Imperial Tobacco The Imperialist 1 Engl | Page 3

#From the 1 st Person DEAR COLLEAGUES, As we close the 2017 Imperial financial year, I would like to reflect with you on the highlights and key achievements of our Cluster team. It wasn’t a simple or easy year, with pricing in the market being one of our key challenges. Imperial, though, was able to show its key strength – the ability to adapt quickly to changes on the market and remain competitive. We set out at the beginning of the year to improve our share position. I am delighted to report that, through your hard work across the year and particularly in the fourth quarter, we have been able to achieve that goal, gaining momentum for next year. With your help we have significantly transformed our business in Russia. We simplified our portfolio and established a very strong international brand available, P&S. It is one of the fastest growing brands in Russia. We have improved our KA position. The share of our volume in the KA channel increased from 16 to 24% in one year. Furthermore, we improved our coverage to 120,000 outlets, and we have now furniture in half of them available. In Kazakhstan we faced a large price compression due to a minimum price increase. Our low price brands are now selling almost at the same price as premium brands. The team has worked on various solutions how to drive our business in this environment and there was a number of initiatives implemented and a few more to come. One of the first encouraging results is that we tripled our Davidoff sales volume in Kazakhstan in FY 2017. Talking about Central Asia, it is also important that the team demonstrated a very stable performance in Kyrgyzstan and our strong share growth in Mongolia. We will continue to focus on increasing our market share as we have everything we need to achieve this goal: Strong brands, right investment and, most importantly, our highly professional and dedicated team. In order to further support our growth agenda, we have developed a new tool which defines the way we work and, which we already started implementing. It is called MRM, or Market Repeatable Magic. I hope you enjoy reading about it in this edition. I would like to thank you for your great work. Without your personal contribution and engagement we would not be able to achieve such positive dynamics in our Cluster. I am sure that FY2018 will bring new opportunities to retain and promote this positive trend in Russia and Central Asia! Oliver Kutz, General Manager, Russia and Central Asia Cluster The Империалист |  | 3