British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Investor Day (March 2019)
31 slides from British American Tobacco P.l.c's investor day presentation, Mar 14, 2019
Slide 1: Investor Day | 14 March 2019
——EEE BRITISH AMERICAN TOBACCO Investor Day | 14 March 2019 * ae RANSFORMIN ACCELERATING DELIVERY —
Slide 2: Oral Category | The new opportunity
Oral Category | The new opportunity Vincent Duhem Category Director
Slide 3: Important Information
Important Information The information contained in this presentation in relation to British American Tobacco p.l.c. (“BAT”) and its subsidiaries has been prepared solely for use at this presentation. The presentation is not directed to, or intended for distribution to or use by, any person or entity
Slide 4: Important Information (continued)
Important Information Forward-looking Statements (continued) Additional information concerning these and other factors can be found in BAT’s filings with the U.S. Securities and Exchange Commission (“SEC”), including the Annual Report on Form 20-F to be filed on 15 March 2019 and Current Reports on
Slide 5: Vincent Duhem, Category Director
VINCENT DUHEM CATEGORY DIRECTOR 7Yrs Industry Joined BAT in experience 2012 Marketing Brand Category Director Director Director
Slide 6: Opportunity, business model, marketing proposition, BAT leading
1 A sizeable emerging opportunity 2 A promising business model 3 A strong marketing proposition 4 BAT leading with superior product offerings
Slide 7: The Opportunity
THE OPPORTUNITY RANSFORMING ~ ACCELERATING DELIVERY a
Slide 8: An exciting new space
An exciting new space INNOVATION & EXPERTISE TO SMOKE-FREE, DISCREET, EXPERIENCES BEYOND EMBRACED BY NEXT CREATE SMART FORMATS CONSIDERATE SMOKE OR VAPOUR GENERATION NO DEVICE REQUIRED ANYTIME, ANYWHERE NEW SENSORIAL STIMULATIONS EDUCATED, ASU30, INCOME+, GENDER BALANCED => WIDER ADULT CONSUMER => U
Slide 9: The Oral product category
The Oral product category TOBACCO NICOTINE MOIST / LOOSE SNUS ORIGINAL PORTION DRY PORTION ALL WHITE PORTION NICOTINE POUCH LOZENGE GUM FILM SPRAY A WIDE RANGE OF TRADITIONAL AND NEW PROPOSITIONS
Slide 10: Strong position in Traditional Oral Tobacco
Strong position in Traditional Oral Tobacco TOBACCO NICOTINE MOIST / LOOSE SNUS ORIGINAL PORTION DRY PORTION ALL WHITE PORTION NICOTINE POUCH LOZENGE GUM FILM SPRAY EXPERTISE AND LEADERSHIP IN USA AND SCANDINAVIA
Slide 11: A new opportunity
A new opportunity TOBACCO NICOTINE MOIST / LOOSE SNUS ORIGINAL PORTION DRY PORTION ALL WHITE PORTION NICOTINE POUCH LOZENGE GUM FILM SPRAY A NEW GENERATION OF A POTENTIALLY REDUCED RISK PRODUCTS
Slide 12: Another step in the potential reduced risk journey
Another step in the potential reduced risk journey TOBACCO CONVENTIONAL HEATING TRADITIONAL VAPOUR MODERN CIGARETTES ORAL PRODUCTS PRODUCTS ORAL PRODUCTS PRODUCTS REDUCED RISK POTENTIAL modelled assumption based on the science currently available
Slide 13: An answer to consumer trends
An answer to consumer trends DISCRETION CONVENIENCE CONSUMER TRENDS S O C I A L C O N S I D E R AT I O N HYGIENE ON THE GO
Slide 14: A reinvention of experiences
A reinvention of experiences WIDESPREAD RITUAL IN PROMINENT GEOGRAPHIES PROVEN RITUAL LARGE EXISTING BASE OF ORAL PRODUCT CONSUMERS AROUND THE WORLD PROVEN EFFICACY OF NICOTINE DELIVERY
Slide 15: An attractive commercial model
An attractive commercial model C O M P L I M E N TA R Y R I T U A L AT T R A C T I V E MODEL GROSS MARGIN LARGE SOB
Slide 16: An attractive commercial model
An attractive commercial model GROSS MARGIN (£ PER MILLE) SWITZERLAND SWEDEN UNITED KINGDOM GLOBAL APPROX APPROX APPROX APPROX 1.5X 2.4X 3.1X 2-3X VS FMC VS FMC VS FMC VS FMC EPOK LY F T LY F T MODERN ORAL Source: BAT internal estimate / company data
Slide 17: A Strong Proposition
Ss e A STRONG ee RANSFORMIN ~ ACCELERATING DELIVERY a
Slide 18: Designing a whole new experience
Designing a whole new experience PROPRIETARY INNOVATIVE CANS BORN IN SWEDEN NATURAL BASE INGREDIENTS NO “BURN” FOR MAXIMUM COMFORT USA EXPERTISE NICOTINE DELIVERY FRESH FLAVOR EXPERIENCES TECHNOLOGY
Slide 19: BAT delivering superior product performance
BAT delivering superior product performance BAT OUTPERFORMS COMPETITION ON KEY ATTRIBUTES 51% 64% 68% 46% 46% 60% 41% 57% 56% 39% 52% 33% 31% 44% 45% 27% Innovative Offers Great Taste Meet Your Overall liking Aroma Flavour Satisfaction Something Needs Different BAT EPOK ZYN BAT VELO ZYN SOURCE: BAT
Slide 20: Building strong global brands
Building strong global brands WHITE TOBACCO N0 TOBACCO NICOTINE DELIVERY TECHNOLOGY
Slide 21: A wide range of innovative flavours
A wide range of innovative flavours
Slide 22: A new global campaign and go to market
A new global campaign and go to market PREMIUM PRICE ONLINE & DIGITAL NEW RTC DATA ENABLED ACTIVATION EXPERIENTIAL DISRUPTIVE DISTRIBUTION
Slide 23: A Strong Start
A STRONG START RANSFORMING ~ ACCELERATING DELIVERY a
Slide 24: Switzerland: Amazing performance in only 7 months
Switzerland: Amazing performance in only 7 months ORAL SEGMENT ORAL SEGMENT MODERN ORAL SEGMENT VOLUME SHARE VOLUME GROWTH VOLUME GROWTH 1.7% +38% +100% OF TOTAL NICOTINE FY 2018 vs SPLY FY 2018 vs SPLY EPOK VOLUME SHARE OF ORAL CATEGORY 27.0% › FASTEST GROWING BRAND › SEGMENT LEADER - 100% SHARE OF
Slide 25: Norway: The clear driver of Modern Oral
Norway: The clear driver of Modern Oral ORAL SEGMENT ORAL SEGMENT MODERN ORAL SEGMENT VOLUME SHARE VOLUME GROWTH VOLUME GROWTH 44% +7% +33% OF TOTAL NICOTINE FY 2018 vs SPLY FY 2018 vs SPLY EPOK VOLUME SHARE OF ORAL CATEGORY 8.2% › FASTEST GROWING BRAND › SEGMENT LEADER - 73% SHARE OF SEGMENT 1.4% J
Slide 26: Sweden: Leading transformation to Modern Oral
Sweden: Leading transformation to Modern Oral ORAL SEGMENT ORAL SEGMENT MODERN ORAL SEGMENT VOLUME SHARE VOLUME GROWTH VOLUME GROWTH 54% +5% +72% OF TOTAL NICOTINE FY 2018 vs SPLY FY 2018 vs SPLY EPOK/LYFT VOLUME SHARE OF ORAL CATEGORY 1.5% › THE ONLY PREMIUM BRAND GROWING 0.5% › SEGMENT LEADER - 65
Slide 27: LYFT expanding in pilot markets
LYFT expanding in pilot markets UK Russia since Jan 2019 starting May 2019 PURCHASE INTENTION AMONG TRIALISTS 60-80% Source: Consumer engagement panel UK 2019
Slide 28: A significant Oral opportunity
A significant Oral opportunity 2018 | US TOTAL NICOTINE MARKET Oral, 10% TRADITIONAL ORAL MODERN ORAL MOIST SNUS Tobacco Derived Nicotine Products Vapor, 8% Cigarette, 82% 95% 4% 1% Moist Segment Share of SNUS Segment Share of Modern Oral Segment Share of Total Oral Total Oral Total Oral A LARGE AND
Slide 29: VELO: the next generation in USA
VELO: the next generation in USA A WINNING PRODUCT A VALIDATED LAUNCH PROPOSITION CONSUMER MIX IN SUMMER 2019
Slide 30: A great opportunity
A great opportunity 1 A WHOLE NEW CONSUMER SPACE IS OPENING 2 A VERY PROMISING BUSINESS MODEL 3 AN AMBITIOUS MARKETING PLAN 4 WE HAVE STRONG POSITIONS AND WE ARE READY FOR EXPANSION
Slide 31: Thank you.
——EEE BRITISH AMERICAN TOBACCO Thank you. cw * ae RANSFORMING ACCELERATING DELIVERY —