General presentation of Imperial Brands:
Let's go now to Imperial Brands. Indeed, a good knowledge of this group is an essential prerequisite before any investment on its share price and you must be familiar with the activities of this company and its main sources of income in order to anticipate any future opportunities or threats.
Imperial Brands PLC is a British company specialising in the tobacco sector. Specifically, the group is currently one of the world's leading manufacturers and sellers of tobacco products and the leader in this sector in the UK.
In order to better understand the activities of this group, it is possible to divide them into different divisions according to the share of turnover they generate and in this way :
- The manufacture and sale of traditional and new generation tobacco products accounts for the bulk of the group's revenues with 71.6% of sales and with cigarettes under the brands Davidoff, JPS, Parker & amp; Simpson, Fine, West, Lambert & amp; Butler, Winston, News, Bastos, Kool, Gauloises or Knox, cigars with the brands Backwoods and Dutch Master, electronic cigarettes with the brand Blu, heated tobacco with the brand Pulze, sucker tobacco with the brand Skruf and rolling papers with the brand Rizla currently leading in the world.
- The distribution of tobacco products generates the remaining 28.4% of the company's sales.
It is also interesting to know the geographical distribution of the revenues of this group, which makes 12.5% of its turnover in the United Kingdom, 11.6% in Germany, 11.4% in France, 10.8% in the United States and 53.7% in the rest of the world.
Knowing Imperial Brands shares competition:
While Imperial Brands is currently one of the leaders in its industry, it faces significant competition from other tobacco industry giants. These competitors should be known and closely monitored as part of your strategy to invest in this value.
- Philip Morris International: This international company is also specialized in tobacco products and is based in the United States and Switzerland. This group is notably in charge of the production, distribution and sale of tobacco products including cigarettes, rolling tobacco, kreteks, snus and heated tobacco. It employs 79,500 people worldwide and its products come from 50 different factories around the world.
- British American Tobacco: This company is also one of the world's leading tobacco and cigarette companies and owns the Pall Mall, Gladstone, Dunhill, Lucky Strike, Kent, Winfield, Vogue, Players, Parisienne and Alain Delon brands. It is also the second largest tobacco producer in the world in terms of sales and is the leader in more than 50 countries.
- Altria: This company is an American multinational that was part of the Dow Jones index until 2008. This group used to manufacture Philip Morris and Marlboro cigarettes and split from Philip Morris International in 2008. Its tobacco-related business is now limited to the United States.
- Japan Tobacco International: Finally, another serious competitor of Imperial Brands is JTI, which is part of the Japan Tobacco Group and is one of the major players in the tobacco sector worldwide. It is headquartered in Switzerland and the group markets its brands in more than 120 different countries. JTI currently employs no less than 40,000 people worldwide and owns 24 cigarette production plants, 6 research and development centres and 5 tobacco processing centres. Its external growth strategy is based on the acquisition of numerous competing brands and companies.
The strategic alliances set up by the Imperial Brands group:
After discovering who Imperial Brands' main adversaries are, we invite you to learn more about its strategic allies. In fact, the company regularly creates partnerships with other companies. Here are a few concrete examples:
- Auxly Cannabis: In 2020, Imperial Brands enters the Canadian cannabis industry through a $123 million investment agreement with Auxly Cannabis Group. This partnership includes a research and development partnership and allows this Auxly to benefit from Imperial Brands' global licenses for vaporization technology. The agreement provides for a 19.9% stake for Imperial Brands through a debenture convertible into Auxly stocks at a conversion price of 81 cents per share.
- Gemstone Investment Holding: Also in 2020, Imperial Brands has agreed to sell its premium cigar business in the US to Gemstone Investment Holding for €1.2 billion in order to reduce its debt. This sale will be made to two consortia of individual investors. Indeed, the Allied Cigar Corporation will buy the high-end cigars for the rest of the world.
- China National Tobacco: Another partnership was signed in 2013, this time with the public group China National Tobacco, with the aim of strengthening Imperial Brands' position in China, which was then the world's leading tobacco consumer. It was a joint venture called Global Horizon Ventures Limited, based in Hong Kong, between Imperial Brands and Yunnan Tobacco, a subsidiary of the Chinese giant. The agreement enabled Imperial Brands to strengthen its sales of the West and Davidoff brands in China and also to promote Yunnan's Jade and Horizon brands internationally.
As part of your analysis of the Imperial Brands stocks, you will of course have to focus above all on the future partnerships and associations of this company, which will undoubtedly be the starting point for interesting trends.