BAT’s volume down but share up in ‘key markets’

British American Tobacco’s cigarette volumes during 2014, at 667 billion, were down by about 1.4 percent on those of 2013, 676 billion.

Volumes were increased in the company’s EEMEA (Eastern Europe, Middle East and Africa) region from 226 billion to 227 billion; they were unchanged in its Asia Pacific region at 197 billion; they were down in the Americas from 134 billion to 131 billion; and they were down in Western Europe from 119 billion to 112 billion.

BAT’s tobacco volumes during 2014, at 694 billion, were down by about 1.3 percent. Tobacco volumes include, as well as cigarettes, other tobacco products whose volumes are stated in cigarette stick equivalents.

The company said the fall in its cigarette volumes was down to industry declines that drove lower volumes in Russia, Vietnam, Brazil, Denmark and Poland, partially offset by higher volumes in Bangladesh, Iran, Venezuela, Turkey, Ukraine and Pakistan.

The group was said to have increased its market share by 10 basis points in its key markets.

BAT’s five Global Drive Brands (GDB) increased their volume by 5.8 percent, with a share growth of 90 basis points. Dunhill’s volume increased by 2.9 percent, driven mainly by its performance in Indonesia and Brazil, but offset by lower volumes in Malaysia, South Korea and the GCC.

Kent’s volume was 2.8 percent down as a result of market contraction in Russia and Romania, which offset strong performances in Iran, Uzbekistan, Japan and Turkey.

Lucky Strike’s volume was up by 0.8 percent, driven by growth in Mexico and Spain offset by lower volume in Chile and Poland.

Pall Mall’s volume grew by 5.6 percent due to strong performances in Pakistan, South Africa, Mexico and Chile that more than offset lower volumes in Italy, Russia and the UK.

And Rothmans’ volume grew by 39.8 percent driven by its performances in Russia, Italy, Ukraine, the UK, Kazakhstan, Australia and South Africa. Last year was the second year in which Rothmans was been included as a GDB.

The volume of BAT’s other international brands declined by 3.0 percent as growth in State Express 555 and Shuang Xi was more than offset by market declines that led to lower volumes of Craven A, Peter Stuyvesant and Viceroy.

BAT’s revenue, at £13,971 million, was down by 8.4 percent on that of 2013, £15,260 million, though it was up by 2.8 percent at constant rates of exchange.

Adjusted profit from operations was down by 7.2 percent to £5,403 million, but up by 4.4 percent at constant rates of exchange.

Reported profit from operations was down by 17.7 per cent to £4,546 million, and down by 7.1 percent at constant rates of exchange.

Adjusted diluted earnings per share were down by 3.9 percent to 208.1p, but up by 7.9 percent at constant rate of exchange, while basic earnings per share were down by 18.6 percent to 167.1p.

Dividends per share were up by 4.0 percent to 148.1p.

“I am delighted with the excellent progress we have made in the four years since I became chief executive, during which we have enhanced our strategy with a sharpened focus on the consumer,” said Nicandro Durante.

“We have increased our share of the global cigarette market in this period by 70 basis points and grown our Global Drive Brands and share of key segments at an even faster rate, improving the underlying quality of our portfolio.

“We are meeting consumer needs with differentiated products, including innovations which now make up nearly 50 percent of our GDB volume.”