British American Tobacco Malaysia Bhd. · MYX:BAT
British American Tobacco Malaysia Bhd — Q1 2020 Earnings Presentation
16 slides from British American Tobacco Malaysia Bhd's earnings presentation, May 21, 2020
Slide 1: Quarter 1, 2020 Performance
QUARTER 1, 2020 PERFORMANCE 21st May 2020
Slide 2: Agenda
Agenda 1 Q1 Business Review & Financial Performance 2 Impact of COVID-19
Slide 3: Q1 Business review and financial performance
Q1 Business review and financial performance
Slide 4: Q1'20 Performance summary
Q1’20 Performance summary 69% -11% -18% vs Q1’19 -23% vs Q1’19 Of total nicotine vs Q1’19 Illegal FMC & vaping Legal domestic industry BAT domestic volume* Revenue volume * Total BAT volume including Duty Free -21% Corporate market share • Disruption to the research fieldwork in Mar to Apr 2020 due
Slide 5: Q1'20 nicotine industry in Malaysia
Q1’20 nicotine industry in Malaysia Legal FMC Illegal FMC Vol | 1.5bns Vol | 3.1bns Share | 30% Share | 58% Total volume 5.3bns Vol | 0.06bns Vol | 0.6bns Share | 1% Share | 11% THP Illegal Vapour Source: Illegal Cigarette Study, Consumer Track Industry continues to be pressurised by illegal FMC & V
Slide 6: Legal domestic industry impacted by the growth of illegal FMC & Vapour
Legal domestic industry impacted by the growth of illegal FMC & Vapour Industry Domestic Shipment Volume BAT Domestic Shipment Volume Monthly average (mns) Monthly average (mns) Illegal % 69% 66% (FMC + Vapour) 543 -11% -18% 274 224 481 Legal domestic industry (mns) Q1-19 Q1-20 Q1-19 Q1-20 Legal FMC
Slide 7: THP category size small and stagnant
THP category size small and stagnant New categories Glo performance in Q1’20 Factors leading to slower THP category growth Share of Total Nicotine Glo Share of THP category in Klang Valley • Affordability remains a key barrier - High cost of entry 11.5% 10.8% 9.7% 10.0% Illegal 8.3% ▪ Unable to full
Slide 8: Q1 Performance
Q1 Performance Total Volume Revenue Profit from operations mns RM’mil RM’mil -21% -23% -41% vs SPLY vs SPLY vs SPLY
Slide 9: Continue to optimise cost base delivering efficiencies
Continue to optimise cost base delivering efficiencies Operating expenses Restructuring expenses (RM’mil) (RM’mil) -18% vs SPLY 60% Completion to date 65 54 52 RM15 mil RM4 mil Q4’19 Q1’20 Q1'19 Q4'19 Q1'20 -RM13mil : Q1’20 vs SPLY Savings in Q1’20: • RM8mil - Cost base optimisation & sharpening RM5
Slide 10: Dividend payout for Q1 2020
Dividend payout for Q1 2020 Earnings per share 17.8 sen Dividend per share 17.0 sen Payout ratio 96% Payout 18th June 2020
Slide 11: Impact of COVID-19
ti ie aii sca ALE l smn PPE To f a YW’ Impact of COVID-19 MALAYSIA
Slide 12: Navigating through MCO
Navigating through MCO Operating disruption during MCO JB Factory closed. Indonesia factory uninterrupted Supply to retail disrupted during MCO Duty-Free channel impacted ~30% of retail outlets closed during MCO
Slide 13: Back to business - CMCO
Back to business - CMCO Operations resumed 4th May Supporting employees’ wellbeing Distribution • Strict compliance to SOPs • Inventory supply from source factory secured and uninterrupted • Heightened safety & hygiene • 80% work from home during CMCO for office staff (100% Work from home during MCO
Slide 14: Despite MCO, illegal cigarette syndicates continued operating
Despite MCO, illegal cigarette syndicates continued operating Storage in private residences Distributing within ‘10km radius’ Using private vehicles to to avoid road blocks transport contraband Selling on Social Media & Online Delivering via courier / e-hailing delivery services Illegal traders prof
Slide 15: Effective structural reform needed urgently
Effective structural reform needed urgently Policy change → transhipment laws/single point of entry Stricter and rigorous enforcement Faster activation of Multi-Agency Taskforce (MATF) RM5bn pa lost in tax revenue to illicit, which can be used for COVID recovery
Slide 16: BAT Malaysia Summary
BAT Malaysia Summary Q1 performance in line with expectation despite challenging environment Effective regulatory framework required for sustainable tobacco industry
British American Tobacco (Malaysia) Berhad — Q1 2020 Earnings Presentation on 6ix