British American Tobacco Malaysia Bhd. · MYX:BAT

British American Tobacco Malaysia Bhd — Q2 2013 Earnings Presentation

27 slides from British American Tobacco Malaysia Bhd's earnings presentation, Jul 25, 2013

  1. Slide 1: Analyst Briefing Quarter 2, 2013

    ANALYST BRIEFING QUARTER 2, 2013 25th July 2013

  2. Slide 2: Agenda

    AGENDA  Industry Review, Market Share and Volumes  BATM Review  Quarter 2, 2013 Results  Other Highlights  Future Prospects

  3. Slide 3: Q2 2013 Headlines

    Q2 2013 Headlines • YTD PAT/EPS flat v’s SPLY • Weak Q1 domestic volume, some recovery in Q2 • Significant y.o.y growth in contract manufacturing volume • Growth in domestic market share • Domestic Market Shrinkage • Growing illicit white segment • Good growth of new variants • Upgraded Peter Stuyve

  4. Slide 4: Industry Review, Market Share, Volumes and BATM Review

    INDUSTRY REVIEW, MARKET SHARE, VOLUMES AND BATM REVIEW

  5. Slide 5: Industry Volume: Recovering in Q2'13

    Industry Volume: Recovering in Q2’13 Source: Industry Exchange, IMS Volumes (Kretek + Whites) Industry Volumes (bns) Big3 + ELPC + Kretek 2012 2013 4.36 3.69 3.47 3.65 3.56 2.6% 5.9% 3.33 Q1 Q2 Q3 Q4 Volume Variance % Variance Volume Variance % Variance YTD 2013 vs. YTD 2013 vs. Q2 2012 Q2 2013 Q2 2

  6. Slide 6: Premium segment further grew arriving at 73.9% SOM

    Premium segment further grew arriving at 73.9% SOM Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) 72.2 73.9 YTD 2012 YTD 2013 SOM % 23.6 23.7 4.2 2.3 Premium Aspirational Premium VFM SPLY 2012 YTD 2013 Share of Premium YTD Jun 2012 Share of Premium YTD Jun 2013

  7. Slide 7: Illicit whites a key concern

    Illicit whites a key concern. Source: Illicit Cigarette Study, 2010 - 2013 *Survey methodology does not capture sub-VFM brands selling at below minimum price. 36.3 36.1 40 34.9 -0.2ppt 34.5 34.7 33.8 -1.6ppt +0.2ppt 33.6 -1.1ppt -0.2ppt 35 30 25 21.9 22.7 24.5 % Illicit 23.6 22.5 23.5 23.0 20 15 10

  8. Slide 8: BAT shares stable in the latest quarter

    J&J - Oil 3 BAT shares stable in the latest quarter Period Ended JUN13 | Hide NA's | Colour % Chg | Share of Sum(PROD) Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) +1.5ppt BAT share growth driven by Dunhill

  9. Slide 9: Dunhill: Continue to strengthen brand portfolio

    Dunhill: Continue to strengthen brand portfolio stable BAT in recent periods. Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) +1.2ppt +2.5ppt Mar 2013 Q4 2012 Q4 2012 Dunhill Ice – High Menthol Capsule New RELOC Seal Design Dunhill Switch Reinforcement campaign p

  10. Slide 10: Dunhill Lights leads in Premium Lights

    BAT Dunhill Lights leads in Premium Lights Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) Dunhill Lights resilient at 3.3% SOM in May’13 Source: Malaysia Retail Audit (Base: Total Whites, YTD JUN13) Produk ini mengandungi lebih 4,000 bahan kimia termasuk tar, ni

  11. Slide 11: YTD 2013 DH Switch 0.8% SOM

    YTD 2013 DH Switch 0.8% SOM Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) Apr 2011 Apr 2012 Oct – Dec 2012 DH Switch 1.0 Switch 2.0 REINFORCEMENT Launch GET THE BEST OF EXCEPTIONALLY CLICK TO SWITCH FROM LIGHTS TO BOTH WORLDS: SMOOTH & RICH LIGHTS TASTE MENTHOL

  12. Slide 12: DH Ice adding to the growth with an SOM of 0.5%

    DH Ice adding to the growth with an SOM of 0.5% Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) DH Ice National SOM (%) 3.63 3.58 3.61 3.59 3.55 3.48 National 0.52 launch 0.47 0.48 0.5ppt 1.1ppt 0.32 3.03 3.02 2.91 2.97 DH Ice 2.55 2.60 National launch 0.00 JAN13

  13. Slide 13: BAT Aspirational Premium segment share stabilizes

    BAT Aspirational Premium segment share stabilizes BAT Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) -1.6ppt -0.8ppt Source: Malaysia Retail Audit (Base: Total Whites, YTD JUN13) Remain resilient

  14. Slide 14: Pall Mall stabilized at 5.3 SOM in YTD'13

    Pall Mall stabilized at 5.3 SOM in YTD’13. BAT Market – White + Kretek) Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal -0.5ppt Feb 2012: Launch of Pall Mall Mint Jul 2012: Pall Mall Core Range Re-launch Sep 2012: Pall Mall Original Taste Pack Upgrade Source: Malaysia Retail Audit (Base:

  15. Slide 15: Innovation Pack Upgrade: Peter Stuyvesant in July'13

    Innovation Pack Upgrade: Peter Stuyvesant in July’13 BAT Source: YTD Jun’13 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) -0.1ppt Source: Malaysiaini Produk Retail Audit (Base: Totallebih mengandungi Whites, YTD JUN13) 4,000 bahan kimia termasuk tar, nikotina dan karbon monoksida

  16. Slide 16: Peter Stuyvesant Full Flavour has achieved 97% penetration

    Peter Stuyvesant Full Flavour has achieved 97% penetration in the 2 weeks launch. MARKET COMMENTS: Retailers • Packaging is more premium and exclusive Consumers • Think its tastes better and are pleasantly surprise with the Freshness Seal feature Fieldforce • Kirin is a good launch to reinforce itse

  17. Slide 17: Financial Highlights

    FINANCIAL HIGHLIGHTS MALAYSIA

  18. Slide 18: Q2 & YTD: Volume Mix

    Q2 & YTD: Volume Mix Lower volume and revenue from Domestic & DF. Higher Contract Manufacturing Volume and revenue increase Domestic & DF Volumes (mn stick)) Contract Manufacturing Volumes (mn stick) Cigarette Semi Finished 2,177 1,386 + 40.5% Q2 2,264 - 1.8% 2,224 2,422 1,888 Q2 2012 Q2 2013 Q2 201

  19. Slide 19: Quarter 2: 2013 v's SPLY

    Quarter 2: 2013 v’s SPLY Revenue (RM'mn) Net Turnover (RM'mn) 1,157 +16.4% 631 1,068 + 8.3% 542 Q2 2012 Q2 2013 Q2 2012 Q2 2013 Gross Profit (RM'mn) Operating Expenses (RM'mn) + 2.3% 376 89.0 368 72.5 + 22.9% Q2 2012 Q2 2013 Q2 2012 Q2 2013

  20. Slide 20: Quarter 2: 2013 v's SPLY

    Quarter 2: 2013 v’s SPLY Profit from Operation (RM'mn) Earning per Share (Sen/share) 77.3 - 4.4% 73.9 304 - 5.4% 287 Q2 2012 Q2 2013 Q2 2012 Q2 2013

  21. Slide 21: YTD Quarter 2: 2013 v's SPLY

    YTD Quarter 2: 2013 v’s SPLY Revenue (RM'mn) Net Turnover (RM'mn) + 6.7% 2,252 +16.3% 2,111 1,227 1,055 YTD Q2 2012 YTD Q2 2013 YTD Q2 2012 YTD Q2 2013 Gross Profit (RM'mn) Operating Expenses (RM'mn) 735 731 174 166 - 0.5% - 4.6% YTD Q2 2012 YTD Q2 2013 YTD Q2 2012 YTD Q2 2013

  22. Slide 22: YTD Quarter 2: 2013 v's SPLY

    YTD Quarter 2: 2013 v’s SPLY Profit from Operation (RM'mn) Earning per Share (Sen/share) 566 572 - 1.1% 145.5 - 0.1% 145.4 YTD Q2 2012 YTD Q2 2013 YTD Q2 2012 YTD Q2 2013

  23. Slide 23: Q2 Dividends

    Q2 Dividends 2012: RM2.72 - 97.4% Payout YTD 2013: 93.5% Payout 0.77 0.68 0.68 0.65 0.65 0.65 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Dividends for Q2 2013 at 68 cents per share

  24. Slide 24: Other Highlights

    OTHER HIGHLIGHTS MALAYSIA

  25. Slide 25: Recent External Recognition and Corporate Responsibility Highlights

    Recent External Recognition and Corporate Responsibility Highlights FinanceAsia Best Companies Poll 2013 BAT Malaysia achieves recognition for 13th year running in FinanceAsia’s Best Companies Poll. • Most Committed to a Strong Dividend Policy (3rd place) Workplace Responsibility: First Aid & CPR Tr

  26. Slide 26: Future Prospects

    Future Prospects  Group seeks to continue its recent strong share momentum.  Given YTD Performance and overall market dynamics the Group has a cautious outlook on the second half of 2013

  27. Slide 27: Thank You

    THANK YOU BRITISH AMERICAN TOBACCO MALAYSIA

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