Imperial Brands PLC (IMB) Earnings Call Transcript & Summary

Well, welcome, everyone. And my name is Peter Durman, I'm the Head of Investor Relations at Imperial Brands. And thank you for everyone who's coming to join us here in New York. And also a very warm welcome to all of you who are joining online. I'm just going to cover off some housekeeping items before we move into the main event. So first of all, I'll draw your attention to this statement. This is regarding how you should consider any forward-looking statements in today's presentation. So I'll just draw your attention to that. I'd also highlight that any -- which we're going to show you today, some branding, marketing materials from a range of initiatives that we have going on around the world today and I want to highlight that we're only sharing with -- these with you as an investor audience to demonstrate how we're executing our strategy, how we're delivering against our strategy and how we're bringing our brands to life in front of adult nicotine and tobacco consumers. And to that end, they should not be used for any other purpose, okay? Also, just for those of you who are in the room here in New York, if there is a fire -- if a fire alarm goes off, the exits are at the back of the room. So just use those and then follow the stairs, downstairs. So -- and then in terms of the running order for today. We have a series of presentations for you this morning. We'll take a break, about a 20-minute break about sort of mid-morning. And then if you could hold your questions to the end, we'll have a Q&A session at the end. We'll take questions from the room and we'll also take questions online. And for those of you online, we'll give further instructions on how to ask your questions later on. But basically, if you go to the agenda, you'll see a session called Q&A session. If you click on that, that will open up a link to a Zoom area and then we'll tell you how to ask questions through that. So without any further ado, I thank you very much for coming. I'm now going to hand over to our Chief Executive, Stefan Bomhard. Stefan, over to you.

Well, from my side, also a big thank you to all of you here in the room. I really appreciate that you have made the journey over here. I also want to say thank you to all the people watching online. Now today's event is a couple of firsts for us. And I think one of the firsts is, it's the first time we actually talk about the consumer capabilities in Imperial and we kind of went through history. It's probably the first time in quite a long time that we talk about consumer capabilities between our combustible business and our NGP business. It's also a first because it's the first time we're actually holding since I've become the CEO, and investor event in the U.S. And that is important because the U.S. is the home to our U.S. business, which is as a country, the largest operation of Imperial worldwide. It's also the home to many of our loyal consumers of our brands. But it's also the home to many of our investors and an increasing number of our investors. So we thought we'd come to you. And it's also the home of two of our Board members who've actually joined us. So Therese Esperdy is our Chair, has joined us over here. So Therese's over here. And also Andrew Gilchrist, who joined us this year as the newest Board member who has a long history in the tobacco industry, having been the CFO of Reynolds American, when Reynolds American was its own separate listed company in the U.S., yes. So there are lots of reasons for us to come to the U.S. Now I want to talk briefly about Imperial. We are truly a global enterprise and we are the #4 in our industry. Now some wouldn't say we're #4 but they'll say we're the smallest global tobacco company. And we're actually quite proud of that. And we're actually quite excited about it because when you're the smallest that means you have to be doing things differently. That's when we will talk about the challenger mindset because I do think when you're the smallest, you have to do things differently. And that's where challenger becomes very important. But at the same time, we shouldn't forget the history of Imperial. And we were just looking in preparation for this event, we said when the company IPO-ed and became a publicly listed company in 1996, the company wasn't even #10 in the world of tobacco. So the company has come a long way from being not among the top 10 to being the fourth largest tobacco company. And the reason for that was the acquisitive history of the company, on occasion even buying companies that were larger than Imperial that allowed us to become the fourth largest tobacco company in the world. And that's something. So we're very excited and I'm very happy about the history of Imperial and the acquisitions that we've made. Why is that as important as well for us today? Because behind that acquisitive history, the company's biggest market has become the U.S., a market that is a very attractive market in the world of tobacco and nicotine. It's a market with high levels of affordability. And at the same time with these acquisitions, Imperial also build a business in Germany and in Spain. Again, two very affordable market and quite large markets in the world of tobacco. And logically, we were always in the U.K. given this being our home country. And that's for us, clearly also a very attractive market because you clearly have a significant NGP opportunities there. Now for the same, I'm probably more excited about than our countries is our brands. And that's what we will talk a lot about today. And they kind of fall into three buckets. The first bucket are our international brands. Brands like Gauloises, the #1 French tobacco brand, brands like Davidoff, probably one of the most premium cigarettes brands out, or for example, Rizla, the #1 rolling paper. Now they are probably not the largest global brands in our industry but they have some very -- they are very iconic brands and they have some very loyal followings among consumer [indiscernible] out there. So they're very important in our portfolio, and I think they have very loyal followings. But probably what distinguishes us in -- on the combustible side is our stable of local jewels. Brands here in the U.S. like Winston and Kool and Backwoods. Brands like Nobel and Fortuna in Spain and brands like Lambert & Butler, Golden Virginia in the U.K. And I think our local jewels in Imperial make up more than 60% of our global level of sales. So they're very important. And why are they important in the year 2023? Because when you look at consumer trends worldwide, you can clearly see consumers, not just in tobacco but across all consumer categories, more and more being interested in local brands, local provenance, brands that they can relate to at a local level versus big global brands. So having a strong stable of local jewel brand that might have been a bit neglected in the past in Imperial starting to see great opportunity. And finally, we come to our brands in the NGP space, where today, we have an offer across all three categories. It's a key part of our strategy. We are believing that if you want to serve your consumers, as they're looking for reduced harm options in our industry, you need to have different products around different technologies. Therefore, we have blu, Pulze iD and also our Zone X offer. And why is that important? Because fundamentally, even more than on cigarettes, consumers are making different choices. You see that there is a high level of differentiation. And just to illustrate it to you, when you -- on a recent trip around the Alps, so driving through France, you have a market where when consumers are looking for reduced harm products, vape products are their choice. You just cross over the border, you're driving in Italy and you believe you're in a different world because everybody is using heated tobacco when they look for reduced harm product. But this journey doesn't stop there. You then drive on to Austria and surprise, surprise, it's all oral nicotine for consumers. Three countries, three neighboring countries, one trip, three very different consumer choices. So I think that is an important piece. What you can't see in here as well, especially on the NGP side, these brands now in their current form are also the result of partnerships with suppliers, R&D partners. So they are not just -- so we are really believing in an ecosystem as much, especially across our whole portfolio but especially on the NGP side, which brings me briefly to our strategy and our purpose. For me, we worked with the team very hard and came up with the purpose of the company behind our strategy about forging a path to a healthier future for moments of relaxation and pleasure. Now I'm the first one and my team is the first -- we are all recognizing that there are many other companies in our industry that have a similar purpose. And that's fine. I think that is the reflection about we are the smallest. But I think what you hopefully can see from that, we want to make a difference, yes? We, as a leadership team, want to make a difference. And you will hear about the team in a second. Quite a number of members of the team at the exec level and below have joined Imperial in the last 2.5 years and that's what many of us joined for, including myself. So we really want to make a difference. But we recognize we are only going to make a contribution. We can't lead on this one given our smaller scale. But the contribution, we clearly want to make. And I think what we can make is because we are observing that the consumer is changing and there's just not one consumer out there. And I think you will hear about it in a second. We're clearly seeing consumers becoming more local, consumers making different choices. And look, as some of you -- we talked about, disposable vapes out here on the streets, let's not talk about cannabis on the streets of New York but it's very clear. Disposables didn't even exist as a category 2 years ago. So there's a lot of change happening. And I think that's a primary place for a challenger company like ours to start to make our contribution. But I also want to be clear, we'll always do this in a responsible way. This is a executive team with a nice combination between people from inside the industry and outside the industry. But what unites us, we want to do the right thing and we want to do it in a very responsible way. Now just one quick point about performance. We started this journey in January 2021. It couldn't be a face-to-face event. But at that point in time, we laid out our strategy in our Capital Markets Day. What we're happy about that in the last 2.5 years and we're kind of like at the midpoint of our strategy, I think for you, as our investors and partners, you can see some progress. We set out to not be the #1 [ share owner ] in our top 5 markets. 2.5 years in, we've actually regained 49 basis points of market share in the combination of our top 5 markets. For NGP, after reboot in our largest region for us from an NGP perspective, in Europe, we've grown our NGP net revenue and sales by 31%. And I know very important for many of you and rightfully so, from a capital allocation policy since we started this strategy, including this fiscal year, we have and will have returned GBP 4.9 billion between dividend payments and share buybacks to shareholders. So I think we're happy with the start of the strategy. But at the same time, why we're sitting here because I think we just got started. And hopefully, today, we'll be able to share some of the excitement that we have about this. Now before the team comes on stage, I think one of the things that we feel fits under the subject of challenger company, a differentiated approach, the executive team. Out of the executive team of Imperial of 10 people, eight have joined in the last 3 years. And they all bring experience from outside the industry from companies whose logo you see here on the screen. So they bring a lot of consumer goods experience. They bring a lot of consumer insight. They also bring a lot of transformation experience because many of the companies on -- with the logos here have gone through transformation before it came to our industry. So they bring the right skill set, in combination with a deep rooted tobacco experience that absolutely exists in Imperial. So it's really exciting. I think it is, if I'm honest, one of the key differentiating features of us as a company with probably the most -- the broadest and diversest team in our industry. And I think that will serve us well as the industry changes. And today, you will hear in the presentation from some of the talent that is on here but also from a lot of homegrown talent in Imperial. So hopefully, you're as excited after the day as I was. And finally, here is, I think we are investing a lot about driving our performance, driving [Technical Difficulty] We have invested -- all the top 300 leaders of the company have gone to workshops that allow us to really be a performance-driven culture and really lift the behaviors, the five behaviors that you see here. Indeed, actually, the top 300 leaders, when you kind of all the face-to-face meetings and workshops and also personal sessions have invested more than a week each into really becoming ambassadors for that cultural change and for really driving these behaviors throughout the organization. And what you can see also our commitment to making a change doesn't stop there. It's also about putting scientific together -- for example, more than 50 studies completed to work on proving the harm reduction potential of the products that we sell, okay? And this is my final chart before I hand it over and it is the theme of today, everything starts with the consumer. And here, if I go back in history, when we started in January 2021, there was no global consumer office. There was no global marketing team in Imperial that had to do with the history of the company. So what you will see today, is all what has been built in the last 2.5 years. And I think we have made some really good progress. I think we're really happy where we are. But I want to end on a very humble note. Many of you sat through marketing presentations of other consumer goods companies or other companies in this -- in the tobacco industry. I think you will have seen many of the things before. But I think there are two things I would suggest you look for in these presentations. First, can you see the challenger mindset that I talked about? Is it about differentiator? Is it about being faster and more agile, more deep in understanding the consumer. So look for that challenger mindset. And secondly, look for the self-help. I mean from my side, it's about, there's a lot more upside to come because the reality is certain things that you will see, I recognize our competitors have done before but we haven't as Imperial. And that is exciting for you as shareholders and partners because that shows there is a lot more upside potential in this one. So from my side, to finish it off, clearly, where we are today, I think we're still in the foothills. But what is exciting is that we have a map, that's our strategy. We have the equipment. You will see some of that and I think we have the team. So between map, equipment, team, I think there's nothing that should hold us back to reaching the summit. So with that, I hand it over to Andy Dasgupta, our [indiscernible] Officer. Thank you very much. [Break]

Absolute delight for me to be in front of you. It's just been over 2 years that I joined Imperial and this is the first time that I'm really presenting the [Audio Gap] shareholders. So it's a bit like first when I started presenting what [Audio Gap]. Okay. Is that okay? So I joined Imperial because I firmly believe that the transformative opportunity that each one of us have, the ability to impact that lives of that one person sitting in Africa, one person sitting in Australia, one person sitting in the U.S. where we can transform their lives towards being healthier, towards being better, to enable them to live longer, that energizes me. That is the reason I'm here. So when you start off and when we hear about the transformative journey, the sort of people who will be presenting to you are all who believe in this purpose, who wake up every morning because we are energized by what we are doing. That's what we bring on to the play. And hopefully, you're going to get that sense of passion as we move forward. But it all starts off, as I said earlier, it all starts off with a challenger mindset. We cannot -- we're the fourth largest player in the industry. We do not have the deep pockets that some of our competitors do. They are far ahead on the journey on some of the areas like NGP, for instance, than we are. That's what the case was when I came on to the play. So one had to then ask ourselves, what are we going to be doing? How are we going to be -- how will we challenge the existing paradigms in the industries where we are far behind our competitors, how do we operate? So this is really going to be around how do we create a different approach to working that is faster. So agility, you're going to see a lot of that through this. You're going to see that as a common theme. The way we are approaching innovation, for instance. How we do not have the manpower that some of our bigger competitors do. How we then are saying that how do we leverage the power of partnerships in order for us to overcome that gap and deliver innovation faster to our consumers than our competitors do. We are seeing how we -- how can we be stronger. And if you're thinking about strength, the strength that we want to build back onto our -- the biggest assets, our brands, that all starts with the consumer. So we are saying we're going to dig deep. We're going to understand the consumer. The first starting point is really going to be how we're going to be catching up. We are behind competitors. But then the question becomes, once you have caught up, what's going to be that differentiator? How are we going to be doing things differently that allows us to be better in certain instances and you're going to see some of that, hopefully, through the day as well. But let us take you back to the very recent past and we are talking about May of 2021. That's when I joined this company. And the big question was, how do we create a community and I use the word community because this is the very starting point of where we started was, we do not want to create a global central team who then starts dictating things to the rest of the markets and the regions. I've worked in such companies. We have done it. There is always this whole tussle between who takes the decisions, how it works. The matrix organization is one of the most things to make it work. So we said we're going to create a community. There is no global organization. There is no regional organization. There is no market organizations from a culture point of view. We are one team. The other big task ahead of us was how do we bring diversity in this organization that brings; a, diversity of but also diversity in terms of expertise, in terms of experiences that we can build ourselves off. Because the challenge in front of us, we were all extremely excited about the transformative NGP journey. But the reality is that in order for us to be able to invest in our growth towards NGP, we needed a very healthy combustibles business. So there was a need for us to ensure that we are seizing out the tobacco experience that we had within Imperial and bring in tobacco experience from outside and couple that with experiences of people who have worked in different categories, different brands, different ways and approaches to business models and innovation and so on, how we bring that in and create one cohesive community that drives our business forward. To that effect, I'm really proud of my leadership team, the team that we have pulled together and you're going to see -- hear from many of them today. What you will see from the team is that we've got people who, as I said, has deep tobacco experience, not just within Imperial. Anand comes with 10 years of Insights work in PMI, understands -- he led the European Insights organization for PMI before coming in. We have a great balance of people who have worked in leadership roles, in leadership companies but also in challenger companies, companies such as Coke, where you're leaders in the category and others who have worked in companies such as Reckitt, who have always challenged the paradigm. But the one common thread that is there amongst this leadership team is that everyone has a transformative mindset. They wake up in the morning thinking about how can we do things differently? And how are we going to make this work within the complexity of the organization that we have got? You will again see examples of that through the next hour or so. This is really a reflection, pretty much like the exec leadership team, my leadership team, again, has, as I said earlier, this diversity of experiences that we have brought on to the fold, that makes a difference. So let's just take a pause a bit. Let's just move back a couple of years and reflect on what is it that we have achieved really over the last couple of years. Stefan spoke about this but Imperial is an organization that has really been built through acquisitions. Now that has enabled us to go from being the tenth or the 11th or the 12th player to being the fourth largest player. So that has helped us build scale. But the problem has been that because of an acquisitive nature of building the organization, this organization was highly fragmented. So you had pockets of expertise that existed in different markets, in different categories, in different functions and so on and so forth but it was not uniform. The other big issue was that people in different areas of Imperial were doing things in different ways. There was no consistent approach to building brands, to building -- to new innovation, new products and so on and so forth. If you think about innovation, for instance, large part, 99% of all the innovation that I inherited when I joined the company on combustibles, were all cost-led. How do we take cost out of our products? It was rarely focused on consumers and the question was really, how do I deliver better value back to consumers? So that is really the change from where we were to what we are now creating, where we are saying we do have consistent approaches to how we are going to be doing things. It's consumer first. It's not going to be a scenario where we create a business strategy and then just test the hypothesis with consumers. So it is not an inward approach to strategy making. It is because of our deep understanding of consumers, strategy comes out of that understanding as opposed to the other way around. So we've changed our approach to really how we think about what we are going to be doing. We are leveraging successes. We've got pockets where we have got real successes happening in certain markets. You're going to hear some of the work that we are doing in the U.S. But the U.S. is learning from Spain. The Spain team is learning from the U.S. on work that we are doing on digital. You have the U.K. team who's really doing amazing activation work in a dark market. We are taking that learning and sharing it with the team in Australia. That's what's making a difference because we are sharing our successes throughout the different countries that we operate in. But more importantly, we are also sharing our failures. Don't get me wrong, we have had our share of failures on the journey. We're not getting everything right. We are doing things with consumers. We are trying to understand and anticipate the consumer in the best possible way but our approach has always been, we will launch with what is a fit-for-purpose product, may not be the best product for consumers but we will learn quickly, adapt and take back a much improved product into the market or a much improved consumer engagement strategy. You will again see some of the work, the way we have changed -- learned from consumers and taken back products in short periods of time, in 6 months from the launch of version 1 to version 2 and so on and so forth. That's what's making the difference. And to do that, we have had to build new capabilities within the organization. I spoke about insight. You're going to see that on insight, our starting point was that we lacked basic knowledge of our consumers, shoppers, customers. We were focusing on the then and now. We had very limited knowledge and you'd be right if you said that we were behind, significantly behind our competitors. So the starting point was how do you catch up with our competitors with ensuring that our foundational knowledge is at the right level. But then we started asking ourselves, how do we then take it to the next level in digging deep into the consumer psyche and really walking in their shoes to understand their day-to-day life? So we took knowledge from other categories that our team has operated in. Demand space, for example and Anand will talk about it. Now demand space for those of you who work or know the beverage category, the beverages industry has used demand space for now almost a decade. And they have perfected demand spaces into an art, where you've got different products that suits different occasions, different moments, the strategy is different and so on. The question was, can we adapt a version of that demand spaces work into this -- our industry and would that give us a competitive advantage? And you'll see how that is working. Brand and portfolio again, a challenger mindset, how do we do things differently? How do we create in this [ dark ] environment? You're going to see some of the work that Jose is going to be sharing with you, where we have been the first in the industry to test out the metaverse, for instance, in a market like Germany to activate with our consumers and that has made a difference. Not that we are reaching millions of consumers but the fact that we have done it has generated so much of noise within consumers. It's become the most shared platform today with -- for our industry in Germany. So those are the sort of small things that we are doing, challenging ourselves to do differently. You're going to see how we are being bold. We're the first in the industry who's standing up and championing LGBT, as a population. We are doing things -- you're going to talk about -- Jose will talk about some of the work that you're doing in Spain. For a brand to directly champion the LGBT pride network at the store, that requires us to be bold because it does come with risks but we are taking it because we believe that is the right thing to do. That is what our consumers want us to do. Consumers want brands that have a purpose, that have a point of view and we are bringing that to consumers. So that's what's different. Let me start off with what we absolutely need as our base. So we said, if we have to build our NGP business, we need a really strong combustibles business. And we -- let's be honest, our brands were weak. We had very little innovation. In most of our countries, we had milked the business in some cases. We were trying to get as much profit as we could, all for the right reasons. There's no -- nothing wrong with that. But if you don't have a brand that people love, that does not give us the right to do even things like pricing. So in an inflationary environment, when you got to price, you want to have brands that people love. So how do we build that? So if you think about what we have done in the last 2 years, from having literally no innovation on combustibles, in 24 months, we have now launched over 1,700 new SKUs into our different markets. Today, we have got over 530 active innovation projects on combustibles alone that the team is working with. Our approach to innovation has been very different. We have done consumer first but we have also done manufacturing first. We have looked at our factory. We've looked at our lines to say, how do we leverage our lines better to deliver greater value back to consumers and that's come up -- brought us up a lot of new concepts that we have tested with consumers. We have launched line extensions over the last 24 months. If you think about Davidoff Evolve, for instance, we have launched new brands where it's relevant from a consumer point of view, launching Paramount in Germany, or Lambert & Butler in Australia when we realized that because of price pressures, consumers are down trading. We have to give them something that they can latch on to, a great product at the right price point. So we have done all of this over the last 24 months and that is showing results. But that's not all. We said this was all about capability building. So we had to go back and define what is the brand equity that we want to create on each of our brands. So we started on that, not just on the global brands but also on our local brands, which is so very important for us. We have got very clearly defined brand strategies now on every single brand that we have got globally and we are driving that forward. We asked ourselves that, look, as a challenger, how am I going to be different in terms of my reaction time to consumers? When I came in we had one big global agency who were supporting us. We were paying big dollars but we were a very small part of their business. We never had the best of their talent working on our business. Turnaround time from when we wanted a particular consumer program to when it got delivered was sometimes as much as 6 months. And as you know, in this age, we need always-on ways of talking to consumers. So we then said, look, is this the right approach? So we've changed that. We have now got over 10 different agencies who are working on different capabilities focused on digital, focused on AI-led design thinking. How do we then make our design approach a lot faster. So we've brought in an agency who specializes in adaptation at speed. So from the time that we have designed, we now can roll out adaptations of the same within 3 days across every single market that we have got. That's the sort of pace that we have now brought in. And that, by the way, this new approach has also ended up saving us over 20% of the nonworking cost -- the amount that we are paying out to agencies, we have had 20% savings out of it. Better quality work, much faster, way more agile, dedicated people working on our account but at a cheaper rate. You couldn't ask for more. We have launched the Imperial University, which is really about how do we bring that capability that we have now got at the top, the experiences, how do we share and ensure that it's percolating all the way down the organization, that's been rolled out. So we have digital versions of the same and face-to-face versions of the same, all about building capability across all the verticals that you saw. Now what has that meant? If you think about fiscal year 2021, amongst our top 10 brands globally on combustibles, only three of them were growing in terms of operating profit and net revenue. At the end of fiscal year '22, you had 8 out of the top 10, we were all in growth. And we do have today programs in place. If you look at JPS and [indiscernible] we have programs in place where we are very confident that we are also going to get them over the line. That's the difference. One step at a time, one brand at a time, doing things that are slightly different. And that brings us to the whole transformative journey, why we are here. So our NGP approach and you've heard this multiple times from Stefan, is one where we are saying that we are not here. We are a challenger business. Our ambition in NGP is not to become the #1 NGP player overnight. We have clearly said that our competitors have created a sizable business in many of our markets and we believe there is a significant opportunity for us to get in there and get our fair share in all the markets that the category has already been created. We do not have the deep pockets today, maybe in 10 years' time, it's a different story. But today, we don't have the deep pockets to create new categories. But where category creation has already happened, we want to be the fastest team with the most relevant product for a subset of the audience that allows us to get fair share in the category. That's been an approach. And our approach has been to test and learn. So we tested, for example, our heated tobacco proposition in Czech Republic and Greece, quickly learned from it. We improved our product. We improved our marketing package. We tested our proposition across and we've rolled it out. So now if you look at it, our presence on EVP has dramatically increased over the last, not even 12 months. We are now rolling and we're in the process of rolling it out even further across Europe. And that is the reason why we are getting the sort of growth that you are seeing. Half year, our business on NGP in Europe has grown 35%. We expect to keep that momentum going. Not just through expansion but even organic growth in the markets that we have launched. How do we bring in innovation? How do we talk to consumers in a different way where our brands start growing share there? So that's really what's been our focus. Innovation. On NGP, when I joined this company, we had five active projects, that's 24 months back. Today, the team with Mattia, you're going to see some of the work that he's doing, we've got over 60 active projects. So we are doing things in a very different way. We have got setups where we need, whether it's in Liverpool, Hamburg or, Shenzhen but the approach has been very different where we have said -- as I said earlier, we are going to leverage the expertise of our partners. We're going to be leveraging their strength. There are people who have spent the last 10 years working on vaping as a category. How do we leverage their know-how? How do we leverage the 1,000 people that they have on their R&D teams who're working on it, how do we leverage their expertise and get the best out of them? Now you might ask the question, why would they want to work with us versus our bigger competitors? Surprisingly, the very fact that we treat our -- these people as true partners and not suppliers, that's made the world of difference. We take them along on the journey. They sit in on our consumer researches. We write product briefs together. They take launches. We deliver product prototypes together. We have got our own [indiscernible] which we will be talking about in a bit, where we test things on a real-time basis. And this has been a game changer for some of these players. And when Mattia presents, you're going to hear directly from some of them, that's made a huge difference. If you look at our pace of innovation, therefore, we are doing things in a dramatically different way. So we launched -- we spoke about heated tobacco. We launched with what we call our Pulze 1.1 device. We quickly learned from consumers on what were the things that were working very well, what could be a unique differentiator for us and how can we dramatically change our product to deliver against that. 10 months later, we launched Pulze 2.0, and our share trajectory since the launch has been all on the up. So the consumers have rated that product significantly better than what we had before, in some cases, significantly better than the competitive products in the market and that's showing results. Disposables, we were not first to the game. You had a disposable markets that were being created by some of our bigger competitors but also by smaller players out of China and so on and so forth. But we said that, look, given the way this entire category is exploding, we have to be there because that is a relevant offering for consumers on the harm reduction journey and we don't want to be left out of it. But we wanted to be doing things in a responsible way. We didn't want to follow some of the smaller competitors. We had to have the right product that has been through the right testing with the right scientific foundation behind it but launch it. And we did that within 6 months. So we -- Mattia and his team pulled together an agile task force and using scrum methodologies, we managed to take from idea, idea brief to actual launch in market within 6 months. So that's the pace that we have brought in into Imperial. And all of this -- we are doing things in a way to ensure that everything is grounded through real-time feedback with consumers. So now we have opened two consumer labs. The first one is already open in Liverpool. We are opening one in Hamburg as we go. And these are with cutting-edge facilities. So we have pretotyping and prototyping facility. You're going to hear a bit more where we can now test real time with consumers, not just on the electronics of a device but on things like our sticks, vaping products and so on and so forth. We develop prototypes, we test with consumers and the next day, we are in a position to take back an improved prototype for further testing. The speed, it has taken out over 6 months from our innovation -- typical route to market and that's through the labs. We have brought in new technology. We have got eyeball tracking, for example, to test what's really working and not. We're using new brain scanning technology in isolated sensory environments that has been created where we can pinpoint what is truly working in terms of the product. Is it the flavor? Is it the aesthetics of the device? Or is that something else? So using some of these technologies, which, by the way, are readily available but it's just that no one has used it and that is a reflection of the way we are approaching it through a challenger mindset. So it's all about then -- we have now from having an R&D team who are just developing things internally, we are co-creating our products with consumers. And that's what's making a big difference. We have already started doing that on NGP. And from next month, we are going to be doing this with combustibles as well. Again, a complete step change in this industry. Yes, you're all aware of this. Our portfolio is largely skewed towards the sub-premium to the value end. So we know that, look, we need to build up a more balanced portfolio. Revenue growth management is one of the critical tools with portfolio strategy that Jose will talk about that's getting us there. This has allowed us to manage the sort of unprecedented inflation that we have seen last year through approaches on which -- don't depend on absolute pricing alone, which was the past and perhaps, to be honest, it's also the industry standard. We [ are not ] approaching it through the multipronged lens of revenue growth management. What is the right price for the right channel? What's the right pack to deliver it against? What kind of product will deliver the best value against it? We are mapping it right through. The team has delivered playbooks. All of those playbooks have now been rolled out in the markets. We're working hand in hand. So there's a central team, which is a Center of Excellence but then they are working with our marketing teams, our market teams to build up that experience through workshops and so on and we're implementing it at pace. Kim will talk about how for instance, it's impacted our U.S. business as we move forward. So you're going to see that. These are, again, things around the new capabilities that we have brought in. Science, such an important part of what we do. The first decision that we took was to not have our science team as a siloed team outside but we brought in as a part of the consumer team. So the science team now sits next to the innovation team, sits next to the brand team, sits next to the insights team because we believe that as a challenger, our role is not spending millions and millions of dollars in just doing foundational category research. That's probably the area where our competitors will be focusing on. Yes, we do what is basically required. But if we focus our science to ensure that we are getting the best [indiscernible], that we are delivering the best need for the target consumer that we have got, how we are driving better switching. So we are investing a lot on science on switching studies rather than basic foundational studies. That's been the change of our approach on science as well. And everything, suffice to say, we say start with the consumers. I'm bringing this in towards the end, just to say that, look, everything that we have done is all grounded in how we are approaching our consumers. We've got a team who focuses on hindsight. Hindsight is important for us. How do we learn from our past? So we take all the knowledge, we document it. We've been taking it forward. We have a team, part of Anand, who's focusing on insight. What's insight today, what's the then and now? How are consumers behaving today? But we have also created expertise in foresight. How am I going to identify trends earlier and adopt -- identify the early adopters, so we can be prepared for what is coming? We have a consumer insights team. Now we have created shopper insights and customer insights and competitor insights that goes hand in hand with them because that's what brings the holistic knowledge of what we need to do. So those are the sort of changes that we have brought in. All of this, as -- I hope you got the sense, all of us are fueled by this whole transformative journey. And in that doing the right thing for people and planet is very important. So you will see some of the work that we are doing on our brand and innovation side that's driving that forward. For example, carbon-free [ buckets ] on our make your own products or paper filters on cigarettes. We've already launched some of these. We have tried it and regularly improving it. We are focused on it because we believe our consumers actually want their brands of choice to be responsible. And this is what we want to do from a corporate angle as well. So people and planet is an undertone that we put into all of our brand strategy and brand thinking. That's not it. Just on the product front, we have launched disposables. And as I said, we want to be responsible there. We know that the impact of disposables on the environment can be quite negative. So therefore, we have put in place marketing programs like our free returnable options where consumers can just scan a code and they would get a prepaid envelope at no cost delivered to their home where they can put in their used disposables and Imperial would collect it and responsibly make sure it's recycled. Simple programs like that, yes, it adds a little bit of complexity to our business but it is the right thing to do and that's what we want to do. So those are the sort of things that we are putting in place as we move. I hope you got a sense of everything that is happening today, Unfortunately, if you want to talk about all of the work that we are doing, it's going to take a couple of days. You've got a couple of hours. Today, you're going to hear from a few parts of my team. Anand will talk you through insights and the work that we are doing. We'll talk to you about innovation. We'll take a break then of about 20 minutes. I know that many of you during the morning actually walked across to the booth that we have set up. It's an opportunity in the 20 minutes if you want to carry your coffee there and walk around, that's available. Our teams are there to walk you through some of the work that we spoke about. Jose and Kim will then talk about the U.S. And then, of course, we're going to end up with NGP and what we are doing. With that, I'd like to introduce the next presenter, Anand Singh. So Anand, as I said, Anand is a -- he heads up insights in the organization but he comes from a background where he has worked in research in companies such as Nielsen. He's worked in marketing and insights in companies like Coca-Cola. And for the last 10 years, he has been with Philip Morris, where he has led insights for Europe, as a business as well. So he brings not just deep knowledge of foundational insights and tools and methodologies but also a very deep knowledge of our category that we operate in. So with that, Anand, over to you. Thank you.

Thank you, Andy. Thank you, Andy, for the very nice introduction and thanks all for being with us here today in person and those of you who are joining us virtually. Sort of before I start my presentation, I just wanted to share a bit of self-reflection with all of you. So last night, I was flipping through my slides. And if you allow me a bit of an exaggeration, I thought I have the -- I'm the luckiest guy in terms of insights. I have the best job in insights in the world and I'll tell you why. I have spent 3 decades in the CPG industry, most of which have been in insights. Out of that, the last 11 years have been in the tobacco industry. And tobacco, as an industry, is one of the most exciting industries for an insights guy because the kind of -- you can unpeel layers and layers of consumer insights, why they choose certain brands, why they choose to smoke certain things on certain occasions and it's like -- it's really exciting for insights guy. On top of that, today, what the tobacco industry is going through is really transformative and that makes the job even more exciting. But then I have spent the last 11 years, as Andy mentioned, in the tobacco industry. So what really makes me think that I'm the luckiest guy is that I work for Imperial. And I say that because being a challenger company, we can't throw money at every problem. So what we have is we can throw smarts. And that's what sort of makes it really interesting in terms of -- so with that self-reflection, let me quickly walk through in the next 20 minutes on what we are doing in insights to bring consumer truly at the center of our organization and our decision-making. Stefan talked about this that consumer at the center is one of our key strategic enablers and that leads to our behavior, which is the theme of today. One of our first of the five key behavior, which is, start with the consumer. And as I said, I'll try to bring this approach to life and how insights is enabling it, not just for marketing, not just for the GCO, but for the entire organization. Andy mentioned a bit of how we have led this transformation over the last 2 years. But if I talk specifically about insights, we had like the rest of the organization pockets of excellence, what we have done over the last 2 years, we have adopted a more consistent approach. So starting with our consumer trackers, we have actually made sure that everyone in the world follows the same methodology we think in the same way, and that allows us to share learnings to leverage our learnings to the maximum. Over years, our markets have developed specific typologies, but then these typologies were different for each market. What we have done with dimensions that I'll talk about in a moment, try to standardize this and have a common way of thinking across markets, across categories so that we behave as one Imperial and not as disaggregated markets who will in different directions. We have significantly upskilled our data and analytics capability, starting with building a data lake so that people have easy access to data. We democratize access to data, and everyone looks at the same version of truth across the globe. And finally, coming back to our theme of today, in our category, it's very easy to look over our shoulders and we obsess with what competition is doing. And that is because of the regulatory and the competitive environment in our industry. But what we have done is we have made sure that the entire organization and our consumer obsessed. So everyone is really very close to the consumer. Consumer is really has a seat at our decision-making table. So that's what we have done, and I'll try to bring this approach to life in the subsequent slides. Coming down to specifics. If you start at the top left, our senior leadership team, and I talk of the Board and the executive leadership team in the last 1 year has spent more than 400 man hours talking to consumers. So as recently as last week, our Board was in Morocco. And after 1.5 hours, we had to pull them out because they were getting late for the subsequent meetings. So they were talking to the consumers, and that's not a one-off thing. It happens every week whenever we have a meeting. Tomorrow, Stefan and his leadership team have a session with consumers where they're spending half a day talking to our U.S. consumers trying to understand what pulls them, what makes them choose certain categories and how they behave with our category. So this is something that's not an exception, has become a norm across the company. It's led from the top, but percolates across the organization. We have significantly upskilled our insights capability, there's global governance. We have aligned agency partnerships and increased focus on consumer validation. Everything we do goes through a consumer validation, and that's something that we have brought about in the last 2 years. At the same time, using the data analytics teams, we have made sure that the learnings are efficiently shared and, again, are available to everyone across the organization. I talked about the consumer tracker earlier. We have now a consumer tracker in place that covers the entire footprint, and we do more than 120,000 interviews every year. And again, it sort of helps us to understand the category and consumer trends extremely well. And all this is supported by -- sorry, I forgot the fourth one, which is the foresight and discovery, which we have set up as a separate capability with a very strong insights component. Mattia will talk about it in more detail. I'm not going to cover this today, but I'll leave it to Mattia. And all these 4 things, what we have done, they have a very strong data and analytics support to make sure that we have the analytics platform where people can share these things. And we have set up an Insights Academy to simultaneously upscale our capabilities. So all this together sort of leads to the transformation that we are talking about. Today, I wanted to cover one of the things in more detail, which Andy and Stefan both referenced earlier, which is dimension, which is our demand spaces program. But what I thought is before I get into the data and the details of dimensions, why don't we get some consumers on stage and actually give you a flavor of what our consumers think and what they go through and how they make our consumer choices. So with that, I would like to invite Adrian, Kim, Eric and we have Karl. Yes, please join us me. Thank you so much for joining us. So what I'm going to do, I'll start with each one of you one by one. So why don't I start with you, Karl. I just wanted to understand from you what all products do you use today and a bit about your tobacco journey. And what did you start with? And over the years, how has transformed, especially in the recent years. I mean, I don't want to go back 20 years or whatever your age is. But, yes, recently, how is it -- what do you smoke today? And what do you use today?

So today, I transition to using vapes, just for the discrete nature of it, cigarillo, cigars, occasionally cigarettes. When I was in my senior college, I played sports, my whole life, so smoking was not in the equation. But I did in college, use cigars and cigarillos then when I transition into corporate America, I worked at a music law firm for too long, 15 years. So high stressful job meeting my own brakes, I would use cigarettes. And then I would say within the last -- I left that job and I'm an entrepreneur now. I started using vapes primarily because I wanted to be discrete. I didn't want to be that guy someone like cigarettes, my wife hates the smell. And vapes just way more convenient and it just allows me to kind of take my moments and myself without having to infringe or impose on other people. So that's kind of been my journey.

Okay. Do you still smoke a cigarette occasionally?

Occasionally, yes. My wife is away on business right now. So she's in San Diego. So I have -- I actually had one last night, but I do appreciate the discrete nature of a vape. I also live on a 5-floor walk-up. So coming back and up and down those steps is not really convenient. So vape just allows me to use it to my advantage in my convenience.

Perfect. I'll come back to you. Kim, over to you.

So currently, I use cigars, cigarillos, cigarettes and I also use hookah. So the cigars and the cigarillos and the cigarettes, I use them in conjunction with each other. I kind of like to use it as a relaxation for me. I'd like to smoke in the privacy of my own home. So I do like to say like I'm a closet smoker. I don't really like the smoke in front of other people and sometimes in my car. In the hookah, I'd like to enjoy that when I'm out socially.

Okay. So when you're alone, it's more cigarettes and cigars and in a social moment, it's more hookah, right?

Yes. It's like a relaxation as far as the cigarettes and the cigars at the end of the day or whatever the case may be. And I do manipulate them with cannabis, honestly. So Yes.

Okay. I did not hear that. So let me move to Eric. Eric?

Yes. I started with cigarettes, I vape and I -- is based on basically the environment and the situation when I wake up in the morning, I got to have a cigarette. And there's a lot of regulations, obviously, in New York City. Most apartment buildings are smoke free so it might go out of my building and away from it to have my first cigarette of the day, that's how I like to start the day. But yes, with vapes, it is good for being in -- yes, I'm hanging out with my friends that don't smoke. So I have a vape with them. But actually, I do have friends that smoke. And so for that, like, well, if we go out to a bar, you have a drink and then go out for smoke. So it's a social thing for me, too. But yes, vaping is good because it is more discrete, you can get away with it, even though some buildings are like, Oh, you're not supposed to do it indoors. You could still -- if you're a discrete, you can get away with it a little bit. And just easier in a lot of situations, especially in New York with all the regulations to just have a vape with you and smoke that way? Yes.

So I'm really interested in one thing. You said first thing in the morning, you smoke a cigarette, right? But you also have vaper. So instead of going all the way out of your building, why don't you just vape inside your house?

I just like the cigarette. I just like it. It's like something -- it's like -- it's a ritual, I think. I've been doing it for so long, and it's just how I wake up in the morning.

So it's not just the product, it's also the ritual.

It's also the ritual. Yes, the ritual, morning ritual.

Perfect. Adrian?

Hi, everybody. I say my smoking journey started with cigarettes, cigarillos and cigars. I usually smoke at home. I don't smoke during the daytime at work. just because I don't want to smell like it. And it seems like when you get on to elevator people, they're like, Oh, you smoke on. So I didn't really want to hear that anymore. And smoking is a private thing for me. So it's usually done in a social setting too, but it's with people I know. I have been really ventured over to anything else because I kind of like the hand to motion when it comes to tobacco and cigars and the fragrance also is what I like. So I use -- that's how I intake my tobacco.

Okay. So if I summarize, what I heard is, for some of you, ritual is important. You mentioned the hand-to-mouth motion, right? You mentioned the ritual about cigarettes. In terms of satisfaction, because most of you smoke more than one category, smoke or use more than one category. Is there any difference in terms of satisfaction, both the product as well as the social part, how you're seeing?

Definitely a different. For me, personally, the cigarette -- I like to use the cigarettes after the cigar to cigarillo and it kind of -- for lack of a better terminology, takes the edge off. I don't know how to really other way to explain it. And in the hookah, it's like high energy when I'm in that type of setting. So it's a different type of...

So basically, depending on the moment, depending on the context, you use different products, right?

Definitely, yes.

Okay. Okay. Adrian, I see you shaking your head. So would you like to add to it.

Yes. Usually at home, I indulge more in cigars. And usually, when I'm out with friends, if I want to bump a cigarette, like I really need one. I'll do that because normally, people don't have the cigars, I smoke on hand. So that's when certain times I have to switch up, which kind of tobacco I'm going to indulge in.

Karl? Anything you would like to add?

I mean it really depends on the social setting and the people I'm around. Again, I don't want to be that guy. So if my friends or my colleagues are smokers, cigarette smokers, then I'll engage. But the vape is just something that has become part of me because I can be discrete and not infringe or impose on people's space. So it really depends on the social setting from having a drink. Sometimes a cigarette is what I yearn for more. But again, I'm conscious of the perception. So therefore, I always have my vape on me just to make sure that if I do have the urge, I can resort to that as opposed to like the cigarette itself, but it really depends on the social setting and the people I'm around.

Perfect. See, I can go all day long. We do this every week because I talked about the Consumer Connect program. We actually, every week, we have a few consumers who sort of either virtually or in person come and talk to a few of us. But I'm conscious that we are perhaps running out of time. So Peter, do we have time for...

We just move on.

Okay. Thank you, guys. I thought I'll open to the floor and perhaps some of you could ask them some questions. But I think we will spend the whole day doing this, if I go with that. So thank you so much. So before I go to dimensions, I just wanted to go back to our purpose and it's not a coincidence that moments actually features in our company purpose. And you heard the consumers talked about the context, how depending on the moment they are in, their choice of product or category or brand even. We did not get into brands, we run out of time. actually varies depending on the context they are in. And that's what the demand spaces program or dimensions as we call is all about. So here, I just have some snippets of deep ethnography we did when we launched this program, we actually talks to a lot of consumers. So here you see a consumer Malaga, Laura. You see a couple, young couple [ Karlo and Marlin in ] Rome and you see Antonio back in Malaga, who uses FMC. And all these guys, so the first one is more a me moment in-house where it's used to fill time. The second one is a young couple who is sort of in the evening using sharing a heated tobacco product, and we call it a bring joy moment. I'll come to these moments in a bit. And the last for Antonio, it's again a V moment, but it's more out of home. So we did a lot of deep ethnography to understand consumers, different consumers and also the same customers across time, across moments to understand why they choose different products in different times. So we started with that. After that, we actually did a lot of quantitative interviews. So we first looked at all the data we had. We did a lot of expert interviews, both internally as well as externally with industry experts. We covered about 15,000 moments of quantitatively of consumers using these products, and we came with this framework. In the framework, I first wanted to -- so we covered what we talked about the 6 Ws, and I'll come to the 6 Ws in a bit. But before that, I wanted to talk about why we need the dimensions framework and how we are different from other FMCG companies in terms of being a very restricted category, we cannot really work just with typology. So typology of consumer segmentation is usually based either on demographics, psychographics or attitudes or needs. So this is typically what most companies use and they use it because a lot of it is actually also used for media targeting. That's the luxury that's not available to us. So we really need to go beyond the who or the why, why not and we need to cover what we call the 6 W framework, which is a very standard framework for demand spaces. So I mean, Andy mentioned the beverage category, Andy worked at Pepsi, I worked with Coke. Thankfully, we now work together. But we have used it like a decade back, I was using this framework, but it's really a first for our industry. And I can really say this, having spent time in other companies and knowing from my peers and companies I have not worked for in the tobacco sector. This is really a first for our industry. And this is something that's going to be really relevant in our industry as poly usage increases, as consumers make more and more choices. I mean, today, if you look at the global data, 50% of consumers have more than one category in the repertory. So it becomes really important to understand why they make these different choices in different moments and how we can be a larger share of those choices that they make. So that's what the framework is all about. We actually call it a program. We don't call it a one-off study because we did the study last year. We rolled it out earlier this year, beginning of this year across our markets. But we call it a program because we did the one-off study, we established the framework that I'll come to in the next slide, but we also have it tracked continuously in our consumer trackers. Every month, we are looking at how the demand space is evolving. They don't change every month, but we have the data every month so that over time, we can see how the shifts have happened. And we can also actually design programs based on these learnings and then through the consumer tracker, understand the impact of these interventions when we look at the data over time. So that's what the dimensions program is all about. I'll quickly cover -- typically, when we roll out dimensions, we have a 2-, 3-day workshop in markets. I'll try to do justice to it in 2 slides. So this is what the demand spaces program is all about. So we have got 9 demand spaces, as we call them. These are comprised of the 6 dimensions, the 6 Ws, the who, why not, you heard all our consumers talk about how different moments depending on when they smoke, where they are, who they are with. So all these dimensions impact their choice. We have just for simplicity, put it in a 2 dimensional plane. We have 3 corridors. We call it the stimulate corridor and the realigned corridor, if I go to the 2 extremes. These are more the me moments where people are alone. The difference is in the stimulate corridors more about a pick me up, get ready for a task kind of moment. The realign is more about take a break, wind down that kind of moment. So both are more me moments, so there are some we moments in them also. And the middle one is the connect corridor, which is more a we moment. And this is the corridor where the NGPs or the next-generation products are really strong, and I'll come to that in a moment. But before I go there, let me quickly play a couple of videos to bring this to life. I mean you heard the consumers, but we have some videos from the studies that we conducted. So I'll start with the stimulate corridor in a get-ready moment. [Presentation]

So that was a get-ready moment where people use cigarettes or our category to lift them up to get ready for a task. Now I move to the other side, realign, which is more about unwinding or sort of taking a break in between 2 chores. [Presentation]

So that was a quick peek into 2 of our 9 demand spaces, which are the 2 corridors stimulate and realign. Now I'll move to the middle corridor, which is the connect corridor. But before I get into details of that, just wanted to share one surprise for us. When we launched the study, our going-in hypothesis was that across markets, the demand spaces will be very different, and we were really surprised when we got the findings back that give or take a couple of percentage points. The demand space is actually exactly the same across all our markets. What was different was the categories people chose to sort of fulfill these demand spaces, and that's a lot to do with the regulatory environment, the social construct the environment. So that was a good learning for us, but that also helps us sort of understand this demand spaces better and how we can leverage them. So I'll give you one example of how we are using this demand spaces to target our products better and get a higher share of -- within the categories. So if you look at like the connect space, this is the connect space globally on a total tobacco nicotine space. If I just filter this by vapes or EVP, so these products that I have in my hand, you see the connect space becomes much bigger. So essentially connect space is a space where the next-generation products actually play a much larger part because this is more a V space. You heard the consumers say that when they're with others, they don't like to smoke. So actually, the NGP products are playing much more in the connect space. Further, how we were able to actually target it? Recently when we were launching blu bar, this disposable product that we have. We already had a product in the bucket, which is myblu. And we wanted to differentiate the 2 so that they don't cannibalize each other. And in the connect space, there are 2 spaces where EVP is actually quite strong. There's a bring joy and there's keep bonded. And there's another space stimulate where actually EVPs have quite a significant share. So we had all the functional and emotional drivers for each of these demand spaces, and obviously, we looked at that. But the other thing we noticed was that bring joy is a key vape space. So whether it's for the disposables, the 2 numbers that you see there or open systems -- open-tank systems, which I've not shown here, actually bring joy it's -- all of them are relevant for bring joy. But when we look at the other 2 spaces, keep bonded, which is the space which is more social, more weekends, more with friends, there actually disposables have a much higher index, whereas in the other space stimulate, which is more about product satisfaction, the ports become much higher over-indexed. So using this, we were actually able to target the ports more at the stimulate keep going kind of space and the disposable more in the key bonded space. And hence, we are able to differentiate our offerings better, and get a higher share with this cannibalization. So this is just one of the examples of how we are using the demand spaces. We can use the same construct across categories. We have used it for brands, and I'll be happy to talk to you after in this call. So if we get some time to explain to you what we're doing. But right now, this is what we wanted to share about dimensions. It's too little. I don't have time, but let me just move down quickly to other things. The other thing I only talked about data analytics. So this is just one of the tools that I wanted to illustrate today. So here, what you see is the trackers dashboard, what we used to sort of explain the trackers to market and how they can access the data. What you can do is this is a real-life example for a U.K. market where you can look at 2 brands, you can actually compare the brand funnels, right, from awareness to most often used, how do these 2 brands compare. We can choose any market, any brand, we can look for any period, and we can actually -- and again, this is a simple example of how using a framework, we can consistently make sure that everyone looks at the data the same way. You can look at switching data, so you can look at how people come into a brand and people who switch out of the brand, where do they go to. So these are some simple examples of what we are doing with the data analytics platform. And as we speak, we're actually working on a natural language squaring tool. So next week, we are launching something which actually will allow you to just type that show me my share in this market and that tool will actually throw out that thing. So we're working on a lot of things, is work in progress but already a lot of exciting stuff happening. And finally, I wanted to come back to the consumer. So I talked about the Consumer Connect program. And as I mentioned, every week, we have this program running, sometimes virtually, sometimes in person depending on the market. And these are real-life examples of the archive. We are creating a lot of consumer learning and data that everyone can either access later or actually be part of when it's happening. And this is something that's not limited to senior management that I talked about earlier, it's across the organization, across functions, everyone from P&C to supply chain, to finance, actually has access to this, and people are actually so excited about it and using it. We see a lot of chatter about it on our local [ Yammer ] platform that we used to share this. So that's all I wanted to share in the limited time I have. I hope I've been able to give you some sense of the kind of transformation we are driving with Insights, bringing the consumer to the center of our decision-making and giving the consumer a seat at our table. Just to summarize, we now have a consistent global approach. We have a common language across consumer typologies. I talked about dimensions. We have data-driven decision-making. And we -- with the data lake and the analytics tool, we are actually doing a lot of work to democratize data and access to it. And finally, while we do all this, we always stay close to our consumer because we feel that if we can give a face to the data, if people can get deep understanding of consumers through actual real-life interaction with them, that's when the data comes to life, and that's when what we do is actually really most relevant to our consumer. So that's all I wanted to share with you. With that, I hand it back to Andy. Thank you.

[indiscernible] what I was talking about the consumer center organization. With that, I'm going to move on to the next present, and this is going to be Mattia. Mattia heads up our innovation organization, which includes R&D, but it also includes our discovery organization where we're looking 5 years out to see what might be the year that we want to focus on as we move forward. Mattia is -- brings a profile again, as I was speaking about is working companies like [indiscernible], leadership, with the leadership position where we did R&D in the company like [indiscernible], but then he has moved to companies like [indiscernible] we've more challenging in this. His approach, what is it real for today, and that's the reason why he's with us. He's not focused only on the product. On record, for example, he was one of the architects, which created the IoT system behind some of their deliverables when you're running out of washing powder automatically, it goes and toiletries and so on and so forth. So with that, I'm going to hand you over to Mattia. Hopefully, you get a sense of what he has brought into play within Imperial that is giving us a competitive advantage as we move forward, Mattia?

So Andy, thank you very much. Indeed, I'm really excited to be here. As Andy said, I joined 1 year ago in March, and my real motivation is related to have an impact on consumer health. There are not many companies in industry where you can impact positively so many consumers going forward. So really excited to be here with all of you and to share some of the progress that we are making on innovation. I'm conscious you are a little bit tired probably after all this content, so bear with me, and I will, for sure, try to excite you. So what are we doing differently on innovation versus the past? And what capability we are trying to create? First of all, as you understood, we are consumer-led, we start with the consumer, but we continue with the consumer during product development, and we do a few things differently from the past, I will bring it either. We really focus on collaboration internally, first of all, to bring together all our capabilities with the consumer in mind and science because clearly, we want to move to an after future. We look to partners, and we want to shift suppliers to partners, and they will elaborate a little bit better what does it mean and what is the approach that we are having. And we are creating physical environments in our innovation center where consumer, our teams and partners collaborate together to deliver better solutions. Last part, very important is we are introducing agility and they will explain what agility is. It's a little bit a fancy word. But in reality, you will see there are methodology and way of working that could have a significant impact in better solution in speed and why you introduce the first solution you have already in mind the next one, and so you are able to progress. I will explain what it is about. So I'm here, because really, I want to support to create an alter future through collaboration. And as you heard, we are really focusing on being a challenger, and I will explain what does it mean. We are creating 3 pillars for innovation. The first is consumer co-ideation. We are really co-ideating with our consumer, and you will see during the presentation, what I mean with this. We are looking to a technology strategy. While we deliver today, we are looking to what we want to do tomorrow. And we want to create a platform of collaboration around sustainability, around the after future, a better experience with our partners, which is the key third pillar. When you know what you want to do, what you need to deliver to the consumer, you understand which technology can support then you are able to select the right partners and the partnership ecosystem. Some of the products that we need to deliver are complex. So you need more than one partners. All these underpinned by agility. As I said, I will explain agility what it is for us. But the part to me is really differentiating is agility is truly connected with our behaviors. If you look what is agility manifesto, is really connected to our behaviors and to Imperial company culture. It is about small teams taking the full accountability in moving forward, including the different experience, working collaborative together with the consumer delivering today, but already thinking to the future. I work in different organization, introducing Agility in my past and you heard my experience from Andy before, I need to say this was the easiest in introducing agile practices with significant impact to the organization. And this is due to Imperial culture and to be the behaviors. Agility is really connecting and I think this a little bit a differentiating factor for us. So I want to bring alive now the capabilities that we are building. The first one, as Andy said before, is about consumer compression and the sense hub. We call it the sense hub because if we want to make sense of what the consumer wants and what the consumer needs to go to a better future. This is connected to pre and prototyping capability, where we are able to make nonfunctional prototypes, which is about the pretotype if you are familiar with the Google approach enough to make a pretotype in the space of minutes or below 1 hour and really interacting with the consumer up to semi functional prototypes in the space of a couple of hours up to properly functional prototypes to interact. But the best is to show a quick video on what we just opened in Liverpool. [Presentation]

So -- and again, a big thanks to our partners that are enabling us, and you are the partners from Germany to China, to U.S. Your partners here is just a sample, of course, working on packaging, flavors, working on machine technology on device. So there is really a big variety. As Andy was mentioning, just to give you a number, the partners we are working on device in China, if you put together all their R&D, we are talking of over 3,000 people. So you can imagine by synergizing in the right way, you can really boost what we can do. But the other part that I want to mention, this is the capability that we have been building in Liverpool on business sub and consumer contraction pre and prototyping capability, we are also going to open another one this year in Hamburg, where we have other significant capability on technology and science to be closer to the market in Germany and to boost the leverage of additional capability. Plus in China, in Shenzhen, this is a little bit different. This is more on the technology side and on the sensory side to be closer to our partners. And so to capture even better with technology coming out of China. All this is very good, but capability are good if we're delivering results. And so what I would like to share with you are some examples of a result that this capability and different way of working are bringing to us. Looking to early phases of innovation, central phase on innovation and product development in a second example. And third example will be in implementation. So first example is early phases. Here, it is about Zone X, our brand in Modern Oral Nicotine, where through a very close collaboration with a partner in a flavor house, we adopted design thinking methodology. Design thinking is about really understanding the consumers, reimmersing and understanding the trends, looking to connect these trends with technology and brainstorming with the consumer trying to find a different direction on what the consumer wants. Based on this build platform with prototypes and really iterating with the consumer in understanding really if you fulfill their need and then, of course, delivering to the market. While doing this, you learn and you have already in mind that what are the other possible opportunities for the year -- for the following year. This enabled to deliver in 1 year, 7 new variants for Zone X, which is a good achievement for Imperial. And in general, I would say, in terms of innovation cycle in my experience is very good results. The second example that I want to bring is more around the central phase of product development. It is an example on Pulze within tobacco, where we collaborate with multiple partners, you will see, using what is called the lean startup methodology. You know what you want to improve because at this mean point in time, we have already product on the market, Pulze 1.0 and Pulze 1.1 and you want to improve. And so it is more how are you going to iterate to find solution with your partners to improve on the key features and we are starting with device, clearly focusing on a better design, on easier cleaning and a better performance. So this was the challenge where we did a different iteration for all of you that you are here, you are welcome to visit our booth, where you can see how many prototypes we built interacting with the consumer before coming to the solution, which is Pulze 2.0 and [indiscernible] is really delivering very positive results. And our consumers are also mentioning that they can perceive significant improvement from -- beginning from the first activation of the product. This has been done, of course, with a partner in China. The second part, the important, this is a system also how do we improve the stick. And there has been a combination of a partner in the machine manufacturing and how you improve a stick configuration. It is a combination with the Flavour House how to improve the taste. And this enabled us after few interaction to come with multiple balance with an improvement of over 25%. So quite a big achievement. The last but not less important is the packaging, where the focus was on the design, on the convenience and very important on recyclability and sustainability. You heard from Jenny, our partner in [indiscernible] , how she was really proud and my team is very proud. We were able to improve, reduce plastic by 84% by replacing the internal tray from plastic to a cellulosic composite material, and also improving the recyclability of packaging from 41% to 92%. This again going through iteration, ensuring to deliver on [ premiums ], convenience and sustainability. The last example that I want to bring here is about blu bar innovation. Here, as you heard from Andy, we're a little bit late. A lot of products ready last year are on the market. So there was not a doubt if this was an opportunity for a consumer was more about how to do it and how to do fast. [ India, ] what we did is a collaboration with [indiscernible] in China. He said, finally, we see Imperial moving very faster also based on their criteria and we're able to deliver from brief to launch in 6 months. I need to say in my experience also working for [ Rakita ] that is known to be a very fast company is probably the best at achieving [ Rakita ] in terms of timing. Here, we utilize a scrum, which is an agile methodology focused on efficiency and really how to create structure and to enable a team to deliver. So very briefly, through Sprint, small trans functional team, understanding the consumer and understanding the proposition in market, identifying a partner. Then working with the partner in the second sprint on delivering and developing the proposition and the third sprint delivering the proposition to the market after, of course, having proper toxicological tests done. It is not to finish here. As I said, this brought to the market in 6 months, 6 variants. The team already was working on the next coming to the market, and we had additional 5 in March. And I can mention because we are coming to the market now, there are additional 4, and you can imagine what will happen in the near future. So just to close, I hope I brought live, the improvement and the changes that we have been doing, consumer light, but co-ideating continuously with consumer internally and working with our partners creating the space to enable this environment of collaboration and working agility and with different practices to enable this new way of working. So thank you very much. And now you can find a relax for 15, 20 minutes and to enjoy a break. So thank you. [Break]

Welcome back to the post coffee session. I just wanted to introduce our next presenter, who is going to be talking about all the work that we are doing on portfolio strategy and our approach to equity building on our brands. So Jose Cabrera, he comes from Peru. He's worked with multiple companies, started his career in banking. Then moved on and had a very long career with P&G in brand building and then moved on to marketing and strategy functions in Alicorp, where he also towards the end, led the strategy function globally and led part of the -- a massive part of their transformative agenda. So Jose also, therefore, brings his passion to Imperial, hopefully, that you're going to see that as he presents. Over to you, Jose.

Thank you, Andy. Thank you all for being here this morning. Yes, I'm looking forward to giving you a brief glimpse of how we are transforming our portfolio and brand building capabilities at Imperial, but always with a challenger mindset. Now of course, we are in a journey, but I believe we've come a long way in this journey. From an Imperial that prioritized only global brands, which led to many fail migrations, to be honest, to an Imperial that now embraces its portfolio of both international and local users leveraging the history and the innate national identity of this. Like, for example, we see in the beer industry, they do that really well. From an Imperial that had many brands on top of each other, cannibalizing each other with no clear roles to an Imperial that now has a portfolio strategy process that led us to make decisions to put the right brand with the right consumer segment, with the right price point to complement each other, not to cannibalize each other. From an Imperial that changed brand campaigns every 2 to 3 years with a clear lack of consistency from what I'll call the new brand manager syndrome to an Imperial that now prioritizes consistency, and we have an approach to brand building, founded and anchored on common and globally aligned tools. From an Imperial that stopped believing that investing behind our brands was the right thing to do. And 5 to 6 years ago, we reached levels of marketing investment that I consider to be dangerously low to an Imperial that over the last 2 to 3 years has significantly increased its marketing spending as a percentage of net revenue, and now it's at the right levels. And finally, from an Imperial that tried to copy what our competitors were doing in its approach to marketing to an Imperial that for everything we do, as you've seen before, now ask itself are really acting as a challenger. As Anand mentioned, it all starts with the consumer. So that's how we've organized our global marketing and portfolio function to deliver on the different capabilities that we are either step changing or we are creating from scratch. So for example, portfolio strategy is a core capability at the heart of the new Imperial, where we look at portfolio gaps, we look at consumer trends. We look at consumer segments and then we decide what is the right role of each of our brands. And I'll give some examples of that. We've deployed a brand position into that now guides the work of our top 30 brands in the companies. And I will also show you some of the unique positions we've developed for our brands. We have set up a design center of excellence to look at end-to-end design so that we get more consistent approach to our brand building and you will see some of that as well. And we have completely, as Andy mentioned, transform our agency model. Going from a big network agency where we represented less than 1% of the revenue. We didn't get the best creative. We didn't get the best strategies to a flexible approach with boutique agencies over 10 boutique agencies for whom we represent 10%, 20% or 30% of their revenue, so we get the best creative, we get the best strategies and more than anything, we get a challenger mindset from these agency partners as well. And through our matrix organization that embraces collaboration, embraces the common rewards, we are able to work together with the markets to create this perfect symbiotic relationship where we can give them these tools, and they can focus on doing what they do best, which is adapt for the local consumer, sales excellence, delivering the final sale, which is what it's all about, and you'll hear some of that work also from Kim. So I believe we -- Andy talked about the matrix, but it's a matrix that is a community with clear roles and responsibilities. Now, as Stefan, Andy mentioned, one of the things that we have changed the most over the last couple of years is embracing our portfolio. You could see here almost 60% of our revenue comes from our local jewels. Yes, whereas our competitors are based on a small number of big global brands, which we respect a lot, we believe that we -- our portfolio gives us a unique opportunity to adapt to the evolving consumer needs in a fast way, both with local and global brands. We have a diverse set of iconic brands, which you can see here on the screen, across multiple price points and price tiers that gives us this unparalleled flexibility and speed to adapt to the needs that may arise. We will nurture both, we will support both always in a disciplined way, making the right decision for the market, we will support both always in a disciplined way, making the right decision for the market, always looking at both synergies and the opportunity to maximize synergies, but at the same way, business building potential. And to ensure that discipline, we follow a very thorough and disciplined approach, which you can see in the screen, where we start with a 3-year market ambition, we look at the consumer trends with Anand's team. We look at the market landscape with a competitive insights team. We then identify the portfolio opportunities. We set up those portfolio opportunities against the right consumer target and then we create our portfolio classification, which is these are the brands, this is who it's going after and this is the role of the brand in the market. And if we don't see a role for a brand in the market, we take it out, no problem. So -- and what this has allowed us to do as well is to create 3- to 4-year innovation pipelines. A year and a half year ago, when I came in and I asked for the team to show me their innovation pipeline, they showed me something 6 to 12 months out. Now we have 3- to 4-year innovation pipelines. And this process is what allows us to do this. And here a couple of examples that I want to share briefly on some of the portfolio choices that have come out of our portfolio strategy process. In Australia, for example, where JPS is one of the leading brands, but it was skewing a bit older, right? The consumer base of JPS was 40 to 50, so we had an opportunity to go after that 25 to 40-year-old consumer. And we launched JPS Evolve with a new smoking experience and new blend. Of course, Australia is a very dark market, so the naming is very important. The brand equity of JPS was still good enough, but we launched JPS Evolve, new experience and is doing amazingly well in the first 6 months of launch. Germany. Andy mentioned a huge opportunity to capture downtraders. I mean it's a big private label market, one of the biggest in the world. And recently, we launched Paramount, first in our fine cut tobacco subsegment and the results have been off the charts. You can see 340 basis points now captured by Paramount, and we are replicating this model now on FMC, on our factory made cigarettes. Morocco, one of the examples I love the most. We have a good Gauloises business in Morocco, but we saw there was a subsegment of the population that really looked at Spain as an aspirational country, right, that their way of life, their culture. So we recently launched Fortuna, which is our leading brand in Spain, in Morocco to go after this segment. So this is how we manage our portfolio in a very flexible way. Fortuna is what we call a local jewel, yes, Spain's local jewel. Now it's growing in Morocco already 170 basis points, so it has gone from being a local jewel to an international brand and who knows where Fortuna will -- could go next. And in the Czech Republic, we recently launched the News brand, a French brand and also doing extremely well. So these are some of the examples, and we're taking great pride in utilizing our portfolio to our advantage, always thinking as a challenger with a rigorous yet very flexible approach, and I think that's something that stands out for Imperial. Now once we have our portfolio defined, it's very important that we uncover the right consumer insights to ensure that our brands are healthy and doing well. Davidoff, a brand you probably know, one of our most premium brands in our portfolio had been stagnating. Its growth has been stagnating after many years of growth. So we went -- we turned to consumers, right, as Anand described and asked them what's going on? Why have you left the brand? Or why are you -- why are new consumers not coming into the brand? So I'm going to show you a video, which will hopefully give you a good summary of some of the new consumer insights we are uncovering. [Presentation]

This was an eye-opening insight for us. Davidoff had been built on the idea of personal progress, succession, but in a very individualistic way, linked to career progression, linked to financial security. And what consumers told us is, this is not relevant for us anymore, right? I mean we still aspire to progress, yes, but in a different way. Progression now is more about making connections. It's more about entrepreneurship and having different sources of income. It's more about work-life balance. So yes, the idea of personal progress is still there, but in a very different way. And this is exactly what we did with Davidoff and the way we started talking with Davidoff. And I don't think it's a surprise that Davidoff today, this year is one of the fastest-growing brands in our combustibles business. So uncovering consumer insights, earlier than our competitors to develop unique brand positioning is at the heart of brand building like a challenger. So whether it is like I just showed you, Davidoff, inspiring entrepreneurially-minded smokers to shape their own future in a new way or JPS supporting grassroots musicians to let the players play wherever there's a stage or Parker & Simpson celebrating and rewarding local community workers. Our brands now stand for something. Our brands now have provocative and unique positionings that can engage consumers, can get them on a higher emotional connection and ultimately getting trial and loyalty, which is what it's all about. Now in order to bring all of this to market in a consistent, cohesive way, we needed to create inspiring brand worlds, which consumers are going to be able to connect. Yes. So we created, as I mentioned earlier, design center of excellence. And we recruited a small number, 3 or 4 of the top designers in the FMCG industry to help us and guide us towards world-class design. So that we can go from something like what you'd see in the screen, which is what you would have seen 18, 24 months ago to something like this. Yes, much more consistent, much more engaging, much more cohesive. It really looks like one brand. We will never, as Stefan said, have the budgets to compete head-to-head with some of the bigger global brands, but through the power of end-to-end design and designing like a challenger, we can ensure that our dollars work much harder. Lastly, on international brands, we're step-changing the way we connect with consumers and also on local jewels, and I'll give you examples of both. In a restrictive environment, the way we connect, how we connect, when we connect with consumers, it's everything, it's critical to our success. So through a challenger mindset, working with our agency partners and having the right incentive for our marketers and our local execution teams so that they trail and error stuff without fear, right? We learned fast -- we fail fast, we learn fast, and we engage fast. We are creating communication platforms that really engage but more than anything surprise and delight consumers. Let me show you an example of something we're doing on Davidoff based on this new insight that I showed earlier in Saudi Arabia. [Presentation]

Saudi Arabia society is going through major changes over the last few years. And as you can see, Davidoff is not afraid to break paradigms. Davidoff is a company, Saudis, men and women in this journey, and this is just one example. If you have time, please visit the combustibles booth and look at what we're doing on the metaverse, for example. I believe we are the only ones in the industry using the metaverse to connect with consumers. In this case, we'll show you what -- we just finished doing a pilot in Germany where we're bringing to life this whole new JPS world in the metaverse and that the results we've received are so far outstanding. Now I'm going to bring all of this to life with a story of one brand. One of the local jewels we feel very proud about. The brand is called Nobel, a brand with rich history in Spain, one of the leading brands in Spain that up until a couple of years ago had unfortunately been declining, declining share, declining equity. And when we look at the levers, the brand wasn't as strong. So about a few years ago, the team decided to sit down and again, engage with consumers. And then first define a key strategic target. And what I think the team did was amazing. So they said, we're going to go after female, 25 to 35, consumers. Now there's I think a couple of things in Spain. Number one, no brand in the industry was speaking to females. Every brand was speaking to males, 40- to 55-year-olds. So the first thing we did is we saw an opportunity to engage with a segment that wasn't being served. The other thing funnily enough, Spain is one of the countries where it has the most mixed incidence of smoking. So it's 48% female, 52% male, so it's pretty much 50-50. So it wasn't like it was a niche proposition. And there was a huge amount of consumers that weren't being served, so we defined female 25. And then we started to uncover what this female wanted. We wanted to -- we knew she wanted a balanced smoking experience, not very strong, not very soft. We knew she enjoyed to go out. She enjoyed to express herself, right? She wanted a way to enjoy life in her own terms. And the unique positioning we brought in for Nobel is be who you are enjoying life. And so this is how the transformation of an old brand or dated brand began. And the first thing we did, we started with a facelift on packaging with new packaging that brought in amazing results from day 1 with a modern look, a more stylish look, a fresher look, but we didn't stop there. One of the things that Nobel did really well was begun experimenting with limited edition packs. And I'm just going to roll the tape, you will see them here, and I'll speak -- well, you see some of these examples. All of these limited editions are around the theme of urban art, exulting the beauty of modern art, including graffiti, tattoo, neon among others, giving the brand a more vibrant personality, a more modern, a more innovative personality. All of these limited editions, again, we bring in and out and they create excitement, but also create additional incremental sales. Now we didn't stop there. Nobel was the first brand in the Spanish market to leverage influencers tied to the art. So the first collaboration you will see here is with a lady called Maria Escote, which is a famous designer, which you will see there in the bottom. She designs a fashion for iconic people like Beyonce or Zendaya. And what she did is she partnered with us to develop limited editions with the same fashion designs that she had designed on dresses for some of these models. More recently, we partnered with a pop star icon of the LBGTQ community called Alaska, who designed a limited edition inspired in her house, on the colorful house that she has and she did limited editions for us. I mean she has a show everyone knows her house and she created limited edition packs that brought her house to life on our packaging. Again, it's about taking risks. It's about being bold. It's about taking -- making a statement, and this is what Nobel is doing. Less than 24 months ago, we launched the Nobel style line extension. Now you will see it come up here on the screen, Nobel style. This was a huge risk for us because it departed from the traditional colors and brand world of Nobel, which was a brand that was built on this champagne and red colors, right? And you can see a very modern blue, premium design hues like matte finish, shaped embossing, platinum hues. And again, the reception as we continue to rejuvenate this brand has been very positive and the results have been there. Now over the last year, Nobel has also begun championing important social causes and in this case, upright. If you go right now actually during the month of June to Barcelona, Madrid, Seville, and you visit some of our tobacconists you will see we have invited drag queens to begin having -- and we have branded all of the stores, I'll show you a video in a minute, to begin having a conversation and raising awareness about diversity and about inclusion. Let me roll the video. [Presentation]

People want brands with a purpose, so Nobel is not afraid to take a stand. Nobel is not afraid to champion a cause that it truly believes in. Nobel will always be committed to individual freedom and expression and hopefully, this has come to life in this video. Now lastly, only a few months ago, Nobel entered a new segment, again, continue to innovate, continue to push the limits, and we launched a new line extension on the ultraslim subcategory, giving consumers the same balanced taste that they enjoy from the Nobel, but in an ultraslim, very stylish format. And again, results so far, only a few months in, but so far exceeding our expectations. Now in the uber competitive world of tobacco gaining 10, 20 basis points is enough for us to feel really good. What I show here -- what I can show here is the story of Nobel over the last couple of years through consumer understanding, through a unique positioning, fulfilling unmet consumer needs through portfolio extensions and innovation and leveraging the power of design tied to a brand purpose. We are proud to share the results of Nobel, which has grown over 100 basis points and especially accelerated over the last couple of years. We are proud -- we are very proud of our local jewel Nobel. And this is the model that you're going to see us replicating in all of our local jewels and our international brands. Now I have only shown you a very condensed summary of all the great brand building work that we're doing. Hopefully, you've seen that we are consumer-led, that we are embracing both global and local brands, that we are enabling an active portfolio management with a rigorous yet flexible process, and we have a consistent approach to brand building and that we support that brand building by having -- creating consumer experiences that delight and surprise consumers at the key moments of truth. You will continue to see in the next presentations from Rishi in the U.S. from Melvin in the NGP how we are brand building as we are committed to continue to put the consumer at the center of every decision, always with a challenger mindset and anchored in solid brand-building fundamentals that build the business for Imperial. Thank you very much. I'll hand it back over to Andy.

Just adapting and quoting Einstein, "Doing the same thing that others do and expecting different results is probably the mark of a fool." I hope you get the sense that what we are doing is that we are trying to really disrupt the category in terms of how we are building back love into our brands, how we are connecting with consumers, speaking to them with our deep understanding of them. So that's what's really our endeavor and you're going to see different approaches to that -- to the same. You're going to -- you saw Nobel where we are pushing -- we are being bold and we are picking up a cause. You're going to hear Rishi soon talk about what we're doing with Winston, which is where we are trying to rejuvenate and build off latent equity. So we are doing different things, but we are doing things that are truly fit for purpose and disruptive for the market. For the next presentation, it is my pleasure to introduce to you, Kim Reed, my partner in crime and my partner through this entire journey. Kim is my fellow executive leadership team member and the President of the -- our U.S. business. She has had a stellar career in different companies like Kellogg's, PepsiCo and so on, where she has led different functions, largely in sales, general management and where she's also had an amazing transformative track record. With Kim on stage will be Rishi. Rishi, again, comes from a very successful career in P&G and then he moved on to Kimberly-Clark where, again, he's led some of their biggest global categories. So without further ado, let me call up on stage Kim and Rishi.

So good morning. It is good to see all of you all in the room, and those of you that are online. I think it was almost 1.5 years ago, which is hard to believe that we were with you. And it was through a webinar, U.S. webinar at the time, so it is much more enjoyable to be here with you live in person. Thank you, Andy, for that introduction. And he introduced us correctly. We are indeed partners in crime. We spent a lot of time together. And what's great is many of the people you saw on the stage today, we also have really come together as a global community in a really great way. Today, we'll talk a little bit about a portion of our portfolio. As you can imagine, we play across many categories in the U.S. and we could really spend a lot of time talking about all those categories, of course. But today, we will focus on our cigarette business and specifically, our 2 iconic local jewel brands, Winston and Kool, which represent almost half of our share in the U.S. You've already heard a lot about our new approach in terms of how we're building brands in the future. And what I've been really, really pleased about, even in the short time when we talked to you 1.5 years ago is I think we have an even richer, deeper understanding of who our consumer is. And I have to tell you, we have really benefited from having this global community in the U.S. We -- although we're the largest in Imperial, we're #3 in the U.S. market. And so it's really important that we're able to leverage the scale of our global partners as well as their expertise in terms of the tools and capabilities that you've heard about today, but then really marry that up with our local excellence and expertise as well. So a few of the things you'll hear from us today are, quite frankly, linked to the things you've already heard about. So when you think about how do we focus on core priority brands, we've done a lot of work with the global team in terms of prioritizing our portfolio. So I'll talk a little bit about that here in a minute, but we do really think that's driven a point of difference for us in the U.S. marketplace. The second thing I have, quite frankly, personally, really, really enjoyed is what you saw Anand do earlier. Spending time with consumers. There is no better way to get educated about your category. And dimensions in my mind has really been a framework that then gives us a common language no matter what country you're in, no matter what region you're in, no matter what market you're in. And I've appreciated the fact that as we're getting a deeper understanding of who our consumer is, now we have a framework that's consistent in terms of how we engage that consumer, and it really is about learning about their attitudes, their functional benefits as well as their emotional benefits. And for me, that's been game changing in terms of how we thought about our portfolio in the U.S. And then what's been, I think, also game changing for us is we've taken all that rich data and then we've leveraged that with our retail partners in a very, very different way. And I'll talk a little bit about that later on. You'll hear some of that from Rishi as well, but it's really about how do we take that information and then marry that up with our retailers who have a very deep consumer base of adult smokers. So what you'll hear from Rishi and I today is the evolution, quite frankly, since we talked to you 1.5 years ago. There has been a lot of work that's been done in a short period of time, quite frankly, in concert with our global team. We'll talk a bit about our consumer-led ideas, and ultimately how we are driving executional excellence in the marketplace. At the last webinar, we started off being -- with sharing with you a very disciplined approach around our 6 operational levers, and 5 of those 6 apply to the U.S. market. Today, we'll really spend time on the top 3. And we will share with you how we ultimately, again, are collaborating with our global partners to drive better consumer insight, to drive a better portfolio, and then revenue growth management is another area. And we haven't spent a lot of time talking about it today. But when I get into the portfolio section, I'll be able to demonstrate how we have worked with [ Janus ], who's on Andy's team. And then we've got a great RGM team in the U.S. that have really come together and really developed, I think, a best-in-class playbook. So I don't think this is a secret, but the U.S. is the largest market in Imperial. And while that's great, within the U.S. marketplace, we are still a distant #3. And so as we walk through today, I think one of the questions that Stefan said earlier is, hopefully, by the end of our session, you will be able to see how we are playing as a challenger, very differently than we ever have before. And so I'm hoping by the time Rishi and I get done, we can articulate a couple of areas that I think are very different than the way we operated before. But not only is the U.S. the largest market, but it remains a very competitive market. But we also think it's a very unique and attractive market, and there's a few reasons that we say that. First of all, it's still very affordable. When you compare our category in many other CPG categories, it's still -- there's still a level of affordability. Secondly, we have a lot of market freedoms, a lot more than many of the other dark markets when you compare what we can do in the U.S. versus some other markets. And again, we plan to show you that through some of Rishi's presentation. We have a very transparent and rules-based regulatory environment really backed by science. And then lastly, we have -- we believe our point of difference in the marketplace is that we play across categories, multiple categories as well as across different price segments. And we really do think that, that drives a point of difference for us in the marketplace. So I'll start first of all with the portfolio. You heard Jose talk about going from this global brand strategy to really now making sure that we have the right investment and the right focus with our local iconic jewels. And I have to tell you, when I arrived 4 years ago, we had a lot of brands in the U.S., right? And the reality of it is we didn't have prioritization on what each brand stood for, the role that it played and how we engage with that respective consumer. I'm happy to say we've evolved over time. And even recently, we've again connected with our global team to do a portfolio workshop to make sure we have clarity on our portfolio and the role that each brand plays within the portfolio. So we've simplified our portfolio and put investments behind that, and those investments have really driven a much deeper connection with our consumer because we had clarity on the role of Winston. We have clarity on the role of Kool and down the rest of the portfolio. You also see on the left side of that, we also have done some work around RGM because it's also important that we have the right value from our premium segment all the way down to our deep discount segment. And that is a weekly -- trust me, a weekly project that we do every single week to monitor that we have the right value across the portfolio. So within this -- the clarity of this, we have prioritized Winston and Kool, that we -- those are the 2 brands that one, represent almost 50% of our portfolio, but also that we think that we have the right to win in and that we will put our investments behind and you'll see ultimately how Rishi will bring that to life in a bit. And then last piece before I turn it over to Rishi is this dimensions work. As I said, it's been really inspiring and energizing. It's been educational as well to really understand more about who our consumer is. And I have to tell you, I arrived here 4 years ago, and I was brought in at the time to transform the sales organization. And I had the privilege of coming from 2 blue-chip companies, as you heard Andy say, from Pepsi and Kellogg's. And those are best-in-class companies that they have deep understanding of who their consumer is and they have the capabilities in place that they can then turn that over to their sales organization and then drive a level of collaboration to talk to that consumer in a different way. We didn't have any of that when I arrived 4 years ago. And that's a big part of why Andy's organization was stood up and now we've been able to marry, again, our global community with our local excellence and capabilities and expertise. And what has come of that is we've been able to take a lot of this rich consumer insights and have a framework that's consistent using dimensions. And now we've been able to now partner with our sales organization where, again, we have expanded. We have 1,000 people on the street, and we also have a key account team that we've also enhanced over time. And now we're able to take those insights to our retail partners. And what's great about this engagement is, one, we are now talking about our consumer in a very different way than anyone else is in the marketplace right now. And we are now -- not only are we leveraging the functional benefits of our brands, but we're also talking to them about the emotional benefits of our consumer and the passion points that matter with Winston and Kool. And again, you'll hear Rishi tease that out. And so what's exciting then to the retailer when they hear about the different passion points and then we can leverage that with the retailer to drive traffic into their store, what they have given us back in return is access to their loyalty base. And within that loyalty base, there are millions -- in some cases, millions of adult smokers that sit within those retailer and loyalty bases. So as we're working to build up our consumer base internally, and that's still work in progress, the fact that we can come over here and engage with the consumers in a very rich way with millions of consumers, that's game-changing. And we had not been able to do that 4 years ago when I arrived, and we have started to do that today, so that's the evolution of the work that we're doing. So I'll turn it over to Rishi here to now bring all this to life and showcase the work that I just at a very high level and way over simplified, I'm sure he will say and what the work we've done with Winston and Kool and how we bring that to life. So Rishi?

Thank you, Kim. Good morning. I'm really excited to share the progress on the journey we made for 2 of our focused brands, Winston and Kool. 2 brands with a strong history and legacy with 2 brands that were unfortunately losing market share with the previous ownership. We took these brands over in 2015. And since then, we have stemmed the decline and actually reversed the course and bought it back on a growth path. But as we look forward, we believe these brands have a far more growth potential by getting closer to the consumers, by partnering with our global team and developing tools that connect with our consumers when and where they're most receptive, we want to really unlock the full potential of Winston and Kool. Anand talked about dimensions, which is really the moments when and where our consumers are most receptive to hearing the messages from the brand. We put our Winston and Kool consumers on this map. Winston consumers are all about being with their peers, their tribe and staying connected. Kool, on the other hand, is all about on the go, the energy and the enthusiasm and playing in the stimulated space. So let's start with Winston, a brand that has been here since 1954. At one point, Winston used to be the global leadership brand until it got overtaken by Marlboro in the early '70s. But we do believe as we get closer to our consumers, not just our current users, but also the nonusers, we really get to understand deeply on what their trial barriers are and what do we need to address in order to drive and stimulate growth on Winston. I shared this slide last year in the investor forum, where we talked about the 3 key trial barriers that we need to address. First is around the perception of quality and taste. Our loyal consumers do credit us for great, high-quality nicotine, good flavor and satisfying taste. However, consumers who haven't tried us are not sure about our quality. Secondly, the brand has a rich history but is often seen as your uncle's brand. Now we know we have the advantage of having huge awareness, and we need to now convert this in making the brand relevant to the next generation of adult smokers. And as we dispel the myth around the perception of taste and drive relevance, we improve value for our consumers. So on this journey, let's start by truly understanding our consumers. And I'll play a quick video. [Presentation]

So Travis and Rene, as we lovingly call them, they are our Winston target consumers. They love outdoors, they love fishing, they love hunting, they're gearheads, they love motors, they love racing. In short, they love the quintessential American spirit of fun and freedom. In order to connect with them, we've created a new campaign called the America We Love, which is all about connecting these consumers to the moments they love and the role that our brand plays in these moments, whether it's the long road trips you take with your friends, or the impromptu drag bike racing on a beach that happens, all celebrated with a great Winston smoke. So while our lifestyle campaign connects with our consumers at an emotional level, we're also driving equity-building product messaging, really celebrating the provenance of the whole leaf tobacco and the Appalachian North Carolina water that really provides the soothing -- the naturally smooth taste that our consumers crave for. In our campaign, nothing but tobacco and water. In the spirit of demand space, we also know there are certain moments and carefully curated partnerships on the passion points of these consumers. Passion points are the areas that our target audience cares for. Our target audience loves cars and motors, so we've partnered with Motor Trend to create custom content and they have [ headed ] up with creating certain custom souped-up cars that we gave away as part of our sweep stakes. Our consumers love outdoors, they love fishing, they love hunting. We partnered with Men's Journal to create, again, custom content and equity building promotions. And what we connect with them is important. What's also important is where we connect with them. In the U.S., like Kim had mentioned, we still have some permissibility to connect with our adult consumers on the other side of the digital [ HK ]. The more than 300 million smartphones here, and that is where our consumers are, and that is where we are connecting with them. And then there is racing. Winston has a huge heritage with NASCAR, the quintessential American sport. A lot of Americans here in -- also believe Formula One is not the real sport, but NASCAR is. I'll leave that to everyone to judge, but Winston has a huge history with NASCAR. Winston was the sponsor of the Winston Cup Series from 1971 until 2003. While our current regulations don't allow us to associate the brand name with the racing directly, there's still a strong resonance that consumers play back when it comes to Winston and NASCAR. So in true challenger's spirit, we said, how do we give the consumers the thrill and fancy of NASCAR. So as a result, we partnered with Richard Childress Racing or RCR, and bought the rights to 3 of their races and their cars. We pass those rights to our key customer teams. So in this case, you see Thorntons and Kwik Trip, 2 leading gasoline and convenience store brands that we have who are our top 15 customers. Our customers can put their branding, run their races, run promotions and really benefit from all the PR they get, all for free because we're giving them pass-through rights. The consumers in turn really benefit because they get an all expense trip paid for the NASCAR race. They can watch the race from the pit lane. They can meet and greet with the drivers and really have an unforgettable racing weekend. For us, the big benefit is we get access to their adult smokers database. Like Kim mentioned, it's in hundreds of thousands, in some cases, millions. So we can directly talk to our target consumers in a very focused way. In addition to this, through POS, we can also talk about these promotions in store. So in a way, it's kind of creating a win-win-win partnership, a win for our customers, a win for the consumers and for the brand to really start accessing this adult database, so fish where the fish is. This is where all the consumer database exists. So hopefully this gives a good example of how we are bringing a challenger mindset in really getting back to the roots of Winston and celebrating. We just got started here and there's a lot more to happen. Shifting over to Kool, which is our second focused brand. Again, we apply a similar recipe on Kool. We understand our consumers, we understand the trial barriers. We also understand the platform where our Kool consumers engage, which is around festival and music, which is around fashion and art and a our Kool consumer is very digitally savvy and socially and lifestyle integrated. Let's meet our Kool consumers who we lovingly call Sean and Shauna. [Presentation]

So hopefully you feel the energy. They live in the city with all the hustle and energy that comes with it, they're on the edge of what's next with music and style being at the heart of it. They love the thrill, the intense experiences that they're craving for. And with Kool, it works well because we have intense menthol that really partners and complements the intense experiences they're looking for, so a new campaign called feel the [ wild ]. We bring this to life via carefully curated partnership, so our partnership with Rolling Stone around the biggest music festival Lollapalooza or our partnership with Maxim, where we're really celebrating fashion and style. Kool connects with our consumers when and where they're most receptive. Kool also understands that our consumers are digitally savvy. So we created a rewards program called Koolcoins but every time they purchase the brand or engage with our equity messaging, they can collect Koolcoins, which can be redeemed for special discounts and other things of value. Our consumers also love deals. So we give them, whether it's exclusive savings or being part of sweep stakes and offering them value which money can't buy, we nicely complement our equity messaging with the value. And finally, where it all comes together, which is in the store, where our consumers are really working with their wallet. We have a strong presence in the back bar, but also by inviting consumers to feel the [ wild ], we are really connecting our brand with our target and potential consumers. All these efforts to drive a focused brand are beginning to give us some results, starting with a deep consumer understanding, coupled with partnering with a global team in developing tools and creating innovative partnership, which our sales teams can deliver. We're now seeing both Kool and Winston increasing share of the respective segment they play in. We're still at the beginning of this journey, but we feel we are moving in the right direction with a lot more to come. With that, I'll invite Kim back to -- come back and summarize the efforts of brand building here in the U.S.

Okay. So I will summarize here on the last page. I mean hopefully, what you've heard today is that the U.S. is still a very attractive market. It has a lot of -- still has a level of affordability, and it's still very transparent in terms of the regulatory environment. What we wanted to really spend our energy and time on today is demonstrating the marketing freedoms that we have in the U.S. and ultimately, how we are leveraging many of the tools that you saw, many of our global partners present earlier. And again, I'll go back to what Stefan said earlier, is there evidence that we're actually operating as a challenger. I mean listen, we're early in the journey. We're very early in the journey, but 2 that I would highlight. One is the work we've done around the portfolio together with our global partners in terms of simplifying our portfolio, and what that has driven is a level of a point of difference, especially in a macro economic and challenging area, it has really driven a point of difference between us and our competitors, so that's the first thing I would highlight. And the second piece I would highlight. We know both of our 2 largest competitors have significantly larger databases than we do, and their approach is very different in terms of how they use that data. What we've tried to demonstrate to you today is that we are taking a deeper understanding of our consumer and then we have a common framework in how we speak about it, and then we're finding both the functional as well as the emotional passion points that matter to our respective consumer, and then we're leveraging that with our retailers. And we think, again, we're playing that game differently than the rest of the marketplace. So listen, we're early in the journey, as you heard Rishi say. I'm pleased with the results you see on the right side of the chart. It's evidence that there are some things that are going in the right direction, but we are still the third tier player in this market. We have a lot more to do. And what I would say, the thing that I'm most excited about is we've got the right global community, married with the right local excellence and expertise, ultimately in service of the consumer. Thanks for listening.

I hope you did get a sense on the fact we are trying different things. That's what, hopefully, through those different pieces of work, you got a sense on that. And how we are leveraging different tools that are available, digital, for example, CRM as a way to connect with our consumers and deliver them value. Those are the different things we are trying. We are not claiming we are there yet. But every day, we are taking a step forward, we are learning, we are adapting and we are trying new things, so that's what's really important for us. With that, we get to the section which many of you might have been waiting for, what we are doing on our next-generation products journey. For that, I'm going to invite on stage Melvin. Now Melvin is one of those people I spoke about who brings deep tobacco experience and deep Imperial experience as well. So Melvin has been with Imperial for over 20 years in different roles, including as the General Manager for countries such as Australia and the U.K. He is now heading up our global next-generation products team across the world, whereby we've integrated that as one unit team, which is driving everything around brand, everything around innovation as well as working very closely with the markets to actually execute the same in the market. Melvin?

Thank you, Andy. Good morning, good afternoon, everyone. I'm very pleased to give you an update on the progress we are making against our strategy on NGP. In particular, since our business reset in 2020, where we realized we were not consumer-centric enough to have real impact with our consumer. Today, it's absolutely clear. The consumer is at the heart of absolutely everything we do in NGP. Our ambition is to create optionality, options for consumers to actually navigate what we call the risk continuum. As we all know, the implications of smoking. It is our ambition in line with our very clear purpose of forging a pass to a healthier future, to help consumers navigate from the left-hand side where combustible sits more to the right-hand side, with offerings which are tobacco-based such as heated tobacco or nontobacco-based offerings, such as our modern oral propositions or our vapor products. How we go about is very much with the dedication to innovation, Mattia spoke a lot about how we go about and there's a true calibration between categories and innovation to bring propositions alive for our consumer. Now what's the uptake? We all know the categories are growing across the world, and if we just look at Europe and the U.S. We see penetration levels of around 10% in Europe and over 6.5% in the U.S. We then look at the relative size of Europe versus the U.S. You're all very much aware that we focus on the European footprint as that is where we can really execute against our global strategy. A few differences between the 2 footprints is, first of all, the U.S. is very much built around vapor and modern oral. And Europe actually is around vapor and heated tobacco with growing momentum behind modern oral consumption. If we then zoom more specifically into more markets around the world, we have an extreme like Australia, where there is no presence of a legal framework to help consumers navigate that risk continuum and support them in that momentum. Other markets such as Japan, where there's an advanced uptake of heated tobacco, and we really see a sizable next-generation product category emerging, but also European markets, such as Hungary, Italy, Czech Republic, significant uptake of heated tobacco, and then we've got the U.K., actually where vapor is the most prevalent category across all next-generation product categories. It is very clear that our competitors are building these categories across the footprint. We really act as a challenger and we're very pleased with the progress we're making. As today, we believe we've got competitive offerings across all these categories to be able to be rolled out within the footprint. Now let's turn to how we operate as Imperial. And I've mentioned the business reset in 2020, where we really identified that we lacked consumer centricity, and we ended up scaling propositions too quickly, ahead of what consumers were able to absorb. The good news is we learned from that, and that has been fundamentally important to the business reset where we actually came up with a reboot strategy. We've got a validated approach. We consult consumers, and we partner with consumers in development of our products and our brands. We are focused in our footprint, but also we are very focused and disciplined in our investment allocation to make sure we make progress step by step. And we focus together with innovation function very much on the innovation pipeline as the product experience of consumers is essential to the progress we intend to make in next-generation products. So how did we go about 2020, taking that forward? What has been absolutely essential is to build the right foundations, building the right capabilities, and you've seen the capabilities built in Anand's team, in Mattia's team, in Jose's teams, but also at market level with Kim and Rishi and we are actually leveraging those global expert centers to help us inform where we go with next-generation products and how we can best service our consumers. Whether it is decoding the consumer insights together with Anand or actually managing the portfolio, where to go first with Jose's team. The consumer at the heart, you've heard a lot about it. We had to learn it, to really understand what does it mean to co-create, what does it mean to develop a prototype to go back to consumers and ask, does it work? And I'll give you later on an example around Pulze 2.0 and the hours we spent to actually get that right as a next step in our heated tobacco journey, but then also further emphasizing the partnership model that has been expressed already quite a few times. For us, building brands, building products, getting the right design out there, whether it's activation, digital or offline, we need to leverage the expert and the expertise that sits with our partner, and we bring them holistically into the NGP journey, the Next Generation Products journey, we are building and we are creating together. And then reemphasizing the discipline we have, the disciplined market entry strategy. We are a clear challenger, and we only enter markets once the category starts to become sizable. Another important element for us is, do we have a right to play and do we have a right to win? Do we have the commercial strengths available in the market to be able to execute and deliver against our ambition? And right now, we've got a very clear, focused footprint, in which we've rolled out our new propositions of Pulze 2.0, of blu 2.0, of blu bar and also around Zone X. Whilst these are not platform introductions, we've rolled out many flavors that have been developed and have been explained by Mattia earlier on across our Swedish market, Norwegian market and Austrian market. So step-by-step, we are making progress, and we service our consumers with improved, better experiences across the footprint. And also, of course, we are very excited about the announcement last Friday, where we're going to focus on also entering U.S. market in modern oral with a proposition, we are now further building with consumers, and we expect to be ready early next calendar year to be launched in the U.S. Back to the consumer, the consumer at the heart of everything we do. What's essential for us to understand is what drives the consumer from left to right on that continuum I've been sharing. We know there are many drivers, different drivers, whether it's personal well-being, what it's social, enjoyment, flexibility, more occasions, where you can use nicotine where smoking is not allowed or simple economics as some propositions are more economical in usage than cigarettes are. I was really delighted by hearing by 2 of the consumers that were on stage earlier on and were interviewed by [ Anand ] to really point out the role of discretion. Discretion as part of their driver to move into vaping, but also the role of enjoyment as they really articulated a discretion and that connection with themselves, that moment of enjoyment that get me through the day, drivers to get from left to right on the continuum. Understanding the drivers is one. Very important for us is in the progress we make by category to have very clearly articulated target consumers. Now we differentiate ourselves by having target consumers that are focused on life stages. Where most CPG really focus on demographics, we focus on the life stage. The life stage of the considered balancer, the life stage of the next stepper or the life stage of what we call the life editor. And it's very important that these life stages, we connect them to the dimensions that [ Anand ] has explained, whether it is bring joy, keep going or in modern oral, the get-ready moment when you wake up, get ready for the day, I use a pouch or during the day before I've got an exercise to do, where I need to be sharp in my mind, I use a pouch and it gets me going. It accelerates and charge me up. Now what I would like to do is introduce you in a bit more detail the next stepper, which is really a person, he or she, is about 30, 40 years old, family-oriented and really very much focused on convenience and really trying to focus on moments of the day where they can actually relax and leverage the vaping offering, the next stepper. [Presentation]

So these consumers are not only our target -- not only our target consumer but also our partner, our partner in developing brands, developing products and developing wider experiences online and offline that are lasting and are making the right connection between us. So to give you a few examples, what we actually did is, what is on heated tobacco or on blu, the 2.0, or the blu bar is putting the consumer really at the center and at the heart of what we do. They are part of the co-creation phase, validation phases. They entered with our products in their home to have in-home use test for a week, 2 weeks, 3 weeks, experience the product and come back to us in order to tell us what they've really experienced. To give you one example, we introduced a dual power mode on our heated tobacco proposition, and we gave it to consumers. And they came back to us after having experienced it, and they said, "We love dual power mode." But you know what? It actually -- what's more important is these 2 different [ taste stations ]. And therefore, we were able to market it as a claim that resonated much more with consumers as a dual taste mode rather than adopting the initial thought through dual power mode. Test-and-learn approach, pilot markets, very, very important because it allows us beyond the testing period to test and learn from consumers before we scale and we roll out. blu 2.0 was launched initially in the French market in 4 cities. In the 4 different cities, we adopted 4 different price points, 4 different activation mechanisms and 4 different ways to transition consumers from the myblu proposition to the new blu proposition. And the learnings out of those 4 pilot cities were clustered into a learning plan that allowed us to create a national scale rollout plan that has then been rolled out across our vapor footprint. Also on the heated tobacco, our Pulze 2.0 proposition, which was a follow-on of our pilot market launches in Greece and Czech Republic. What has been absolutely essential for us is to identify with consumers what are the point of differences. What are your needs? What do we need to innovate against? And what point of differences are we able to communicate to attract consumers into our funnel and ensure they adopt our product proposition. Let me introduce you to Pulze 2.0. [Presentation]

Product, product experience, absolutely essential for us as a foundation to build our proposition on. But product is one, brand is as important, brands to make that connection with the consumer and to tap into those moments that are relevant for the target consumer, the considered balancer. That considered balancer that you saw earlier on, which is slightly older, men or women that are really just benefiting from the joys of life and are looking for those moments of pleasure. And we are there to make these moments of pleasure richer, to really amplify the richness of the moment by having a convenient proposition that is easy to use and rich flavors that are actually allowing them to really enjoy the moment. And we translate that both into lifestyle campaigns but also into functional campaigns, highlighting, for example, the dual taste mode or the wide range of flavor we are bringing to market. But also the fact that you can have 25 sessions just on one charge, convenient to get you through the day. Both very much built on an improved consumer experience and a brand that is relevant and resonates with the target consumer, considered balancer. Now let's turn to blu. I've introduced you to the target consumer of blu, which is that next stepper. And we've brought to market, over the last 12 months, 2 key platforms for our vapor brand. First, blu 2.0, which has been the next-generation post-myblu, really focusing on design and key features that benefit the convenience-seeking next stepper. What's also very important is actually the range of flavors. And that's true for blu 2.0, but it's also very much true for blu bar. The launch in the disposable segment. Very important in disposable segment is actually the flavor sensation, but as importantly, the convenience of the products. The way it's -- our proposition is designed to be small, to be easy to carry and hold 600 puffs, which is slightly more puffs than our peers in the market. Product platform, blu 2.0 and blu bar. As important, as for heated tobacco in vapor for blu, beside the product experience is the brand experience. Again, the next stepper, which has a very busy life, it's moving into setting up a family, moving into the next stage of a career. And it's really about tapping in those small moments of joy that we all recognize, and it makes us dream back when we were younger, when we were getting [ unlit ], we really went out and party. And now we really treasure those small moments in life that are there for us to cease, to capture, and blu is there as a partner to enjoy and seek the pleasure of the moment. Heated tobacco, vapor, modern oral. Modern oral, they are really 3 key things that are essential in getting the right experience out there. First of all, it's nicotine uptake. Secondly, it's flavor and flavor duration throughout consumption. And the third one is [ in-house ] view. These 3 criteria has been at the core of the development of our new Zone X proposition, where we've actually been able to roll out a bamboo fibre platform, and we're now available in a wide range of flavors. And every time we bring out a new flavor, it actually attracts new consumers that come in at the top end of the funnel and -- that help us strengthen the brand and create a broader, loyal consumer base. As for the other brands, product is one, brand, clearly, is second, where we are focusing on the slightly younger life editor that is really keen to be in control of what he does on the day. The life editor wants to be in control of what he tells his friend online. That's why he's editing his life, not only by the hour, but by the minute. He also wants to be in control of his mood. You want to be in control of the flavor he wants and the nicotine impact he's after. We've got Zone X there to zone in with certain flavors such as Cosmic Blast or with slightly lower nicotine a moment to relax to zone out with Havana Breeze. Products, brands but also activation in market. We work very closely. We partner with [ VICI ], we scheme with the wider teams across our footprint to set up experiences, activation programs online, in retail or at festivals to capture the attention of consumers and very much -- very important to attract them to our brands. I'd like to give you a flavor of what we're doing with Zone X and how we activate that together with all our internal partners. [Presentation]

Whilst we are very keen and proud to build these new brands, what's really important to overemphasize is the responsibility we take in building those brands. Responsibility as Imperial but also, very important, responsibility as an industry and responsibility by the governments. As we all recognize the role NGP plays in traditioning adult smokers to potentially reduce risk [indiscernible] proposition. We need to make sure we're able to inform consumers in the right way to take them by the hand and really help them navigate that continuum. For that to be done successfully and responsibly, we need to include thinking about [ exercise ] model with ensured quality standards. But also a very important role that the government is to absolutely enforce standards across the industry and across the footprint. Where are we on our journey? And I want to reemphasize, we are humble. We are making a start, but I think we make steps in the right direction. And if I just look at the performance to date on vapor, on heated and on modern oral, you really see that we start to make inroads, and we start to build momentum. We've got some sizable vapor positions in markets like Greece, Spain, Italy, Germany and Czech Republic. And -- where we've rolled out now our blu 2.0 platform. But if you look at the uptake of blu bar in markets like Greece and Spain, 8.8%, [ 9.7% ] following the 6 months development window that Mattia has alluded to, we're actually quite convinced and optimistic that we can make further inroads with these propositions. On heated tobacco, same story. We started our journey only 2 years ago with pilots in Czech Republic and Greece, where we now have positions just over 5% in Czech Republic and just under 3% in Greece. On the back of our learnings, we've rolled it out to more markets, and we're now available in 7 markets. And even in the markets where we've launched less than 12 months ago, we have now a position north of 1% market share, which is really important for us in order to allow now for the new innovations to come through, the new experience to come through and to actually start to build step-by-step our presence in this very important heated tobacco category. And then we've got modern oral, where we've got sizable positions in Austria and Norway; big profitable market, Norway. But also, we recognized it in Sweden, we are far behind our fair share. And on the back of everything we do with Zone X, we start to make progress. We move forward, and we're growing share in the modern oral sector in Sweden. Now, what does it mean in terms of numbers? And let's go back to where I started and the focus for us on the European footprint as that is where we can actually activate and deliver against our next-generation product strategy. And you see the growth momentum building on our net revenue, delivery across the European footprint, 29%; growth, 34% growth; first half this year, another 35% growth. So on the back of the share momentum, we really also see an acceleration in net revenue momentum in Europe. And then linking it back to our purpose, affording the path to a healthier future. You can see in markets like Italy, Portugal, Greece, Norway, Sweden, the momentum is building. And the share of next-generation product revenue is already very sizable in terms of our overall net revenue delivery. Overall in Europe, we are now -- at around 7% of our net revenue base is coming from our Next Generation Products categories. And that momentum is further building. So in summary, humble, we are a challenger. At the same time, I think we are proud about the steps and the progress we are making with our rebuilding strategy, the way we work with consumers, the way we work internally with our internal partners but as importantly, having brought our external partners to work with us to build momentum, to drive innovation, but to remain focused in our footprint choices and remain very disciplined in our investment and our capital allocation. We are delivering momentum, and we foresee further growth in the months and years to come. I'm now going to hand back to Stefan.

All right. We're coming to the end, and I will be very brief. And from my side, what is exciting here is, I talked with you before that hopefully, you get the sense everything starts with the consumer, including having 4 consumers here on stage. That's the change in Imperial, it truly starts with the consumer. That is the foundation of where we want to go. And I shared with you before kind of the roadmap, where we said, "Look, what I want to -- if you look at it, why I'm excited?" We have a map now. I think the strategy is now well embedded inside the company. I think we have the equipment, equipment being defined about whether its dimensions, what [ Anand ] shared with you before. So as a framework, how we look at consumers. But also the equipment means things like the partnerships that Mattia has shared with you, the partners that come in-house, the innovation centers where we bring partners and consumers in at the same time. And I think we can only show you top of the iceberg. But we have the team. You saw some members of the teams. There are even move members of the team out in the booth that you can meet, that hopefully gives you a sense with the map, with the equipment, we have the team. And I will say this upfront as well. Let's be clear. In our journey as a challenger in our industry, we will have missteps. There is no doubt about it because on purpose, it says forging a path to a healthier future, yes? So don't expect us to get everything right, we won't. But I think what you hopefully take away from this morning with us is about, the ingredients are there now. The ingredients for Imperial to be a challenge in our industry as being the smallest player are absolutely in place. And we as a team, not just the presenters, all the 29,000 employees of Imperial, are truly excited about that. So with that, I want to finish and then we move over to the Q&A. But it's probably one thing -- the team put a lot of effort into it. And I also want to thank you personally for spending -- especially the members here in the room for spending this morning with us to giving us the opportunity to actually show what has happened in the last 2.5 years in the consumer space at Imperial. So thank you very much. Now with this, I want to invite Peter and Kim and Andy on stage for answering any questions. So Peter will play the moderator for this session. But look, the rest of the team is also here to answer any questions that you might have, okay?

Thanks, Stefan. So just some logistical points. First of all, we will -- for those of you who are watching online and if you want to ask a question, you're very welcome. What I ask you to do, if you go into the agenda page on the app, and you'll find within there's a link within the Q&A session. If you click on that link, it will open up a window in Zoom. If you go through the [ prep ] process, you should enter a Zoom room. And if you want to ask a question, raise your hand, and I'll meet your mic and so on, and you can go ahead and ask your question. But first of all, what we'll do is while people are joining online, we'll take questions from the room. And what I ask you to do is please raise your hand. If you could wait as well then for a microphone to arrive and if you could state your name and organization before posing your question. Otherwise, we look forward to taking your questions. So thank you. So we'll take anyone. So yes, in the first row, Vivien, please.

Vivien Azer, TD Cowen. Thank you for the presentation. Andy, you mentioned the expectation for continued growth in NGPs in Europe as you move towards your revenue aspiration with the balance of expansion versus organic growth. So I was wondering if you could contextualize what the mix of that was in terms of the 35% that you saw in the first half and how you expect that mix to evolve, going forward?

Thanks, Vivien. If you look at the first half of this year, a large part of the growth has been actually organic through the launches that we put into place in last year. Most of the expansion that you are going to be seeing for F '23 is going to happen in the second half of the year. So to answer your question, in the markets that we have launched, we are seeing traction with our consumers, we are seeing share growth, and a large part of that 35% is getting driven through that.

Post your question again, just for the benefit of the people online.

And your expectation going forward, please?

We expect that to continue. As I said earlier, we are not expecting to become the #1 player in any of the markets. We expect -- our mission is to get our fair share in the markets that we have launched. We expect that momentum to continue over the next few years that we have launched, and we are going to be expanding into.

And just from my side, Vivien, to add to this, I think what you are hopefully get in to the way because I don't want us to get just fixed on a specific number. But I think, hopefully, what came across to you, especially in Melvin's and Mattias' presentations, we do have now the [ office ] in all 3 categories that are relevant in Europe and across the world in our priority markets. And we'll continue to upgrade them. Let's be clear. As a challenge, the one thing you always watch for is your competitors. Our competitors will continue to innovate and be formidable competitors. But I think what you have to sense now is that we've moved from a position where we're focused on one category, vaping, to really having a multi-category approach with an offer that I think is competitive in the marketplace. And if it's not, we'll continue to update it together with our partners.

Ask a question, and the second one there with Owen. Pass the mic back.

Owen, Jefferies. First question, just coming back to the U.S., so a lot of focus on Winston and Kool and driving share there. I'm just wondering what is the plans and strategy around deep discounts over the next couple of years? And if the macro starts to improve? And then linked to that, you mentioned the webinar on the U.S. 18 months ago, you said it was not, I remember, on deep discount. Then the comments were get to a certain market share and then try to take pricing. Is that still the plan there? And I have another question after that.

Yes. So thank you for the question. We talked a lot today about the portfolio work that we've done as a global as well as a local team. And so the approach that we've taken is really driving a point of difference across the marketplace that ultimately meets the consumer need. So we've got a portfolio that plays in premium, got a portfolio that plays in traditional discount, value all the way to deep discounts. So our focus is not solely on deep discount. It is a true total of portfolio approach. We're choosing Winston and Kool because we think that's the opportunity in terms of really driving the premium category. And we think there's an opportunity, really, and you heard Rishi talk a lot about it, in reviving those brands and being able to still celebrate the heritage of those brands, while at the same time, modernize those to meet our ultimate consumer need. What I'm really pleased about is, as you saw the last page that I showed in terms of our progress around share, that share growth has not just come from deep discount. Specifically, we've seen growth across 3 of the price segments that we play in. And so it's not just a deep discount growth. Yes, that is where a lot of our growth has come, and the value of that is when we start to then go back and negotiate contracts with our retailers, that gains us additional space. And what we would put in that additional space would be Winston and Kool. So it aligns right back to where our investments are, where our focus is across the portfolio. But it is a full-portfolio approach that ultimately plays across all price segments. That's our -- ultimately, we're consumer led.

Okay. And then to your -- what you said 18 months ago around, if you get to a certain market share, within a deep discount segment, then you can potentially start to push pricing. Is that still relevant? Or so we look at...

Yes. So I think great question. We have continued -- first of all, I'll remind you again, the U.S. is a very affordable market. And we've continued to take pricing every year. We've taken it across the portfolio this year. So yes, we will continue to do that. We grew a little over 9% price mix this year in the half 1. We expect to be able to continue to drive pricing power in the market because it's still a very affordable market. But that will be -- we will do that across the entire portfolio. And that's why I also talked a lot about our revenue growth management tools, right? It's really important that we make sure we have the right value across each parts of our portfolio that ultimately give the value to the consumer.

And just one follow-up, if that's okay, on heated tobacco, so some of the traction you're getting there does appear perhaps targeting all the demographic. I'm just wondering, are the share gains coming from competition or it's incremental consumers that are switching to the heated tobacco category that haven't necessarily been spoken to before?

I think consistent with our strategy, most of the gains that we are seeing is indeed coming from competition. So there is a small number of consumers who are coming into the category through us, the very fact that we have the smallest all-in-one device is indeed appealing to the segment that we speak to. But most of our growth has come from share gains from others.

A couple of questions from Gaurav Jain from Barclays. So one is the Czech Republic, the heated tobacco share, which is 5.3%. So in Prague, will it be closer to 10%, like in some of the key cities, is your market share now approaching double digits in heated tobacco? That's my first question.

We are selective in terms of the customers that we are selling and prioritizing into. So where you're right, we have a national share of 5.3%, depending on the customer; we have shares, which is approaching double digit, others where we are slightly lower. So it's -- we know where to prioritize, where we can gain the most traction out of and where we believe we have a clear advantage versus competition. So on those channels, we are getting a greater than the 5.3% share.

I mean, to build on Andy's answer, it is I think what's exciting. This is an example of the challenger mindset as well. Yes, I mean, in principle, we walked into a market, heated tobacco market, where our competitors have clearly established themselves very well. But I think -- and I wouldn't get hang up on a specific market share number. That will change over time. But I think what you hopefully take away, we're not in the game, we're in the game in heated tobacco, we're in the game in oral nicotine. We're in the game in vaping, even if disposables. And I think the exciting thing is that just having been in Eastern Europe, in Hungary, one of the neighboring markets where we just [ launched ], sitting there with Paula, watching who is the equivalent of Kim for our European -- for our ACE business. And we're going market-by-market the attention of detail, which we didn't talk a lot about to we're looking what is our market share, yes, in specific key accounts city-by-city. That is the attention of detail when I'm paying to it. And looking at the promotional mechanic, yes, in the key account in the Czech Republic, GECO is the largest customer. They're looking in last week, what promotion did work? How many sticks did we sell? That's the attention of details that we do now as a challenger company. That doesn't mean we're not going to have a setback at one point in time, but it's at constant looking about it what is the right mechanics. That's kind of where the challenger might manifest itself now.

Now, you are investing in all the NGP categories. And even in e-cigarettes, you have invested behind the disposable systems as well, which are under a lot of media attention, regulatory pressure. So how do you like prioritize your limited resources? Like is it actually a good idea to invest behind blu bar, knowing fully well all the negative media headlines that are coming in every day? Or are those people and money, is that better devoted against pursuing heated tobacco in Prague or other cities in Czech?

Look, I think we'll go back. We are led by the consumer. So at the end of the day, as Stefan referred to it, we -- consumer trends on which categories they are gravitating towards and adopting is actually different by different markets. It's -- even within one market, depending on the geography by regions, it's actually different. So what we are doing is we -- based on our understanding, we look at the markets and where a category has already been created and where there is momentum behind the category, that's where we bring in our offering. To your question on blu bar, if you just go back to our purpose of forging a path towards a healthier future, we will only be achieving that if we do offer harm-reduced solutions, where the consumers are choosing to go to? And disposables, clearly in Europe, is one of the core areas where the consumer is betting today. It's -- in some of our markets, it stood up to 8x the size of the pot business, right? So we cannot not be in that space. But what we are doing is we have chosen to consciously be highly responsible. So our marketing standards, who we talk to, the products that we bring, sustainability and some of the initiatives we are putting in place around being more ESG compliant, all of this, we are doing it in a responsible way. So yes, to summarize, we are where the consumer wants to be. We do have offerings, but we are making sure we are delivering that in a highly responsible manner.

And one last question. I was just reflecting on that consumer occasions that was spoken off in the morning and in the panel, people are obviously using multiple products. So -- and I was trying to think how should I think about that. Let's say, in the U.S. you have cigarette portfolio and a strong cigar portfolio. So is it that of the cigarette consumers who are also cigar consumers, your market share will be higher in the cigar category versus a national average and vice versa as well? Like are you going to be able to bundle products to your consumers?

It's a great question, Gaurav. Thanks for asking. So what we do find, yes, there is significant poly usage, that is, I mean, there's 50% of our consumers are consuming different categories. What we are doing is we are leveraging our strengths in difference. For example, in the U.S., we have a major asset in Backwoods. So in channels where we put in Backwoods, where we do have a huge amount of customer pull, we leverage that to our advantage to sell in other products as well, like a Winston and Kool, where it's relevant. So from a sales point of view, and Kim just referred to it before, we leverage our strengths. The other piece is Rishi spoke about, for instance, the customer database that we are acquiring from our key customers, right? So once we get the database, we now have the ability to look at a consumer-by-consumer or shopper-by-shopper level to see what are the brands that they are buying and if they are indeed today a Winston user who also uses Backwoods, it gives us the ability to send them targeted offers on Backwoods as well. So from our point of view, we are -- I'd be honest with you, we are early in that journey. We are learning very quickly on poly usage. We are leveraging the data that we have got, and we have started testing different things to see how we can leverage the poly usage to our advantage. Have we taken it to the ultimate level of really knowing exactly which set of consumers can we target with a customized bundled promotional offer? Perhaps we are not there yet, but we are getting there.

But I think, Gaurav, I think with your question, you pick on a very important part of our strategy. If you start with the consumer, you very -- I mean, in the thousands of interviews, 120,000 interviews that we -- that [ Anand ] talked about, one of the common themes is that consumers use all kind of different products. That is, and therefore, for us to have one integrated organization, is one of the differentiating features and one of the things that changes we've made as part of our new strategy. Where they will lead us to, we'll figure that out over time, to your point. I think there are business opportunities that will come out of that. But it's important, as we put our stake in the ground, we start with the consumer. You can only come to one conclusion that every consumer is different. Everybody is on a different journey. But for many of them, it includes cigarettes, includes cigars, especially in the U.S.; and it includes NGP products. And I think that is a competitive advantage that is a differentiator that we all bring it together. Our smaller scale is actually here, one of the things drivers of that, but it very nicely fits with what consumers want and how the way consumers look at the world.

Jared Dinges, JPMorgan. Look, I wanted to hear more about your recent acquisition in the U.S. in modern oral. Clearly, it's not something you guys had talked about as much previously. So like you said, you're going to roll out in 2024. What is the cost of this? Does this going to mean there's maybe a bit of a delay to your total breakeven for NGP? Is it a dry or a more moist variant? Is that unflavored? I would just love to hear a bit more about that acquisition.

Okay. Jared, I'll kick it off and then the team jumps in. I think hopefully, you sense we are quite excited about this. But it is very, very consistent with our strategies that we laid out in January 21. We always said, we're going to be consumer led. When there is a market developing, we will participate in that market. And we always said that we will come to capital allocation. We always said, we, as Imperial, believe in small bolt-on acquisitions. You've seen the price stack for this one. This definitely fits in the subject of small bolt-ons. What's the driver? When we started this strategy in January '21, the U.S. was largely a vaping market. But what has changed in the last 2.5 years, the fastest-growing segment in NGP in the U.S. has been the modern oral segment, yes? So that's why we felt as part of our -- if we're really committed to our strategy in the U.S. that has become now to a certain size, that it becomes attractive for us to end into. That is what you've seen. And what you've also seen the challenger mindset at work. As you rightly picked up, the product [ Licks ] product today is a differentiated product in the marketplace. It's a moist product in the market that's largely defined by dry products. So again, we're going to do our consumer research. Kim, Andy and the team will work that through before we come with our proposition in the marketplace. But that is an example of what we'll do. I think it's also an example, the consumer never stands still. The market dynamics will change, and you see here also our agility at work about how we adjust to as the market moves.

Yes. I mean I think the only thing that I would add is, I think Stefan laid it out very nicely, we have been very consistent on our NGP approach. We are the challenger, so we will not lead the demand, the category in a market, right, where the consumer will drive our decisions. In this case, when you look at the oral nicotine market in the U.S., the modern oral nicotine represents 20% of that category. So it's a meaningful start, and it's continuing to grow. So it made absolute sense for us to not only get into that category, but I think the additional piece is that we can also leverage our route to market. So we've got 1,000 people on the street, right, that also can leverage getting that into great distribution. The reason we're taking the time to launch it earlier in '24 is we now need to do, again, a lot of what you heard today, a lot of -- do our due diligence on the consumer research to make sure we have a full commercial plan that ultimately delivers on what the consumer's expectations are. And that's the work we're doing right now as a collective global and local team. So we're excited about the addition and the expansion of NGP within the U.S.

Maybe just a quick follow-up. In terms of capacity, is it something that you can take meaningful share very early on? Or do you need to ramp up capacity as well with the acquired business?

I think a part of our commercial plan will be looking at our capacity, going forward. We don't expect to be -- to get our fair share immediately. But over time, we do expect to get to our fair share. That is our intention long term.

One of the things that we did focus on as we were looking at this was to ensure that we have, Stefan referred to it, a differentiated product. So we have a huge amount of learning coming from our Nordics market, where most of the products are actually wet. What wet does is that it actually is less aggressive in the -- in your mouth than the dry products that you typically have in the U.S. [ Licks ] has a more wet proposition. And we believe with our know-how, we can actually bring in a lot more differentiation into the market, which might give us an advantage versus the products that are currently there. So we are -- we remain hopeful, but we have to learn and really fine-tune our proposition before we take it in.

I think what we do is now try and take a question that we have online. So let me come to Mark, I'm going to ask you to unmute. And if you unmute, we should be able to hear you now.

Yes. I just wanted to ask about PMTAs. Do you have any pending PMTAs which you're maybe particularly keen on the outcome of, and how do you feel about their chances of success?

Yes. So was expecting this question. So I would have been disappointed if we had not gotten it. I will just tell you. Listen, I think everyone knows the FDA has given us an MDO. We have appealed that in the Federal court, and we're waiting on a decision. Beyond that, there's really not much further information I can share until that ruling is decided. But thank you for the question.

And we have another question from Andrei Condrea from UBS. Let me just unmute you, you should be unmuted.

Hello, everyone. Thank you very much for this event. Just a follow-up on Mark's and Jared's questions on your new acquisition in moder oral. So the product you're launching -- we launched it in the U.S., you had relaunched it in 2024. Has there been a PMTA submitted for this product? Or are we looking at a more protracted [ tweak ] for a submission and decision?

Yes. So our application has been submitted, and it has been accepted by the FDA at this stage.

So we have no further questions at the moment online. If anyone wants to ask a question online, again, you can access the Zoom room by clicking on the agenda -- the Q&A item on the agenda, and that will access the room. Otherwise, we'll go back to -- taking room, any further questions in the room that we have here.

Thank you. Kim this is for you. I know that we're all watching the MSAI data very closely in terms of the U.S. cigarette volume outlook. It is getting modestly better. But if we look at the longitudinal data nationally, the smoker base in the U.S. is getting inherently older. So I was wondering if you could just give some perspective on how you think that impacts the run rate for U.S. combustible cigarette volumes, going forward, please?

So I think if you look at the macroeconomic challenges we've had here recently, it has impacted, overall, our consumers. Clearly, their wallets have been tighter. And we've seen, obviously, volume declines at a very high level at this stage. We do think that, as I mentioned earlier, there's still affordability in the marketplace. And so we still think there's an opportunity for us to continue to take pricing. Having said that, I think there are some signals that are giving -- that are indicating that we believe that the volumes will start to go back to historical levels. And so some of those areas are: We're seeing employment continuing to rise. We're seeing inflation go from 9% down to 4% here most recently. We're seeing gas prices start to stabilize. And so we think all those factors signal that we will get back to a much more historical level. I'm not really sure that as we look at the age of our smoker -- you heard a few consumers up here earlier today. Part of the immersion in terms of -- when we've spoken to consumers and talk to them whether they're at 50-plus or if they're in the earlier young adult age. It really depends on the individual consumer. And again, all of our decisions will be led by the consumer. And what they all tell us is it really just depends on what's going on in their day-to-day world. It will depend on if they're more challenged from a compensation standpoint, it will depend on just what's going on in terms of their decision-making from a day-to-day standpoint. So I don't know that age is really the driver of the declines that we're seeing right now, just based on a lot of the consumers that we've talked to. Some of the conversations -- we were just in Philadelphia a few months back. And some of those consumers said, "Listen, I will spend less on groceries, but I'm going to make the decision to buy my cigarettes. I will spend less on gas, but I will make the decisions to buy my cigarettes." So I mean, in most cases, age is not necessarily a factor in determining where we think the performance will continue to go.

In fact, Vivien, just to build on that. So we follow consumers, obviously, very regularly. Recent study after COVID, we realized that 76% of Gen Z consumers, they have changed their choice of brand up, they've downgraded and so on. So they can change their lifestyle because of affordability, but it's only 44% of boomers who have changed. So actually, the change has happened more in the younger segment than in the older segment. So if anything, it's provided this category with more stability than uncertainty.

And if I use that, I think it's a broader comment. But you, hopefully, sense that. Nobody can give a guarantee, and we're the smallest player in the rest about -- where the U.S. market will develop. But I think hopefully, you see the benefit of the 120,000 interviews with consumers across the world. There's a different level of understanding on our side, what's going to the head back to our consumers. And I think, in a world, that will continue to be volatile and will continue to change, I think that will put us in a better spot to really understand the trends in the market. Yes.

Just to follow up on that, and thank you very much for all that perspective, so if age isn't necessarily as big a consideration as maybe I think it is, the other factor would be per capita consumption. And while the NSDUH data is quite lagged, we saw or capita consumption for the youngest legal age cohort fall below [ 10, 6 ] per day, and that's consistent with what we heard from your consumers on stage, right? From a consideration standpoint, it sounds like they're being much more thoughtful about their combustible per cap. So how does that influence the outlook for the industry volumes?

Yes. Look, I mean, we track that. Some of these -- some of the trends are category trends, which are not necessarily within our control. But if I just go back to the whole comment that we made on poly usage, if you just think about the fact that over the last 4 years, the number of categories that our consumer is using has only gone up from 1.4% to 1.6%, it is not a dramatic change. If you also then take into account that whilst the tobacco volume has declined roughly about 2.7% in the same period, overall nicotine consumption has increased 2%. And if you just go back to dimensions, what is happening is something quite interesting. Consumers, depending upon the moment that they are in, depending upon where they are, are choosing different categories which we believe might actually -- what happens with tobacco, it remains to be seen. But on overall nicotine, they're choosing to actually -- they have the choice between categories, and that's actually driving growth rather than a decline. So we don't know what's going to happen in the future, but at least now, that's the data point that we have got.

Anyone else have got a question? We have no further questions online. That's different with the light -- lights in my eyes. I think we have done the question. Great.

And I think from my side, look, we started off with the consumer, we want to finish off with you as our investors and customers. So hopefully, what this morning has shown you, a lot of things have happened at Imperial the last 2.5 years of really putting the consumer at the center. But I want to be very clear, this is a leadership team that thinks let's start with the consumer but finishes with you as investors because ultimately, we're here to make a difference. And I think we are in a better place to deliver in, year in, year out, the level of returns we've promised you with the strategy we have in place now, with the team, with the equipment that we have. And so all I am going to do is kind of please, if you want, they are still outside the booth. If you didn't see them at the first break, we have a great opportunity to touch more of the products. You can even try some of the products on the terrace out here and mainly with team. So I want to say a big thank you to all of you because you all have invested here, especially in the room, a whole morning with us to give us the chance and tell you what's different at Imperial. So thank you very much from my side.