British American Tobacco - Half-year Report to 30 June 2016

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News Release

Half-year Report to 30 June 2016

28 July 2016

A strong performance driven by organic growth


Six months results - unaudited

Revenue £6,669m £6,900m £6,398m +4.2% +7.8%
Adjusted profit from operations* £2,452m £2,551m £2,507m -2.2% +1.8%
Profit from operations £2,213m £2,309m £2,347m -5.7% -1.6%
Adjusted diluted earnings per share* 111.1p 113.6p 100.2p +10.9% +13.4%
Basic earnings per share 143.8p - 142.4p +1.0% -
Interim dividend per share 51.3p - 49.4p +4.0% -
*The non-GAAP measures, including adjusting items and constant currencies, are set out on page 22 of the attached full announcement.


  • Group revenue was up 7.8% at constant rates of exchange, or 6.0% on an organic basis, driven by a strong volume performance and good pricing. Reported revenue was 4.2% higher than the same period last year, reflecting the continued adverse translational impact of exchange rates.
  • Group cigarette volume was 332 billion, an increase of 3.4% on the same period last year, or 2.1% on an organic basis.
  • The Group’s cigarette market share1 in its Key Markets2 continued to grow strongly, up 30 basis points (bps) driven by the Global Drive Brands which increased volume by 10.8%.
  • Adjusted Group profit from operations, at constant rates of exchange, was up 1.8% at £2,551 million. Excluding the adverse transactional impact of foreign exchange, the increase would have been approximately 8%. At current rates of exchange, adjusted profit from operations fell 2.2%.
  • Profit from operations, at current rates of exchange, was 5.7% lower at £2,213 million.
  • Underlying operating margin3 fell 170 bps. Excluding the adverse transactional impact of foreign exchange, it would have increased by around 50 bps. On a reported basis, operating margin fell 240 bps to 36.8%.
  • Adjusted diluted earnings per share, at constant rates of exchange, were up 13.4%. At current rates, they were 10.9% higher at 111.1p.
  • Basic earnings per share were 1.0% higher at 143.8p (2015: 142.4p), benefiting from the acquisition of Lorillard Inc. by the Group’s associate Reynolds American Inc. (RAI) in 2015 and one-off gains as a result of RAI’s sale of the international brand rights of Natural American Spirit.
  • Our Next Generation Products portfolio continues to develop with Vype performing well and now available in six markets. iFuse (our first tobacco heating product) is performing ahead of expectations in Romania. Our portfolio has been further strengthened by the acquisition of Ten Motives in April 2016.
  • The Board has declared an interim dividend of 51.3p, being one third of the 2015 dividend, a 4% increase on last year. This will be paid on 28 September 2016.
[1] Key Market offtake share, as independently measured by AC Nielsen
[2] The Group’s Key Markets represent over 75% of the Group’s volume
[3] Underlying operating margin excludes the impact of acquisitions and certain accounting adjustments made in 2015

Richard Burrows, Chairman, commenting on the 6 months ended 30 June 2016

"The business has delivered strong organic growth in the first six months of the year. This is despite the significant adverse transactional impact of foreign exchange and the continued investment in our long-term future via our Next Generation Products portfolio. With profit growth weighted to the second half of the year, we remain confident that we will deliver another year of good earnings growth at constant rates of exchange."

Half-year report to 30 June 2016 - Full announcement (1,130 kb) 


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