British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Consumer Analysts Group of Europe, March 2012
24 slides from British American Tobacco P.l.c's conference presentation, Mar 20, 2012
Slide 1: Consumer Analysts Group of Europe
Consumer Analysts Group of Europe London, 20 March 2012
Slide 2: Ben Stevens
Ben Stevens Finance Director and Chief Information Officer
Slide 3: Agenda
Agenda A proven strategy Our brands and strengths The competitive landscape Performance Q&A
Slide 4: Our vision
Our vision Leadership in earnings and value “For Leadership to be sustainable, we need to be best when it comes to: - Understanding our consumers and our customers, - Leading emerging consumer segments, - Developing and rolling-out innovations which exceed consumer needs - Meeting the expectations o
Slide 5: Strategy for creating shareholder value
Strategy for creating shareholder value The strategy does not change, but we are improving how we execute it Growth is necessary to meet our revenue and earnings targets We seek to grow share across key geographies, including through M&A We seek to grow share in key consumer segments via brands with
Slide 6: Strategy for creating shareholder value
Strategy for creating shareholder value Productivity Generate the funds to underpin earnings and invest in profitable growth Winning Organisation Ensure that we have the right talent in the right organisation to execute our growth strategy Responsibility Act in the right way to protect our ability t
Slide 7: Our strengths
Our strengths Some great brands - Based on consumer insights - Opportunities in emerging consumer segments - Opportunities in Key Geographies - First to world innovations
Slide 8: Our strengths
Our strengths Some great brands World leading innovations - Brand driven - Focussed on size and scale - Deployment across the Globe - A full pipeline
Slide 9: Our strengths
Our strengths Group volumes Some great brands 25% Developed Emerging World leading innovations 75% A great business mix Low Premium 31% 36% 33% VFM
Slide 10: Our strengths
Our strengths Some great brands World leading innovations A great business mix Fully integrated supply chain - Leaf sourcing - Distribution
Slide 11: Our strengths
Our strengths Some great brands World leading innovations A great business mix Fully integrated supply chain Harm reduction
Slide 12: The industry will recover
The industry will recover 1.0% 0.5% 0.5% 0.0% 0.0% -0.5% -0.5% -0.5% Pre-Recession During Recession Post-Recession -1.0% -1.5% -2.0% -2.0% -2.5% -3.0% -3.0% -3.5% * Company estimates for Total world including Illicit trade and excluding China, USA and India INDUSTRY VOLUME DECLINE IS MODERATING
Slide 13: Well positioned for the recovery
Well positioned for the recovery… VOLUME PERFORMANCE FULL YEAR, 2011 Industry Organic Acquisitions performance & disposal Total* dynamics IMPACT ON BAT -1.5% +1.1% -0.0% -0.4% Accelerated legitimate Share increased in Acquisition of Protabacco industry declines due Pakistan, Japan, Egypt, in Colombi
Slide 14: Met or exceeded KPIs in 2011
Met or exceeded KPIs in 2011 An TOBACCO Volume (rep) Volume (org) GDB volume Revenue (rep) Revenue (org, const) Adjusted Profit (rep) 11% Adjusted Profit (org, const) 10% Operating margin (rep) Operating margin (org) Adj EPS DPS 11% 11%
Slide 15: Global drive brands performance
Global drive brands performance GDB VOLUMES 2001-2011 Volume: 48 billion Share flat in T40 Strong growth in Brazil, Romania and GCC Innovations account for over 50% of volume S. Korea impacted by price increase Volume: 67 billion, up 10% GDB volume: 226 billion +9% Share +0.3 ppt in T40 Internationa
Slide 16: Global drive brands performance
Global drive brands performance GDB VOLUMES 2001-2011 Volume: 30 billion, up 14% Share +0.2 ppt in T40 Growth in WE, South America Capsule markets driving growth Volume: 81 billion, up 11% GDB volume: 226 billion +9% Share +0.3 ppt in T40 International brands: 371 billion +4% Strong performance in P
Slide 17: Growing premium share
Growing premium share T40 PREMIUM SHARE BAT SOS% +0.6ppt 2011 vs 2010 Industry Premium SOM% BAT Premium SOS% Source : Company estimates, based on shipment data
Slide 18: Productivity programme
Productivity programme 35% margin target achieved 1 year early Targeting 50 to 100 basis points improvement a year GROUP OPERATING MARGIN 2007 - 2011
Slide 19: High single figure targets delivered
High single figure targets delivered 194.6 CAGR in EPS 12% p.a. CAGR in dividends 14% p.a. 175.7 153.0 Adj EPS Div per share 128.8 126.5 114.2 108.5 98.1 99.5 89.3 83.7 75.8 66.5 69.2 66.2 61.8 57.9 55.9 47.0 38.8 41.9 32.0 35.2 29.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 50% 52
Slide 20: Consistent earnings per share growth
Consistent earnings per share growth 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 11% 9% 8% 4% 10% 17% 10% 11% 19% 19% 15% 11% 5% 9% 10% 5% 0% 1% 3% 14% 15% 15% 1% 12% 11% 10% 10% 9% 10% 8% 8% 3% 0% -4% -6% -5% At constant rates FX Impact 10% average EPS growth at constant currency So
Slide 21: Strong Cash Flow
Strong Cash Flow 2007 2008 2009 2010 2011 £mns, Current FX Actual Actual Actual Actual Actual Operating cash flow 2,935 3,986 4,317 4,901 5,187 Growth 12% 36% 8% 14% 6% Operating cash flow conversion rate 98% 107% 97% 98% 94% Free cash flow 1,711 2,604 2,630 3,240 3,326 Growth 11% 52% 1% 23% 3% Free
Slide 22: £18.5bn returned to shareholders
£18.5bn returned to shareholders £bn 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Free cash flow 1.3 1.4 1.2 1.5 1.3 1.6 1.5 1.7 2.6 2.6 3.2 3.3 23.3 Dividends paid -0.6 -0.6 -0.7 -0.8 -0.8 -0.9 -1.0 -1.2 -1.4 -1.8 -2.1 -2.4 -14.3 Share buy-back 0.0 0.0 0.0 -0.7 -0.5 -0.5 -0.5 -
Slide 23: FT Global 500 index: up to 52nd place
FT Global 500 index: up to 52nd place Market Cap £60.2bn Market Cap £7.5bn All years as at 31 March 2011 – as at 31 December 2011 Source: Financial Times
Slide 24: Consumer Analysts Group of Europe
Consumer Analysts Group of Europe London, 20 March 2012
British American Tobacco — Consumer Analysts Group of Europe, March 2012 on 6ix