British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q1 2011 Earnings Presentation
30 slides from British American Tobacco Malaysia Bhd's earnings presentation, Apr 21, 2011
Slide 1: British American Tobacco (Malaysia) Berhad 1st Quarter 2011 Results
British American Tobacco (Malaysia) Berhad 1st Quarter 2011 Results Analyst Presentation 21 April 2011
Slide 2: Agenda
Agenda Industry Review, Market Share and Volumes BATM’s Activities Quarter 1, 2011 Results Other Highlights Future Prospects
Slide 3: Industry Review, Market Share and Volumes
INDUSTRY REVIEW, MARKET SHARE AND VOLUMES
Slide 4: Illicit Trade
Illicit Trade 39.7 40 37.5 0.1 36.3 36.7 35 -3.0 pp 32.5 -1.2pp 30 25.7 -4.2 pp 23.7 0.4 20.7 23.0 % Illicit 25 +11.8pp 21.9 18.9 20 13.4 15 16.7 16.0 10 14.4 13.7 13.6 11.9 5 2008 2009 2010 2010 Wave 1 (Mar - 2010 Wave 2 (Jun - 2010 Wave 3 (Oct - Survey methodology does not capture sub VFM brands s
Slide 5: Sub VFM brands – Decline driven primarily by brands adjusting back to minimum pricing
Sub VFM brands – Decline driven primarily by brands adjusting back to minimum pricing +0.5pp -0.7pp +1.2pp Excise led price increase +1.2pp +0.5pp -1.0pp +0.6pp Source: Malaysia Retail Audit (Base: Total Whites) Sub VFM segment declines after 4 months of aggressive growth by -1.8pp (Jan vs Mar 2011)
Slide 6: Industry volumes decreased
Industry volumes decreased 4 Industry volumes (CMTM members) 2010 2011 3 (bn sticks) 2 1 0 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Shipment Volume Variance YTD 2011 YTD 2010 (in bn sticks) YTD 11 vs YTD 10 BATM 2.08 2.25 -7.5% Industry (CMTM members) 3.18 3.50 -9.0% Other whites (estimate) 0.30 0.30 1.4% Note: Othe
Slide 7: Weekly Volume Performance
Weekly Volume Performance 200 195 National Invoice Perform ance 2011 190 180 167 167 169 166 168 165 170 165 167 160 160 159 161 154 156 154 155 153 Million sticks 160 152 150 150 148 146 150 143 141 140 133 126 CNY 130 120 110 100 Wk 42 44 46 48 50 52 2 4 6 8 10 12 14 40 '10 Week BAT volumes showin
Slide 8: BAT & GDB Share
BAT & GDB Share Share of Market % 65 65 Excise led price increase 61.1 60 59.6 59.8 59.3 59.8 59.9 60.2 59.6 60.2 60 60 59.0 58.9 58.7 59.0 53.3 52.9 53.0 52.6 50 54.5 52.2 51.4 51.3 51.1 51.6 55 53.6 55 52.0 51.8 40 50 7.9 7.5 50 6.2 6.2 7.6 7.5 7.2 8.4 7.0 6.5 6.1 6.8 6.2 0.4 0.4 30 0.5 0.4 0.5 45
Slide 9: Market remains Premium-skewed
Market remains Premium-skewed BAT BAT Share of Premium 73.5 Share of Premium 72.0 Share of Value for Money 36.1 Share of Value for Money 42.6 Share of Sub VFM - Share of Sub VFM - Source: Malaysia Retail Audit, March 2011 (Base: Total Whites)
Slide 10: BAT VFM share of segment growing
BAT VFM share of segment growing GPI @ RM0.70 +3.6ppt Source: Malaysia Retail Audit (Base: Total Whites) Improvement in BAT VFM SOS driven by Peter Stuyvesant (+6.4ppt YTD 2011 vs SPLY).
Slide 11: Brand Activities and Performance
BRAND ACTIVITIES AND PERFORMANCE
Slide 12: Dunhill
Dunhill 1000 46 44 800 12 Mths Moving Average Volume (Mns) 42 Retail Audit Share (%) 40 600 38 400 36 34 200 32 0 30 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 2011 RA 2010 RA Note: RA figures are on a month by month basis Source: Nielsen Retail Audit YTD 2011 market share at 42.9% (-
Slide 13: Redefining the Menthol Segment
Redefining the Menthol Segment MALAYSIA: (%) BAT Share of Premium Menthol Dunhill Menthol Boost 25 +1.3pp 20 22.3 +3.7pp 21.0 17.3 15 2009 2010 2011 YTD Source: AC Nielsen Retail Audit YTD Mar 2011 (Base: Legal White) (%) Dunhill Menthol with RELOC function and Dunhill BOOST 7-11 : DH BOOST Share of
Slide 14: Pall Mall
Pall Mall 9 140 8 120 7 12 Mths Moving Average Volume (Mns) 100 6 Retail Audit Share (%) 5 80 4 60 3 40 2 20 1 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 2011 RA 2010 RA Source: Malaysia Retail Audit (Base: Total Whites) RA figures are on a month by month basis YTD 2011 market sha
Slide 15: Introducing Pall Mall ICE
Introducing Pall Mall ICE Produk ini mengandungi lebih 4,000 bahan kimia termasuk tar, nikotina dan karbon monoksida yang membahayakan kesihatan.
Slide 16: Kent
Kent 60 4 12 Mths Moving Average Volume (Mns) 50 3 12 Mths Retail Audit Share (%) 40 2 30 1 20 0 10 -1 0 -2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 2010 RA 2011 RA Source: Malaysia Retail Audit (Base: Total Whites) RA figures are on a month by month basis YTD 2011 market share at 2
Slide 17: Peter Stuyvesant
Peter Stuyvesant 60 4 12 Mths Moving Average Volume (Mns) 50 3 Retail Audit Share (%) 40 30 2 20 1 10 0 0 Jun-10 Jul Aug Sep Oct Nov Dec Jan-11 Feb Mar Source: Malaysia Retail Audit (Base: Total Whites) PS PS RA RA figures are on a month by month basis Peter Stuyvesant at 3.3% market share for YTD M
Slide 18: Financial Highlights
BRITISH AMERICAN TOBACCO MALAYSIA FINANCIAL HIGHLIGHTS
Slide 19: Quarter 1 2011 vs Quarter 1 2010
Quarter 1 2011 vs Quarter 1 2010 EPS declines less than volume benefiting from proactive cost management and productivity savings, partially offset by unfavourable mix.
Slide 20: Contract Manufacturing / Exports
Contract Manufacturing / Exports Q1 2010 Q1 2011 13% 24% Domestic Brunei Duty Free Export 90% growth in cigarette export volume drives manufacturing cost per mille lower
Slide 21: Productivity Savings
Productivity Savings 60 51.3 50 44.8 2.8 41.5 39.8 1.6 8.6 38.6 40 6.7 4.5 2.7 3.3 RM million 3.9 8.2 30 12.9 23.4 3.4 20 15.4 39.9 36.5 32.6 28.8 4.9 16.6 23.0 10 3.6 7.0 0.1 0 3.5 3.4 3.5 0 2004 2005 2006 2007 2008 2009 2010 Q1 2011 Supply Chain Indirects Overheads
Slide 22: Other Highlights
BRITISH AMERICAN TOBACCO MALAYSIA OTHER HIGHLIGHTS
Slide 23: Tobacco Regulations Amendments
Tobacco Regulations Amendments Amendments to the Control of Tobacco Product Regulations 2004 were introduced on 31 March 2011 The amendments made were in relation to: Gazette of minimum price at RM7/pack of 20s (i.e. 35 sen per stick) from RM6.40/pack of 20s previously The requirement retail selling
Slide 24: Annual Report 2010 published
Annual Report 2010 published English Bahasa Malaysia
Slide 25: Recent Corporate Responsibility highlights
Recent Corporate Responsibility highlights Employee Volunteer Programme 2011 CNY lunch with students of SIMA Handicapped Centre in Penang 15th February, 2011 First ever EVP outside of Central Area!
Slide 26: Recent Corporate Responsibility highlights
Recent Corporate Responsibility highlights Eradicating Poverty by 2010 (Project E10) Desa KEDA Nagalilit, Kulim, Kedah Groundbreaking Ceremony on 21st February 2011: - Marking the foundation for 20 homes for the hardcore poor - A collaboration between BATM Foundation and Kedah Regional Development A
Slide 27: Recent Corporate Responsibility highlights
Recent Corporate Responsibility highlights Earth Hour 2011 Lights out for one hour in BAT Malaysia on 26th March 2011 428 pledges from employees! Prior to Earth Hour Earth Hour Japan Earthquake and Tsunami Donation Drive Week-long donation drive (17th – 25th March) to collect funds for the earthquak
Slide 28: Future Prospects
BRITISH AMERICAN TOBACCO MALAYSIA FUTURE PROSPECTS
Slide 29: Future Prospects
Future Prospects Industry volumes down on hefty excise led price increase and illegal sale of local manufactured products at below minimum price. BAT performs better than industry despite larger premium and 14’s portfolio Financial impact of regulation prohibiting packs less than 20 sticks in line w
Slide 30: Thank You
BRITISH AMERICAN TOBACCO MALAYSIA Thank You
British American Tobacco (Malaysia) Berhad — Q1 2011 Earnings Presentation on 6ix