British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — FY2014 Earnings Presentation
41 slides from British American Tobacco P.l.c's earnings presentation, Feb 26, 2015
Slide 1: Preliminary Results 2014
PRELIMINARY RESULTS 2014 26 February 2015
Slide 2: Nicandro Durante, Chief Executive
Nicandro Durante Chief Executive
Slide 3: Summary
PRELIMINARY RESULTS 2014 Summary Financials Volume Current Constant Revenue Cigarettes -1.4% £14.0bn -8.4% 2.8% 667bn Profit Total Tobacco -1.3% £5.4bn -7.2% 4.4% 694bn Margin GDBs 38.7% 0.5pp 0.5pp 278bn 5.8% EPS Total IBs 208.1p -3.9% 7.9% 397bn 3.0% A strong performance in a tough environment
Slide 4: Ben Stevens, Finance Director
Ben Stevens Finance Director
Slide 5: Regional performance
PRELIMINARY RESULTS 2014 Regional performance* Cigarette Volume Revenue Profit AsPac Amr WE EEMEA Group AsPac Amr WE EEMEA Group AsPac Amr WE EEMEA Group 9.1% 8.1% 6.6% 5.7% 4.4% 2.8% 1.2% 1.2% 0.1% 0.3% -0.9% -1.4% -2.4% -2.3% -5.9% FX impact -9.1% -15.6% -5.2% -15.3% -11.2% -9.8% -13.8% -5.7% -16.
Slide 6: Foreign exchange
PRELIMINARY RESULTS 2014 Foreign exchange 100 90 BRL 80 AUD ZAR JPY 70 RUB 60 50 Average Q1 2014 Q2 2014 Q3 2014 Q4 2014 2013
Slide 7: Foreign exchange impacts
PRELIMINARY RESULTS 2014 Foreign exchange impacts Financials Current Constant Constant excl. transactional fx 2013 2014 2013 2014 2013 2014 Revenue 1% -8% 4% 3% 4% 3% Profit 3% -7% 7% 4% 8% 6% Margin 1.0pp 0.5pp 1.1pp 0.5pp 1.5pp 1.2pp Strong underlying performance masked by significant translationa
Slide 8: Asia Pacific – Regional Performance
PRELIMINARY RESULTS 2014 Asia Pacific – Regional Performance Financials Volume Constant Current Revenue 1.2% -7.9% Cigarettes 0.1% £4,253m 197bn Profit 1.2% -8.6% GDBs 6.5% £1,713m 79bn
Slide 9: Americas – Regional Performance
PRELIMINARY RESULTS 2014 Americas – Regional Performance Financials Volume Constant Current Revenue 5.7% -9.9% Cigarettes -2.3% £3,506m 131bn Profit 8.1% -5.7% GDB 10.4% £1,475m 36bn
Slide 10: Western Europe – Regional Performance
PRELIMINARY RESULTS 2014 Western Europe – Regional Performance Financials Volume Constant Current Cigarettes 112bn -5.9% Revenue -2.4% -7.6% £3,546m Fine Cut 4.7% 21bn 1.7% Profit -0.9% -6.6% £1,262m GDB -0.1% 67bn 22.5
Slide 11: EEMEA – Regional Performance
PRELIMINARY RESULTS 2014 EEMEA – Regional Performance Financials Volume Constant Current Revenue 6.6% -8.7% Cigarettes 0.3% £4,377m 227bn Profit GDB 9.1% -7.4% 7.9% £1,625m 96bn
Slide 12: Operating margin 2013 – 2014
PRELIMINARY RESULTS 2014 Operating margin 2013 – 2014 Based on adjusted profit and current FX 0.3pp 1.9pp 0.4pp 0.5pp 0.5pp 43.0% 41.1% 40.3% 40.0% 38.7% 38.1% 36.3% 36.8% 35.0% 35.4% Asia Pacific Americas W Europe EEMEA Group 2013 2014
Slide 13: Drivers of adjusted EPS growth
PRELIMINARY RESULTS 2014 Drivers of adjusted EPS growth +3.2p -25.6p +1.5p -0.7p +2.0p +1.8p +9.3p 216.6p 208.1p EPS 2013 Profit Net Finance Associates Taxation Non-controlling Share Buy-Back Exchange EPS 2014 Performance Costs interest
Slide 14: Cash flow
PRELIMINARY RESULTS 2014 Cash flow £441m £309m £627m £140m £426m £1,433m £5,403m £5,403m £5,535m £4,908m £249m £4,342m £437m £609m £325m £2,909m £2,660m £2,507m £2,223m £1,898m £1,898m Adj operating Non cash Working Net Capex Pension fds - Net interest Tax Dividends to Non-tobacco Restructuring Div
Slide 15: Financing/Shareholder returns
PRELIMINARY RESULTS 2014 Financing/Shareholder returns 140% of Free Cash Flow returned to shareholders in 2014: £2.7bn – Dividends paid to shareholders £0.8bn – Share buy back Net Debt increased by £0.65bn to £10.2bn Moody’s credit rating remains unchanged at A3 Fitch and S&P ratings rem
Slide 16: Nicandro Durante, Chief Executive
Nicandro Durante Chief Executive
Slide 17: Key results highlights
PRELIMINARY RESULTS 2014 Key results highlights • Consistent delivery
Slide 18: Key results highlights
PRELIMINARY RESULTS 2014 Key results highlights • Consistent delivery • Strong share and GDB growth
Slide 19: Global Drive Brands
PRELIMINARY RESULTS 2014 Global Drive Brands Volume: 55 billion, +2.9% Share up 10bps Good volume and share growth in Indonesia, Brazil and Romania Lower volumes in S.Korea and Malaysia
Slide 20: Global Drive Brands
PRELIMINARY RESULTS 2014 Global Drive Brands Volume: 55 billion, +2.9% Volume: 64 billion, -2.8% Share up 10bps Share flat Good volume and share growth in Indonesia, Impacted by market declines in Russia and Brazil and Romania Romania Lower volumes in S.Korea and Malaysia Robust growth in Japan, Ira
Slide 21: Global Drive Brands
PRELIMINARY RESULTS 2014 Global Drive Brands Volume: 55 billion, +2.9% Volume: 64 billion, -2.8% Share up 10bps Share flat Good volume and share growth in Indonesia, Impacted by market declines in Russia and Brazil and Romania Romania Lower volumes in S.Korea and Malaysia Robust growth in Japan, Ira
Slide 22: Global Drive Brands
PRELIMINARY RESULTS 2014 Global Drive Brands Volume: 55 billion, +2.9% Volume: 64 billion, -2.8% Share up 10bps Share flat Good volume and share growth in Indonesia, Impacted by market declines in Russia and Brazil and Romania Romania Lower volumes in S.Korea and Malaysia Robust growth in Japan, Ira
Slide 23: Global Drive Brands
PRELIMINARY RESULTS 2014 Global Drive Brands Volume: 55 billion, +2.9% Volume: 64 billion, -2.8% Share up 10bps Share flat in T40 Good volume and share growth in Indonesia, Impacted by market declines in Russia and Brazil and Romania Romania Lower volumes in S.Korea and Malaysia 36 billion, up 39.8%
Slide 24: Key results highlights
PRELIMINARY RESULTS 2014 Key results highlights • Consistent delivery • Strong share and GDB growth • Continued good progress on Next Generation Products
Slide 25: Next-Generation Products update
PRELIMINARY RESULTS 2014 Next-Generation Products update
Slide 26: Next-Generation Products update
PRELIMINARY RESULTS 2014 Next-Generation Products update
Slide 27: Key results highlights
PRELIMINARY RESULTS 2014 Key results highlights • Consistent delivery • Strong share and GDB growth • Continued good progress on Next Generation Products • RAI/LO transaction on track
Slide 28: Key results highlights
PRELIMINARY RESULTS 2014 Key results highlights • Consistent delivery • Strong share and GDB growth • Continued good progress on Next Generation Products • RAI/LO transaction on track • Potential offer for Souza Cruz minority under consideration
Slide 29: Summary: A challenging year ahead
PRELIMINARY RESULTS 2014 Summary Continued growth in revenue, share, margin and profit Adjusted EPS at constant rates up 8% Continued economic uncertainty Significant transactional FX headwinds Good pricing, but competitive in some markets Commitment to growing cash returns to shareholde
Slide 30: Preliminary Results 2014
PRELIMINARY RESULTS 2014 26 February 2015
Slide 31: Supplementary Slides
SUPPLEMENTARY SLIDES 26 February 2015
Slide 32: Cigarette volumes by region FY 2014
PRELIMINARY RESULTS 2014 Cigarette volumes by region FY 2014 Region Billions 2014 2013 % change Asia Pacific 197 197 +0.1% Americas 131 134 -2.3% Western Europe 112 119 -5.9% Eastern Europe, Middle East and Africa 227 226 +0.3% Group 667 676 -1.4%
Slide 33: Cigarette volumes by region H2 2014
PRELIMINARY RESULTS 2014 Cigarette volumes by region H2 2014 Region Billions 2014 2013 % change Asia Pacific 93 97 -3.5% Americas 67 70 -3.5% Western Europe 59 62 -3.8% Eastern Europe, Middle East and Africa 115 115 +0.3% Group 336 344 -2.3%
Slide 34: Cigarette volumes by region Q4 2014
PRELIMINARY RESULTS 2014 Cigarette volumes by region Q4 2014 Region Billions 2014 2013 % change Asia Pacific 47 48 -3.2% Americas 35 37 -4.5% Western Europe 30 32 -5.2% Eastern Europe, Middle East and Africa 59 58 +1.6% Group 171 175 -2.3%
Slide 35: Revenue by region FY 2014
PRELIMINARY RESULTS 2014 Revenue by region FY 2014 Region £m 2014 2013 % change Asia Pacific 3,873 4,203 -7.9% Americas 2,990 3,317 -9.9% Western Europe 3,359 3,635 -7.6% Eastern Europe, Middle East and Africa 3,749 4,105 -8.7% Group 13,971 15,260 -8.4% All numbers as reported
Slide 36: Revenue by region H2 2014
PRELIMINARY RESULTS 2014 Revenue by region H2 2014 Region £m 2014 2013 % change Asia Pacific 1,941 2,095 -7.4% Americas 1,575 1,667 -5.5% Western Europe 1,776 1,921 -7.5% Eastern Europe, Middle East and Africa 1,881 2,005 -6.2% Group 7,173 7,688 -6.7% All numbers as reported
Slide 37: Adjusted profit from operations FY 2014
PRELIMINARY RESULTS 2014 Adjusted profit from operations FY 2014 Region £m 2014 2013 % change Asia Pacific 1,548 1,693 -8.6% Americas 1,286 1,364 -5.7% Western Europe 1,189 1,273 -6.6% Eastern Europe, Middle East and Africa 1,380 1,490 -7.4% Group 5,403 5,820 -7.2% All numbers as reported
Slide 38: Adjusted profit from operations H2 2014
PRELIMINARY RESULTS 2014 Adjusted profit from operations H2 2014 Region £m 2014 2013 % change Asia Pacific 747 818 -8.7% Americas 654 632 +3.5% Western Europe 652 700 -6.9% Eastern Europe, Middle East and Africa 685 726 -5.6% Group 2,738 2,876 -4.8% All numbers as reported
Slide 39: Top 40 market share movements (1)
PRELIMINARY RESULTS 2014 Top 40 market share movements (1) SOM FY14 Movement Market SOM FY14 Movement Market (%) (ppt) (%) (ppt) Argentina 26.7 (0.4) France 17.0 0.2 Australia 39.7 (3.2) GCC 32.7 (2.0) Bangladesh 46.3 1.2 Germany 19.4 (0.4) Belgium 32.0 0.5 Indonesia 6.2 (0.2) Brazil 78.4 1.3 Italy
Slide 40: Top 40 market share movements (2)
PRELIMINARY RESULTS 2014 Top 40 market share movements (2) SOM FY14 Movement Market SOM FY14 Movement Market (%) (ppt) (%) (ppt) New Zealand 70.8 (1.5) Sweden 28.5 0.3 Pakistan 67.2 1.4 Switzerland 40.0 (0.5) Philippines 0.7 0.3 Taiwan 10.1 0.8 Poland 27.0 0.2 Turkey 19.5 0.0 Romania 53.6 (0.2) UK 8
Slide 41: Foreign currencies
PRELIMINARY RESULTS 2014 Foreign currencies Average Closing 2014 2013 2014 2013 US dollar 1.648 1.564 1.559 1.656 Canadian dollar 1.819 1.612 1.806 1.760 Euro 1.241 1.178 1.289 1.202 South African rand 17.861 15.099 18.039 17.347 Brazilian real 3.874 3.381 4.145 3.908 Australian dollar 1.827 1.623 1
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