British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q1 2014 Earnings Presentation
23 slides from British American Tobacco Malaysia Bhd's earnings presentation, 2014
Slide 1: Analyst Briefing Quarter 1, 2014
ANALYST BRIEFING QUARTER 1, 2014
Slide 2: Agenda
AGENDA Industry Review, Market Share and Volumes BATM Review Quarter 1, 2014 Results Other Highlights Future Prospects
Slide 3: Q1 2014 Headlines
Q1 2014 Headlines • 2013, illegal cigarettes up by +1.2ppt V’s 2012 (Wave 3 ICS 38.9%) • New and unprecedented illegal cigarette enforcement by RMC. • Declining legal industry* domestic volume -8.5% V’s Q1’13. • BATM Domestic & Duty Free volume -6.4% V’s SPLY. • Domestic market share growth of +0.1p
Slide 4: Industry Review, Market Share, Volumes and BATM Review
INDUSTRY REVIEW, MARKET SHARE, VOLUMES AND BATM REVIEW
Slide 5: Industry Volume: -8.5% Decline V's SPLY
Industry Volume: -8.5% Decline V’s SPLY Source: Industry Exchange, IMS Volumes (Kretek + Whites) Industry Volumes (bns) 2013 2014 Big3 + Sub VFM + Kretek 8.5% 3.73 3.69 3.65 3.50 3.17 Q1 Q2 Q3 Q4 Volume Variance % Variance Volume Variance % Variance Q1 2013 Q1 2014 Q1 2014 vs. SPLY Q1 2014 vs. SPLY
Slide 6: Aspirational Premium growing at the expense of Premium and VFM
Aspirational Premium are growing at the expense of Premium and VFM Source: YTD Feb 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) 73.8 73.7 YTD 13 YTD 14 SOM % 23.6 24.2 2.5 2.1 Premium Aspirational Premium VFM SPLY 2013 YTD Feb 14 Share of Premium YTD 13 Share of Premium YTD 1
Slide 7: Sharp increase in illegal whites witnessed (W3'13) after excise led price increase
Sharp increase in illegal whites witnessed (W3’13) after excise led price increase Source: Illicit Cigarette Study, 2010 - 2013 *Survey methodology does not capture sub-VFM brands selling at below minimum price. 36.3 38.9 40 36.1 35.7 34.9 -0.2ppt 34.5 34.7 34.4 -1.6ppt +1.2ppt +0.2ppt -1.1ppt 33.8
Slide 8: BAT showing slight softening post price increase
BAT showing slight softening post price increase J&J - Oil 3 YTD 14 show stable shares vs 2013. Period Ended FEB14 | Hide NA's | Colour % Chg | Share of Sum(PROD) Source: YTD Feb 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) +1.0ppt Peter Stuyvesant has been showing month-on-m
Slide 9: Dunhill: Continue to grow in YTD 14 while soften slightly in Feb14
Dunhill: Continue to grow in YTD 14 while soften slightly in Feb14. Source: YTD Feb 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) +0.2ppt +1.3ppt Mar 2013 Sept 2013 Dec 2013 Dunhill Ice – High Menthol Capsule Dunhill Kretek - Longer satisfaction with Dunhill FF & Lts - Limited
Slide 10: BAT Aspirational Premium SOS softened in recent months
BAT Aspirational Premium SOS softened in recent months Source: YTD Feb 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) BAT -0.7ppt -0.1ppt Source: Malaysia Retail Audit (Base: Total Whites, YTD FEB14) Peter Stuyvesant contributed to the gains
Slide 11: Peter Stuyvesant rejuvenated since Jul'13
BAT Peter Stuyvesant rejuvenated since Jul’13 Source: YTD Feb 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) +0.5ppt +0.2ppt Source: Malaysia Retail Audit (Base: Total Whites, YTD FEB14) Produk ini mengandungi lebih 4,000 bahan kimia termasuk tar, nikotina dan karbon monoksida
Slide 12: Pall Mall: softening indication of share gains post product upgrade
Pall Mall: Shown softening BAT indication of +0.7ppt share gains post product upgrade in Feb’14 Source: YTD Feb 14 Malaysia Retail Audit (Base: Total Legal Market – White + Kretek) -0.1ppt -0.5ppt Dec 2013: Pall Mall FF & Lts Product Upgrade: New Blend Plus Capsule Jun 2013: Dec 2013: Pall Mall Ment
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS OBACCO
Slide 14: Q1: Volume and Revenue
Q1: Volume and Revenue Contract Manufacturing Volumes (mn stick) Domestic & DF Volumes (mn stick) Cigarette Semi Finished 2,539 - 23.1% - 6.4% 2,088 2,144 2,005 1,744 1,204 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Net Turnover (RM'mn) Revenue (RM'mn) 1,154 +6.0% 632 1,096 +5.3% 596 Q1 2013 Q1 2014 Q1 2013 Q1
Slide 15: Key Metrics: Total Q1, 2014 vs SPLY
Key Metrics: Total Q1, 2014 vs SPLY Gross Profit (RM'mn) Operating Expenses (RM'mn) +14.7% +34.1% 103 407 77 355 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Profit from Operation (RM'mn) Earning per Share (Sen/share) 304 78.9 +9.3% +10.4% 279 71.5 Q1 2013 Q1 2014 Q1 2013 Q1 2014
Slide 16: Q1 2014 Dividend RM0.75, 95% Payout
2012 2013 2014 RM2.72 RM2.82 97.4% Payout 97.8% Payout 0.77 0.78 0.75 0.68 0.68 0.68 0.65 0.65 0.65 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 2014 Dividend RM0.75, 95% Payout 16
Slide 17: Other Highlights
OTHER HIGHLIGHTS OBACCO
Slide 18: 53rd Annual General Meeting (AGM) – 22 April 2014
The 2013 Annual Report is now available! Click on the link below to download a copy from our corporate website: http://www.batmalaysia.com/group/sit es/BAT_7RYJ8N.nsf/vwPagesWebLi ve/DO7SUKSJ?opendocument&SKN =1 53rd Annual General Meeting (AGM) – 22 April 2014 The 53rd Annual General Meeting of the
Slide 19: Launch of BAT plc Sustainability Summary 2013
Launch of BAT plc Sustainability Summary 2013 • Report on the Group’s sustainability agenda key focus areas: Harm Reduction, Sustainable Agriculture, and Corporate Behaviour • Available for download here: www.bat.com/sr2013 • For iPad and Android tablets: iTunes App Store and Google Play App Store
Slide 20: Ops Outlet: Nationwide crackdown on illegal cigarettes at retail point
Ops Outlet: Nationwide crackdown on illegal cigarettes at retail point by the Royal Malaysian Customs (RMC) • Ops Outlet (Operasi Outlet) - launched by the RMC on 5th March 2014 • Through Ops Outlet, the Customs has intensified its enforcement activities at retail point and is pushing for stiffer pe
Slide 21: RMC enforcement initiatives has received relentless media coverage
RMC enforcement initiatives has received relentless media coverage since the launch of Ops Outlet on 5% March 2014 BRITISH AMERICAN TOBACCO map MARCH, 204 paw sears rms nace Cigarette crackdown intensifies ujert TRADE: Customs officers make big seizures, detain several shop owners oa ‘Kon cmon. cu a
Slide 22: Future Prospects
Future Prospects Following the excise led price increase in late Q3 2013, illegal cigarettes trade spiked in the last quarter of 2013. Q4 2013 industry domestic volume collapsed by 17% and the wave three 2013 ICS (Illicit Cigarette Study) showed a huge +4.5ppt increase in illegal cigarette trade to
Slide 23: Thank You
THANK YOU BRITISH AMERICAN TOBACCO MALAYSIA
British American Tobacco (Malaysia) Berhad — Q1 2014 Earnings Presentation on 6ix