• October 9, 2024

Reynolds’ domestic cigarette volume down by 6.8 percent last year

R.J. Reynolds Tobacco’s U.S. domestic cigarette volume during the year to the end of December, at 64.2 billion, was down by 6.8 percent on that of 2012, 68.9 billion.

Camel volume fell by 1.4 percent to 20.9 billion, and Pall Mall volume fell by 2.7 percent to 21.3 billion, so the company’s total “growth brands” volume was down by 2 percent to 42.2 billion.

The volume of RJR’s other brands was down by 14.8 percent to 22 billion.

Reynolds American Inc., whose business sectors take in RJR, Santa Fe and American Snuff, announced its full-year and fourth-quarter results yesterday.

RJR’s volume during the fourth quarter to the end of December, at 15.6 billion, was down by 8.6 percent on that of the fourth quarter of 2012, 17.1 billion.

Camel volume fell by 3.5 percent to 5.1 billion and Pall Mall volume fell by 6.6 percent to 5.3 billion, so the company’s total growth brands volume was down by 5.1 percent to 10.4 billion.

The other-brands volume fell by 14.8 percent to 5.2 billion.

RJR’s share of the domestic cigarette market during the year to the end of December, at 26 percent, was down from 26.5 percent during 2012.

Camel’s share was increased by 0.3 of a percentage point to 8.8 percent and Pall Mall’s share rose by 0.4 of a percentage point to 9 percent.

The share held by the company’s other brands fell by 1.1 percentage points to 8.3 percent.

Meanwhile, Santa Fe’s cigarette (Natural American Spirit) volume during the year to the end of December, at 3.6 billion, was increased by 15.1 percent on that of 2012, while its volume during the three months to the end of December, at 0.9 billion, was 9.6 percent up on that of the three months to the end of December 2012.

Santa Fe’s share of the retail market during 2013, at 1.4 percent, was up by 0.2 of a percentage point on that of 2012.

American Snuff’s volume during the year to the end of December, at 465.8 million cans, was up by 6.5 percent on that of 2012.

Grizzly volume increased by 7.7 percent to 419.3 million cans, while sales of the company’s other moist snuff products fell by 3 percent to 46.5 million cans.

American’s volume during the three months to the end of December, at 121.7 million cans, was up by 8.2 percent on that of the three months to the end of 2012.

Grizzly volume was increased by 9.6 percent to 109.8 million cans, while the volume of the company’s other brands fell by 2.5 percent to 11.9 million cans.

American’s share of the moist snuff market during the year to the end of December, at 33.2 percent, was increased by 0.8 of a percentage point on that of 2012.

Grizzly’s share was up by 1.2 percentage points to 30.1 percent, while the share of other brands was down by 0.3 of a percentage point to 3.1 percent.

RAI had net sales of $8,236 million during the 12 months to the end of December, 0.8 percent down on those of 2012.

Reported operating income was increased by 41.5 percent to $3,132 million, while adjusted operating income was up by 5.5 percent to $3,021 million.

Reported net income was increased by 35.1 percent to $1,718 million, while adjusted net income was up by 3.4 percent to $1,744 million.

And reported net income per diluted share was up by 40.2 percent to $3.14, while adjusted net income per diluted share was up by 7.4 percent to $3.19.

“Reynolds American delivered growth in fourth-quarter earnings and margin despite lower-than-expected wholesale inventory levels,” said Daniel M. Delen, president and CEO, in announcing the results.

“This performance wrapped up a successful year for all our reportable business segments. Our companies continued to make progress in their strategy to transform the tobacco industry, while demonstrating solid fundamental business dynamics and excellent execution in a challenging economic environment. I’m particularly pleased with the market-share gains on our companies’ key brands, which were driven by strong brand equity and efficient execution of their strategies.”

Delen said that a 2013 highlight was the “exciting performance of R.J. Reynolds Vapor Company’s Vuse digital vapor cigarette, which presents a superior option for adult smokers as they consider switching to smoke-free alternatives.”

Vuse is now widely available in Colorado stores—its first major market—and the brand’s recent expansion in neighboring Utah is said to be progressing smoothly.

“Vuse is a highly differentiated product that symbolizes the very best of our companies’ rich history of innovation,” said Delen. “Vuse is already the market leader in Colorado and importantly, the brand is driving significant category growth in the state. In Utah, early indications are that consumers there also appreciate the brand’s distinctive features.”

Looking ahead, Delen said that RAI and its operating companies were well positioned for profitable growth in 2014.

“We will continue to invest in Vuse in 2014 as we expand the brand into national distribution,” he said. “This is further evidence of our companies’ focus on building their businesses for sustainable long-term success.

“RAI’s commitment to delivering value to shareholders was again evidenced by the 6.3 percent increase in our dividend that we announced today, and we remain focused on finding new opportunities to return value to our shareholders.”