British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q3 2011 Earnings Presentation
31 slides from British American Tobacco Malaysia Bhd's earnings presentation, Oct 20, 2011
Slide 1: British American Tobacco (Malaysia) Berhad 3rd Quarter 2011 Results
British American Tobacco (Malaysia) Berhad 3rd Quarter 2011 Results Analyst Presentation 20 October 2011
Slide 2: Agenda
Agenda Industry Review BATM’s Activities Quarter 3, 2011 Results Other Highlights Future Prospects
Slide 3: Industry Review and BATM Activities
INDUSTRY REVIEW AND BATM ACTIVITIES
Slide 4: Illicit incidence remains high
Illicit Trade 40 37.5 0.1 37.3 36.3 35 -1.2pp +1.0pp 30 25.7 0.4 20.7 % Illicit 25 21.9 23.9 +11.8pp 20 13.4 15 16.7 10 14.4 13.4 11.9 5 2008 2009 2010 2011 Wave 1 (Mar-May) Smuggled Kretek Smuggled Whites Counterfeit Survey methodology does not capture sub-VFM brands selling at below minimum price.
Slide 5: Zero Excise Increase
Zero Excise Increase “There was no hike in the price of cigarettes in the Budget 2012 as it is quite high now and increasing it would only encourage the use of illegal cigarettes, which is currently on the rise……….However, the Government can increase the price of cigarettes any time,” PM Malaysia
Slide 6: YTD Industry volumes decreased
YTD Industry volumes decreased Industry volumes (CMTM members) 2010 3,743 3,805 2% 2011 4 3,495 3,434 3,365 2% 3,180 9% 2,888 3 (in b n st ic k s) 2 1 0 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Shipment Volume Variance YTD YTD Variance Q3 2011 Q3 2010 (in bn sticks) Q3 11 vs Q3 10 2011 2010 YTD 11 vs YTD 10 BATM 2.3
Slide 7: Market remains Premium-skewed
Market remains Premium-skewed BAT Q3 2010 BAT Q3 2011 Share of Premium 71.6 Share of Premium 72.3 Share of Value for Money 41.5 Share of Value for Money 43.7 Share of Sub-VFM - Share of Sub-VFM - Source: Malaysia Retail Audit (Base: Total Whites) Note: Q3 2010 & 2011 is July and August
Slide 8: BATM Market share
BATM Market share % 2011 2010 63 2011: 60.6 (YTD) 62 62.0 2010: 59.8 (FY) 61.8 60.7 61 61.3 60.2 60.4 60.9 60.2 60.0 59.9 59.9 59.7 60.5 59.8 60 59.6 59.0 58.9 59.5 59 59.0 58.7 58 57 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Source: Retail Audit (Base: Whites only) Month on month share growt
Slide 9: BATM recovered share at the expense of Sub VFM
BATM recovered share at the expense of Sub VFM BAT (left axis) Others Aug vs. Jan’11 65 30 61.8 62.0 60.2 60.2 60.5 60.9 61.3 +3.3ppt 59.6 59.0 59.0 60 58.9 58.7 25 55 20 50 15 45 10 9.5 7.8 9.0 8.7 7.7 -3.6ppt 40 6.6 7.3 7.0 5 6.5 6.1 6.0 5.9 35 0 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Ap
Slide 10: BAT & GDB Share
BAT & GDB Share +0.8ppt Source: Malaysia Retail Audit (Base: Total Whites) Highest share since March 2008.
Slide 11: Dunhill
Dunhill Dunhill Global Pack Design with RELOC Jan 2011: Dunhill Menthol BOOST May 2011: Dunhill SWITCH Source: Malaysia Retail Audit (Base: Total Whites) First convertible cigarette in Malaysia Dunhill highest share ever. Produk ini mengandungi lebih 4,000 bahan kimia termasuk tar, nikotina dan karb
Slide 12: Dunhill Boost Campaign on Capsule's Proposition
Dunhill Boost Campaign on Capsule’s Proposition 0.6 0.42 0.4 0.37 0.35 0.26 0.2 0.06 0 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 DH Boost Pack sleeve and printed poly to communicate clearly on Capsule proposition and its USP – “Click to release Menthol, Whenever you want” Produk ini me
Slide 13: BAT VFM share of segment growing
BAT VFM share of segment growing +3.8ppt Source: Malaysia Retail Audit (Base: Total Whites) 2011 stable. Growth vs 2010
Slide 14: Pall Mall
Pall Mall Source: Malaysia Retail Audit (Base: Total Whites) Share of segment stable Produk ini mengandungi lebih 4,000 bahan kimia termasuk tar, nikotina dan karbon monoksida yang membahayakan kesihatan.
Slide 15: Addition of Pall Mall Ice further strengthened Pall Mall in VFM Menthol
Addition of Pall Mall Ice further strengthened Pall Mall in VFM Menthol Pall Mall Menthol – SOM (%) Pall Mall Menthol Pall Mall Ice 2.6 2.5 2.5 2.4 2.4 2.4 2.4 2.3 2.2 2.2 2.2 0.4 0.4 0.3 0.4 0.3 2.2 0.0 2.0 1.8 2.3 1.6 2.2 2.2 2.2 2.1 2.1 2.1 2.1 2.1 1.4 1.2 1.0 Dec-10 Jan-11 Feb Mar Apr May Jun Ju
Slide 16: Peter Stuyvesant
Peter Stuyvesant Source: Malaysia Retail Audit (Base: Total Whites) International Peter Stuyvesant Core Range International Peter Stuyvesant 2011 Edition Produk ini mengandungi lebih 4,000 bahan kimia termasuk tar, nikotina dan karbon monoksida yang membahayakan kesihatan. Share of segment growing
Slide 17: Festive Appreciation and Anti-Illicit Campaign
Festive Appreciation and Anti-Illicit Campaign Distribution of Anti-Illicit Trade (AIT) Smart TRP for Hari Raya informative leaflets Hari Raya Puasa Poster
Slide 18: Financial Highlights
BRITISH AMERICAN MALAYSIA FINANCIAL HIGHLIGHTS
Slide 19: Quarter 3, 2011 vs Quarter 3, 2010
Quarter 3, 2011 vs Quarter 3, 2010 Higher operating expenses due to changed distribution model
Slide 20: YTD Q3, 2011 vs YTD Q3, 2010
YTD Q3, 2011 vs YTD Q3, 2010 Year on year operating expenses down significantly
Slide 21: Productivity Savings (RM million)
Productivity Savings 60 51.3 50 44.8 2.8 41.5 38.6 39.8 8.6 1.6 40 6.7 4.5 2.7 3.3 RM million 3.9 8.2 30 23.4 12.9 3.4 16.1 20 15.4 39.9 36.5 32.6 28.8 5.4 4.9 16.6 23.0 0.5 10 1.5 7.0 8.7 3.5 3.4 0 2004 2005 2006 2007 2008 2009 2010 YTD Q3 2011 Supply Chain Indirects Overheads Mfg Synergy
Slide 22: Other Highlights
BRITISH AMERICAN MALAYSIA OTHER HIGHLIGHTS
Slide 23: Distribution model change - Pen Msia Footprint (2010)
Distribution model change - Pen Msia Footprint (2010) EDx KB EDx HSC EDx KT DSS PG & BW EDs DSOs Distribution 2010 Vol Model contribution % DSS 3 48.0 DSS Puchong DSO 11 8.0 EDx Seremban EDx 4 28.5 ED 25 15.5 EDx NJB/MC Total 54 100 DSS JB
Slide 24: Distribution model change - Pen Msia Footprint (Oct-2011)
Distribution model change - Pen Msia Footprint (Oct-2011) Kedah / Perlis / Penang Kelantan / Terengganu / KL Selangor Vol Dist Dist. No. Contri Points % EDx 5 20 76.6% Negeri Sembilan / Johor Melaka DSO 6 6 5.7% ED 10 10 11.9% Total 21 36 94.2%
Slide 25: Recent CR highlights
Recent CR highlights Plant Nursery Land Clearing – Workday Employee Volunteer Programme (22nd July) 26 volunteers spent the day planting saplings and cleaning up the surrounding areas of Joy Garden Old Folks Home, Semenyih 10th Higher Education Starter Kit (HESK) Awards Ceremony (23rd August) A tota
Slide 26: Recent CR highlights (cont'd)
Recent CR highlights (cont’d) Save our Waterfalls – Workday Employee Volunteer Programme (9th September) A total of 38 volunteers rolled up their sleeves and braved the cold waters to help clean up the Sungai Liam Waterfall in Ulu Yam State Office Festive Employee Volunteer Programme (25th September
Slide 27: Awards and Recognition
Awards and Recognition BAT Malaysia receives recognition for 11th year running in FinanceAsia poll BAT Malaysia was recognised in FinanceAsia’s Best Managed Companies Poll in the categories below: Best Managed Company – 6th place Best Corporate Governance – 3rd place Best Investor Relations – 4th pl
Slide 28: Awards and Recognition
Awards and Recognition BAT Malaysia receives SVA Exemplary Award in KPMG Shareholder Value Award 2011 BAT Malaysia was recognised as the inaugural winner of the SVA Exemplary Award in the recent KMPG Shareholder Value Award 2011 on the 13th October 2011 for having won 10 times in a straight row sinc
Slide 29: Future Prospects
BRITISH AMERICAN MALAYSIA FUTURE PROSPECTS
Slide 30: Future Prospects
Future Prospects BAT continues to outperform industry for 3rd Quarter running, supported by new product launches No excise increase announced in 2012 budget Improved outlook for Q4 Concern on future Government Excise and its impact on Illicit
Slide 31: Thank You
BRITISH AMERICAN MALAYSIA Thank You
British American Tobacco (Malaysia) Berhad — Q3 2011 Earnings Presentation on 6ix