British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Investor Day (March 2019)
18 slides from British American Tobacco P.l.c's investor day presentation, Mar 14, 2019
Slide 1: Accelerating Our Journey to Transform Tobacco
ACCELERATING OUR JOURNEY TO TRANSFORM TOBACCO Investor Day | 14 March 2019
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 to be filed on 15 March 2019 and Current Reports on
Slide 4: Inheriting a strong foundation…
Inheriting a strong foundation… GREAT *RESULTS OVER THE LAST 8 YEARS CONTINUED OUTPERFORMANCE IN COMBUSTIBLES** ESTABLISHED MULTI-CATEGORY - STRATEGY *High signal figure (HSF) Adjusted Diluted EPS delivery in L8Y ** Corporate share growth of +250 bps & strategic brands +~~800bps ~~ in L8Y in T40 mar
Slide 5: But the nicotine environment is changing…
But the nicotine environment is changing… SHARE PRICE UNDER PERFORMANCE INDUSTRY CHANGING FAST COMPETITION IN NEW CATEGORIES *High signal figure (HSF) Adjusted Diluted EPS delivery in L8Y ΎΎŽƌƉŽƌĂƚĞƐŚĂƌĞŐƌŽǁƚŚŽĨнϮϱϬďƉƐΘƐƚƌĂƚĞŐŝĐďƌĂŶĚƐнΕϴϬϬďƉƐŝŶ>ϴzŝŶdϰϬŵĂƌŬĞƚƐ ~~~
Slide 6: Industry revenue pool is growing rapidly
Industry Revenue pool is growing rapidly OTP 3% ORAL 5% 9% THP 10% ~£100bn (~+25%) By 2023* VAPOUR FMC 73% T40 Markets – Nicotine revenue pool (%). Growth (%) 2023 vs. 2018) Oral= Traditional oral + Modern White * estimate Source: BAT Internal Estimates
Slide 7: BAT's new chapter
B!T’s new chapter A stronger, simpler, faster organisation to deliver a step-change in New Categories and sustainable long term shareholder returns
Slide 8: Our ambition: £5bn revenue in New Categories by 2023-24
Our ambition £5bn revenue in New Categories by 2023-24 3-5% ~£5bn CAGR New Category Revenue 5X BAT Revenue (bn) Acceleration Modern Oral in new categories Vapour THP Combustibles + Traditional Oral 2018 2023-24 Average 30-50% pa growth in New Categories Source: BAT Internal Estimates. £5bn stated @
Slide 9: What this means
What this means ~ 20 25-35% 12-18% >50% Share of Share of Share of Share of BPS FMC* THP Vapour Modern Oral Categories will evolve at different rates Note: Share ambition refers to: % Share of revenue in T40 markets *!verage per annum” for the FMC share growth Source: Internal 2023/24 Share refers t
Slide 10: A Sharper Focus
A Sharper Focus COMBUSTIBLE VALUE STEP-CHANGE SIMPLIFY THE GROWTH IN NEW CATEGORIES COMPANY Stronger, Simpler, Faster
Slide 11: A Sharper Focus
A Sharper Focus COMBUSTIBLE VALUE STEP-CHANGE SIMPLIFY THE GROWTH IN NEW CATEGORIES COMPANY – Grow share – Products & Brands that – Organisation 2.0 consumers love – Leverage our Brands – Additional cost savings – Delivering in Digital programme – Grow Gross Margin > than Revenue – Building new worl
Slide 12: Combustible value growth
Combustible value growth ACCELERATE GROSS SHARPER GROW SHARE MARGIN INNOVATION FOCUS Leverage our brand & innovation assets Strategic brands portfolio Focus on growth segments 150Mn consumers use our Brands daily Revenue to Gross Margin conversion Powered by innovation improving fast Leading Share a
Slide 13: Step-change in New Categories
Step-change in New Categories BRANDS AND DELIVER IN BUILDING NEW PRODUCTS THAT CONSUMERS LOVE DIGITAL WORLD CAPABILITIES Satisfaction and Product Design Integrated data & analytics Product Design Flavour experiences Personalised consumer engagement Creation of digital cells Shift to closed systems a
Slide 14: Simplify the Company
Simplify the Company FOCUS ON CASH & ORGANISATION 2.0 COST SAVINGS PROGRAM CULTURE & TALENT DELEVERAGING Stronger | Simpler | Faster Reduce complexities Multi function global business services Generating around £1.5bn of free cash Building new skills & talent with automation & analytics flow after d
Slide 15: The US opportunity
The US opportunity COMBUSTIBLE VALUE STEP-CHANGE IN NEW SIMPLIFY THE GROWTH CATEGORIES COMPANY Strong early RAI synergies of performance of Vibrant Brand portfolio $400mn amongst ASU30 Vuse Alto delivered by 2020 Value Share* is key focus Further value in combustibles Fully integrate Modern Oral VEL
Slide 16: What I believe in
What I believe in CHANGE RESULTS DELIVERY TEAM
Slide 17: A Sharper Focus
A Sharper Focus COMBUSTIBLE VALUE STEP-CHANGE SIMPLIFY THE GROWTH IN NEW CATEGORIES COMPANY Stronger, Simpler, Faster
Slide 18: Today's Team
Today’s Team Kingsley Chris Paul Vincent ACCELERATING GROWTH IN COMBUSTIBLES – WINNING THROUGH STEP-CHANGING NEW ORAL CATEGORY: THE NEW NICOTINE WORLD FOCUS & SHARPENED EXECUTION CATEGORIES THE NEW OPPORTUNITY Jerome David Jim Ricardo Tadeu CANADIAN LITIGATION SCIENCE SUPPORTING A THRIVING BUSINESS
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