Annual Report 2009 - British American Tobacco

OVERVIEW
The Group grew revenue by 17 per cent
in very difficult times, to £14,208 million.
This was the result of favourable exchange
rate movements, good pricing momentum,
volume from acquisitions made in the middle
of 2008 (Skandinavisk Tobakskcompagni (ST)
and Tekel) and the acquisition of Bentoel in
June 2009. Revenue increased by 10 per cent
at constant rates of exchange. All the regions
contributed to this good result.
The reported profit from operations was
15 per cent higher at £4,101 million. Adjusted
profit from operations was 20 per cent higher
and would have been up 10 per cent at
constant rates of exchange, despite the adverse
transactional impact of exchange rates on costs.
Group volumes from subsidiaries were
724 billion, an increase of 1 per cent, as a result
of the acquisitions of ST, Tekel and Bentoel.
Americas
Western
Europe
Africa and
Middle East
REGIONAL REVIEW
“ Revenue growth of 17 per cent and
Global Drive Brand volume up 4 per cent
in the economic climate experienced in
2009, is an outstanding performance. ”
Nicandro Durante Chief Operating Officer
Market shares increased in a number of markets
but, on an organic basis, volumes were down
3 per cent mainly as a result of deteriorating
economies which led to declines in the total
size of a number of markets and, in some
markets, down-trading and an increase in
illicit trade. Good volume growth in Bangladesh,
South Korea, Vietnam, Uzbekistan, Nigeria,
Egypt and the Gulf Cooperation Council (GCC)
was more than offset by declines in Malaysia,
Japan, Brazil, Mexico, Argentina, Venezuela,
Italy, Russia, Ukraine, Romania and South Africa.
Despite market size declines in many countries,
the four Global Drive Brands achieved good
overall volume growth of 4 per cent and
improved share in a number of markets.
Just over half of the growth was contributed
by brand migrations. Although there was
pressure on the premium segment, Dunhill
grew market share in all its key markets,
except in Taiwan, while Kent increased market
share in its main markets, apart from Japan.
Eastern
Europe
Asia
Pacific
Kent volumes fell by 4 per cent mainly as
a result of industry declines in Russia and
Japan, its principal markets and despite a
higher market share in Eastern Europe and
an increased premium segment share in
Russia. Volumes grew in Kazakhstan, Ukraine,
Uzbekistan and Azerbaijan, while they were
slightly down in Romania. Dunhill rose by
9 per cent, mostly driven by a brand migration
in Brazil, with growth in South Korea, the
GCC, South Africa and Russia, partially offset
by declines in Malaysia, Taiwan and Australia.
Lucky Strike volumes were 4 per cent higher
with growth in Germany, France, Italy and
Chile, partially offset by declines in Spain,
Japan and Argentina, largely as a result of
the industry volume decline. Market share
grew well across all its key markets. Pall Mall
volumes increased by 10 per cent with growth
in Germany, Uzbekistan, Spain, Mexico, Chile
and Turkey, partially offset by lower volumes
in Pakistan, Russia, Romania and Hungary.
42 British American Tobacco Annual Report 2009 Directors’ report: Business review
Associates
Percentage of Group profit per region
4
3
5
1. ASIA-PACIFIC 26%
2. AMERICAS 27%
3. WESTERN EUROPE 22%
4. EASTERN EUROPE 9%
5. AFRICA AND MIDDLE EAST 16%
1
2