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

British American Tobacco P.l.c — FY2012 Earnings Presentation

34 slides from British American Tobacco P.l.c's earnings presentation, Feb 28, 2013

  1. Slide 1: Preliminary Results 2012

    PRELIMINARY RESULTS 2012 28th February 2013

  2. Slide 2: Nicandro Durante, Chief Executive

    Nicandro Durante Chief Executive

  3. Slide 3: Delivering the strategy

    PRELIMINARY RESULTS 2012 Delivering the strategy Volume (rep) -1.6% Volume (org) -2% GDB volume 3% Revenue (rep) -1% Revenue (org, const) 4% Adjusted Profit (rep) 3% Adjusted Profit (org, const) 8% Operating margin (rep) 1.6 ppt Adj EPS 7% DPS 7%

  4. Slide 4: Global drive brands

    PRELIMINARY RESULTS 2012 Global drive brands GDB volumes 2002-2012 250 • Volume: 49 billion, up 2% 200 • Share +0.1 ppt in T40 150 • Strong growth in Indonesia, South 100 Africa, Malaysia 50 • Innovations account for 73% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 • Volume: 67 billion,

  5. Slide 5: Global drive brands

    PRELIMINARY RESULTS 2012 Global drive brands GDB volumes 2002-2012 250 200 • Volume: 33 billion, up 11% 150 • Share 0.2 ppt in T40 100 • Growth in Western Europe and Americas 50 • Capsule markets driving growth 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 • Volume: 83 billion, up 3% • Sh

  6. Slide 6: Volume and revenue

    PRELIMINARY RESULTS 2012 Volume and revenue 15% 10% 9% 5% 4% 4% 3% 2% 0% -1% -1% 0% -2% -1% -2% -3% -3% -5% -5% -4% -10% Asia Pacific Americas W. Europe EEMEA Group Volume (organic) -2% -3% -5% 0% -2% Revenue (organic @ const) -1% 4% 3% 9% 4% Revenue (@ curr) -1% -3% -4% 2% -1%

  7. Slide 7: Volume and profit

    PRELIMINARY RESULTS 2012 Volume and profit 20% 15% 15% 10% 8% 8% 8% 7% 6% 5% 3% 3% 0% 0% -2% -2% -2% -3% -3% -5% -5% -10% Asia Pacific Americas W. Europe EEMEA Group Volume (organic) -2% -3% -5% 0% -2% Profit (org @ const) 7% 6% 3% 15% 8% Profit (@ curr) 8% -2% -3% 8% 3%

  8. Slide 8: Asia Pacific

    PRELIMINARY RESULTS 2012 Asia Pacific Volume -2% Strong profit growth due to good performances across the region GDBs 3% Volume impacted by declines in South Korea, Japan and Indonesia Revenue -1% Strong GDB performance Profit 8% Operating margin 3.3ppt

  9. Slide 9: Americas

    PRELIMINARY RESULTS 2012 Americas Volume -3% 0% Illicit trade stabilised in Canada and du Maurier share increased GDBs 7% Strong performance of Lucky Strike in Argentina Good GDB growth in Colombia Revenue -3% 4% Share up in Brazil, Canada, Venezuela and Mexico Profit -2% 6% Operating margin 0.4ppt

  10. Slide 10: Western Europe

    PRELIMINARY RESULTS 2012 Western Europe Volume -5% Strong performance of Lucky Strike across the region GDBs 1% Fine Cut volume up +8% Good performance of Pall Mall in Germany and Switzerland Revenue -4% 3% Volume up in the UK, Germany, Romania and Czech Republic Profit -3% 3% Operating margin 0.3pp

  11. Slide 11: Eastern Europe, Middle East and Africa

    PRELIMINARY RESULTS 2012 Eastern Europe, Middle East and Africa Volume 0% Market share up in Ukraine, Egypt, GCC and Russia GDBs 3% Volume up in South Africa with good Dunhill performance Strong Kent performance Revenue 2% 9% Good volume performance by Pall Mall in Russia Profit 8% 15% Operating mar

  12. Slide 12: Ben Stevens, Finance Director and Chief Information Officer

    Ben Stevens Finance Director and Chief Information Officer

  13. Slide 13: Operating margin

    PRELIMINARY RESULTS 2012 Operating margin 40.5% 40.9% 39.5% 37.4% 36.2% 35.8% 34.1% 34.5% 34.7% 32.9% 2011 2012 Asia Pacific Americas W. Europe EEMEA Group

  14. Slide 14: Profit from operations – adjusting items

    PRELIMINARY RESULTS 2012 Profit from operations – adjusting items £m 2012. 2011. % change Adjusted profit 5,681. 5,519. +3% Restructuring & integration costs (206) (193) Amortisation of trademarks (63) (58) Goodwill impairment -. (273) Fox River -. (274) Profit from operations 5,412. 4,721. +15%

  15. Slide 15: Profit before tax

    PRELIMINARY RESULTS 2012 Profit before tax £m 2012. 2011 % change Profit from operations 5,412. 4,721. +15% Net finance costs (456) (460) -1% Associates 692. 670. +3% Profit before tax 5,648. 4,931. +15%

  16. Slide 16: Taxation and profit for the period

    PRELIMINARY RESULTS 2012 Taxation and profit for the period £m 2012. 2011. % change Profit before tax 5,648. 4,931. +15% Taxation (1,526) (1,556) -2% Profit for the period 4,122. 3,375. +22% Underlying tax rate was 30.6% (2011: 31.2%)

  17. Slide 17: Non-controlling interests and adjusted EPS

    PRELIMINARY RESULTS 2012 Non-controlling interests and adjusted EPS Profit attributable to £m 2012. 2011. % change Owners of the parent 3,841. 3,095. +24% Non-controlling interests 281. 280. 0% Profit for the period 4,122. 3,375. +22% Adjusted profit after tax 4,044. 3,857. Number of shares 1,949m.

  18. Slide 18: Drivers of adjusted EPS growth

    PRELIMINARY RESULTS 2012 Drivers of adjusted EPS growth Pence % EPS 2011 (p) 194.6. Profit performance 15.6. 8% Acquisitions / disposals 0.1. 0% Net finance costs 0.8. 0% Associates 3.3. 2% Taxation 2.3. 1% Non-controlling interests (1.1) 0% Share buy-back 2.2. 1% Exchange (10.3) -5% EPS 2012 (p) 20

  19. Slide 19: Cash flow

    PRELIMINARY RESULTS 2012 Cash flow 2012. 2011. £m. £m. Adjusted profit from operations 5,681. 5,519. Non cash items 430. 515. Increase in working capital (282) (141) Net capital expenditure (742) (566) Operating cash flow 5,087. 5,327. Pension funds – shortfall funding (164) (140) Net interest paid

  20. Slide 20: Cash flow

    PRELIMINARY RESULTS 2012 Cash flow 2012. 2011. £m. £m. Free cash flow 3,259. 3,326. Dividends paid to shareholders (2,538) (2,358) Share buy-back (1,258) (755) Net investment activities (43) (311) Other net flows (57) (93) Net cash flow (637) (191)

  21. Slide 21: Net debt

    PRELIMINARY RESULTS 2012 Net debt 2012 2011 £m £m Opening net debt at 1 January (7,928) (7,841) Net cash flow for the period (637) (191) Exchange rate effects 89. 123. Other (including change in accrued interest) 3. (19) Closing net debt at 31 December (8,473) (7,928)

  22. Slide 22: Financial targets met

    PRELIMINARY RESULTS 2012  Financial targets met  Adjusted EPS 7% higher at 207.5 pence  Proposed dividend per share 7% higher at 134.9 pence  Annual share buy-back programme increased to £1.50 bn  Operating margin up by 160 bps, to 37.4%  Pricing and share momentum continues into 2013 28

  23. Slide 23: Preliminary Results 2012

    PRELIMINARY RESULTS 2012 28th February 2013

  24. Slide 24: Supplementary Slides

    SUPPLEMENTARY SLIDES 28th February 2013

  25. Slide 25: Volumes by region FY 2012

    PRELIMINARY RESULTS 2012 Volumes by region FY 2012 Region Billions 2012 2011 % change Asia Pacific 188 191 -2% Americas 142 143 -0% Western Europe 129 135 -5% Eastern Europe, Middle East and Africa 235 236 -0% Group 694 705 -2%

  26. Slide 26: Volumes by region H2 2012

    PRELIMINARY RESULTS 2012 Volumes by region H2 2012 Region Billions 2012 2011 % change Asia Pacific 93 96 -3% Americas 71 73 -2% Western Europe 67 70 -5% Eastern Europe, Middle East and Africa 119 122 -2% Group 350 361 -3%

  27. Slide 27: Volumes by region Q4 2012

    PRELIMINARY RESULTS 2012 Volumes by region Q4 2012 Region Billions 2012 2011 % change Asia Pacific 47 50 -6% Americas 38 38 +2% Western Europe 34 35 -4% Eastern Europe, Middle East and Africa 58 59 -2% Group 177 182 -3%

  28. Slide 28: Revenue by region FY 2012

    PRELIMINARY RESULTS 2012 Revenue by region FY 2012 Region £m 2012 2011 % change Asia Pacific 4,214 4,251 -1% Americas 3,460 3,558 -3% Western Europe 3,442 3,600 -4% Eastern Europe, Middle East and Africa 4,074 3,990 2% Group 15,190 15,399 -1%

  29. Slide 29: Revenue by region H2 2012

    PRELIMINARY RESULTS 2012 Revenue by region H2 2012 Region £m 2012 2011 % change Asia Pacific 2,164 2,226 -3% Americas 1,754 1,814 -3% Western Europe 1,793 1,881 -5% Eastern Europe, Middle East and Africa 2,027 2,040 -1% Group 7,738 7,961 -3%

  30. Slide 30: Adjusted profit from operations FY 2012

    PRELIMINARY RESULTS 2012 Adjusted profit from operations FY 2012 Region £m 2012 2011 % change Asia Pacific 1,666 1,539 8% Americas 1,415 1,441 -2% Western Europe 1,186 1,228 -3% Eastern Europe, Middle East and Africa 1,414 1,311 8% Group 5,681 5,519 3%

  31. Slide 31: Adjusted profit from operations H2 2012

    PRELIMINARY RESULTS 2012 Adjusted profit from operations H2 2012 Region £m 2012 2011 % change Asia Pacific 851 773 10% Americas 661 673 -2% Western Europe 628 656 -4% Eastern Europe, Middle East and Africa 702 657 7% Group 2,842 2,759 3%

  32. Slide 32: Top 40 market share movements (1)

    PRELIMINARY RESULTS 2012 Top 40 market share movements (1) SOM FY12 Movement Market SOM FY12 Movement Market (%) (ppt) (%) (ppt) Argentina 26.7 -0.1 Egypt 15.8 +2.9 Australia 44.2 -0.3 France 16.5 +0.7 Bangladesh 44.0 +1.8 GCC 34.6 +0.3 Belgium 32.4 -0.5 Germany 19.7 +0.4 Brazil 74.9 +1.2 Hungary 40

  33. Slide 33: Top 40 market share movements (2)

    PRELIMINARY RESULTS 2012 Top 40 market share movements (2) SOM FY12 Movement Market SOM FY12 Movement Market (%) (ppt) (%) (ppt) Mexico 34.2 +0.3 Spain 11.9 -0.5 Netherlands 27.3 +0.1 Sweden 27.9 +0.9 New Zealand 71.5 +0.3 Switzerland 41.6 +0.3 Pakistan 64.2 +4.1 Taiwan 9.1 +0.9 Poland 28.4 -0.2 Tur

  34. Slide 34: Foreign currencies

    PRELIMINARY RESULTS 2012 Foreign currencies Average Closing 2012 2011 2012 2011 US dollar 1.586 1.604 1.626 1.554 Canadian dollar 1.584 1.586 1.619 1.583 Euro 1.234 1.153 1.233 1.197 South African rand 13.054 11.632 13.791 12.547 Brazilian real 3.109 2.683 3.328 2.899 Australian dollar 1.532 1.554 1

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