British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Deutsche Bank Conference, June 2017
18 slides from British American Tobacco P.l.c's conference presentation, June 2017
Slide 1: British American Tobacco – Nicandro Durante, CEO
BRITISH AMERICAN TOBACCO Nicandro Durante – CEO Deutsche Bank Conference, June 2017 CONFIDENTIAL
Slide 2: Important notice
Important notice This presentation in relation to British American Tobacco p.l.c. (“BAT”) and its subsidiaries (collectively, the “BAT Group”) and Reynolds American Inc. (“Reynolds”) and its subsidiaries has been prepared solely for use at this presentation. The presentation is not directed to, or i
Slide 3: Important notice
Important notice Additional information concerning these and other factors can be found in Reynolds’s filings with the U.S. Securities and Exchange Commission (“SEC”), including Reynolds’s most recent Annual Reports on Form 10‐K, Quarterly Reports on Form 10‐Q and Current Reports on Form 8‐K, which
Slide 4: Consistent growth in earnings and dividend
Consistent growth in earnings and dividend Earnings per share growth Dividends per share Average growth 2005 ‐ 2016: 11% p. a.* CAGR:12% 169 154 148 142 135 127 114 100 84 66 56 47 5% 10% 10% 9% 5% 12% 15% 12% 10% 9% 9% 10% 11% 10% 8% 10% 10% ‐4% ‐5% ‐4% ‐12% ‐10% 2005 2006 2007 2008 2009 2010 2011
Slide 5: Our strategy continues to deliver
Our strategy continues to deliver Strong organic growth powered by GDBs and innovations Further growth driven by NGP Portfolio & Geographic Expansion Augmented by strategic M&A in combustibles and NGP RAI - on track for a transformational deal
Slide 6: Excellent market share growth powered by GDBs
Excellent market share growth powered by GDBs +40bps +100bps GDB Share +120bps +90bps +90bps +40bps BAT Share +80bps +50bps +10bps +40bps +20bps +10bps +40bps +10bps 2010 2011 2012 2013 2014 2015 2016 2017 YTD Note: Reported Year‐End Figures/ Independent Nielsen retail audit data / FMC Only/YTD Apri
Slide 7: Driven by an innovation pipeline that is rich and growing
Driven by CONTINUING TO pipeline an innovation DEPLOY INNOVATIONS that is rich and growing WITH SPEED & SCALE Innovation volume tripled 2016 Innovations | 1 in every 3 54% of GDB volume vs 2010 cigarettes sold carries an innovation CIGARETTE VOLUME CAPSULE TUBE SLIMMER GDB VOLUME 100% 100% 10% 90% 2
Slide 8: Differentiated strategy to win in NGPs
Differentiated strategy to win in NGPs SOCIAL CONSIDERATION TOBACCO TASTE AND AND HYGIENE SENSORIALS VAPOUR by 2020* THP by 2020 FLAVOUR EXPERIENCES £10bn+ industry value £9bn+ industry value NICOTINE SATISFACTION 53m+ consumers 9m+ consumers PROFILE OF VAPERS IN T12 MARKETS**, % DEMAND FOR TOBACCO
Slide 9: Vapour – BAT a market leader
Vapour – BAT a market leader › Vype is present in 10 markets globally › Market leader in UK & Poland BAT VOLUME SALES GROWTH Q1 ’17 VS SPLY VAPOUR SHARE IN RETAIL Vype Q1 '16 Vype Q1 '17 10M / Chic Q1 '17 1 56.1% 50% +20% +310% -23% 1 37.6% 27% 10.6% 10.8% 9.2% 7.5% 6.1% +100% +310% 5.7% 3.1% 2.7% 1
Slide 10: Tobacco Heating Products - Glo is exceeding expectations
Tobacco Heating Products - Glo is exceeding expectations OFFTAKE SHARE - SENDAI DEVICE PENETRATION 8% 7.9% 23% 24% 7% 7% 7% 8% 21% 7% 7% 7% 7% 21% 6% 6% 6% 7% 19% 20% 6% 18% 18% 5% 6% 16% 17% 4% 5% 14% 15% 4% 11% 12% 13% 3% 10% 10% 3% 3% 8% 9% 2% 2% 6% 7% 4% 3% w1 w5 w9 w13 w17 w21 w25 w1 w3 w5 w7 w
Slide 11: THP – Glo roll-out on track
THP – Glo roll-out on track JAPAN (July 2017) SWITZERLAND (April 2017) July 3rd: Expansion to Tokyo / Launched in one of the biggest Osaka / Miyagi covering 25% of retailers nationwide tobacco consumers By end of 2017: National Expansion National awareness already at 25% CANADA (May 2017) SOUTH KORE
Slide 12: Strategic M&A augmenting growth in NGP & tobacco
Strategic M&A augmenting growth in NGP & tobacco UK ‐ VIP acquisition › Accelerated retail network expansion UK ‐ 10 Motives acquisition NGPs › Strengthened market position, together with Vype, BAT is now the market leader Poland ‐ CHIC acquisition › Accelerated retail network expansion and leading
Slide 13: RAI - A transformational transaction
RAI ‐ A transformational transaction Creates stronger, truly global tobacco & NGP company A truly global Direct access to Balanced presence Portfolio of company in the the attractive in high growth strong, growing fast‐growing US market emerging markets global brands NGP category and high profitabil
Slide 14: Highly attractive US market
Highly attractive US market ONE OF THE BIGGEST TOBACCO MARKETS BY VOLUME… …AND LARGEST OPEN MARKET BY VALUE… Billion sticks 2015 Value $bn 2015 2,490 228 US CAGR 94 US CAGR 2015 – 20E: 2015 – 20E: (2.1)% 1.8% 303 269 264 182 32 103 97 88 83 23 23 20 20 81 17 17 16 France Russia US Turkey Egypt US Ge
Slide 15: RAI – On track for completion early Q3
RAI – On track for completion early Q3 › SEC registration process expected to be completed shortly › Shareholder documents expected to be published shortly › Shareholder vote mid‐July › Completion expected shortly thereafter
Slide 16: Current trading
Current trading › Trading in line with expectations › Market share growth momentum continues: +10bps* YTD, on top of +50bps in 2016 › Profit growth expected to be weighted to the second half, due to: › Phasing of volume shipments › NGP investments › Marketing spend › At current rates FX a 7% tailwin
Slide 17: Last years – consistent delivery for shareholders whilst also investing for the future
Last 5 years – consistent delivery for shareholders whilst also investing for the future Corporate share up 170 bps GDB share up 530 bps One of the largest NGP businesses in the world $1bn Portfolio Transformation EPS +10%* average growth p.a. last 5 years DPS +6% CAGR last 5 years …While also inves
Slide 18: British American Tobacco
BRITISH AMERICAN TOBACCO Deutsche Bank Conference, June 2017 CONFIDENTIAL
British American Tobacco p.l.c. — Deutsche Bank Conference, June 2017 on 6ix