Our strategy is aligned to our purpose of creating something better for the world’s smokers and focuses on driving results in three key areas. In Tobacco we are maximising opportunities for our Growth Brands in priority markets. Through our growing portfolio of Next Generation Products we are providing adult smokers with a range of less harmful alternatives to cigarettes, with a particular focus on the vapour category.
The disciplined approach we take to managing cost and cash provides the funds to invest in growth. Our updated sustainability strategy supports our commercial and public health ambitions, and everything we do is underpinned by high standards of governance.
We have also evolved our business model to more clearly explain how Tobacco Maximisation and Next Generation Products (NGP) create value. We have two distinct growth models, our Market Repeatable Model for tobacco and the 4Bs for NGP. Consistently applying these models to the right markets and the right brands is key for delivering quality growth. Our high operating margins drive the strong cash flows that are a hallmark of our business and although NGP may initially dilute these margins we expect to see profitability improve over time. We use the cash we generate to reinvest to support growth, pay down debt or return to shareholders through dividends.
4Bs FOR NEXT GENERATION PRODUCTS
MARKET REPEATABLE MODEL FOR TOBACCO
SIMPLE MARKETS FOCUSED PORTFOLIO
SUSTAINABLE BRAND INVESTMENTS
ALWAYS ON PRICE STRATEGY
CORE RANGE EVERYWHERE, ALL THE TIME
TAILOR CUSTOMER SOLUTIONS
HONEST ACCURATE LEARNING
SIMPLE MARKET FOCUSED PORTFOLIO
Our Market Repeatable Model starts with a simple market focused portfolio that is built around an optimal number of brands and stock keeping units that are aligned with consumer needs. Our strongest assets are our Growth and Specialist Brands and we focus on driving their performance to generate quality market share growth.