British American Tobacco - Half-year Report to 30 June 2017

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News Release

Half-year Report to 30 June 2017

27 July 2016

A good performance with strong strategic momentum


Six Months Results - unaudited

Revenue £7,717m £6,901m £6,669m +15.7% +3.5%
Adjusted Revenue* £7,648m £6,838m £6,669m +14.7% +2.5%
Profit from operations £2,574m £2,295m £2,213m +16.3% +3.7%
Adjusted profit from operations* £2,841m £2,531m £2,452m +15.8% +3.2%
Basic earnings per share 121.8p - 143.8p -15.3% -
Adjusted diluted earnings per share* 134.4p 118.0p 111.1p +21.0% +6.2%
Interim dividend per share 56.5p - 51.3p +10.1% -
*The non-GAAP measures, including adjusting items and constant currencies, are further discussed on page 21 and 22 of the attached full announcement.


  • Revenue, at current rates of exchange, was 15.7% higher than the same period last year, reflecting the translational foreign exchange tailwind due to the relative weakness of sterling. Adjusted revenue, adjusted for excise on goods bought in from third parties, was up 2.5% at constant rates of exchange.
  • Profit from operations, at current rates of exchange, was 16.3% higher at £2,574 million.
  • Adjusted profit from operations, at current rates of exchange, grew 15.8%. At constant rates of exchange, adjusted profit from operations was up 3.2% at £2,531 million. Excluding the adverse transactional impact of foreign exchange, the increase would have been approximately 6%.
  • Adjusted operating margin was ahead of prior year by 30 basis points (bps) at 37.1%.
  • Basic earnings per share were 15.3% lower at 121.8p (2016: 143.8p) due to the impact in 2016 of the sale by Reynolds American Inc. (“Reynolds”) of the international brand rights to Natural American Spirit.
  • Adjusted diluted earnings per share, at current rates of exchange, were 21.0% higher at 134.4p and, at constant rates, were up 6.2%.
  • The Group’s cigarette market share1 in its Key Markets2 continued to grow, up 30 bps, driven by the Global Drive Brands (“GDBs”) which were higher by 50 bps.
  • Group cigarette volume was 314 billion, 5.6% down against a strong prior year comparator, with the GDB volume down 1.3%. Excluding Pakistan, which was impacted by stock movements ahead of an excise-led price increase and the subsequent market contraction, volume declined 2.6%, with the GDBs up 2.6%.
  • Continued excellent performance in Next Generation Products (“NGPs”), with our Tobacco Heating Product (“THP”), glo, reaching an estimated 8% market share in Sendai, Japan. Early progress in other launch markets is above expectations. In vapour, the Group continued to cement its leadership position in Europe.
  • The acquisition of Reynolds was completed on 25 July 2017, for a total consideration estimated, at the date of closure, at £41.7 billion for the remaining 57.8% of Reynolds not already owned by the Group.
  • The Board has declared an interim dividend of 56.5p, being one third of the total 2016 dividend, a 10% increase on last year. This will be paid on 28 September 2017. As announced on 26 April 2017, the Group will move to quarterly dividends from 1 January 2018.
[1] Key Market offtake share, as measured by independent retail audit.
[2] The Group’s Key Markets represent over 70% of the Group’s cigarette volume.

Richard Burrows, Chairman, commenting on the 6 months ended 30 June 2017

"These are exciting times for the Group. In the first six months of 2017, the combustible business continued to perform well, against the backdrop of a strong volume comparator. The performance of glo continues to exceed expectations, with new market launches showing encouraging early signs. The Group is the largest vapour company in the world and the successful completion of the Reynolds acquisition bolsters our leading position in both NGPs and combustibles. We remain confident of delivering another year of good earnings growth at constant rates of exchange."

Half-Year Report to 30 June 2017 - Full announcement (1.3 mb) 


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