British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — FY2015 Earnings Presentation
40 slides from British American Tobacco P.l.c's earnings presentation, Feb 25, 2016
Slide 1: Preliminary Results 2015
PRELIMINARY RESULTS 2015 25 February 2016
Slide 2: Nicandro Durante, Chief Executive
Nicandro Durante Chief Executive
Slide 3: A strong performance driven by market share growth
PRELIMINARY RESULTS 2015 A strong performance driven by market share growth Excellent underlying performance, despite significant FX headwinds Outstanding quality share performance, driven by the GDB’s Commitment to shareholder returns
Slide 4: Ben Stevens, Finance Director
Ben Stevens Finance Director
Slide 5: Summary: An excellent performance despite significant FX headwinds
PRELIMINARY RESULTS 2015 Summary Financials Volume Current Constant Revenue Cigarettes -6.2% 5.4% -0.5% £13,104m 663bn Profit Total Tobacco -7.6% 4.0% -0.8% £4,992m 689bn Margin GDBs -60bp -50bp 8.5% 38.1% 301bn EPS Total IBs 208.4p 0.1% 10.1% 412bn 3.9% An excellent performance despite significant
Slide 6: Currency impact on Operating Profit
PRELIMINARY RESULTS 2015 Currency impact on Operating Profit FY 2016 H1 2015 H2 2015 FY 2015 estimate Transactional -4% -8% -6% -7% Translational -7% -16% -12% -1% Total -11% -24% -18% -8% FX headwinds remain a challenge for 2016
Slide 7: Operating margin
PRELIMINARY RESULTS 2015 Operating margin 160 bps 40.3% -190 bps 38.7% 38.4% -30 bps 38.1% 2014 Reported Underlying 2015 Transactional 2015 Like-for- TDR / 2015 Reported Margin improvement Underlying FX like Margin Accounting Margin Margin changes
Slide 8: Currency impact on results
PRELIMINARY RESULTS 2015 Currency impact on results Financials Constant ex. Current Constant Transactional FX Revenue -6% 5% 5% Profit -8% 4% 10% EPS 0% 10% 16% Very strong underlying performance masked by significant translational and transactional FX impacts
Slide 9: Regional performance
PRELIMINARY RESULTS 2015 Regional performance* Cigarette Volume Revenue Profit AsPac Amr WE EEMEA Group AsPac Amr WE EEMEA Group AsPac Amr WE EEMEA Group 11.7% 10.9% 7.5% 5.4% 5.1% 4.0% 3.5% 1.1% 1.3% 0.1% 0.5% 0.0% -0.5% -0.1% -5.2% Translation FX impact -2.6% -20.7% -8.1% -16.6% -11.6% -5.1% -20.0
Slide 10: Asia Pacific – Regional Performance
PRELIMINARY RESULTS 2015 Asia Pacific – Regional Performance Financials Volume Constant Current Revenue 0.0% -2.6% Cigarettes 0.1% £3,874m 198bn Profit GDBs -0.1% -5.2% 5.6% £1,546m 84bn
Slide 11: Americas – Regional Performance
PRELIMINARY RESULTS 2015 Americas – Regional Performance Financials Volume Constant Current Revenue Cigarettes 11.7% -9.0% -5.2% £3,340m 124bn Profit GDBs 10.9% -9.1% 7.2% £1,426m 38bn
Slide 12: Western Europe – Regional Performance
PRELIMINARY RESULTS 2015 Western Europe – Regional Performance Financials Volume Constant Current Revenue 3.5% -4.6% Cigarettes 0.5% £3,476m 112bn Profit GDBs 5.1% -3.6% 4.3% £1,249m 69bn
Slide 13: EEMEA – Regional Performance
PRELIMINARY RESULTS 2015 EEMEA – Regional Performance Financials Volume Constant Current Revenue Cigarettes 7.5% -9.1% 1.1% £4,030m 229bn Profit GDBs £1,399m 1.3% -12.5% 110bn 14.4%
Slide 14: Drivers of adjusted EPS growth
PRELIMINARY RESULTS 2015 Drivers of adjusted EPS growth +0.6p 229.1p -20.7p +1.2p +3.2p +9.4p +8.2p -1.6p 208.1p 208.4p EPS 2014 Profit Net Finance Associates Taxation Non-controlling Share EPS 2015 Translation EPS 2015 Performance Costs interest Buy-Back constant FX Exchange current FX
Slide 15: Cash flow
PRELIMINARY RESULTS 2015 Cash flow £337m £263m £483m £148m £522m £1,273m £235m £963m £593m £480m £4,992m £3,481m Adj operating Non cash Working Net Capex Pension fds - Net interest Tax FII GLO Dividends to Restructuring Div from Free cash profit items Capital chg s'fall funding refund NCI associates
Slide 16: Financing/Shareholder returns
PRELIMINARY RESULTS 2015 Financing/Shareholder returns Net Debt increased by £4.6bn to £14.8bn Credit rating unchanged at A3 / A- stable Full year dividend growth of 4%
Slide 17: Nicandro Durante, Chief Executive
Nicandro Durante Chief Executive
Slide 18: Year in Review
PRELIMINARY RESULTS 2015 Year in Review • Strong organic growth
Slide 19: Global Drive Brands
PRELIMINARY RESULTS 2015 Global Drive Brands Volume: 59 billion, +6.0% Share up 30bps Good share growth in Indonesia, Brazil and S Korea Lower volumes in S Korea and Malaysia
Slide 20: Global Drive Brands
PRELIMINARY RESULTS 2015 Global Drive Brands Volume: 59 billion, +6.0% Volume: 66 billion, +3.3% Share up 30bps Share flat Good share growth in Indonesia, Brazil and Impacted by market declines in Russia, Ukraine and S Korea Romania Lower volumes in S Korea and Malaysia Robust growth in Japan, Iran
Slide 21: Global Drive Brands
PRELIMINARY RESULTS 2015 Global Drive Brands Volume: 59 billion, +6.0% Volume: 66 billion, +3.3% Share up 30bps Share flat Good share growth in Indonesia, Brazil and Impacted by market declines in Russia, Ukraine and S Korea Romania Lower volumes in S Korea and Malaysia Robust growth in Japan, Iran
Slide 22: Global Drive Brands
PRELIMINARY RESULTS 2015 Global Drive Brands Volume: 59 billion, +6.0% Volume: 66 billion, +3.3% Share up 30bps Share flat Good share growth in Indonesia, Brazil and Impacted by market declines in Russia, Ukraine and S Korea Romania Lower volumes in S Korea and Malaysia Robust growth in Japan, Iran
Slide 23: Global Drive Brands
PRELIMINARY RESULTS 2015 Global Drive Brands Volume: 59 billion, +6.0% Volume: 66 billion, +3.3% Share up 30bps Share flat Good share growth in Indonesia, Brazil and Impacted by market declines in Russia, Ukraine and S Korea Romania Lower volumes in S Korea and Malaysia 52 billion, up 46.5% Robust g
Slide 24: Year in Review
PRELIMINARY RESULTS 2015 Year in Review • Strong organic growth • Margin expansion opportunity
Slide 25: Year in Review
PRELIMINARY RESULTS 2015 Year in Review • Strong organic growth • Margin expansion opportunity • Continued investment in the future: • Innovations and new growth markets
Slide 26: Year in Review
PRELIMINARY RESULTS 2015 Year in Review • Strong organic growth • Margin expansion opportunity • Continued investment in the future: • Innovations and new growth markets • M&A
Slide 27: Year in Review
PRELIMINARY RESULTS 2015 Year in Review • Strong organic growth • Margin expansion opportunity • Continued investment in the future: • Innovations and new growth markets • M&A • Good progress on NGPs
Slide 28: 2015 – An Outstanding Year
2015 – AN OUTSTANDING YEAR Volume Share Financials VOLUME CORPORATE REVENUE PROFIT EPS SHARE -0.5% +40bps VS INDUSTRY -2.3% GDB GDB +5% +10% +16% VOLUME SHARE +8.5% +120bps constant currency constant currency constant currency ex transactional fx ex transactional fx Confident of another good year of
Slide 29: Preliminary Results 2015
PRELIMINARY RESULTS 2015 25 February 2016
Slide 30: Supplementary Slides
SUPPLEMENTARY SLIDES 25 February 2016
Slide 31: Cigarette volumes by region FY 2015
PRELIMINARY RESULTS 2015 Cigarette volumes by region FY 2015 Region Billions 2015 2014 % change Asia Pacific 198 197 +0.1% Americas 124 131 -5.2% Western Europe 112 112 +0.5% Eastern Europe, Middle East and Africa 229 227 +1.1% Group 663 667 -0.5%
Slide 32: Cigarette volumes by region H2 2015
PRELIMINARY RESULTS 2015 Cigarette volumes by region H2 2015 Region Billions 2015 2014 % change Asia Pacific 95 93 +1.1% Americas 63 67 -6.0% Western Europe 61 59 +2.4% Eastern Europe, Middle East and Africa 123 115 +6.4% Group 341 336 +1.7%
Slide 33: Cigarette volumes by region Q4 2015
PRELIMINARY RESULTS 2015 Cigarette volumes by region Q4 2015 Region Billions 2015 2014 % change Asia Pacific 50 47 +4.7% Americas 33 35 -5.6% Western Europe 31 30 +3.8% Eastern Europe, Middle East and Africa 63 59 +6.5% Group 177 171 +3.0%
Slide 34: Revenue by region FY 2015
PRELIMINARY RESULTS 2015 Revenue by region FY 2015 Region £m 2015 2014 % change Asia Pacific 3,773 3,873 -2.6% Americas 2,720 2,990 -9.0% Western Europe 3,203 3,359 -4.6% Eastern Europe, Middle East and Africa 3,408 3,749 -9.1% Group 13,104 13,971 -6.2% All numbers as reported
Slide 35: Revenue by region H2 2015
PRELIMINARY RESULTS 2015 Revenue by region H2 2015 Region £m 2015 2014 % change Asia Pacific 1,880 1,941 -3.1% Americas 1,336 1,575 -15.2% Western Europe 1,740 1,776 -2.0% Eastern Europe, Middle East and Africa 1,750 1,881 -7.0% Group 6,706 7,173 -6.5% All numbers as reported
Slide 36: Adjusted profit from operations FY 2015
PRELIMINARY RESULTS 2015 Adjusted profit from operations FY 2015 Region £m 2015 2014 % change Asia Pacific 1,469 1,548 -5.2% Americas 1,169 1,286 -9.1% Western Europe 1,146 1,189 -3.6% Eastern Europe, Middle East and Africa 1,208 1,380 -12.5% Group 4,992 5,403 -7.6% All numbers as reported
Slide 37: Adjusted profit from operations H2 2015
PRELIMINARY RESULTS 2015 Adjusted profit from operations H2 2015 Region £m 2015 2014 % change Asia Pacific 693 747 -7.2% Americas 547 654 -16.4% Western Europe 627 652 -3.8% Eastern Europe, Middle East and Africa 618 685 -9.8% Group 2,485 2,738 -9.2% All numbers as reported
Slide 38: Top 40 market share movements (1)
PRELIMINARY RESULTS 2015 Top 40 market share movements (1) SOM FY15 Movement Market SOM FY15 Movement Market (%) (ppt) (%) (ppt) Argentina 24.3 0.0 France 17.4 0.4 Australia 39.7 0.0 GCC 31.1 (1.4) Bangladesh 47.6 1.3 Germany 19.4 0.1 Belgium 31.0 (0.9) Indonesia 6.7 0.6 Brazil 78.1 (0.3) Italy 20.0
Slide 39: Top 40 market share movements (2)
PRELIMINARY RESULTS 2015 Top 40 market share movements (2) SOM FY15 Movement Market SOM FY15 Movement Market (%) (ppt) (%) (ppt) New Zealand 70.9 0.1 Spain 10.7 (0.4) Pakistan 68.8 1.8 Switzerland 38.5 (1.5) Philippines 0.8 0.1 Taiwan 10.2 0.1 Poland 27.0 (0.1) Turkey 20.7 1.2 Romania 53.9 0.3 UK 9.
Slide 40: Foreign currencies
PRELIMINARY RESULTS 2015 Foreign currencies Average Closing 2015 2014 2015 2014 Australian dollar 2.036 1.827 2.026 1.905 Brazilian real 5.101 3.874 5.831 4.145 Canadian dollar 1.954 1.819 2.047 1.806 Euro 1.378 1.241 1.357 1.289 Indian rupee 98.070 100.529 97.508 98.424 Japanese yen 185.012 174.223
British American Tobacco p.l.c. — FY2015 Earnings Presentation on 6ix