British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q3 2012 Earnings Presentation
25 slides from British American Tobacco Malaysia Bhd's earnings presentation, Oct 23, 2012
Slide 1: Analyst Briefing Quarter 3, 2012
ANALYST BRIEFING QUARTER 3, 2012 23rd Oct 2012
Slide 2: Agenda
Agenda Industry Review, Market Share and Volumes BATM Review Financial Highlights Other Highlights Future Prospects
Slide 3: Industry Review, Market Share, Volumes and BATM Review
INDUSTRY REVIEW, MARKET SHARE, VOLUMES AND BATM REVIEW
Slide 4: Industry Volumes – Q3 uplift due to GPI speculation
Industry Volumes – Q3 uplift due to GPI speculation Source: Confederation of Malaysian Tobacco Manufacturers (CMTM) INVOICE SHARE Note: Sub-VFM volumes extrapolated from Retail Audit Industry Volumes (bns) Big3 + Sub VFM 4.0 4.2 5% 3.5 3.6 3% 3.6 3.5 2% 3.1 Q1 Q2 Q3 Q4 2011 2012 Volume Variance % Va
Slide 5: Premium grew with no excise increase, with BAT leading
Premium grew with no excise increase, with BAT leading Source: Sep2012 Malaysia Retail Audit (Base: White Only) YTD 2011 80 71.1 74.6 70 YTD 2012 SOM % 60 50 40 30 21.9 21.3 20 10 6.9 4.1 0 Premium VFM SubVFM BAT 2012 BAT 2011 YTD Q2 YTD Q3 YTD Q2 YTD Q3 Share of Premium 72.0 72.0 Share of Premium 7
Slide 6: Illicit Trade – expected to remain at current level for 2012
Illicit Trade – expected to remain at current level for 2012 Source: Illicit Cigarette Study, 2008 - 2012 37.5 36.3 +0.2ppt 36.1 40 +11.8ppt -1.2ppt 34.8 34.9 -0.2ppt 34.7 -1.3ppt 35 25.7 30 20.7 25 21.9 22.7 23.5 % Illicit 22.5 24.5 20 Smuggled White: +2.8ppt 13.4 15 16.7 10 14.4 13.4 12.2 11.9 11.
Slide 7: BAT continue to grow Share of Market
BAT continue to grow Share of Market Source: Sep2012 Malaysia Retail Audit (Base: White Only) 2012: 62.5% (YTD Sept) Fasting 2011: 61.0 (Full Year) % month 62.9 63.0 62.7 62.6 62.7 62.5 62.4 62.4 62.3 62.1 62.1 62.1 62.0 61.8 61.8 61.6 61.5 2011: 60.6% (YTD SPLY) 61.3 60.9 61.0 60.5 60.1 60.0 59.0 5
Slide 8: BAT growth driven by GDB Share
BAT growth driven by GDB Share Source: Sep2012 Malaysia Retail Audit (Base: White Only) BATM +1.5ppt Source: Malaysia Retail Audit (Base: Total Whites, YTD SEP12) Strong GDB performance, primarily Dunhill. BAT SOM up +1.5ppt to 62.5% (YTD September 2012 vs. FY 2011).
Slide 9: Dunhill – extend Premium leadership further
Period Ended SEP12 | Hide NA's | Colour % Chg | Share of White Dunhill – extend Premium leadership further Source: Sep2012 Malaysia Retail Audit (Base: White Only) +2.4ppt April 2012 Dunhill SWITCH New & improved pack April 2012 Year-long equity building campaign Q4 2012 Reinforcement campaign POSM
Slide 10: Pall Mall
J&J - Oil 3 Period Ended SEP12 | Hide NA's | Colour % Chg | Share of White Pall Mall Source: Sep2012 Malaysia Retail Audit (Base: White Only) Feb 2012: -0.4ppt Launch of Pall Mall Mint Jul 2012: Pall Mall Pack Upgrade Sep 2012: Pall Mall Original Taste Pack Upgrade Source: Retail Index (Malaysia) Pa
Slide 11: Peter Stuyvesant
J&J - Oil 3 Period Ended SEP12 | Hide NA's | Colour % Chg | Share of White Peter Stuyvesant Source: Sep2012 Malaysia Retail Audit (Base: White Only) -0.1ppt Peter Stuyvesant resilient , with 3.2% SOM as of YTD September 2012 Source:Produk ini(Malaysia) Retail Index mengandungi lebih 4,000 bahan kimi
Slide 12: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 13: Volume / NTO - Mix
Volume / NTO - Mix Volume (bns) +26% Net Turnover (RM'mn) +9.5% 1,680 mn 1,534 mn 5.2 125 3.4 3.9 5.5 73 128 14 6.9 6.8 1,447 1,427 YTD Q3 2011 YTD Q3 2012 YTD Q3 2011 YTD Q3 2012 Domestic & DF Contract Mfg - Cig Contract Mfg - (SFG)* Domestic, DF, Brunei Contract Mfg - Cig Contract Mfg - (SFG)* Hig
Slide 14: Quarter 3, 2012 vs Quarter 3, 2011
Quarter 3, 2012 vs Quarter 3, 2011 Lower volume due to absence of excise speculation. Better revenue due to higher contract manufacturing margin from conversion of toll to contract manufacturing and lower operating expenses
Slide 15: YTD 2012 vs YTD 2011
YTD 2012 vs YTD 2011 Flat volume and higher revenue from contract manufacturing and lower operating expenses result in higher EPS
Slide 16: Productivity Savings
Productivity Savings 60.0 51.3 50.0 2.8 44.8 41.5 38.6 39.8 1.6 8.6 40.0 6.7 4.5 2.7 3.3 3.9 30.5 8.2 RM'mn 30.0 12.9 13.0 20.0 39.9 36.5 14.09 32.6 1.5 28.8 11.17 4.4 23.0 6.5 10.0 5.5 11.6 3.4 2.1 3.6 4.2 0.0 2006 2007 2008 2009 2010 2011 3Q, 2012 LE2012 Supply Chain Indirects Overheads Mfg Synerg
Slide 17: Q3 Dividends
Q3 Dividends 2011: 98% Payout (110% inc. Special) 0.30 0.66 0.65 0.65 0.65 0.60 0.60 0.60 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Dividends for Q3 2012 at 65 cents per share
Slide 18: Other Updates
OTHER UPDATES
Slide 19: Announcement by Ministry of Health on new regulations
Announcement by Ministry of Health on new regulations On 14 August 2012, the Ministry of Health announced that as of 1 September 2012 along with a ban on price discounting, the size of cigarette packs will be standardized with 20 sticks per pack whilst each carton of cigarettes will also be standa
Slide 20: Increase of Duty Payable on Manufactured Cigarettes
Increase of Duty Payable on Manufactured Cigarettes We were officially informed by the Royal Malaysian Customs on 18 October 2012, of a mandated uplift in the ex-factory pricing of our cigarettes of between 26% to 58%, effective 19 October. Consequently, excise and sales tax payable on our manufac
Slide 21: Recent CR Highlights: MyKasih food aid programme
Recent CR Highlights MyKasih “Love My Neighbourhood” food aid programme Continuing its commitment towards corporate responsibility, the Company has contributed approximately RM3m to provide essential food items to the less fortunate through this programme. Process flow Housewife receives Approved su
Slide 22: Recent CR Highlights
Recent CR Highlights 11th Higher Education Starter Kit (HESK) Awards Ceremony (4th Sept) A total of 141 aspiring students from the tobacco growing community awarded with the HESK awards totalling RM98,700.
Slide 23: Future Prospects
FUTURE PROSPECTS
Slide 24: Future Prospects
Future Prospects Although there is no excise increase announced in the recent budget, there is still an increase in the duties payable to Government as a result of the mandated increase in ex-factory pricing. Consequently, the Group has taken a price increase for all its brands. The Group is opt
Slide 25: Thank You
Thank You BRITISH AMERICAN TOBACCO MALAYSIA
British American Tobacco (Malaysia) Berhad — Q3 2012 Earnings Presentation on 6ix