| Wed 28 Oct 2009, 9:00 | | BTI - British American Tobacco P.l.c - Interim management statement for the |
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BTI
BTI
BTI - British American Tobacco P.l.c - Interim management statement for the
nine months ended 30 September 2009
British American Tobacco p.l.c.
Incorporated in England and Wales
(Registration number: 03407696)
Short name: BATS
Share code: BTI
ISIN number: GB0002875804
("British American Tobacco p.l.c." or "the Company")
28 October 2009
BRITISH AMERICAN TOBACCO p.l.c.
INTERIM MANAGEMENT STATEMENT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2009
Strong revenue growth at both constant and current exchange rates
Volumes from subsidiaries increased 2 per cent to 533 billion
Global Drive Brands volumes grew by 4 per cent
SUMMARY OF PERFORMANCE
Trading update
British American Tobacco performed well in the nine months to the end of
September, although total volume growth slowed.
Group revenue for the nine months grew strongly in constant currency terms,
driven by the continued good pricing momentum and volume growth from the
acquisitions made in the middle of last year (Skandinavisk Tobakskompagni (ST)
in Denmark and Tekel in Turkey), as well as the acquisition of PT Bentoel
Internasional Investama Tbk (Bentoel) in Indonesia on 17 June 2009. All
regions contributed to this good result. Revenue benefited further from the
favourable impact of significant exchange rate movements.
Group volumes from subsidiaries were 533 billion, up 2 per cent, as a result
of the acquisitions of ST, Tekel and Bentoel. Organic volumes were 3 per cent
lower than last year as a result of a sharp decline in the low margin volumes
acquired in the ST and Tekel transactions, which were included, on a
comparable basis, for the first time in the third quarter.
The four Global Drive Brands had a good performance and achieved overall
volume growth of 4 per cent. Dunhill was up 6 per cent, Lucky Strike 5 per
cent and Pall Mall grew by 9 per cent; Kent volumes were 2 per cent lower
mainly driven by industry volume declines in its key markets.
Trading environment
This strong performance was achieved against deteriorating trading conditions,
with industry volumes lower in a number of markets including Japan, Russia,
Brazil, Italy and South Africa, as well as a decline in the premium segment in
the third quarter. In some markets, particularly in Central and Eastern
Europe, there was down-trading to illicit trade as a result of excise
increases, affecting the low price segment.
The Group continued to address its cost base and, amongst other initiatives,
started the consultation process with a view to closing the Soeborg factory in
Denmark.
Cigarette volumes
The segmental analysis of the volumes of subsidiaries is as follows:
9 months to Year to
30.09.09 30.09.08 31.12.08
bns bns bns
Asia-Pacific 134 134 180
Americas 111 119 161
Western Europe 98 89 123
Eastern Europe 95 102 137
Africa and Middle East 95 80 114
533 524 715
Comment
Paul Adams, Chief Executive, commented "Our consumers are clearly finding the
current economic conditions difficult, as unemployment continues to rise.
This has led to a softening of our volumes, although I am encouraged by the
growth in our Global Drive Brands and the strong growth in revenue."
CHANGES IN THE GROUP
The acquisition of the cigarette and snus businesses of ST was subject to
regulatory approval which was received on the condition that the Group divest
a small number of local trademarks, primarily in Norway. The disposal of the
trademarks was completed earlier this year and the total proceeds resulted in
a gain of GBP2 million.
On 17 June 2009, the Group acquired an 85 per cent stake in Indonesia`s fourth
largest cigarette maker PT Bentoel Internasional Investama Tbk (Bentoel) for
US$494 million (GBP303 million). A public tender offer for the remaining
shares was announced after the acquisition and was completed by 26 August
2009, resulting in the acquisition of a further 14 per cent share in the
company, for GBP52 million, bringing the total shareholding in the Bentoel
Group to 99.7 per cent.
On 20 October 2009, it was announced that Bentoel and BAT Indonesia decided to
enter into a merger plan whereby BAT Indonesia will merge into Bentoel. The
Bentoel name will be retained and the company will remain listed on the
Indonesia Stock Exchange.
FINANCIAL POSITION
The Group has sufficient financing and facilities available for the
foreseeable future and at 30 September 2009 its guaranteed revolving credit
facility of GBP1.75 billion was undrawn. This facility acts as a backstop for
the Group`s re-established euro commercial paper (ECP) programme (GBP1
billion) of which GBP663 million was outstanding on 30 September 2009.
The main change in financing arrangements since the beginning of the financial
year was the repayment of the Euro900 million maturing debt at the end of
February 2009, financed from bonds issued during 2008 and from cash generated
from operations. In June and in August 2009 respectively, the Group issued a
GBP250 million bond with maturity of June 2022, and a new 5 year Malaysian
MYR250 million bond. It repaid a MYR100 million bond and EUR 395 million of
the Turkish acquisition facilities respectively in May 2009 and in September
2009. In addition, the remaining EUR759 million Turkish acquisition facility
was repaid during October with EUR 700 million refinanced to October 2012 with
an option to extend it by a year to 2013, at the discretion of the banking
participants in the syndicated facility.
There have been no material events, transactions or change in the financial
position of the Group since the year end, other than as outlined in this
statement. Further, the Board is not aware of any material events,
transactions or change in the financial position of the Group which have
occurred since 30 September 2009 up to and including 27 October 2009, being
the latest practicable date before the date of the publication of this Interim
Management Statement.
On behalf of the Board
Nicola Snook
Secretary
27 October 2009
NOTES AND ADDITIONAL INFORMATION
British American Tobacco is the world`s second largest quoted tobacco group by
global market share, with brands sold in more than 180 markets. We have four
Global Drive Brands - Dunhill, Kent, Lucky Strike and Pall Mall - and over 300
brands in our portfolio. We hold robust market positions in each of our
regions and have leadership positions in more than 50 markets.
As previously announced, Jan du Plessis is stepping down as Chairman on 30
October, after over five successful years as Chairman, having joined the Board
as a Non-Executive Director in 1999. Richard Burrows, who joined the Board as
a Non-Executive Director on 1 September, is becoming Chairman.
About this Interim Management Statement (IMS)
This IMS relates to the nine months ended 30 September 2009 and contains
information that covers the third quarter and the period since the quarter end
to 27 October 2009, being the latest practicable date before the date of the
publication of this IMS.
This announcement does not constitute an invitation to underwrite, subscribe
for, or otherwise acquire or dispose of any British American Tobacco p.l.c.
shares or other securities.
This IMS contains certain forward looking statements which are subject to risk
factors associated with, among other things, the economic and business
circumstances occurring from time to time in the countries and markets in
which the Group operates. It is believed that the expectations reflected in
this announcement are reasonable but they may be affected by a wide range of
variables which could cause actual results to differ materially from those
currently anticipated.
Past performance is no guide to future performance and persons needing advice
should consult an independent financial adviser.
The IMS is released to the London Stock Exchange and the JSE Limited. It may
be viewed and downloaded from our website, www.bat.com
Copies of the IMS may also be obtained during normal business hours from: (1)
the Company`s registered office; (2) the Company`s representative office in
South Africa; and (3) British American Tobacco Publications, details of which
are given below.
FINANCIAL CALENDAR 2010
25 February Preliminary Announcement
28 April Annual General Meeting and Interim Management Statement
27 July Half-Yearly Report
27 October Interim Management Statement
CORPORATE INFORMATION
Primary listing
London Stock Exchange (Share Code: BATS; ISIN: GB0002875804)
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ, UK
tel: 0800 408 0094; +44 870 889 3159
Share dealing tel: 0870 703 0084 (UK only)
Your account: www.computershare.com/uk
Share dealing: www.computershare.com/dealing/uk
Queries: www.investorcentre.co.uk/contactus
Secondary listing
JSE (Share Code: BTI)
Shares are traded in electronic form only and transactions
settled electronically through Strate.
Computershare Investor Services (Pty) Limited
PO Box 61051, Marshalltown 2107, South Africa
tel: 0861 100 950; +27 11 373 0017
Queries: web.queries@computershare.co.za
American Depositary Receipts (ADRs)
NYSE Alternext US (Share Code: BTI; CUSIP Number: 110448107;
ISIN: US1104481072)
Sponsored ADR programme; each ADR represents two ordinary shares of
British American Tobacco p.l.c.
Citibank Shareholder Services
PO Box 43077
Providence, Rhode Island 02940-3077, USA
tel: 1-888-985-2055 (toll-free) or +1 781 575 4555
email: Citibank@shareholders-online.com
web: www.citi.com/dr
Publications
British American Tobacco Publications
Unit 80, London Industrial Park, Roding Road,
London E6 6LS, UK
tel: +44 (0)20 7511 7797; facsimile: +44 (0)20 7540 4326
e-mail: bat@team365.co.uk or
Computershare Investor Services (Pty) Limited in South Africa
using the contact details shown above.
British American Tobacco p.l.c.
Registered office
Globe House
4 Temple Place
London
WC2R 2PG
tel: +44 (0)20 7845 1000
British American Tobacco p.l.c.
Representative office in South Africa
34 Alexander Street
Stellenbosch
7600
South Africa
(PO Box 631, Cape Town 8000, South Africa)
tel: +27 (0)21 888 3722
ENQUIRIES:
INVESTOR RELATIONS: PRESS OFFICE:
Ralph 020 7845 David 020 7845
Edmondson/ 1180 Betteridge/Catherine 2888
Rachael 020 7845 Armstrong/
Brierley 1519 Elif Boutlu
28 October 2009
Sponsor: UBS South Africa (Pty) Ltd
Date: 28/10/2009 09:00:01 Produced by the JSE SENS Department.
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