BAT's Volumes Increased

Source from:  Tobacco Reporter 11/02/2009

British American Tobacco's sales volume during the nine months to the end of September, at 533 billion, was up by two per cent on that of the nine-month period to the end of September 2008, the company has reported in an interim management statement. The increase was the result of the acquisitions of Skandinavisk Tobakskompagni (ST) and Tekel in the middle of last year, and of Bentoel in June this year. Organic volume was three per cent lower than last year as a result of a sharp decline in the low margin volumes acquired in the ST and Tekel transactions, which were included, on a comparable basis, for the first time in the third quarter. Volumes increased in BAT's Africa and Middle East region by 18.7 per cent to 95 billion and by 10.1 per cent in Western Europe to 98 billion. At 134 billion, volumes were unchanged in the Asia Pacific region, but fell by 6.7 per cent to 111 billion in the Americas and by 6.9 per cent to 95 billion in Eastern Europe. Volume sales of the company's Global Drive Brands rose by four per cent overall, with Pall Mall up by nine per cent, Dunhill up by six per cent, Lucky Strike up by five per cent, but Kent down by two per cent. BAT said that its strong performance had been achieved against deteriorating trading conditions. Industry volumes had been lower in a number of markets, including Japan, Russia, Brazil, Italy and South Africa, and there had been a decline in the premium segment in the third quarter. In some markets, particularly in Central and Eastern Europe, there had been down-trading to illicit products as a result of excise increases, and this had affected the low price segment. The company said it was continuing to address its cost base and, amongst other initiatives, had started the consultation process with a view to closing the Soeborg factory in Denmark. "Our consumers are clearly finding the current economic conditions difficult, as unemployment continues to rise," said chief executive, Paul Adams. "This has led to a softening of our volumes, although I am encouraged by the growth in our Global Drive Brands and the strong growth in revenue." Enditem