British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — H1 2023 Earnings Presentation
27 slides from British American Tobacco Malaysia Bhd's earnings presentation, Jul 27, 2023
Slide 1: 2023 Financial & Business Updates
2023 Financial & Business Updates Presented by: Anthony Yong (Finance Director) 27th July 2023
Slide 2: Key Takeaways – H1 2023
Key Takeaways – H1 2023 01 02 Combustible business under Accelerating transformation increased pressure into New Categories 03 04 Tobacco Bill is referred Short-term impact to to Parliamentary Select financial performance Committee (PSC) Accelerating A Better TomorrowTM
Slide 3: 2023 Financial Performance – Highlights
2023 Financial Performance – Highlights -24.1% -25.1% -28.4% Q1 ‘23 vs Q1 ’22 Q1 ‘23 vs Q1 ’22 Q1 ‘23 vs Q1 ’22 Volume Revenue Operating Profit +6.6% +6.4% -32.7% Q2 ‘23 vs Q2 ’22 Q2 ‘23 vs Q2 ’22 Q2 ‘23 vs Q2 ’22 Volume Revenue Operating Profit -7.3% -7.8% -30.8% H1 ‘23 vs H1 ‘22 H1 ‘23 vs H1 ‘22 H
Slide 4: Q2 '23 vs Q1 '23 Financial Performance
Q2 ‘23 vs Q1 ‘23 Financial Performance +69.5% +73.8% +23.9% Q2 ‘23 vs Q1 ‘23 Q2 ‘23 vs Q1 ‘23 Q2 ‘23 vs Q1 ‘23 Volume Revenue Operating Profit Q2 Revenue rebounded reflective of yearly market trends | Amplified New Categories Investment
Slide 5: H1 '23 Business Performance – Highlights
H1 ‘23 Business Performance – Highlights 55.9% +1.2% -7.3% -0.4 % -1.8ppt vs H1 ‘22 vs. H1 ’22 vs. H1 ’22 vs. H1’22 Illegal Legal Domestic Total Share of Incidence Volume Volume Market Industry BAT H1 ‘23 Volume impacted by soft BAT volumes in Q1 ‘23 Source: Illegal Cigarettes Study , Study on the M
Slide 6: H1 '23 Business Performance – Illicit vs Legal
H1 ‘23 Business Performance – Illicit vs Legal Illicit Incidence Avg. Monthly Legal Industry Volume (mns) 63.8 568 594 599 535 556 57.7 56.6 57.2 55.3 2020 2021 2022 Q1 '23 Q2 '23 2020 2021 2022 Q1'23 Q2'23 Source: Nielsen Illegal Cigarettes Study Source: CMTM Industry Exchange Q1 ‘23 legal industry
Slide 7: 2023 Group Strategy Outlook
2023 Group Strategy Outlook Grow Step Change Inspired & Combustible in New Sustainable Value Categories Organization Accelerating A Better TomorrowTM
Slide 8: Regulatory Development
Regulatory Development BAT Malaysia urges the PSSC to study the Bill comprehensively & consider: • impact of extreme policies on tobacco black market; • measures to stop tobacco black market in the country; and On 12th June 2023, • appropriate regulatory framework Minister of Health has referred for
Slide 9: Vuse is launching
Vuse is launching in Malaysia! Look forward to the Immersive Session
Slide 10: H1 '23 Key ESG Activities
H1 ‘23 Key ESG Activities World Environment & Innovation Day 2023 BAT Malaysia Celebrates Top Employer 2023 Awareness to reduce pollution & provide sustainable solutions Top Employer Certification 6th consecutive year! + Best Hybrid Working Model @2023 Employee Experience Award Reverse Vending Recyc
Slide 11: To Build A Better Tomorrow
Our purpose is clear… To Build A Better TomorrowTM We have operated in Malaysia for >100 years delivering stakeholder value across our business We are building an Enterprise of the Future - a high-growth, multi- category, consumer centric company with sustainability at front and center We will build
Slide 12: An Ambitious Future
An Ambitious Future Empower B40 communities to achieve food self-sufficiency through community owned and run farm gardens. Tanjung Karang: Kampung Sungai Gulang-Gulang Shah Alam: Pangsapuri Melati ~ 14,000 beneficiaries Partners ~100K Beneficiaries 2 Pilot Projects Delivered (2023) (2022 – 2023) 250
Slide 13: Tobacco Harm Reduction
Tobacco Harm Reduction Presented by: Fairuz Helmi Abdul Malek (Director of External Affairs) 27th July 2023
Slide 14: To reduce the health impact of our business
BAT is committed to building A Better TomorrowTM Our Purpose Our Commitment To reduce the To provide adult consumers with a wide range of enjoyable health impact and less risky* products of our business To encourage smokers to switch completely to scientifically-substantiated reduced-risk alternativ
Slide 15: Tobacco harm reduction recognised in policy and regulation in a number of countries
Tobacco harm reduction recognised in policy and regulation in a number of countries Food and Drug Administration The closer the risks and exposures from the RRP are to cessation… the more confident Public Health a regulator can be in the England chances for net public health Science is informing ben
Slide 16: Most of the harm from tobacco is caused by combustion not nicotine
Most of the harm from tobacco is caused by combustion not nicotine+ It’s the other chemical compounds in tobacco, and in the smoke created by setting tobacco on fire, that directly and primarily cause the illness and death, not the nicotine. DR. SCOTT GOTTLIEB US FDA Commissioner (July 2017) Nicotin
Slide 17: A portfolio of non-combustible solutions
A portfolio of non-combustible solutions Most of the harm from tobacco is caused by combustion not nicotine*† *As stated by: Dr. Scott Gottlieb, US FDA Commissioner (July 2017), and UK Royal College of Physicians, Nicotine without smoke: Tobacco harm reduction (2016) + Nicotine is an addictive subst
Slide 18: Extensive Scientific Substantiation supports our products as Reduced Risk
Extensive Scientific Substantiation supports our products as Reduced Risk* Emissions : - 90% >30 yrs of studies show Emissions : - 99%1 Snus is much less risky than to - 95%2 smoking Toxicology : even less Toxicology : - 99%1 Toxicology : - 95%2 harmful than Snus3 We believe Modern Oral Our data is
Slide 19: Facts: Vapour products
Facts: Vapour products
Slide 20: Vapour Products
iF Vapour Products Vapour products are battery-powered devices that heat e-liquid to produce an inhalable aerosol, commonly known as vapour. Most e-liquids contain water, flavourings and nicotine and a base made of Propylene Glycol (PG) and Vegetable Glycerin (VG). It’s the PG and VG that produce a
Slide 21: Growing Consensus on Harm Reduction
vuse Growing Consensus on Harm Reduction Potential of Vaping Products UK Public Health England, 2018' “Vaping poses only a small fraction of the risks of smoking and switching completely from smoking to vaping conveys substantial health benefits over continued smoking. Based on current knowledge, st
Slide 22: Vapour Market Insights
Vapour Market Insights Presented by: Cheah Hsu Jen (Senior Category Manager, Vapour) 27th July 2023
Slide 23: Vapour makes up significant size of adult nicotine users in Malaysia
Vapour makes up significant size of adult nicotine users in Malaysia MY Nicotine Users (2023) THP, 5% 1.8mn Vapour, VAPE USERS 30% Illicit FMC, 33% RM 2.3bn Legal FMC, EST. INDUSTRY VALUE 32%
Slide 24: Vape consumer size sees YOY growth trend
Vape consumer size sees YOY growth trend 1.8 1.3 2023 0.6 2021 2019 MY Vape Users (mn.)
Slide 25: High incidence of vape users within adult population in Malaysia
High incidence of vape users within adult population in Malaysia 16.8% 16.0% 10.8% 6.4% #1 vape brand #1 CS vape brand #1 vape brand
Slide 26: Various types of vape device formats available
Various types of vape device formats available OPEN SYSTEM CLOSED SYSTEM MODERN DISPOSABLE (MODI) Pre-filled device + unit Customisable Pre-filled pods device Single-use with limited puff Refillable eLiquids Pods compatible in bottles WITHIN brand Fastest growing 29% 28% 42% vape format
Slide 27: Highly competitive vapour landscape in Malaysia
Highly competitive vapour landscape in Malaysia Mix of local & Various formats & flavours international brands
British American Tobacco (Malaysia) Berhad — H1 2023 Earnings Presentation on 6ix