British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q1 2017 Earnings Presentation
21 slides from British American Tobacco Malaysia Bhd's earnings presentation, Apr 20, 2017
Slide 1: Transforming Today for Tomorrow: 1st Quarter 2017 Performance
TRANSFORMING TODAY FOR TOMORROW 1st QUARTER 2017 PERFORMANCE 20th April 2017
Slide 2: Agenda
AGENDA Industry Review Company Review Q1 2017 Financial Results
Slide 3: Industry Review
eA Tateltiava Review
Slide 4: Q1 Business Highlights
Q1 Business Highlights 2 months of share stabilization Illicit share hike to 57.1% Gained Leadership in (+19% vs SPLY) Aspirational Premium Segment in Feb’17 BAT domestic volume declined by 20% vs SPLY Dunhill Classic in market to grow market share Volume stabilizing in the last 3 months
Slide 5: Latest illicit incidence – as of Feb 2017 – drop of 0.4%
Latest illicit incidence – as of Feb 2017 – drop of 0.4% Illicit Volume Share (%) 64.5 56.8 57.1 58.2 54.3 50.1 50.9 49.9 49.1 45.7 41.8 43.2 42.9 35.5 Top 3 Brands John Gudang Saat Garam Legal Illicit Aug'15 Nov'15 May'16 Aug'16 Oct'16 Nov'16 Dec'16
Slide 6: Strong will shown to address illicit trade
Strong will shown to address illicit trade Deterrent penalties for Newly appointed RMC Strengthening controls those involved in illicit DG committed to the at border to curb cigarette trade fight against illicit trade smuggling ..reducing contraband cigs in the domestic markets by Malaysia Border Se
Slide 7: Sentiments against increasing tax and cigarette prices to RM21.50
Sentiments against increasing tax and cigarette prices to RM21.50 Tan Sri Mohd Sherrif,- Star 10 April 2017
Slide 8: Sentiments against increasing tax and cigarette price to RM 21.50
Sentiments against increasing tax and cigarette price to RM 21.50 “MoH’s National Health and Morbidity Survey 2015 reported that number of smokers increased to 5 million. During same period, cig price on average increased by 30%”
Slide 9: Company Review
Company Review
Slide 10: Total legal market registered a decline of -14.2% vs. SPLY
Total legal market registered a decline of -14.2% vs. SPLY. Big-3 IMS (mns) 703 668 660 642 603 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 2017 vs. 2016: YTD Q1’17 Avg. 2016 2017 Change Industry 703 603 -14.2% BAT 408 324 -20.4% Source :Industry Exchange In-Market Sales (Sales to retail outlets)
Slide 11: BAT domestic volume is impacted by excise and macro environment
BAT domestic volume is impacted by excise and macro environment Excise Impact Consumer spending Q1’17 Macro Environment stretch/depreciation of RM Vs. SPLY Key Highlight Illicit volume 57% + 19% share grew by 48% 19% over the Illicit Volume Share last year BAT volume Signs of stabilization decli
Slide 12: Dunhill share recovery for 3 months since Dec 16
Dunhill share recovery for 3 months since Dec 16. Peter Stuyvesant and Pall Mall gained leadership in Aspirational Premium Share of Market – Malaysia (%) 57.1 56.0 53.5 53.7 53.2 53.5 53.5 6.5 6.7 4.3 7.7 7.0 7.4 7.7 7.7 4.4 4.4 4.5 4.5 4.4 4.3 42.2 40.8 37.3 37.9 37.1 37.3 37.4 2016 2017 YTD OCT'16
Slide 13: 21st Hari Hasil Recognition - Best Tax Payer Award 2016
21st Hari Hasil Recognition - “Best Tax Payer Award 2016” “Best Tax Payer Award 2016” - Private Limited Company category by the Inland Revenue Board of Malaysia based on compliance in making timely submission of tax estimation, payment and accuracy of tax assessment computation
Slide 14: Q1 2017 Financial Performance
Q1 2017 Financial Performance
Slide 15: Key Highlights
Key Highlights Q1’17 vs. Q1’16 Q1 vs. SPLY reflected a slowing decline across metrics due to volume trend in 2016 Illicit trade grew by 19% (48% to 57%) Domestic volume run rates declined by 20% (94/week to 77/week) Operating expenses reduced by 18% by overhead savings from cost efficiency i
Slide 16: Financial Metrics
Financial Metrics Domestic & Duty Free Volume Revenue 1,077 mns 771 mil - 23.1% vs SPLY - 24.5% vs SPLY Operating Expenses Profit from Operations 97mil 158 mil -18.1% s SPLY - 32.8% vs SPLY
Slide 17: Q1 2017 Volume and Revenue Performance
Q1 2017 Volume and Revenue Performance Domestic & duty free volume Illicit Change vs. SPLY 2,000 57% Volume 60% Share + 19% 1,800 48% 50% 1,600 1,400 40% 1,200 1,000 30% 800 600 1,400 20% BAT 1,077 Volume -23.1% 400 10% 200 High trade speculation in 0 0% duty free channel during Q1 2016 Q1 2017 Q1 2
Slide 18: YTD Q1 Performance
YTD Q1 Performance Domestic & DF Volumes (mn stick)) Contract Manufacturing Volumes (mn stick) Cigarette Semi Finished 931 +2.2% -23.1% 2,042 1,400 1,077 1,068 2 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Revenue (RM'mn) Net Turnover (RM'mn) 1,021 -24.5% 771 529 -27.9% 382 Q1 2016 Q1 2017 Q1 2016 Q1 2017
Slide 19: YTD Q1 Performance
YTD Q1 Performance Gross Profit (RM'mn) Operating Expenses (RM'mn) 354 119 -27.5% 256 -18.1% 97 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Profit from Operation (RM'mn) Earning per Share (Sen/share) 235 61 -32.3% -32.8% 158 42 Q1 2016 Q1 2017 Q1 2016 Q1 2017
Slide 20: Dividend payout
Dividend payout 2016 2017 RM 2.78 YTD 110.0% Payout *Special dividend 0.46 0.77 0.55 0.55 0.45 0.40 Q1 Q2 Q3 Q4 Q1
Slide 21: Thank You
THANK YOU
British American Tobacco Malaysia — Q1 2017 Earnings Presentation on 6ix