British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q4 2016 Earnings Presentation
20 slides from British American Tobacco Malaysia Bhd's earnings presentation, Feb 16, 2017
Slide 1: Analyst Briefing Quarter 4, 2016
ANALYST BRIEFING QUARTER 4, 2016 16th February 2017
Slide 2: Agenda
AGENDA Industry Review Company Review Q4 2016 Results: Financial Highlights
Slide 3: Industry Review
BRITISH AMERICAN TOBACCO MALAYSIA Industry Review
Slide 4: 2016 macro environment was challenging
2016 macro environment was challenging Increase in consumer expenditure Low consumer confidence CCI Q3’16 89 vs ASPAC 109 Ringgit MALAYSIA Removal of subsidies & Toll rates hikes in 4 depreciation increase in fuel prices major highways 77% consumers believe Lowest against the nation is in recession
Slide 5: Illicit trending in the same direction
Illicit trending in the same direction There are 3 different methodologies but which clearly indicate illicit trending more than 50% - between 51% to 54% (~10.5 billion sticks) ICS (RMC methodology) TRACK Pack Swap Litter collection Consumer survey Pack swap 3x a year Monthly Once off Volume share:
Slide 6: Encouraging signs of actions by Government
Encouraging signs of actions by Government RMC COBRA team formed MOF & RMC tightened RMC developed new to conduct high profile & controls at Duty Free strategies in 2017 dangerous operations Islands
Slide 7: Encouraging signs of actions by Government
Encouraging signs of actions by Government RMC enhanced RMC going after enforcement at Point of Warehouse Owner & Entries - Ports & Jetties Forwarding Agent
Slide 8: Legal market declined -25.7% vs SPLY
Legal market declined -25.7% vs SPLY Big-3 IMS (mns) 988 926 860 734 686 651 643 626 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 2016 vs. 2015: Monthly Avg. 2015 2016 Change Industry 925 651 -25.7% BAT 584 389 -29.7% Source : In-Market Sales (Sales to retail outlets) & not Excise/Invoice Data
Slide 9: Company Review
BRITISH AMERICAN TOBACCO MALAYSIA Company Review
Slide 10: Dunhill decline as a result of illicit, however good performance in Peter Stuyvesant
Dunhill decline as a result of illicit, however good performance in Peter Stuyvesant Share of Market – Malaysia (%) 60.9 60.5 57.1 58.6 58.1 57.1 54.3 5.6 6.1 6.5 6.4 6.2 6.3 4.5 4.3 7.0 4.3 4.4 4.2 4.3 4.5 46.1 45.6 43.5 43.6 42.6 42.2 38.6 2015 2016 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Dunhill Pall Mall
Slide 11: Dunhill: Menthol and lights showed resilience and growth
Dunhill: Menthol and lights showed resilience and growth when compared to full flavour 46.1 45.6 43.5 43.6 42.6 42.2 4.0 3.9 3.4 3.8 3.8 3.7 4.0 38.6 3.3 3.4 3.4 3.6 3.5 4.0 3.6 38.7 38.3 36.3 36.5 34.8 35.1 31.0 2015 2016 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Full Flavour Lights Menthol Dunhill Source: FY
Slide 12: Peter Stuyvesant: Solid growth trajectory across the range
Peter Stuyvesant: Solid growth trajectory across the range 7.0 8.0 6.5 6.4 6.3 6.1 6.2 7.0 0.3 5.6 0.3 0.3 0.3 0.2 0.3 6.0 0.2 2.1 1.6 1.6 1.8 5.0 1.9 1.6 1.3 4.0 3.0 4.2 4.2 4.6 3.7 4.0 4.0 4.0 2.0 1.0 0.0 2015 2016 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Full Flavour Lights Menthol Peter Stuyvesant Source:
Slide 13: Factory closure, New Office, New Business
• Land sale completed with sale proceeds received Factory closure in Nov 2016. • Export business ceased in Dec 2016 • Released 70 people in factory in 2016 New Office • Relocate by Aug 2017 New Business • New business transformation progress well and on Operating Model track to be completed by 2H 20
Slide 14: Q4 2016 Results Financial Highlights
Q4 2016 Results Financial Highlights
Slide 15: 2016 Full Year Performance - Headlines
2016 Full Year Performance - Headlines Business Performance (full year 2016 vs. SPLY): Volume: Legal market declined by -25.7% vs. SPLY. (BAT volume declined -29.7% vs SPLY) Revenue: -18.0% Profit from Operations: -25.9% (excl. one-off restructuring income: -29.5%) Illegal cigarettes: continue to gr
Slide 16: Q4 Volumes, Revenue and Profit from Operation
Domestic & DF Volumes (mn stick)) Contract Manufacturing Volumes (mn stick) Cigarette Semi Finished 1,033 -63.3% 1,517 -19.6% 1,220 1,095 585 196 Q4 2015 Q4 2016 Q4 2015 Q4 2016 Revenue (RM'mn) Profit from Operation (RM'mn) Excl. One Off / +15.7% Restructuring -32.5% 317 317 1,058 -20.5% 274 185 841
Slide 17: Full Year Volumes, Revenue and Net Turnover
Domestic & DF Volumes (mn stick)) Contract Manufacturing Volumes (mn stick) Cigarette Semi Finished 6,104 7,159 -27.8% -46.2% 5,169 2,816 4,544 2,916 Q4 2015 Q4 2016 Q4 2015 Q4 2016 Revenue (RM'mn) Net Turnover (RM'mn) -18.0% -25.6% 4,582 2,518 3,756 1,873 Q4 2015 Q4 2016 Q4 2015 Q4 2016
Slide 18: Gross Profit, Operating Expenses, Profit from Operation, EPS
Gross Profit (RM'mn) Operating Expenses (RM'mn) -24.2% 1,674 439 399 1,270 -9.1% Q4 2015 Q4 2016 Q4 2015 Q4 2016 Profit from Operation (RM'mn) Earning per Share (Sen/share) Excl. One Off / Excl. One Off / Restructuring Restructuring -25.9% -20.7% -29.5% -25.8% 919 253 1,240 319 253 873 919 236 Q4 20
Slide 19: Dividends 2015 vs 2016
2015 2016 RM 3.12 RM 2.78 98.0% Payout 110% Payout -11% Vs 2015 Special 0.46 dividend 0.78 0.78 0.78 0.78 0.77 0.55 0.55 0.45 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 20: NOA INVHL
NOA INVHL
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