PRELIMINARY RESULTS February 2015

Transcription

1 26 February 2015

2 Nicandro Durante Chief Executive

3 Summary Financials Volume Current Revenue 14.0bn Profit 5.4bn Margin 38.7% EPS 208.1p Cigarettes -8.4% 2.8% -1.4% 667bn -7.2% 0.5pp -3.9% Constant 4.4% 0.5pp 7.9% Total Tobacco 694bn GDBs 278bn Total IBs 397bn -1.3% 5.8% 3.0% A strong performance in a tough environment

4 Ben Stevens Finance Director

5 Regional performance* Cigarette Volume Revenue Profit AsPac Amr WE EEMEA Group AsPac Amr WE EEMEA Group AsPac Amr WE EEMEA Group 8.1% 9.1% 5.7% 6.6% 4.4% 2.8% 0.1% 0.3% 1.2% 1.2% -2.3% -1.4% -2.4% -0.9% -5.9% FX impact -9.1% -15.6% -5.2% -15.3% -11.2% -9.8% -13.8% -5.7% -16.5% -11.6% As reported -7.9% -9.9% -7.6% -8.7% -8.4% -8.6% -5.7% -6.6% -7.4% -7.2% *At constant rates of exchange

6 Foreign exchange BRL AUD ZAR JPY RUB Average 2013 Q Q Q Q4 2014

7 Foreign exchange impacts Financials Current Constant Constant excl. transactional fx Revenue 1% -8% 4% 3% 4% 3% Profit 3% -7% 7% 4% 8% 6% Margin 1.0pp 0.5pp 1.1pp 0.5pp 1.5pp 1.2pp Strong underlying performance masked by significant translational and transactional FX impact

8 Asia Pacific Regional Performance Financials Volume Constant Current Revenue 4,253m -7.9% Cigarettes 1.2% 0.1% 197bn Profit 1,713m 1.2% -8.6% GDBs 79bn 6.5%

9 Americas Regional Performance Financials Volume Constant Current Revenue 3,506m 5.7% -9.9% Cigarettes 131bn -2.3% Profit 1,475m 8.1% -5.7% GDB 36bn 10.4%

10 Western Europe Regional Performance Financials Volume Constant Revenue 3,546m -2.4% Current -7.6% Cigarettes 112bn -5.9% Fine Cut 21bn 4.7% 1.7% Profit 1,262m -0.9% -6.6% GDB 67bn -0.1% 22.5

11 EEMEA Regional Performance Financials Volume Constant Current Revenue 4,377m 6.6% -8.7% Cigarettes 227bn 0.3% Profit 1,625m GDB 9.1% -7.4% 96bn 7.9%

12 Operating margin Based on adjusted profit and current FX 0.3pp 1.9pp 0.4pp 0.5pp 0.5pp 43.0% 40.3% 40.0% 41.1% 35.0% 35.4% 36.3% 36.8% 38.1% 38.7% Asia Pacific Americas W Europe EEMEA Group

13 Drivers of adjusted EPS growth +3.2p -25.6p +9.3p +1.8p +2.0p +1.5p -0.7p 216.6p 208.1p EPS 2013 Profit Performance Net Finance Costs Associates Taxation Non-controlling interest Share Buy-Back Exchange EPS 2014

14 Cash flow 441m 309m 627m 140m 426m 1,433m 5,403m 5,403m 5,535m 4,908m 4,342m 249m 437m 609m 2,909m 2,660m 2,223m 325m 2,507m 1,898m 1,898m Adj operating profit Non cash items Working Capital chg Net Capex Pension fds - s'fall funding Net interest Tax Dividends to NCI Non-tobacco litigation settlements Restructuring Div from associates Free cash flow

15 Financing/Shareholder returns 140% of Free Cash Flow returned to shareholders in 2014: 2.7bn Dividends paid to shareholders 0.8bn Share buy back Net Debt increased by 0.65bn to 10.2bn Moody s credit rating remains unchanged at A3 Fitch and S&P ratings remain unchanged at A- Full year dividend growth of 4%

16 Nicandro Durante Chief Executive

17 Key results highlights Consistent delivery

18 Key results highlights Consistent delivery Strong share and GDB growth

19 Global Drive Brands Volume: 55 billion, +2.9% Share up 10bps Good volume and share growth in Indonesia, Brazil and Romania Lower volumes in S.Korea and Malaysia

20 Global Drive Brands Volume: 55 billion, +2.9% Share up 10bps Good volume and share growth in Indonesia, Brazil and Romania Lower volumes in S.Korea and Malaysia Volume: 64 billion, -2.8% Share flat Impacted by market declines in Russia and Romania Robust growth in Japan, Iran and Uzbekistan Share gains in Japan, Turkey and Vietnam

21 Global Drive Brands Volume: 55 billion, +2.9% Share up 10bps Good volume and share growth in Indonesia, Brazil and Romania Lower volumes in S.Korea and Malaysia Volume: 64 billion, -2.8% Share flat Impacted by market declines in Russia and Romania Robust growth in Japan, Iran and Uzbekistan Share gains in Japan, Turkey and Vietnam Volume: 31 billion, +0.8% Share up 10bps Growth momentum - Mexico, Spain, France and Russia Convertibles and Additive Free driving growth

22 Global Drive Brands Volume: 55 billion, +2.9% Share up 10bps Good volume and share growth in Indonesia, Brazil and Romania Lower volumes in S.Korea and Malaysia Volume: 64 billion, -2.8% Share flat Impacted by market declines in Russia and Romania Robust growth in Japan, Iran and Uzbekistan Share gains in Japan, Turkey and Vietnam Volume: 31 billion, +0.8% Share up 10bps Growth momentum - Mexico, Spain, France and Russia Convertibles and Additive Free driving growth Volume: 92 billion, +5.6% Share up 30bps Strong performance across the Regions Record volume including Fine Cut Pall Mall Fine Cut No 1 brand in Western Europe

23 Global Drive Brands Volume: 55 billion, +2.9% Share up 10bps Good volume and share growth in Indonesia, Brazil and Romania Lower volumes in S.Korea and Malaysia Volume: 36 billion, up 39.8% Volume: 31 billion, +0.8% Share up 10bps Share up 40bps Growth momentum - Mexico, Spain, France and Russia Convertibles and Additive Free driving growth Volume: 64 billion, -2.8% Share flat in T40 Strong performance in EEMEA, Western Europe and Australia Great momentum of slimmer innovations in Eastern Europe Impacted by market declines in Russia and Romania Robust growth in Japan, Iran and Uzbekistan Share gains in Japan, Turkey and Vietnam Volume: 92 billion, 5.6% Share up 30bps Strong performance across the Regions Record volume including Fine Cut Pall Mall Fine Cut No 1 brand in Western Europe

24 Key results highlights Consistent delivery Strong share and GDB growth Continued good progress on Next Generation Products

25 Next-Generation Products update

26 Next-Generation Products update

27 Key results highlights Consistent delivery Strong share and GDB growth Continued good progress on Next Generation Products RAI/LO transaction on track

28 Key results highlights Consistent delivery Strong share and GDB growth Continued good progress on Next Generation Products RAI/LO transaction on track Potential offer for Souza Cruz minority under consideration

29 Summary Continued growth in revenue, share, margin and profit Adjusted EPS at constant rates up 8% Continued economic uncertainty Significant transactional FX headwinds Good pricing, but competitive in some markets Commitment to growing cash returns to shareholders Proposed full year dividend per share 4% higher at pence A challenging year ahead, but optimistic of another good year excluding currency impacts

30 26 February 2015

31 SUPPLEMENTARY SLIDES 26 February 2015

32 Cigarette volumes by region FY 2014 Region Billions % change Asia Pacific % Americas % Western Europe % Eastern Europe, Middle East and Africa % Group %

33 Cigarette volumes by region H Region Billions % change Asia Pacific % Americas % Western Europe % Eastern Europe, Middle East and Africa % Group %

34 Cigarette volumes by region Q Region Billions % change Asia Pacific % Americas % Western Europe % Eastern Europe, Middle East and Africa % Group %

35 Revenue by region FY 2014 Region m % change Asia Pacific 3,873 4, % Americas 2,990 3, % Western Europe 3,359 3, % Eastern Europe, Middle East and Africa 3,749 4, % Group 13,971 15, % All numbers as reported

36 Revenue by region H Region m % change Asia Pacific 1,941 2, % Americas 1,575 1, % Western Europe 1,776 1, % Eastern Europe, Middle East and Africa 1,881 2, % Group 7,173 7, % All numbers as reported

37 Adjusted profit from operations FY 2014 Region m % change Asia Pacific 1,548 1, % Americas 1,286 1, % Western Europe 1,189 1, % Eastern Europe, Middle East and Africa 1,380 1, % Group 5,403 5, % All numbers as reported

38 Adjusted profit from operations H Region m % change Asia Pacific % Americas % Western Europe % Eastern Europe, Middle East and Africa % Group 2,738 2, % All numbers as reported

39 Top 40 market share movements (1) Market SOM FY14 (%) Movement (ppt) Market SOM FY14 (%) Movement (ppt) Argentina 26.7 (0.4) France Australia 39.7 (3.2) GCC 32.7 (2.0) Bangladesh Germany 19.4 (0.4) Belgium Indonesia 6.2 (0.2) Brazil Italy 20.5 (0.6) Canada 50.2 (0.9) Japan Chile 94.8 (0.1) Kazakhstan Colombia Malaysia 61.2 (0.7) Czech 20.7 (0.1) Mexico Denmark 74.8 (3.9) Netherlands 25.9 (0.4) Based on retail audit

40 Top 40 market share movements (2) Market SOM FY14 (%) Movement (ppt) Market SOM FY14 (%) Movement (ppt) New Zealand 70.8 (1.5) Sweden Pakistan Switzerland 40.0 (0.5) Philippines Taiwan Poland Turkey Romania 53.6 (0.2) UK Russia Ukraine South Africa 80.6 (1.4) Venezuela South Korea 13.0 (0.3) Vietnam 30.8 (0.4) Spain 11.1 (0.5) Based on retail audit

41 Foreign currencies Average Closing US dollar Canadian dollar Euro South African rand Brazilian real Australian dollar Russian rouble Japanese yen Indian rupee