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Imperial Brands' longtime CEO Cooper to step down amid vaping backlash

By Siddharth Cavale

By Siddharth Cavale

LONDON (Reuters) - Imperial Brands Plc <IMB.L> Chief Executive Officer Alison Cooper will step down once a replacement is found, a move that comes as the cigarette maker grapples with a regulatory backlash against e-cigarettes and declining tobacco sales.

The departure of Cooper, who has led the maker of Davidoff cigarettes for nine years, comes days after it issued a full-year profit warning blaming the U.S. regulatory crackdown on vaping.

It also follows the impending departure of Chairman Mark Williamson, who in February announced that he would step down once a successor was found, citing new British guidelines on the length of board chair tenures.

The smallest of the four major global tobacco players in the world, Imperial has been slow to react to the vaping craze in the United States, a market where it generates nearly 30% of its annual profit. This in part has allowed rival Altria-backed <MO.N> Juul to capture nearly three-quarters of the new market.

At the same time, a spike in teenage use and a string of illnesses and deaths possibly linked to the devices prompted the U.S. administration to ban flavoured e-cigarettes.

That has meant a double whammy for Imperial, which cut back on its 10% dividend growth target earlier this year to focus on developing its e-cigarette portfolio that includes Blu e-cigarettes.


"CURIOUS TIMING"

Last week, the company said that it was seeing a "marked slowdown" in the growth of its e-cigarettes category, due to the U.S. ban, as many wholesalers and retailers were not ordering or promoting their products.

This also led the company to cut its full-year revenue forecast, sending its shares to a nine-year low.

"The timing of the move is curious, given that the company as well as the sector is facing some serious headwinds as we move into the end of the year and look to 2020," Michael Hewson, Chief Market analyst at CMC Markets, said.

"There’s no comment from her about why she is leaving..and it seems like they don't have a succession plan in place."

Cooper, 53, has spent two decades at the company and is one of just five female CEOs among Britain's top 100 listed companies. Since Cooper became CEO in May 2010, Imperial's stock has fallen 2%, while sales have risen 8%.

While the hunt for a new CEO continues, Cooper's focus will include the asset divestment programme, from which the company expects to realise proceeds of up to 2 billion pounds ($2.46 billion) by May 2020, Imperial said.

As part of the plan, the company is looking to sell its premium cigar business, that includes brands such as Cohiba, Montecristo and Romeo Y Julieta. The company said last week said the business had generated strong interest from a number of potential buyers and that it remains on track to realise its proceeds target.

Shares of the company rose 0.4% in morning trade on Thursday.


(Editing by Deepa Babington)