British American Tobacco Malaysia Bhd. · MYX:BAT

British American Tobacco Malaysia Bhd — Q3 2018 Earnings Presentation

15 slides from British American Tobacco Malaysia Bhd's earnings presentation, Oct 19, 2018

  1. Slide 1: 3rd Quarter 2018 Performance

    3rd QUARTER 2018 PERFORMANCE 19th OCTOBER 2018

  2. Slide 2: Agenda

    Agenda  Business Review  Q3 2018 Financial Performance

  3. Slide 3: Business Review

    MALAYSIA Business Review

  4. Slide 4: Q3 Year-to-date highlights versus same period last year

    Q3 Year-to-date highlights versus same period last year Total Illegal Cigarette Total Legal Industry Volume +1.4 ppt -3.8% 63% +1.0% vs preceding quarter Stagnant YTD Q3 2018: 588 mns YTD Q3 2017: 611 mns Revenue Profit from operations -8.0% -13.0% +8.3% vs preceding quarter +26.5% vs preceding quar

  5. Slide 5: Legal volumes on gradual recovery since Q1

    Legal volumes on gradual recovery since Q1 Illegal Volume Share (%) 61 63 63 63 62 60 59 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 - to date Legal Volumes Amongst Big 3 Monthly Average (mns) Ramadan (Fasting) 681 SST-Price Volatility 603 606 624 605 606 577 590 596 500 Q3 vs Q2 +1.0% YTD18 vs SPLY -

  6. Slide 6: BAT volumes remain stable in Q3 despite price volatility

    BAT volumes remain stable in Q3 despite price volatility BAT Volumes Monthly Average (mns) Ramadan Price (Fasting) Volatility 337 336 331 324 318 318 304 Q3 vs Q2 Stable YTD18 vs SPLY -5.8% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Source: YTD Sep’18 Industry Exchange Data

  7. Slide 7: SST Pricing remains uncertain

    SST Pricing remains uncertain 1st June 1st Sep 4th Sep 5th Sep 7th Sep 21st Sep 25th Sep GST zero rated SST 10% +RM0.50 +RM0.50 +RM0.20 -RM0.50 -RM0.50 Cig price not allowed to reduce Current Prices in the Market Price/pack Premium RM17.00 RM17.20 RM17.00 AP RM15.50 RM15.70 RM15.50 VFM RM12.00 RM12.

  8. Slide 8: Illegal trade challenge remains big but a step in the right direction

    Illegal trade challenge remains big but a step in the right direction New Government’s manifesto: Promise 52 – Fight crime and social ill “Enforcement agencies will be directed to stop smuggling of alcohol and cigarettes across the border, including tighter controls along the borders and heavier pun

  9. Slide 9: BAT Malaysia making a difference

    BAT Malaysia making a difference HR Asia Awards Shell Global Grow West BEST COMPANY TO OUTSTANDING WORK FOR SUPPLIER AWARD BATM is recognised for BAT being Top 3 supplier. successful leadership in BAT Malaysia mentioned managing talent as one of the best partners worldwide Corporate Social Responsib

  10. Slide 10: Q3 2018 Financial Highlights

    Q3 2018 Financial Highlights

  11. Slide 11: YTD Q3 2018 Financial highlights

    YTD Q3 2018 Financial highlights Challenges remains Nonetheless, Q3 is a good quarter 63% High illegal cigarettes remains Volumes stabilised in Q3 -5.8% Volume contraction Removal of GST from Jun to Aug 2018 Unresolved interpretation of SST pass on +8.3% Q3 Revenue back to growth vs preceding quarte

  12. Slide 12: Revenue and profit grew quarter on quarter

    Revenue and profit grew quarter on quarter Revenue Quarter to RM’000 quarter -6.9% +6.5% +8.3% growth 27 -8.0% 13 2,231 2,053 708 736 685 666 638 Q4'17 Q1'18 Q2'18 Q3'18 YTD Q3'17 YTD Q3'18 Revenue GST Profit from operations RM’000 Quarter to quarter +18.2% +16.9% +26.5% growth -13.0% 25 545 12 192

  13. Slide 13: Improving gross profit margin from cost focus

    Improving gross profit margin from cost focus Steadily improving gross profit margin 37.2 35.1 Main drivers: % • Strong volume mix 29.9 30.6 29.4 • 2017 one-off tax stamp refund Exclude GST benefit • Productivity savings Q4'17 Q1'18 Q2'18 Q3'18 Cumulative operating expense overview 2018 RM’000 +4.7%

  14. Slide 14: Dividend payout and share performance

    Dividend payout and share performance Dividend > 90% payout Stable share performance +41% vs Apr lowest 2017 2018 RM 1.69 RM 1.08 34.2 34.3 33.9 34.5 31.7 28.4 26.4 0.40 0.43 0.43 0.43 0.40 0.33 0.35 Jan Feb Mar Jul Aug Sep Oct Q1 Q2 Q3 Q4 Q1 Q2 Q3

  15. Slide 15: British American Tobacco Malaysia

    wh BRITISH AMERICAN TOBACCO MALAYSIA

British American Tobacco (Malaysia) Berhad — Q3 2018 Earnings Presentation on 6ix