British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q2 2014 Earnings Presentation
26 slides from British American Tobacco Malaysia Bhd's earnings presentation, July 2014
Slide 1: Analyst Briefing Quarter 2, 2014
ANALYST BRIEFING QUARTER 2, 2014 July 2014
Slide 2: Agenda
AGENDA Industry Review, Market Share and Volumes BATM Review Q2 2014 Results Other Highlights
Slide 3: Q2 2014 Headlines
Q2 2014 Headlines › Legal industry volumes declining but recovery experienced in Q2 › BATM Market Share resilient despite late September 2013 Excise led price increase › BATM Domestic & DF volumes -4.5% vs. SPLY › Very strong financial set of numbers vs. SPLY: Revenue: +6% Profit from Operations
Slide 4: Industry Review, Market Share and Volumes
INDUSTRY REVIEW, MARKET SHARE and VOLUMES
Slide 5: Legal market decline -7.6% vs. SPLY due to late Sept. 2013 price increase
Legal market decline -7.6% vs. SPLY due to late Sept. 2013 price increase. However, signs of recovery 1400 1,268 1200 1,125 1,139 1,151 1,095 1,082 1,112 1,047 1,053 1,033 1,065 1,050 1,019 1,027 1000 961 887 905 863 800 600 400 200 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr M
Slide 6: Aspirational Premium growing at the expense of Premium and VFM
Aspirational Premium growing at the expense of Premium and VFM 74.0 73.6 YTD 13 YTD 14 SOM % 23.6 24.3 2.4 2.1 Premium Aspirational Premium VFM Share of Premium YTD May vs SPLY BAT 72.4 (+0.1) BAT continues to have Share of Aspirational Premium leadership BAT 34.8 (-0.1) In Premium share Source: YTD
Slide 7: Resilient Corporate Share of Market
Resilient Corporate Share of Market J&J - Oil 3 Period Ended MAY14 | Hide NA's | Colour % Chg | Share of Sum(PROD) Source: YTD May 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) -0.3ppt +1.0ppt
Slide 8: BATM Review
BATM REVIEW MALAYSIA
Slide 9: Dunhill holding SOM due to strong equity despite downtrading pressure
BAT Dunhill holding SOM due to strong equity despite downtrading pressure Source: YTD May 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) +1.3ppt Mar 2013 Dec 2013 (Zeus) Apr 2014 (Britannia) Dunhill Ice – High Menthol Capsule Dunhill FF & Lts - Limited Edition Pack Dunhill FF &
Slide 10: BAT Aspirational Premium: Share of segment has stabilised in the last 3 months
BAT Aspirational Premium: Share of segment has stabilised in the last 3 months BAT Source: YTD May 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) -0.7ppt -0.3ppt Source: Malaysia Retail Audit (Base: Total Whites, YTD MAY14)
Slide 11: Peter Stuyvesant continues to grow since Jul'13
BAT Peter Stuyvesant continues to grow since Jul’13, breaking the 4% mark in Apr 2014 Source: YTD May 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) +0.7pt +0.2ppt Source: Malaysia Retail Audit (Base: Total Whites, YTD MAY14) Produk ini mengandungi lebih 4,000 bahan kimia terma
Slide 12: Pall Mall: Declined in Q1 '14, but has stabilised
Pall Mall: Declined in Q1 ‘14, but has stabilised BAT in the last 2 months Source: YTD May 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) -0.1ppt -0.7ppt Dec 2013: Pall Mall FF & Lts Product Upgrade: New Blend Plus Capsule Dec 2013: Pall Mall FF & Lts Product Upgrade: New Blend
Slide 13: Q2 2014 Results: Financial Highlights
BRITISH AMERICAN TOBACCO Q2 2014 RESULTS FINANCIAL HIGHLIGHTS
Slide 14: Q2 Discrete: Volume and Revenue
Q2 Discrete: Volume and Revenue Domestic & DF Volumes (mn stick)) Contract Manufacturing Volumes (mn stick) Cigarette Semi Finished 2,177 - 4.5% -14.1% 2,777 2,224 2,124 2,422 1,174 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Revenue (RM'mn) Net Turnover (RM'mn) 1,157 1,226 +6.6% 673 +6.0% 631 Q2 2013 Q2 2014 Q
Slide 15: Q2 Discrete: Key Metrics
Q2 Discrete: Key Metrics Gross Profit (RM'mn) Operating Expenses (RM'mn) +14.1% 429 376 89 +5.5% 94 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Profit from Operation (RM'mn) Earning per Share (Sen/share) 335 +17.7% 87 287 +16.8% 74 Q2 2013 Q2 2014 Q2 2013 Q2 2014
Slide 16: Q2 YTD: Volume and Revenue
Q2 YTD: Volume and Revenue Domestic & DF Volumes (mn stick)) Contract Manufacturing Volumes (mn stick) Cigarette Semi Finished 4,716 -18.4% 4,865 4,368 - 5.5% 4,129 4,166 2,379 YTD 2013 YTD 2014 YTD 2013 YTD 2014 Revenue (RM'mn) Net Turnover (RM'mn) +5.7% +6.3% 2,252 2,380 1,227 1,305 YTD 2013 YTD 2
Slide 17: Q2 YTD: Key Metrics
Q2 YTD: Key Metrics Gross Profit (RM'mn) Operating Expenses (RM'mn) +14.4% 836 197 166 +18.8% 731 YTD 2013 YTD 2014 YTD 2013 YTD 2014 Profit from Operation (RM'mn) Earning per Share (Sen/share) +13.1% 640 566 166 +14.1% 145 YTD 2013 YTD 2014 YTD 2013 YTD 2014
Slide 18: Dividends 2014 YTD
2012 2013 2014 YTD RM 2.72 RM 2.82 97.4% Payout 97.8% Payout 0.77 0.78 0.78 0.75 0.68 0.68 0.68 0.65 0.65 0.65 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 19: Other Highlights
OTHER HIGHLIGHTS OBACCO
Slide 20: Widespread practice of retailers selling illegal brands below total tax
Widespread practice of retailers selling illegal brands at RM3.50–RM4.00 below total tax and the mandated minimum price making it very affordable and accessible Illegal cigarettes available at pocket money price (RM2.50-RM3.50) – encourages the underage to smoke
Slide 21: Illegal cigarettes are more harmful
Illegal cigarettes are more harmful MOH Disease Control Division Director: Unregulated content of Smuggled Kretek extra harmful to health. Illegal kretek is MORE ADDICTIVE @ 40mg tar and does not comply with minimum pricing and sells less than 20 sticks in the market
Slide 22: Illegal cigarettes are more harmful
Illegal cigarettes are more harmful Youth & Sport minister : Government increases price of legal cigarettes to curb smoking amongst youth. But cheap price of illegal cigs Health Minister : Illegal negates this and drives youth cigarettes are twice as smoking dangerous incidence up
Slide 23: Ops Outlet – RMC's robust enforcement against errant retailers
Ops Outlet – RMC’s robust enforcement against errant retailers selling illegal cigarettes (raid and remand and jail by courts)
Slide 24: MOH's enforcement against Illegal Cigarettes
MOH ‘s enforcement against Illegal Cigarettes
Slide 25: External Recognition
External Recognition BATM in the top ten list of blue chip companies in Bursa Malaysia that excelled in governance and transparency July 2014 – A recent assessment conducted by Focus Malaysia placed BATM in the top ten list of blue chip companies in Bursa Malaysia that excelled in governance and tra
Slide 26: Thank You
THANK YOU BRITISH AMERICAN TOBACCO MALAYSIA
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