BAT volumes up in 2016

| February 23, 2017

British American Tobacco’s cigarette volumes during the 12 months to the end of December, at 665 billion, were increased by about 0.2 percent on those of the 12 months to the end of December 2015, 663 billion. On an organic basis volumes fell by 0.8 percent, a figure set against what the company estimated was an industry-wide decline of about three percent.

Global Drive Brand (GDB) volume grew by 7.5 percent and they now account for 49 percent of group cigarette volume, up from 32 percent in 2011.

The company’s cigarette volumes were increased in its EEMEA (Eastern Europe, Middle East and Africa) region from 229 billion to 236 billion, and in its Western Europe region from 112 billion to 120 billion; but they were down in its Americas region from 124 billion to 113 billion, and in its Asia-Pacific region from 198 billion to 196 billion.

Volume growth in Bangladesh, Ukraine, Russia, Vietnam, Turkey, Mexico, Poland and Indonesia was offset by declines in Pakistan, Brazil, Venezuela and Malaysia.

In presenting today its preliminary results for 2016, BAT reported that the group had increased its market share by more than 0.5 of a percentage point, driven by the performance of its GDBs whose combined share was up by 1.0 percentage point.

Dunhill’s overall market share was flat. The brand’s volume fell by 3.3 percent, driven mainly by industry declines in Malaysia and Brazil, more than offsetting growth in South Korea, Romania and continued growth in Indonesia.

Kent volume increased by 1.0 percent, and its market share was up by 0.1 of a percentage point, driven by the brand’s performance in Chile, Turkey and Japan.

Lucky Strike grew its market share by 0.1 of a percentage point, while the brand’s volume was up by 13.5 percent, with growth in Indonesia, Colombia Egypt, France, Germany and Croatia more than offsetting lower volume in Argentina and Russia.

Pall Mall’s market share grew by 0.1 of a percentage point, with volume marginally higher as growth in Venezuela, Poland, Mexico and Romania more than offset reductions in Pakistan and the migration to Rothmans in Italy.

Rothmans’ 36.9 percent volume growth and its market share increase of 0.7 of a percentage point was driven by the brand’s performance in Russia, Ukraine, Italy, Nigeria, Turkey and South Korea.

The volume of the company’s other international brands declined by 9.0 percent as growth in State Express 555 and Craven A (in Vietnam) was more than offset by lower volume from Peter Stuyvesant (in South Africa), JPGL (largely in SE Asia), and Vogue (where growth in Russia was offset by lower volume in South Korea due to the migration to Rothmans).

Innovations volume grew by 12 percent, driven by the success of tube filters, capsules and the slimmer formats across the GDB portfolio; and they now account for 29 percent of the company’s cigarette volume.

BAT’s tobacco volumes during 2016, at 689 billion were unchanged from those of 2015. Tobacco volumes include, as well as cigarettes, other tobacco products whose volumes are stated in cigarette stick equivalents.

BAT’s revenue, at £14,751 million, was increased by 12.6 percent on that of 2015, £13,104 million.

Adjusted profit from operations was up by 9.8 percent to £5,480 million.

Profit from operations was down by 2.9 percent to £4,655 million.

Adjusted diluted earnings per share were up by 10.4 percent to 247.5p, while basic earnings per share were increased by 8.4 percent to 250.2p.

Dividends per share were up by 10.0 percent to 169.4p.

“The Group delivered a great set of results in 2016, with excellent growth seen across all key business metrics,” said chief executive Nicandro Durante.

“This was achieved despite a challenging backdrop of adverse foreign exchange rates impacting our cost base and ongoing pressure on consumers’ disposable income in many of our key markets.”

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