Welcome to the Imperial Brands 2018 Interim Results Media Call. Today's conference is being recorded. I will now hand the call over to Ms. Alison Cooper, Chief Executive of Imperial Brands. Please go ahead.
Thank you, and good morning. I'm here with our CFO, Oliver Chen, Chief Development Officer, Mackie Phillips, and after a quick overview of the results, we'll take any questions. We made further good progress against our strategy in the first half with tobacco highlights including our growth brands, which again outperformed the market with strong growth in volumes, share and revenue, driven by JPS, West, Winston and Gorworth. Our specialist Brand also performed well led by Backwoods, cool, blue, Rousselah and our premium cigar business. These are quality brands delivering quality growth and together, our growth and specialist now account for 65 percent of the group's tobacco net revenue.
We also gained share in many of our priority markets, including the UK, Germany, France, Russia, and Saudi Arabia. Again, this was driven by the excellent performance of our growth brands. And in next generation products, we're significantly setting up our presence with the international roll out of our Vapor brand, My Blue, and the ongoing development or innovation pipeline. My Blue is now available in the USA, UK, France, Russia and Germany, with more markets to follow. Feedback from consumers and retailers has been very positive, and we'll shortly be adding to the blue franchise with the launch of Blue Ace for new open system products.
We'll also be conducting more comprehensive consumer trials of our heated tobacco products in the coming months. The momentum we're building in tobacco and next generation products reflects continued investments in our most important brands and markets and sharp focus on our strategic priorities. Applying that sharp focus to our assets has identified a number that are less central to our strategy, which we can exit or divest in orders further simplify the business, enhance performance and allocate capital effectively. Our recent disposal of a portfolio of other tobacco products in the USA is a small example of this, and we're progressing other opportunities, initially targeting proceeds of up to 1,000,000,000 within the next 12 to 24 months. As you will understand, we're not able to make any further comments on these plans today.
But when we're able to, we'll update you further. So as I said in my opening, we continue to make good strategic progress Our financial results have been held back by the carryover of the tough 2017 trading environment, but the environment is improving. And this will support a considerably stronger revenue and profit performance in the second half. Thank you. I'll now take any questions.
Thank
you. You. We'll now take our first question from Mr. Sam Chambers of Bloomberg. Your line is open.
Please go ahead.
Good morning, everyone. I was just wondering if you could just talk a bit more about this nicotine salt product you mentioned in the release. Morning. Are you confident this can hold the slide you've seen in your USC Cigarette business in the market share, that is?
Okay. Yes. I'll get Matt to comment in a second as well. I think important context for from a U. S.
Perspective, is the significant EDP opportunity in the U. S. Market. And there is a there's a share measure, a new and share measure in the market, which isn't reflective of what's really going on the market as a whole with the base shop dynamic also clearly with the online business in e vapor as well. But my view has made a very, very good start in the market.
We're very pleased with the positive progress. It's only got in in recent months. But its initial days very, very positive progress and very, very good consumer feedback. Mixbox would be in addition. Maybe you want to pick up on that now in terms of how we see that dynamic developing.
Yeah, I just reiterate what Allison has said, really, we've got, we've got a fantastic new platform that we launched in the U. S, very, very recently. And, I think that platform will do very well on its own. Nicotine sorts is an additional, sort of enhancement to that platform, really. It does, it does drive greater satisfaction in our view from a from a smoker perspective.
And so I think it will do very well. Yeah, we're excited about it.
Okay, sure. I mean, if we can obviously look at the market share figures in different ways. If you have different ones for me, that's fair enough. But, Jewjell has obviously been growing very rapidly. I was just wondering if the success of that product, how much of a concern is that for you?
And is it a sign that in NGP, your business is vulnerable to be sort of from outside traditional tobacco industry?
I don't view it as a concern at all. I mean, the reality of the U. S. Market is that because of the, the regulations that the FDA have, have bought in in 2016, they've had a free, a fairly free run at the market. And, I think there's, yeah, there's a lot we can learn from what's been successful.
We've, there's a huge amount of stuff that, that we're looking at, which is quite different to the way to all of approach things. I mean, ultimately, we're trying to build and we're looking to build an absolutely fantastic brand that is backed with, with great innovations, which which consistently improve the consumer experience. And then the way that one engages with consumers, on an omnichannel basis is, is really, really important. We think we've got great opportunities in in in all three areas of that. So it's, you know, we're really excited about the June.
Yeah. I think one final context point maybe with Blue is that we've taken a deliberate decision with Blue over the last few years to really wait that the Blue plus product is a great product, but we've been waiting really, and so we had something we thought was really, really good from a consumer perspective, a really consumer experience before we really back that, and that's what we're doing now. So in reality, the share will be only representing a tiny portion of the market. Is not something that's, that has bothered us, to this point now. We're really rolling out my blue.
That will clearly also impact the Nielsen share as well as all the other of the volume drivers that we have in that market. Then just one final context point on the disruption as well, is that Imperial overall globally has roughly 14% of the world market ex China, and therefore, the opportunity we see in eBay space is very much one that's additive for Imperial because we come from quite a small share position in the world, and that would include in the U. S. Where we have just under a 9% share. So it's a very positive additive opportunity for us rather than something we look at as a as a concern around disruption.
And as as Matt said, the consumer experience is developing innovation pipeline means we're very excited about what we can do in this space.
And just on that 14% figure Allison, is that the the, the e vapor global market?
No, sorry, that's our tobacco share in terms of our global footprint in tobacco. So what I'm trying to highlight there is the fact that we've got 86% of smokers that aren't ours currently. And therefore, in terms of the additive opportunity for our business, it's significant.
Okay. I see. Yes. And just one more on a slightly different note, following up on the news from yesterday, you your business in the Middle East has obviously faced a lot of disruption with everything that's been going on there. I was just wondering if you could comment on Trump's decision yesterday to pull the U.
S. Out of the Iran agreement, whether it was something you were concerned about or how it would affect your business in the Middle
Yes, I don't see any significant impacts. We have a business in the Middle East, but it's in terms of the overall group, it's not that significant. And most of the market is Saudi Arabia, where we've been performing very well in that market, albeit has been, has been a number of excise increases there, that we've been managing our portfolio, delivered a very, very good result in Saudi, but I wouldn't see therefore for overall Middle East. So consistent given our footprint and given the relevance to Imperial, it's significant.
Okay. Thank you.
Thank There are no further questions at this time.
Okay. Well, thank you for joining us this morning. And looking forward to, the rest of the day in terms of discussing what has been a very good set of results for Imperial with the progress in both tobacco and next generation products, and, have a good day.
Thank you. Ladies and gentlemen, that concludes today's call. You may now