British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Debt Investor Presentation (July 2020)
18 slides from British American Tobacco P.l.c's debt investor presentation, July 2020
Slide 1: Multi-Category strategy delivers growth in difficult times
Multi-Category strategy delivers growth in difficult times Fixed Income Debt Investor Update Call Tadeu Marroco – Finance Director | Neil Wadey – Group Head of Treasury
Slide 2: 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 3: Important Information
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 filed on 26 March 2020 and Current Reports on Form 6
Slide 4: Building A Better Tomorrow
Building A Better Tomorrow A Defining Corporate Purpose Good Progress in 2020 Non-Combustibles now 10% of revenue Additional 2.7m* Non-Combustibles consumers Invested additional £250m** in New Categories Set ambitious 2025 environmental targets Set ambitious 2030 Carbon Neutrality target To reduce t
Slide 5: Delivering for Today & Investing in the Future
Delivering for Today & Investing in the Future Clear Commercial Priorities Good Progress in 2020 STEP-CHANGE IN Growing share* in New Categories NEW CATEGORIES New Category revenue** +12.7% COMBUSTIBLE VALUE Cigarette price/mix*** +8.5% GROWTH Group revenue** +2.4% Quantum savings c.£240m YTD SIMPLI
Slide 6: H1 2020 Results: A strong performance in a challenging environment
H1 2020 RESULTS: A strong performance in a challenging environment +50bps +20bps +40bps -6.3% -5.3% (excl GTR) Corporate Corporate Value Strategic Cig+THP Volume Share Share BAT Volumes Value Share (FMC+THP) +12.7% +2.4% +3.3% +6.6% New Category Group Adjusted Profit* from Adjusted Diluted Revenue*
Slide 7: Successfully navigating a challenging environment
Successfully navigating a challenging environment COVID revenue* headwind c.4% H1; c.3% expected FY Developed Markets Emerging Markets New Categories (c.75% of Group revenue) (c.25% of Group revenue) Consumption resilient; Volume impacted by Category growth slowed; stable to slightly higher lockdown
Slide 8: H2: COVID uncertainty remains
H2: COVID uncertainty remains Navigating COVID with Agility GTR Substantially • Little evidence of accelerated downtrading Impacted to date in DMs • Planning for some recovery end Q4 • Lockdown restrictions slowly easing • All factories now fully reopened • BCPs maintain supply continuity South Afri
Slide 9: New Categories: Consumer acquisition drives growth
New Categories: Consumer acquisition drives growth +2.7m (vs H1 2019) +12.7 % +£ 250 m Non-Combustible New Category Additional product Consumers Revenue* Investment** #1 UP 2 x UP 2 x Vapour Device E-commerce Speed of Sales*** Revenue* Innovation^ Share growth versus FY19. Source: Company data 9 * O
Slide 10: Vapour: Vuse/Vype driving strong growth
Vapour: Vuse/Vype driving strong growth +2.1m +39% +70% (vs H1 2019) Vapour Vapour US Vapour Consumers Revenue* Revenue* 26 % UP 3x UP 3 x Value Share Strategic Brand Vuse Alto US in T5 Markets Value Share in T5** Value Share** Number of consumers growth versus HY19. Number of consumers includes pol
Slide 11: THP: Growing volume share in Japan and ENA
THP: Growing volume share in Japan and ENA Jun YTD vs. +70bps 5.4 YTD FY 19* % 5.3% +0.3pp to 18.9% Japan Total Nicotine glo Japan Volume Share June Share 2.3% +1.3pp Moscow 0.2% +0.1pp 0.7% +0.5pp 0.7 glo Hyper Japan % 2.8 glo Moscow % THP revenue down -12%* due to: › Japan excise harmonisation Jun
Slide 12: Modern Oral: 71% growth in an exciting category
Modern Oral: 71% growth* in an exciting category Volume share YTD vs. Jun YTD FY 19** #1 +3.6 ppts 9.3% +3.6pp Scandinavia -300bps L3Mths Volume Share US Modern Oral Share 3.9% +1.7pp Portfolio gaps limiting 72.6% +17.1pp share growth in US +71 Encouraging pilots in APME & AMSSA 53.4% +7.1pp % › COV
Slide 13: Operating Margin: Releasing funds to support the growth agenda
OPERATING MARGIN: Releasing funds to support the growth agenda New Categories investment +c.£250m; margin +80bps +0.8 -2.7 4.0 -0.5 43.7% 42.9% +80bps + 250 £New Category m Marketing Investment 2019 Adjusted Pricing and Operational Incremental New Transactional FX 2020 Adjusted Operating Margin Effi
Slide 14: 2020 H1 Results: Our Multi-Category strategy delivers growth in difficult times
2020 H1 RESULTS: Our Multi-Category strategy delivers growth in difficult times Delivering revenue, profit and earnings growth* in exceptional circumstances Multi-Category consumer acquisition drives revenue and share growth** Excellent Combustibles value and volume share growth Navigating COVID sup
Slide 15: Cash and Deleverage
CASH AND DELEVERAGE: Strong liquidity position >90% operating cash conversion Strong H1 Operating Cash Strengthened Liquidity Manageable Maturity Flow Conversion in H1 Profile £ in billions £ in billions 80% 3.9 7.2 3.4 £ 70%* 66% € 1.9 3.3 3.0 2.6 73%* 2.3* $ 1.0 USD: April 2020 EUR: April 2020 GBP
Slide 16: Committed to dividend growth & 65% pay-out ratio
Committed to dividend growth & 65% pay-out ratio CAPITAL DISCIPLINE ALLOCATION PRIORITIES c.£650m Capex = Depreciation* Deleverage (Adj Net debt/Adj EBITDA**) • Around 3x expected by end 2021 • 1.5x-2.5x long term corridor Working Capital efficiencies Dividend • 65% pay-out ratio growth in GBP £1bn
Slide 17: Appendix
Appendix
Slide 18: Appendix: Definitions
Appendix A1: Adjusting (Adj.) Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence. A2: Constant currency Constant currency – measures are calculated based on a re-translation, at the prior year’s exchange rates, of the current year
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