News Release

Interim management statement for the 3 months ended 31 March 2011

28 April 2011

  • Good organic revenue growth of 5 per cent at constant rates of exchange
  • Volumes from subsidiaries decreased by 2.4 per cent to 164 billion, organic volumes reduced by 1.8 per cent
  • Global Drive Brands volume grew by 9 per cent

Nicandro Durante, Chief Executive, commented “British American Tobacco has made a good start to the year and our rate of organic volume decline is slowing.  Our innovations are enabling us to take price increases and grow share in our Top 40 markets.”

Summary of performance

Trading update

British American Tobacco performed well in the three months to the end of March, with good organic revenue growth.

Group organic revenue for the three months grew by 5 per cent in constant currency terms reflecting a continued good pricing environment. Reported revenue at both constant and current rates remained in line with last year which is mainly attributable to the disposal of Lyfra, the cessation of the Gauloises contract in Germany and the ending of the phone cards distribution in Brazil, all in 2010.

Group volumes from subsidiaries were 164 billion, down 2.4 per cent from 168 billion in 2010, while organic volumes were 1.8 per cent lower. Industry volume declined significantly in markets such as Spain, Mexico, Australia and Vietnam. However, the Group grew market share in all these markets.

The four Global Drive Brands delivered a strong overall performance with volume growth of 9 per cent and share growth in a number of key markets. Kent was up by 16 per cent, driven by Russia, Japan, South Korea, Romania and Ukraine. Pall Mall grew by 10 per cent as a result of volume growth in Pakistan, Romania and Turkey whilst good performances in Brazil, Taiwan, Russia and Romania contributed to a 6 per cent increase in Dunhill volumes. Lucky Strike volumes were 4 per cent lower mainly driven by industry volume declines in Spain.

Trading environment

This good performance was achieved in trading conditions which remain challenging, with industry volumes markedly lower in a number of markets. However, the Group’s innovation strategy resulted in market share growth across all regions. There were higher than expected shipments to Japan, where the environment remains highly uncertain following the devastating earthquake.

The Group continues to address its cost base and, amongst other initiatives, is progressing the factory closure activities in Europe, as well as the downsizing of manufacturing facilities in Australasia.

Cigarette volumes

The segmental analysis of the volumes of subsidiaries is as follows:


  3 months to
3 months to
Year to
Asia-Pacific 44 45 188
Americas 36 38 149
Western Europe 30 31 136
Eastern Europe, Middle East and Africa 54 54 235
Total 164 168 708

Changes in the Group

On 7 April 2010, the Group announced that it had agreed to sell its Belgium distribution business, Lyfra NV, to Landewyck Group S.a.r.l. The transaction was completed on 25 June 2010.

Share buy-back programme

The Group resumed an on-market share buy-back programme from the beginning of March 2011. During the period to 31 March 2011, 4.7 million shares were bought at a cost of £111 million (31 March 2010: nil), giving an average cost per share purchased of £23.91.

Financial position

The Group has sufficient financing and facilities available for the foreseeable future and at 31 March 2011 its central banking facility of £2 billion was undrawn. This facility also acts as a backstop for the Group’s £1 billion euro commercial paper (ECP) programme of which £312 million was outstanding on 31 March 2011.

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 31 December 2010 up to and including 27 April 2011, being the latest practicable date before the date of the publication of this Interim Management Statement.

On behalf of the Board
Nicola Snook
27 April 2011

Interim management statement for 3 months ended 31 March 2011 (68 kb)


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