British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Debt Investor Presentation (2024)
22 slides from British American Tobacco P.l.c's debt investor presentation, 2024
Slide 1: Building a Smokeless World
Building a Smokeless World Fixed Income Update Call - Preliminary Results 2023 Javed Iqbal – Interim Finance Director | Neil Wadey – Group Head of Treasury
Slide 2: Important Information
Important Information The information contained in this presentation in relation to British American Tobacco p.l.c. (“BAT”) and its subsidiaries has been prepared solely for use at this presentation. The presentation is not directed to, or intended for distribution to or use by, any person or entity
Slide 3: Important Information (continued)
Important Information Forward-looking Statements (continued) Additional information concerning these and other factors can be found in BAT’s filings with the U.S. Securities and Exchange Commission (“SEC”), including the Annual Report on Form 20-F and Current Reports on Form 6-K, which may be obtain
Slide 4: Resilient FY23 performance, in line with guidance
Resilient FY23 performance, in line with guidance Group New Category Profit from Operations / Diluted Earnings Revenue Revenue Operating Margin per Share^ -250% Reported -1.3% +15.6% -£15,751m -322% £27,283m £3,347m -95.8ppts -646.6p -57.7% Adjusted Constant +1.6% * +17.8%* +3.1%** Currency £28,096m
Slide 5: Adjusted results demonstrate continued delivery
Adjusted results demonstrate continued delivery Organic Group Adjusted Adjusted Diluted Revenue* Operating Profit** EPS** (£ bn) (£ bn) (pence) Key performance drivers +3.1% +3.1% +4.0% • Organic New Category revenue* +21.0% • Organic Combustibles revenue* +0.6% 27.5 12.4 12.8 371.4 386.4 • Volume -
Slide 6: Driving sharper execution in six areas of focus
Driving sharper execution in six areas of focus Sharpen execution 1 2 3 4 5 Lead Drive Consistent U.S. Enhance Significantly responsible profitability in combustibles financial strengthen HP New Category New Categories value growth flexibility development NC profitability Volume and value Enhanced P
Slide 7: Reached NC profitability two years ahead of original target
1 2 3 4 5 6 1. Reached NC profitability two years ahead of original target Profitability* 2020 2021 2022 2023 -0.4 Key drivers -1.0 c.£400m • Scale benefits • Improved trade margins*** -1.1 Improvement in • Reduced COGS 2023** • Marketing optimisation • Pricing +£1.1bn* • Vuse and Velo already profi
Slide 8: U.S. commercial actions delivering encouraging results
1 2 3 4 5 6 2. U.S. commercial actions delivering encouraging results Activating focused plans to drive … implementing carefully and thoroughly consistent value… will take time H1’23 FY23 Dec’23 H1’23 FY23 Dec’23 v v v v v v H1’22 FY22 Jan’23 H1’22 FY22 Jan’23 Volume share* Value share* basis points
Slide 9: While U.S. macros are showing signs of improvement, consumers remain stretched
1 2 3 4 5 6 2. While U.S. macros are showing signs of improvement, consumers remain stretched Improving Macros Consumer Confidence Breakdown Income Level Bottom Tier Middle Tier Top Tier 2022 2023 vs. ’22 <$50K $50k to $125k >$125k Actuals Actuals Expected Change in Household Prices 7.6% 5.5% 4.2% I
Slide 10: Significantly strengthening our HP pipeline
1 2 3 4 5 6 3. Significantly strengthening our HP pipeline Device – glo Hyper pro Consumables - Premium credentials - neo - Differentiated offer - New Supertob consumables (100% lamina) - New Heat Boost technology - Enhanced taste satisfaction and sensorials - Longer lasting session* and fast charge
Slide 11: Creating better products with our sharper innovation ecosystem
1 2 3 4 5 6 3. Creating better products with our sharper innovation ecosystem One Sharper, disciplined integrated approach global R&D ecosystem Sharper product lifecycle management DEFINE DISCOVERY DEVELOP DEPLOY UK China U.S. Italy Malaysia Indonesia Rapid cycles Set innovation Accelerated scale- M
Slide 12: Encouraging progress with regulatory changes
1 2 3 4 5 6 4. Encouraging progress with regulatory changes Continuing development of Expanding our reach More proactive supportive regulatory frameworks within regulated markets thought leadership Increasing recognition of NC’s role in achieving Tobacco Harm 2018 2023 Reduction in key markets: 27 7
Slide 13: Enhancing financial flexibility
1 2 3 4 5 6 5. Enhancing financial flexibility Operational Market ITC excellence divestments*** • £470m cost savings – On • >29% stake regularly • c.35 non-strategic market track for £1bn 3-yr target reviewed exits in three years • Mitigating inflationary • >100 years of ownership, • c.20bn stick re
Slide 14: Continued Strong Operating Cash Conversion
1 2 3 4 5 6 5. Continued Strong Operating Cash Conversion Strong Operating Cash Leverage Reduced to Short Term Bond Maturity Conversion* 2.6x Profile Adjusted net debt / £ in billions adjusted EBITDA*** 3.0 104% 100% 100% 2.9 3.2 3.2 2.5^ 2.6 FY21 FY22 FY23 Due'24 Due'25 Due'26 FY21 FY22 FY23 £1.7bn
Slide 15: BAT's purpose is to create A Better Tomorrow: Building a Smokeless World
1 2 3 4 5 6 6. BAT’s purpose is to create A Better Tomorrow: Building a Smokeless World Soraya Benchikh Cora Koppe- Main & Management Board Stahrenberg Chief Financial Officer Management Board (from 1 May 2024) Chief People Officer Truly Love our Inclusive Consumer Empowered Passion through Trust to
Slide 16: Dynamic approach to capital allocation as we transform
Dynamic approach to capital allocation as we transform Cash Flow c.£40bn Investing Litigation/ 5 Year in our Transformation Fiscal/Regulatory outcomes Cumulative Free Cash Flow*** Free Cash Flow* Growing Leverage Bolt-On Share Dividend middle 2-3x** M&A Buy-Backs Committed to sustainably returning c
Slide 17: Progressive improvement to sustainable medium-term algorithm
Progressive improvement to sustainable medium- term algorithm 2026 Sustainable medium-term growth 2025 algorithm, driven by our transformation, Progressive improvement underpinned by industry growth towards medium-term guidance 2024 Making investment choices to drive medium- 3-5% term sustainable gr
Slide 18: Our transformation supports our long-term financial ambitions
Our transformation supports our long-term financial ambitions Estimated growth 2023-2026 2026-2035 CAGR Weighted Weighted contribution contribution to to Group Group Smokeless 2-3% Key drivers Organic • Smokeless growing contribution to growth Revenue Combustibles 0-1% • Managing combustibles transi
Slide 19: Refining our strategy with new Strategic Pillars
Refining our strategy with new Strategic Pillars A Better Tomorrow™ Building a Switch Smokeless to Better World Quality Sustainable Dynamic Growth Future Business Empowered Do the Truly Stronger Love Our Passion Through Right Inclusive Together Consumer To Win Trust Thing 19
Slide 20: Building a Smokeless World
Building a Smokeless World • Resilient 2023 performance benefitting from our global multi-category portfolio • Making good progress across our six key focus areas A Better • 2024 investment will build the foundations for long-term value creation Tomorrow™ • Significant future opportunity with growin
Slide 21: Q&A
Q&A Fixed Income Update Call - Preliminary Results 2023 Javed Iqbal – Interim Finance Director | Neil Wadey – Group Head of Treasury
Slide 22: Appendix
Appendix A1: Adjusting (Adj.) Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence. A2: Constant currency Constant currency – measures are calculated based on the prior year's exchange rate, removing the potentially distorting effec
British American Tobacco p.l.c. — Debt Investor Presentation (2024) on 6ix