British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q4 2019 Earnings Presentation
21 slides from British American Tobacco Malaysia Bhd's earnings presentation, Feb 20, 2020
Slide 1: Quarter 4, 2019 Performance
why BRITISH AMERICAN TOBACCO QUARTER 4, 2019 PERFORMANCE 20‘ February 2020
Slide 2: Agenda
01 Q4 Key Highlights ive EN DA 02 Q4 Business review 03 Other highlights 04 Q4 Financial performance
Slide 3: Q4 Key Highlights
sl OL Q4 Key Highlights
Slide 4: Q4 highlights
Q4 highlights Industry volume Illegal trade BAT share price -10% | 68% All time vs SPLY \ (FMC & vaping) (48% vs Q3'19) Qa low Market share Cost base Profit from 54.4% initiatives operations -1.8ppt vs SPLY -18% \ -25% \ \ (-0.7ppt vs Q3’19) vs SPLY WS
Slide 5: The reality - Market will continue to erode value without structural interventions
The reality - Market will continue to erode value without structural interventions 25.0 Legal FMC volume (bns) 80% Illegal incidence 68% 60% 20.0 52% 34% • Legal Industry volume halved post 2015 shock excise 40% 15.0 increase 12.4 • Illicit doubled in 5 years 20% 10.0 8.0 • 0% Estimated RM25bn gover
Slide 6: Share price performance impacted
Share price performance impacted External factors severely impacting investors Share movement since GE18 confidence -62% • 2014 : Market capitalization RM20 billion -> 2020 RM3billion May 2018 • 2017 : Removed from FBMKLCI 19th Feb 2020 RM32.34 RM12.20 • 2020 : removed from MSCI Global Standard Inde
Slide 7: Q4 Business Review
sl OZ Q4 Business Review
Slide 8: Legal industry continued to contract, structural breakthrough in external environment is critical
Legal industry continued to contract, structural breakthrough in external environment is critical Legal FMC Volumes Monthly Avg (mns) 2019 vs SPLY -10% Mainly driven by: 590 596 590 577 543 547 High illegal cigarette trade 527 507 Illegal vaping Public place smoking ban SST PPS Glo Pricing Ban launc
Slide 9: Q4 volume growth at the back of Rothmans performance
Q4 volume growth at the back of Rothmans performance 2018 325 2019 318 318 304 BAT Volumes Monthly Avg (mns) YTD’19 vs SPLY +14% -12% -8% +4% 296 284 260 Q4’19 274 Q2’19 Q3’19 Q1’19 SST Pricing Q1 Q2 Q3 Q4
Slide 10: Dunhill holding in premium whilst Rothmans delivering strong performance
Dunhill holding in premium whilst Rothmans delivering strong performance Stabilised despite pricing & VFM pressure Rothmans gaining strength Share of Premium Segment (%) Market Share (%) 6.7 60.0 +2.6ppt 59.9 59.9 4.1 35.5% SOM 32% SOS 3.2 +5ppt -2ppt Fastest growing in VFM SST Pricing Q3-18 +RM0.40
Slide 11: Quarter of Glo performance - category growth suppressed
1 Quarter of Glo performance - category growth suppressed Market share performance GLO share of THP category in KLV (%) 9.5% 9.9% 5.8% 2.6% Oct-19 Nov-19 Dec-19 Jan-20 To Date Source: Key Accounts Scan Data, NGP Consumer Pulse 2019
Slide 12: Other highlights
sl OS Other highlights
Slide 13: Transformation and strength of BATM being recognised
Transformation and strength of BATM being recognised High corporate governance standard Investment in talent getting reward 42% Top 20 Excellence Award for CG Disclosure vs. industry 28% Female diversity Exemplary safety and health standards at workplace GOLD award Asia Pacific occupational health &
Slide 14: Other updates
Other updates Social engagement, empowerment & development Social impact Food aid programme : 52 families in Bangi benefited Education 23 higher education students from B40 Empowerment Contribution to charity fundraising Donated 180 digital assets to be recycled and Environment refurbished to be use
Slide 15: Q4 Financial performance
sl 4) Q4 Financial performance
Slide 16: Key financial highlights
Key financial highlights Q4’19 vs preceding quarter 2019 vs SPLY LEGAL INDUSTRY VOL 1,641 mils +8% -10% VOLUME 887 mils +14% -12% REVENUE RM662 mil +13% -11% GROSS PROFIT RM192 mil +19% -20% OPERATING EXPENSES RM 39 mil -22% -18% (underlying) PROFIT FROM OPERATIONS RM138 mil +23% -25% 2019 financial
Slide 17: Revenue and gross profit impacted due to market contraction and one-off benefit in 2018
Revenue and gross profit impacted due to market contraction and one-off benefit in 2018 REVENUE GROSS PROFIT (RM’million) (RM’million) -11% -20% (-15% underlying) 51 One-offs impacting 2018 gross profit of 5ppt is mainly due to GST removal one-off benefit 2,823 2,509 844 718 2018 2019 2018 2019 One-
Slide 18: Protecting profit from operations with cost initiatives
Protecting profit from operations with cost initiatives OPERATING EXPENSE PROFIT FROM OPERATIONS Aggressive cost base in protecting (RM’million) Restructuring expenses (RM’million) shareholder’s value: -18% underlying • Rationalizing investments -16% underlying 15 71 • Optimizing expenses 281 230 56
Slide 19: Dividend payout
Dividend payout ▪ Dividend per share of RM1.18 for 2019 ▪ Dividend payout as follow: Payout month Dividend per share Interim dividend Jun 2019 RM 0.30 First Aug 2019 RM 0.26 Second Nov 2019 RM 0.29 Third Mar 2020 RM 0.33 Fourth Total RM 1.18 ▪ Payout Ratio Q4: 97% ▪ Payout Ratio FY (est.): 98%
Slide 20: 2020: The Real Deal
2020 : “The Real Deal” Move the government for action Drive commercial growth within legal segment • Establish demand solution • Intensify enforcement across Drive share growth in FMC all ministries Opportunity for new revenue pool Stabilise and energise new organizational model Regulate vaping Fast
Slide 21: New Managing Director - Jonathan Reed from 1 March 2020
New Managing Director - Jonathan Reed from 1 March 2020 Officially appointed as Director of BAT Malaysia Board on 20th February 2020 Jonathan will officially take office as new MD of BAT Malaysia effective 1st March 2020 23 Years prior experience, including: • 2018-2019 : Marketing Director BAT Midd
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