Bentoel Acquisition Fires BAT Volumes

Source from:  Tobacco Reporter 07/29/2010

British American Tobacco's volume sales during the three months to the end of June, at 180 billion, were up by about 0.5 per cent on those of the three months to the end of June 2009. But during the six months to the end of June, volume sales, at 348 billion, were 0.3 per cent down on those of the six months to the end of June last year. And, excluding the contribution made by the acquisition of Bentoel in Indonesia, sales were down by three per cent, mainly because of industry volume declines in a number of countries, but mainly Romania, Turkey, Japan and Pakistan. During the three months to the end of June, volume sales in BAT's Asia Pacific region were up by 11.1 per cent to 50 billion, sales in its Eastern Europe and its Africa and Middle East regions were unchanged at 33 billion and 32 billion respectively, while sales in the Americas fell by 2.8 per cent to 35 billion and sales in Western Europe fell by 9.1 per cent to 30 billion. During the six months to the end of June, Asia Pacific sales increased by 7.9 per cent to 95 billion. But in all other regions, sales fell: by 1.3 per cent to 73 billion in the Americas, by 1.6 per cent to 63 billion in Africa and the Middle East, by 6.3 per cent to 59 billion in Western Europe, and by 3.3 per cent to 58 billion in Eastern Europe. The market share of the group's top 40 markets increased during the six months to the end of June and BAT's four Global Drive Brands achieved overall volume growth of six per cent. Dunhill sales were up by 21 per cent, Lucky Strike sales increased by one per cent and Pall Mall sales grew by seven per cent, but Kent volumes were down by four per cent due to industry declines in this brand's main markets. BAT reported that group revenue during the six months to the end of June increased by eight per cent to ￡7,298 million as a result of continued good pricing momentum, volume from the acquisition of Bentoel made in June 2009, and the favorable impact of exchange rate movements. Revenue increased by four per cent at constant rates of exchange. The reported Group profit from operations was eight per cent higher at ￡2,271 million while adjusted profit from operations was 14 per cent higher and would have been nine per cent higher at constant rates of exchange. Adjusted diluted earnings per share rose by 13 per cent, principally as a result of the strong growth in profit from operations and favorable exchange movements. Basic earnings per share were up five per cent to 76.9p. "These results show that British American Tobacco's business is in very good shape, with continued pricing momentum, increasing market share in key markets and improving organic volume trends," chairman, Richard Burrows, said in a statement that started with a reference to "a difficult trading environment". "While the comparisons with 2009 will become tougher in the second half, shareholders should see another year of good growth in both earnings and dividends." Enditem