued stabilisation of priority market shares, reduced losses from our investment in NGP and restructuring cost savings driving a mid-single-digit compound annual growth rate for Group adjusted operating profit.

The business is highly cash generative with low capital intensity, a working capital focus and disciplined capital expenditure producing adjusted operating cash conversion of typically 90% to 100%.

Free cash flow generated in FY23

£2.4bn

6 Imperial Brands | Annual Report and Accounts 2023

ENHANCING OUR CAPITAL RETURNS

We have a clear capital allocation framework alongside our strategy:

1. INVEST IN STRATEGY

Since our strategy is largely organic and we work with innovation partners, our capital expenditure needs are relatively light. Any M&A is likely

to be small.

2. MAINTAIN LEVERAGE

We are committed to an investment grade credit rating and will maintain our leverage at the lower end of the range 2.0-2.5 times adjusted net debt/ EBITDA range.

3. PROGRESSIVE DIVIDEND GROWTH

We have committed to grow our dividend every year, taking into account the underlying business performance.

4. RETURN SURPLUS CAPITAL TO SHAREHOLDERS

Having reached our leverage target, we have committed to an ongoing share buyback programme, with £1.1 billion committed in FY24.

Capital returned to shareholders in FY23

£2.3bn

Further information on our strategy can be found on pages 16 to 29.

www.imperialbrandsplc.com 7

CHAIR'S STATEMENT

TRANSFORMING

FORSUCCESS

Dear Shareholders

The transformation of Imperial into a consumer-focused challenger business is now translating into a stronger and more consistent operational performance and enhanced shareholder returns. Despite a difficult macroeconomic and geopolitical environment, with inflationary headwinds, shifting consumer preferences and regulatory challenges, we continue to methodically deliver on our external commitments.

One of my highlights of the past year was attending our capital markets event in New York in June, where management showcased our new consumer capabilities in insights, innovation and marketing. What impressed me was both the best-in- class quality of the work by our new global centres of expertise and the deep collaboration with local markets. We are making progress in other transformation priorities:

improvements in data, simplification of processes, and the development of a performance-based culture.

All of this enabled the business to deliver an improved performance in both combustible and next generation products (NGP) during the 2023 fiscal year. Furthermore, we are providing shareholders with consistent, growing returns through a progressive dividend policy and an ongoing share buyback programme.

I would like to thank the 25,000 people who work at Imperial, as well as our many valued business partners, for their individual contributions to our growing collective success.

CONSUMER INSIGHTS ARE DRIVING OUR TRANSFORMATION

Everything we do starts with consumers - and their diverse voices can be heard on pages 4-5 and

throughout this report. Consumers tell us they value local brands with strong heritage and global brands with distinctive personalities - traditional areas of strength for Imperial, which we are now further developing. Many consumers also tell us they have yet to find a perfect potentially reduced-harm replacement for cigarettes. This means we are seeing a growing diversity of behaviour with consumers using different products for different moments in their day.

Therefore, we see a future for this industry where multiple nicotine categories and a diverse ecosystem of businesses will coexist and evolve. Innovation, and responsible competition and regulation, will be the motors which drive us to a healthier future. Thanks to our focused investments in transformation, Imperial is now well placed to make a positive contribution to this wider industry transition.

8 Imperial Brands | Annual Report and Accounts 2023

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Imperial Brands plc published this content on 08 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 December 2023 14:09:08 UTC.