British American Tobacco p.l.c. · LSE:BATS
British American Tobacco p.l.c — H1 2013 Earnings Presentation
32 slides from British American Tobacco p.l.c's earnings presentation, Jul 31, 2013
Slide 1: Half-Yearly Results 2013
HALF‐YEARLY RESULTS 2013 31st July 2013
Slide 2: Nicandro Durante, Chief Executive
NICANDRO DURANTE Chief Executive
Slide 3: Delivering the strategy
HALF‐YEARLY RESULTS 2013 Delivering the strategy Total Tobacco Vol -3% GDB volume 2% Revenue (rep) 2% Revenue (const) 4% Adjusted Profit (rep) 4% Adjusted Profit (const) 6% Operating margin (rep) +1.0 ppt Adj EPS 8% DPS 7%
Slide 4: Global Drive Brands
HALF‐YEARLY RESULTS 2013 Global Drive Brands Global Drive Brand Volume • Volume: 25.1 billion • Share +0.2ppt • Good share performances in Indonesia, Chile, Romania, Malaysia and the GCC • Share growing in South Korea • Volume: 31.7 billion GDB volume: 114 bns, +2% • Share flat • Volumes impacted
Slide 5: Global Drive Brands
HALF‐YEARLY RESULTS 2013 Global Drive Brands Global Drive Brand Volume • Volume: 14.8 billion • Share +0.1ppt • Good share growth in Western Europe • Volume: 42.7 billion GDB volume: 114 bns, +2% • Share +0.2ppt International brands: 188 bns, +2% • Good growth across the regions • Pall Mall Fine
Slide 6: Volumes and Revenue
HALF‐YEARLY RESULTS 2013 Volumes and Revenue 9% 7% 5% 5% 4% 4% 4% 3% 3% 2% 2% 1% -1% -3% -3% -4% -6% -8% -9% -11% Asia Pacific Americas W. Europe EEMEA Group Volume 5% -9% -8% -4% -3% Revenue (const) 5% 2% 1% 7% 4% Revenue (curr) 3% -3% 4% 3% 2%
Slide 7: Volumes and Profit
HALF‐YEARLY RESULTS 2013 Volumes and Profit 13% 9% 9% 7% 7% 6% 5% 4% 3% 2% 2% 0% -1% -5% -3% -4% -8% -9% -12% Asia Pacific Americas W. Europe EEMEA Group Volume 5% -9% -8% -4% -3% Profit (const) 9% 2% 0% 13% 6% Profit (curr) 7% -1% 3% 7% 4%
Slide 8: Asia-Pacific
HALF‐YEARLY RESULTS 2013 Asia-Pacific Profit growth Australia, Pakistan, Volume 5% Vietnam, Taiwan and Bangladesh GDBs 14% Strong GDB performance Strong performance from Revenue Indonesia, with increasing 3% volume and stabilisation of share Profit 7% Operating margin +1.7 ppt
Slide 9: Americas
HALF‐YEARLY RESULTS 2013 Americas Profit across the region impacted Volume -9% by FX Volume reduction mainly due to GDBs 17% declining industry volumes in Brazil Revenue ‐3% Good share growth driven by Brazil, Canada, Mexico and Venezuela Profit ‐1% Strong GDB performance Operating margin +1.0 ppt
Slide 10: Western Europe
HALF‐YEARLY RESULTS 2013 Western Europe Difficult economic environment Volume ‐8% resulted in significant market contractions across the region GDBs ‐3% Grew both profit and share in the Fine Cut segment Revenue 4% Good profit growth from France, Switzerland, UK, and Sweden Profit 3% Operating margi
Slide 11: Eastern Europe, Middle East and Africa
HALF‐YEARLY RESULTS 2013 Eastern Europe, Middle East and Africa Volume ‐4% Strong profit performance in the region driven by higher pricing GDBs ‐9% Volumes declined due to Turkey, Ukraine and Egypt Revenue 3% Maintained leadership of the premium segment in Russia Profit 7% Operating margin +1.7 ppt
Slide 12: Ben Stevens, Finance Director and Chief Information Officer
BEN STEVENS Finance Director and Chief Information Officer
Slide 13: Operating Margin
HALF‐YEARLY RESULTS 2013 Operating Margin 44.4% 43.4% 41.5% 39.8% 38.9% 37.9% 36.4% 34.7% 33.7% 33.4% 2012 2013 Asia Pacific Americas W. Europe EEMEA Group * Based on adjusted profit
Slide 14: Profit from operations – adjusting items
HALF‐YEARLY RESULTS 2013 Profit from operations – adjusting items £m 2013 2012 % change Adjusted profit 2,944 2,821 +4% Restructuring & integration costs (97) (68) Amortisation of trademarks (40) (31) Profit from operations 2,807 2,722 +3%
Slide 15: Profit before tax
HALF‐YEARLY RESULTS 2013 Profit before tax £m 2013 2012 % change Profit from operations 2,807 2,722 +3% Net finance costs (241) (211) -14% Associates 425 336 +26% Profit before tax 2,991 2,847 +5%
Slide 16: Net finance costs
HALF‐YEARLY RESULTS 2013 Net finance costs £m £m 2013 2012 Variance Interest payable (302) (283) -7% Investment income 24 50 -52% Fair value/exchange 37 22 +68% Net finance costs (241) (211) -14%
Slide 17: Taxation and profit for the period
HALF‐YEARLY RESULTS 2013 Taxation and profit for the period £m 2013 2012 % change Profit before tax 2,991 2,847 +5% Taxation (803) (782) -3% Profit for the period 2,188 2,065 +6% Underlying tax rate was 30.5% (2012: 30.8%)
Slide 18: Non-controlling interests and adjusted EPS
HALF‐YEARLY RESULTS 2013 Non-controlling interests and adjusted EPS Profit attributable to £m 2013 2012 % change Shareholders’ equity 2,040 1,908 +7% Non-controlling interests 148 157 -6% Profit for the period 2,188 2,065 +6% Adjusted Profit for the period 2,096 1,987 +5% Number of shares 1,922 m 1,
Slide 19: Drivers of adjusted EPS growth
HALF‐YEARLY RESULTS 2013 Drivers of adjusted EPS growth Pence % EPS 2012 (p) 101.3. Profit performance 6.4 6% Net finance costs -0.1 0% Associates 1.6 2% Taxation 0.5 1% Non-controlling interests 0.2 0% Share buy-back 1.2 1% Exchange -2.0 -2% EPS 2013 (p) 109.1 8%
Slide 20: Cash flow
HALF‐YEARLY RESULTS 2013 Cash flow 2013 2012. £m. £m. Adjusted profit from operations 2,944 2,821 Non cash items 241 217. Increase in working capital (1,156) (1,159) Net capital expenditure (189) (190) Operating cash flow 1,840 1,689 Pension Funds – Shortfall Funding (70) (70) Net interest paid (274
Slide 21: Cash flow
HALF‐YEARLY RESULTS 2013 Cash flow 2013. 2012. £m. £m. Free cash flow 812 721. Dividends paid to shareholders (1,765) (1,723) Share buy-back (612) (536) Net investment activities (17) (27) Other net flows (98) (85) Net cash flow (1,680) (1,650)
Slide 22: Net debt
HALF‐YEARLY RESULTS 2013 Net debt 2013 2012. £m. £m. Opening net debt at 1 January (8,473) (7,928) Net cash flow for the period (1,680) (1,650) Exchange rate effects / accrued interest (395) 183 Net debt at 30 June (10,548) (9,395)
Slide 23: Good underlying results
HALF‐YEARLY RESULTS 2013 Good underlying results Adjusted EPS 8% higher at 109.1p Proposed dividend per share 7% higher at 45 pence Continued good pricing Growing market share FX headwinds and industry volume pressure
Slide 24: Thank you for watching the webcast
HALF‐YEARLY RESULTS 2013 Thank you for watching the webcast. The Q&A session will commence shortly. Thank you for your patience.
Slide 25: Half-Yearly Results 2013
HALF‐YEARLY RESULTS 2013 31st July 2013
Slide 26: Supplementary Slides
SUPPLEMENTARY SLIDES Half-yearly results 2013
Slide 27: Volumes by region H1 2013
HALF‐YEARLY RESULTS 2013 Volumes by region H1 2013 Region Billions 2013 2012 % change Asia Pacific 100 95 +5% Americas 64 71 -9% Western Europe 57 62 -8% Eastern Europe, Middle East and Africa 111 116 -4% Group 332 344 -3%
Slide 28: Volumes by region Q2 2013
HALF‐YEARLY RESULTS 2013 Volumes by region Q2 2013 Region Billions 2013 2012 % change Asia Pacific 52 50 +5% Americas 32 34 -4% Western Europe 31 33 -6% Eastern Europe, Middle East and Africa 57 61 -7% Group 172 178 -3%
Slide 29: Revenue by region H1 2013
HALF‐YEARLY RESULTS 2013 Revenue by region H1 2013 Region £m 2013 2012 % change Asia Pacific 2,108 2,050 +3% Americas 1,650 1,706 -3% Western Europe 1,714 1,649 +4% Eastern Europe, Middle East and Africa 2,100 2,047 +3% Group 7,572 7,452 +2%
Slide 30: Adjusted profit from operations H1 2013
HALF‐YEARLY RESULTS 2013 Adjusted profit from operations H1 2013 Region £m 2013 2012 % change Asia Pacific 875 815 +7% Americas 732 740 -1% Western Europe 573 555 +3% Eastern Europe, Middle East and Africa 764 711 +7% Group 2,944 2,821 +4%
Slide 31: Margins: profit per mille
HALF‐YEARLY RESULTS 2013 Margins: profit per mille £11.44 £10.42 £10.05 £8.75 £8.95 £8.87 £8.58 £8.20 £6.88 2012 £6.13 2013 Asia Pacific Americas W. Europe EEMEA Group
Slide 32: Foreign currencies
HALF‐YEARLY RESULTS 2013 Foreign currencies Average Closing 2013 2012 2013 2012 US dollar 1.544 1.577 1.517 1.568 Canadian dollar 1.568 1.586 1.600 1.599 Euro 1.176 1.216 1.167 1.236 South African rand 14.221 12.521 15.057 12.828 Brazilian real 3.139 2.941 3.351 3.166 Australian dollar 1.523 1.528 1
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