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Altria’s cigarette, cigar and smokeless volumes up

| July 30, 2015

Philip Morris USA’s domestic cigarette shipment volume during the three months to the end of June, at 33,124 million, was up by 3.1 percent on that of the three months to the end of June 2014, 32,134 million.

Marlboro shipments increased by 3.0 percent to 28,498 million; shipments of other premium brands fell by 3.4 percent to 1,767 million; while shipments of discount brands increased by 8.9 percent to 2,859 million.

PM USA’s share of the domestic retail cigarette market during the three months to the end of June, at 51.4 percent, was increased by 0.5 of a percentage point on that of the three months to the end of June 2014. Marlboro’s share, at 44.2 percent, was up by 0.3 of a percentage point; the share of its other premium brands was down by 0.1 of a percentage point to 2.8 percent; while the share of the company’s discount brands was increased by 0.3 of a percentage point to 4.4 per cent.

The Altria Group yesterday published its second-quarter and first-half results for 2015.

Middleton’s cigar shipment volume during the three months to the end of June, at 334 million, was increased by 0.9 percent on that of the three months to the end of June 2014, 331 million.

Black & Mild brand shipments were up by 1.6 percent to 325 million, while shipments of other cigar brands fell by 18.2 percent from 11 million to nine million.

Middleton’s share of the domestic retail cigar market during the three months to the end of June, at 27.9 percent, was down by 0.8 of a percentage point from that of the three months to the end of June 2014. Black & Mild’s share was down by 0.7 of a percentage point to 27.6 percent, while the share of the company’s other brands was down by 0.1 of a percentage point to 0.3 per cent.

USSTC and PM USA’s combined, domestic smokeless-products shipment-volume during the three months to the end of June, at 209.0 million cans and packs, was up by 2.6 percent on that of the three months to the end of June 2014, 203.8 million.

Shipments of Copenhagen were up by 5.4 percent to 121.2 million; those of Skoal were up by 0.1 percent to 69.4 million; while those of other brands were down by 5.6 percent to 18.4 million.

USSTC and PM USA’s share of the US domestic market for smokeless products during the three months to the end of June, at 54.8 percent, was down by 0.1 of a percentage point on that of the three months to the end of June 2014. Copenhagen’s share was up by 0.8 of a percentage point to 31.3 percent; Skoal’s share was down by 0.7 of a percentage point to 19.8 percent; while the share of other brands was down by 0.2 of a percentage point to 3.7 percent.

Meanwhile, PM USA’s cigarette shipment volume during the six months to the end of June, at 62,322 million, was increased by 2.4 percent on that of the six months to the end of June 2014, 60,883 million.

Marlboro shipments rose by 2.1 percent to 53,615 million; shipments of other premium brands fell by 3.3 percent to 3,345 million; while shipments of discount brands increased by 8.8 percent to 5,362 million.

Middleton’s cigar shipment volume during the six months to the end of June, at 636 million, was increased by 5.1 percent on that of the six months to the end of June 2014, 605 million.

Black & Mild brand shipments were up by 5.6 percent to 623 million; while shipments of other brands fell by 13.3 percent to 13 million.

USSTC and PM USA’s combined, domestic, smokeless-products shipment-volume during the six months to the end of June, at 400.1 million, was increased by 2.6 per cent on that of the six months to the end of June 2014, 389.9 million.

Copenhagen shipments were up by 5.7 percent to 231.3 million; Skoal shipments were up by 0.1 percent to 133.4 million; while shipments of other brands were down by 6.1 percent to 35.4 million.

Altria’s second-quarter reported diluted earnings per share (EPS) increased by 15.6 percent to $0.74, and its second-quarter adjusted diluted EPS, which excludes the impact of special items, increased by 13.8 percent to $0.74.

Altria’s first-half reported diluted EPS decreased by 1.6 percent to $1.25, but its first-half adjusted diluted EPS increased by 13.1 percent to $1.38.

“Altria delivered excellent second-quarter and first-half results, growing adjusted diluted EPS more than 13 percent with a very strong performance from the smokeable products segment and solid contributions across our other businesses,” said Marty Barrington, Altria’s chairman, CEO and president.

“Further, our tobacco companies’ brands continued to strengthen their market leadership, with record retail share on Marlboro and more than 51 percent combined share on Copenhagen and Skoal year-to-date.

“Based on this very strong first-half performance and our outlook for the second half, we are raising our full-year adjusted EPS guidance.”

Tough tobacco control law passed in Uganda

| July 30, 2015

Ugandan lawmakers on Tuesday passed a law banning smoking within 100 meters of public buildings, banning the sale and use of shisha tobacco and banning all forms of tobacco, advertising, promotion and sponsorship, according to a story by Deo Walusimbi for the Observer, relayed by the TMA.

Control Bill 2014, which now goes for signature to President Yoweri Kaguta Museveni, requires graphic health warnings to be included on 75 percent of the surface of cigarette packs and requires packs to be sold with a minimum of 20 pieces.

The bill provides for violations to be punished with fines and/or jail terms.

It authorizes police officers to make arrests without obtaining search warrants, but they cannot destroy confiscated tobacco products, as was allowed for in the original bill.

The bill calls for establishment of a tobacco control committee.

Japan’s smoking incidence up – or down

| July 30, 2015

Japan’s adult smoking incidence increased slightly between May 2014 and May 2015, according to figures posted on Japan Tobacco Inc.’s website, but the company believes that the incidence is actually falling in line with long-term trends.

JT today announced the latest results of its Japan Smoking Rate Survey, a study that has been carried out annually since 1965.

Smoking among adult men increased by 0.7 of a percentage point to 31.0 percent between May last year and May this year; smoking among adult women fell by 0.2 of a percentage point to 9.6 percent; while smoking among all adults increased by 0.2 percent to 19.9 percent.

The researchers used adult population data from the Statistics Bureau of the Ministry of Internal Affairs and Communications (50.36 million men and 54.40 million women as of April 1, 2004; and 50.38 million men and 54.37 million women as of April 1, 2015) to calculate that the number of adult male smokers had risen between May 2014 and May 2015 from 15.26 million to 15.62 million; that the number of adult female smokers had fallen from 5.33 million to 5.22 million; and that overall the number of adult smokers had risen from 20.59 million to 20.84 million.

Commenting on the figures, JT said that the results of the survey showing an increase in smoking among adult men and, therefore, among the adult population as a whole, were within the margin of statistical error.

The company said it was of the view that the incidence of smoking in Japan had, between May 2014 and May 2015, continued to decline.

The continuing decline was said to be due to various factors, including the aging of Japanese society, the growing awareness about the health risks associated with smoking, the tightening of smoking-related regulations and tax and price hikes.

Iggesund announces packaging design winners

| July 30, 2015

One of the winners was a crisp design.

One of the winners was a crisp design.

Iggesund Paperboard has received almost 200 design proposals in response to the challenge it issued earlier this year to the world’s designers to create better and more sustainable consumer packaging. Three of the designs have been chosen and their creators will receive rewards. In addition, the company has opened dialogues with various of the designers about being able to use their creations in various contexts.

“We’re overwhelmed by the enthusiasm that greeted our project, both from the participating designers but also the attention it has received in the press,” said Staffan Sjöberg, public relations manager at Iggesund Paperboard. “And of course we’re pleased, because one of our aims was to show more designers what they can do with paperboard in general and our products, Invercote and Incada, in particular.”

One of the winning entries is a packaging system for rolls of toilet or kitchen paper submitted by Maikel Roberts, of Barcelona, Spain. “It’s exciting from our perspective as a paperboard manufacturer because it involves an upgrade from plastic wrap to paperboard,” Sjöberg said. “What Maikel has created is a system that allows more to be loaded on every pallet and also gives better exposure at the point of sale. It also probably makes in-store handling easier.”

Jessica Bergdahl, Moa Ahlström, and Linnea Löfgren, first-year students at Nackademin in Stockholm, Sweden, were selected for their tri-function crisps packaging. As packaging, it protects its contents better than a traditional bag does; it can be unfolded so as to function as a serving bowl; and the lid, which is used to close the packaging, can be used to serve dip. “Packaging that can offer several functions during its lifetime is always interesting and I’m convinced that we will see more of this type of thing in the future,” said Bo Wallteg, long-time editor-in-chief of the packaging industry magazine Nord-Emballage, and member of the competition jury.

Alpha Design, of Bulgaria was the third winner for its proposal for a holder and protective cover for e-book readers. “A paperboard cover or holder is inexpensive and also means e-book readers can be supplied with customised contents and a cover that reflects the contents,” said Johan Granås, business developer at Iggesund, who was also a member of the three-person jury. “But even if that option is not used, this should still be a cheaper alternative than many other holders and covers now on the market.”

Iggesund worked with the US crowdsourcing agency Crowdspring, whose global network of designers formed the basis of the competition.

“We hoped to see some local variations where we could distinguish differences between countries and parts of the world,” said Sjöberg. “But we lucked out there – the vast majority of the entries were makeovers of products from global brands.”

BAT’s first-half volume down but share up

| July 29, 2015

British American Tobacco’s cigarette volume during the six months to the end of June, at 322 billion, was down by 2.9 percent from that of the six months to the end of June 2014.

The company estimated that the industry-wide volume decline during this period was 3.5 percent and that it had enjoyed a ‘significant increase in market share’.

Volume, at 52 billion, was stable in the company’s Western Europe region, but down in each of its other regions: in its Asia Pacific region by about 1.0 percent to 103 billion; in its EEMEA (Eastern Europe, the Middle East and Africa) region by about 4.5 percent to 107 billion; and in its Americas region by about 4.8 percent to 60 billion.

BAT’s total tobacco volume, which includes other tobacco products converted as cigarette equivalents, was down from 344 billion during the six months to the end of June 2014 to 334 billion during the six months to the end of June 2015.

The company reported that its global drive brands volume was increased by 6.0 percent and that their share had continued to grow strongly. Dunhill’s volume increased by 2.4 percent with growth driven mainly in Indonesia and Brazil, partially offset by lower volumes in South Korea, Malaysia and Gulf Co-operation Council countries. Kent’s volume was down by 0.9 per cent as good growth in Iran and Turkey was more than offset by market contraction in Russia, Ukraine and Romania.

Lucky Strike’s volume was increased by 2.9 percent driven by growth in Belgium, Mexico and France that offset lower volumes in Russia and Italy. Pall Mall’s volume grew by 2.8 percent with strong performances in Pakistan, Poland, Mexico and Canada more than offsetting lower volumes in Italy, Russia and Australia.

And Rothmans’ volume grew by 36.6 percent, with strong performances in Russia, Australia, Turkey, Kazakhstan, Italy and Ukraine.

The volume of other international brands declined by 6.1 percent as growth in State Express 555 and Shuang Xi were more than offset by volume declines in respect of Craven A, Peter Stuyvesant and Viceroy caused by market declines in their strongholds.

BAT’s revenue, calculated at constant rates of exchange during the six months to the end of June, at £6,962 million, was up by 2.4 percent on that of the six months to the end of June 2014. It was down by 5.9 percent to £6,398 million at current rates.

Adjusted profit from operations was up by 1.3 percent to £2,699 million at constant rates of exchange, but down by 6.0 percent to £2,507 million at current rates.

Profit from operations was increased by 3.0 percent to £2,533 million at constant rates of exchange, but down by 4.6 percent to £2,347 million at current rates.

Adjusted diluted earnings per share were increased by 3.9 percent to 105.8p at constant rates of exchange, but 1.6 percent lower to 100.2p at current rates.

Basic earnings per share were up by 52.6 percent to 142.4p.

In announcing the half-year results, CEO, Nicandro Durante, said that the business had performed well despite a strong volume comparator and the intensified low price competition in Australia. But he added that adverse foreign exchange rate movements had significantly impacted the company’s results.

“Cigarette volume was down 2.9 percent although the consistent growth of GDB volume, higher by 6.0 percent, demonstrates that our strategy continues to deliver,” he said in part. “Underlying volume, excluding one-offs, was down by approximately 2.5 percent. This is against an industry decline of around 3.5 percent following significant excise driven price increases in Russia, Australia and South Korea.

“Our market share, an important indicator of the underlying strength of our business, grew strongly with corporate share up 40 basis points in the Key Markets and the Global Drive Brands continuing to perform excellently with share up 80 basis points. Pricing in general continued to be strong, with price/mix ahead of last year.”

RAI’s Newport-boosted 2Q volume up by 4.4 percent

| July 29, 2015

R.J Reynolds Tobacco’s domestic cigarette volume during the three months to the end of June, at 16.3 billion, was increased by 4.4 percent on that of the three months to the end of June 2014, 15.6 billion.

Camel volume was increased by 3.5 percent to 5.4 billion, Pall Mall volume was down by 2.2 percent to 5.2 billion, and other-brand cigarette volume was down by 16.3 percent to 4.3 billion.

The three months’ figures included a 1.4 billion contribution from Newport, which Reynolds acquired when it completed its acquisition of Lorillard on June 12, but excludes the divested brands Winston, KOOL and Salem.

Reynolds’ share of the domestic retail cigarette market during the three months to the end of June, at 31.8 percent, was down by 0.1 of a percentage point from that during the three months to the end of June 2014.

Newport’s share was increased by 0.4 of a percentage point to 13.2 percent, Camel’s share was increased by 0.1 of a percentage point to 8.2 percent, Pall Mall’s share was down by 0.3 of a percentage point to 7.8 percent, and other-brands’ share was down by 0.3 of a percentage point to 2.6 percent.

Santa Fe’s cigarette (comprising the Natural American Spirit brand) volume during the three months to the end of June, at 1.3 billion, was up by 25.1 percent on that of the three months to the end of June 2014.

At the same time, Natural American Spirit’s share of the retail market increased by 0.3 of a percentage point to 1.8 percent.

American Snuff’s moist snuff volume during the three months to the end of June, at 128.5 million cans, was increased by 6.0 percent on that of the three months to the end of June 2013.

Grizzly volume was increased by 7.1 percent to 117.2 million cans, while other-brands volume was down by 4.1 percent to 11.3 million cans.

At the same time, American’s share of the moist-snuff retail market rose by 1.1 percentage points to 33.8 percent. Grizzly’s share was up by 1.3 percentage points to 31.1 percent, while the share of the company’s other moist snuff brands fell by 0.2 of a percentage point to 2.8 percent.

Reynolds American Inc yesterday announced its second quarter and half year 2015 results.

Net sales for the three months to the end of June, at $2,403 million, were increased by 11.1 per cent from that of the three months to the end of June 2013.

Reported operating income was up by 422.0 percent to $4,364 million and adjusted operating income was increased by 25.1 percent to $1,011 million.

Reported net income was up by 291.9 percent to $1,928 million and adjusted net income was up by 22.2 percent to $579 million.

Reported net income per diluted share was up by 267.4 percent to $3.38 and adjusted net income per diluted share was up by 14.6 percent to $1.02.

“Reynolds American delivered excellent results in the second quarter, in addition to successfully completing the Lorillard acquisition and related divestiture,” said Susan M. Cameron, president and CEO of RAI.

“The strength of our operating companies and their growth brands continued to benefit RAI’s earnings and operating margin through the first half, and the integration of the powerful Newport menthol brand into R.J. Reynolds Tobacco Company’s cigarette portfolio is going very smoothly.”

Meanwhile, Reynolds’ domestic cigarette volume during the six months to the end of June, at 30.2 billion, was 1.1 percent up on that of the six months to the end of June 2014.

Santa Fe’s cigarette (Natural American Spirit) volume during the six months to the end of June, at 2.3 billion, was up by 24.3 percent on that of the six months to the end of June 2014.

And American’s moist snuff volume during the six month to the end of June, at 246.0 million cans, was up by 3.3 percent on that of the six months to the end of June 2014.