british american tobacco p.l.c. annual report 2008 - Regional review

Sub Navigation

The reported Group revenue was 21 per cent higher at £12,122 million as a result of improved pricing, a better product mix, the acquisitions of Tekel and Skandinavisk Tobakskompagni (ST) made at the half year and favourable exchange rate movements. At constant rates of exchange, revenue would have increased by 11 per cent.

The reported Group profit from operations was 23 per cent higher at £3,572 million, up 24 per cent if adjusting items are excluded. All regions contributed to this strong result at current rates of exchange. Profit from operations, excluding adjusting items, would have been 14 per cent higher at constant rates of exchange, with all regions up.

Group volumes from subsidiaries were 715 billion, up 4 per cent, a combination of organic volume growth of 1 per cent and the benefit of additional volumes from the 2 acquisitions made earlier this year.

The 4 Global Drive Brands continued their strong performance and achieved overall volume growth of 16 per cent. Around a quarter of the growth was contributed by brand migrations.

Kent volume grew by 18 per cent with excellent growth in Russia, Romania, Kazakhstan, Ukraine and Chile and from new markets like Kyrgyzstan, Mongolia and Serbia, while it also benefited from a brand migration in South Africa. Volumes were lower in Japan, although market share increased.

Dunhill rose by 7 per cent, with growth in South Korea, Taiwan, Australia, South Africa, Russia, Romania, France, Italy and Saudi Arabia, while volumes were maintained in Malaysia, leading to an increase in market share.

Lucky Strike volumes were up 9 per cent with good growth in Spain, Italy, France, Chile, Brazil and Argentina, partly offset by declines in Japan and Germany as a result of lower industry volumes.

Pall Mall increased volumes by 22 per cent with the geographic roll-out to more markets, such as Pakistan, Malawi, Mexico and Belarus, and the continued growth in Turkey, Romania, Uzbekistan, Hungary, the Netherlands and Malaysia. This was partly offset by lower volumes in Poland, Russia, Spain, Greece and Italy.

In the fourth quarter, revenue grew by 26 per cent to £3,418 million and profit from operations, excluding adjusting items, was up 37 per cent to £962 million, mainly as a result of the inclusion of ST and Tekel in 2008, as well as the benefits from exchange rate movements. This information is shown on the Quarterly analyses of profits.