BAT volumes increased

| February 22, 2018

British American Tobacco’s cigarette and tobacco-heating product (THP) volumes during the 12 months to the end of December, at 686 billion, were increased by about 3.2 percent on those of the 12 months to the end of December 2016, 665 billion. On an organic basis, volumes fell by about 2.6 percent.

Tobacco volumes which include as well as cigarettes and THPs, other tobacco products whose volumes are stated in cigarette stick equivalents, were increased by about 3.6 percent, from 689 billion to 714 billion.

In a preliminary announcement about its results for the year to the end of December 2017, which saw it complete its acquisition of Reynolds American Tobacco in July, BAT said that its market share in its key markets had increased last year by 0.4 of a percentage point. This growth was said to have been driven by the group’s global drive brands (GDB), including THPs, whose market share, excluding the US, had increased by 1.1 percentage points on volume up by 7.6 percent on an organic basis.

The company’s cigarette and THP volumes were increased in its Western Europe region from 120 billion to 122 billion. But they were down in its EEMEA (Eastern Europe, Middle East and Africa) region from 236 billion to 228 billion, down in its Americas region from 113 billion to 107 billion, and down in its Asia-Pacific region from 196 billion to 193 billion.

BAT’s revenue during the year to the end of December, at £20,292 million, was increased by 37.6 percent on that of 2016, £14,751 million; while adjusted organic revenue, at £15,712 million, was increased by 6.5 percent.

Profit from operations, at £6,476, was increased by 39.1 percent; while adjusted organic profit from operations was up by 7.8 percent to £5,910 million.

Diluted earnings per share were up by 634.0 percent to 1,830.0p; while adjusted diluted earnings per share were increased by 14.9 percent to 284.4p.

Dividend per share was up by 15.2 percent to 195.2p.

“The Group delivered another set of strong financial results in 2017, despite a challenging trading environment,” said chief executive Nicandro Durante (pictured). “Following the transformational deal in July 2017, these results benefit from the acquisition of RAI while also demonstrating the strength of the organic business.”

Durante said also that BAT had made “excellent progress” with its next generation product business. “Our flagship THP, glo, first launched in Japan in December 2016, reached 3.6 percent market share by the end of 2017 – having been rolled out nationally from October 2017. Since then, 50 percent of the overall category growth in Japan has been from glo – demonstrating its strong consumer appeal in a very short period. Good initial progress is also being made in our other launch markets of South Korea, Russia, Canada, Romania and Switzerland.

“In the vapor category, Vype is now present in nine markets and we remain market leader in the UK, with Vype and Ten Motives combined delivering around 40 percent share of measured retail in December 2017. We also lead the vapor category in Poland. In the US, the Vuse range of products continues to have a significant presence in the market. We see the rapidly developing vapor category, as a whole, contributing significantly to our long-term growth ambitions in NGPs.”

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Category: Breaking News, Corporate, Financial, Markets, Next-generation products, Vapor

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