British American Tobacco P.l.c. · LSE:BATS

British American Tobacco P.l.c — FY2013 Earnings Presentation

40 slides from British American Tobacco P.l.c's earnings presentation, Feb 27, 2014

  1. Slide 1: Preliminary Results 2013

    PRELIMINARY RESULTS 2013 27th February 2014

  2. Slide 2: Nicandro Durante, Chief Executive

    Nicandro Durante Chief Executive

  3. Slide 3: Summary

    PRELIMINARY RESULTS 2013 Summary Financials Volum e Current Constant Revenue Cigarettes 2.7% £15.3bn 0.5% 4.2% 676bn Profit Total Tobacco 2.6% £5.8bn 3.2% 7.1% 703bn Margin GDBs 38.1% 1.0pp 1.1pp 237bn 1.9% EPS Total IBs 216.6p 5.6% 9.5% 385bn 2.1% A very strong financial performance in a tough econ

  4. Slide 4: Consistent performance over the past 5 years

    PRELIMINARY RESULTS 2013 Consistent performance over the past 5 years Revenue* Profit* EPS* CAGR 1.8% CAGR 7.0% CAGR 9.3% 15,399 5,820 5,641 15,190 15,260 5,473 216.6 14,883 205.2 4,944 191.9 173.4 14,208 4,443 151.6 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Average

  5. Slide 5: £15bn returned to shareholders since 2009

    PRELIMINARY RESULTS 2013 £15bn returned to shareholders since 2009 £bn, Current FX 2009 2010 2011 2012 2013 Total Free Cash Flow 2.6 3.2 3.3 3.3 3.4 15.8 Dividends Paid 1.8 2.1 2.4 2.5 2.6 11.4 Share Buy-Back 0.0 0.0 0.8 1.3 1.5 3.6 Total Shareholder Returns 1.8 2.1 3.2 3.8 4.1 15.0 Total Shareholde

  6. Slide 6: Ben Stevens, Finance Director

    Ben Stevens Finance Director

  7. Slide 7: Regional performance

    PRELIMINARY RESULTS 2013 Regional performance* Cigarette Volume Revenue Profit 11.8% 7.5% 7.1% 5.6% 5.6% 4.9% 4.5% 4.0% 4.2% 3.4% 1.5% Amr WE EEMEA Group AsPac AsPac Amr WE EEMEA Group AsPac Amr WE EEMEA Group -2.7% -3.7% -6.2% -7.8% FX impact -5.9% -7.5% +4.1% -4.8% -3.7% -5.7% -6.4% +4.3% -6.3% -3

  8. Slide 8: Foreign exchange

    PRELIMINARY RESULTS 2013 Foreign exchange 110 -3.9% 105 +9.5% 100 95 216.6p 90 INR 205.2p BRL 85 AUD JPY 80 ZAR 75 EPS 2012 Business Exchange EPS 2013 performance Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

  9. Slide 9: Asia Pacific – Regional Performance

    PRELIMINARY RESULTS 2013 Asia Pacific – Regional Performance Financials Volum e Constant Current Revenue 5.6% 0.3% Cigarettes 4.9% £4,448m 197bn Profit 7.5% 1.8% GDBs 12.5% £1,787m 75bn

  10. Slide 10: Americas – Regional Performance

    PRELIMINARY RESULTS 2013 Americas – Regional Performance Financials Volum e Constant Current Revenue 3.4% 4.1% Cigarettes 6.2% £3,579m 134bn Profit 4.5% 1.9% GDB 12.3% £1,453m 32bn

  11. Slide 11: Western Europe – Regional Performance

    PRELIMINARY RESULTS 2013 Western Europe – Regional Performance Financials Volum e Constant Current Cigarettes 119bn 7.8% Revenue 1.5% 5.6% £3,493m Total Tobacco 6.5% 141bn Profit 4.0% 8.3% £1,222m GDB 6.2% 63bn 22.5

  12. Slide 12: EEMEA – Regional Performance

    PRELIMINARY RESULTS 2013 EEMEA – Regional Performance Financials Volum e Constant Current Revenue 5.6% 0.8% Cigarettes 3.7% £4,302m 226bn Profit GDB 11.8% 5.5% 67bn 4.6% £1,579m

  13. Slide 13: Operating margin 2012 – 2013

    PRELIMINARY RESULTS 2013 Operating margin 2012 – 2013 Based on adjusted profit and current FX 0.8pp 0.9pp 0.9pp 1.6pp 1.0pp 41.1% 40.3% 40.2% 39.5% 38.1% 37.1% 36.3% 35.0% 34.7% 34.1% Asia Pacific Americas W Europe EEMEA Group 2012 2013 Drivers of margin:  Strong pricing in key markets: Australia,

  14. Slide 14: Drivers of adjusted EPS growth

    PRELIMINARY RESULTS 2013 Drivers of adjusted EPS growth +3.0p -0.1p +3.0p -8.1p -1.6p +1.0p +14.2p 216.6p 205.2p

  15. Slide 15: Cash flow

    PRELIMINARY RESULTS 2013 Cash flow £422m £375m £5,820m £547m £190m £443m £1,440m £5,820m £5,867m £5,320m £3,371m £699m £265m £4,687m £310m £3,247m £2,982m £2,672m £2,672m Adj operating Non cash items Working Capital Net Capex Pension fds - Net interest Tax Dividends to Restructuring Div from Free ca

  16. Slide 16: Financing/Shareholder returns

    PRELIMINARY RESULTS 2013 Financing/Shareholder returns  121% of Free Cash Flow returned to shareholders in 2013:  £2.6bn – Dividends paid to shareholders  £1.5bn – Share buy back  Net Debt increased by £1.0bn to £9.5bn  Moody’s credit rating upgraded to A3 from Baa1  Fitch and S&P ratings rema

  17. Slide 17: Nicandro Durante, Chief Executive

    Nicandro Durante Chief Executive

  18. Slide 18: Key highlights

    PRELIMINARY RESULTS 2013 Key highlights • Strong performances in key markets in all regions

  19. Slide 19: Key highlights

    PRELIMINARY RESULTS 2013 Key highlights • Strong performances in key markets in all regions • New market opportunities providing further long term growth potential

  20. Slide 20: Key highlights

    PRELIMINARY RESULTS 2013 Key highlights • Strong performances in key markets in all regions • New market opportunities providing further long term growth potential • Record margin of 38.1%

  21. Slide 21: Key highlights

    PRELIMINARY RESULTS 2013 Key highlights • Strong performances in key markets in all regions • New market opportunities providing further long term growth potential • Record margin of 38.1% • Strong share growth across our Top 40 markets • Another excellent performance from the GDBs and other Interna

  22. Slide 22: Global Drive Brands

    PRELIMINARY RESULTS 2013 Global Drive Brands GDB Volume 2009 - 2013 Volume: 54 billion, up 9.7% 250 Share up 0.2ppt in T40 Strong volume growth in Indonesia, South Korea, and the GCC 200 Good share growth across all major markets Record share in Malaysia 150 100 2009 2010 2011 2012 2013  GDB volume

  23. Slide 23: Global Drive Brands

    PRELIMINARY RESULTS 2013 Global Drive Brands GDB Volume 2009 - 2013 250 200 Volume: 65 billion, down 2.9% Share flat in T40 150 Impacted by market declines in Russia, Romania and Japan Growth in the Middle East and Uzbekistan 100 2009 2010 2011 2012 2013 Innovation pipeline remains strong  GDB volu

  24. Slide 24: Global Drive Brands

    PRELIMINARY RESULTS 2013 Global Drive Brands GDB Volume 2009 - 2013 250 200 150 Volume: 31 billion, down 6.5% 100 2009 2010 2011 2012 2013 Share up 0.1ppt Market contraction in WE New markets – Philippines and Russia Innovations account for 29% of volume  GDB volume: 237 bns, +1.9%  Total Internat

  25. Slide 25: Global Drive Brands

    PRELIMINARY RESULTS 2013 Global Drive Brands GDB Volume 2009 - 2013 250 200 150 100 2009 2010 2011 2012 2013 Volume: 87 billion, up 4.4% Share up 0.3ppt in T40  GDB volume: 237 bns, +1.9% Strong performance across Americas and ASPAC  Total International brands: 385 bns, +2.1% Record share in a num

  26. Slide 26: Global Drive Brands

    PRELIMINARY RESULTS 2013 Global Drive Brands  GDB volume incl. Rothmans: 263 bns, +3.5%  Total International brands: 385 bns, +2.1%  Premium volume: flat Volume: 26 billion, up 21.7% Share up 0.3ppt in T40 Strong performance in EEMEA and Western Europe Great momentum of slimmer innovations in Eas

  27. Slide 27: Next-Generation Products update

    PRELIMINARY RESULTS 2013 Next-Generation Products update

  28. Slide 28: Summary

    PRELIMINARY RESULTS 2013 Summary  Strategy is delivering  Continued growth in revenue, share, margin and profit  Adjusted EPS at constant rates up 10%  Currency headwinds  Solid pricing, although industry volume remains under pressure in some markets  Growing cash returns to shareholders  Pro

  29. Slide 29: Preliminary Results 2013

    PRELIMINARY RESULTS 2013 27th February 2014

  30. Slide 30: Supplementary Slides

    SUPPLEMENTARY SLIDES 27th February 2014

  31. Slide 31: Cigarette volumes by region FY 2013

    PRELIMINARY RESULTS 2013 Cigarette volumes by region FY 2013 Region Billions 2013 2012 % change Asia Pacific 197 188 +5% Americas 134 142 -6% Western Europe 119 129 -8% Eastern Europe, Middle East and Africa 226 235 -4% Group 676 694 -3%

  32. Slide 32: Cigarette volumes by region H2 2013

    PRELIMINARY RESULTS 2013 Cigarette volumes by region H2 2013 Region Billions 2013 2012 % change Asia Pacific 97 93 +4% Americas 70 71 -3% Western Europe 62 67 -7% Eastern Europe, Middle East and Africa 115 119 -3% Group 344 350 -2%

  33. Slide 33: Cigarette volumes by region Q4 2013

    PRELIMINARY RESULTS 2013 Cigarette volumes by region Q4 2013 Region Billions 2013 2012 % change Asia Pacific 48 47 +3% Americas 37 38 -4% Western Europe 32 34 -6% Eastern Europe, Middle East and Africa 58 58 0% Group 175 177 -1%

  34. Slide 34: Revenue by region FY 2013

    PRELIMINARY RESULTS 2013 Revenue by region FY 2013 Region £m 2013 2012* % change Asia Pacific 4,203 4,214 0%. Americas 3,317 3,460 -4% Western Europe 3,635 3,442 +6% Eastern Europe, Middle East and Africa 4,105 4,074 +1% Group 15,260 15,190 0% All numbers as reported 2012 restated for IAS19

  35. Slide 35: Revenue by region H2 2013

    PRELIMINARY RESULTS 2013 Revenue by region H2 2013 Region £m 2013 2012* % change Asia Pacific 2,095 2,164 -3% Americas 1,667 1,754 -5% Western Europe 1,921 1,793 +7% Eastern Europe, Middle East and Africa 2,005 2,027 -1% Group 7,688 7,738 -1% All numbers as reported 2012 restated for IAS19

  36. Slide 36: Adjusted profit from operations FY 2013

    PRELIMINARY RESULTS 2013 Adjusted profit from operations FY 2013 Region £m 2013 2012* % change Asia Pacific 1,693 1,663 +2% Americas 1,364 1,391 -2% Western Europe 1,273 1,175 +8% Eastern Europe, Middle East and Africa 1,490 1,412 +6% Group 5,820 5,641 +3% All numbers as reported 2012 restated for I

  37. Slide 37: Adjusted profit from operations H2 2013

    PRELIMINARY RESULTS 2013 Adjusted profit from operations H2 2013 Region £m 2013 2012* % change Asia Pacific 818 848 -4% Americas 632 651 -3% Western Europe 700 620 +13% Eastern Europe, Middle East and Africa 726 701 +4% Group 2,876 2,820 +2% All numbers as reported 2012 restated for IAS19

  38. Slide 38: Top 40 market share movements (1)

    PRELIMINARY RESULTS 2013 Top 40 market share movements (1) SOM FY13 Movement Market SOM FY13 Movement Market (%) (ppt) (%) (ppt) Argentina 27.1 +0.7 France 16.8 0.0 Australia 43.2 -1.0 GCC 34.7 +0.1 Bangladesh 45.1 +3.7 Germany 19.8 0.0 Belgium 32.0 -0.4 Indonesia 6.5 -0.5 Brazil 77.0 +2.1 Italy 21.

  39. Slide 39: Top 40 market share movements (2)

    PRELIMINARY RESULTS 2013 Top 40 market share movements (2) SOM FY13 Movement Market SOM FY12 Movement Market (%) (ppt) (%) (ppt) New Zealand 72.3 +0.8 Sweden 28.2 +0.3 Pakistan 65.8 +1.6 Switzerland 41.3 -0.2 Philippines 0.4 +0.4 Taiwan 9.3 +0.2 Poland 26.9 -1.5 Turkey 19.5 -1.6 Romania 53.8 +1.7 UK

  40. Slide 40: Foreign currencies

    PRELIMINARY RESULTS 2013 Foreign currencies Average Closing 2013 2012 2013 2012 US dollar 1.564 1.586 1.656 1.626 Canadian dollar 1.612 1.584 1.760 1.619 Euro 1.178 1.234 1.202 1.233 South African rand 15.099 13.054 17.347 13.791 Brazilian real 3.381 3.109 3.908 3.328 Australian dollar 1.623 1.532 1

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