British American Tobacco Revenue Rises On Pricing

Source from:  RTTNews 10/27/2011

British American Tobacco Plc (BTI: News ,BATS.L: News ) reported Wednesday that its nine-month revenue, on an organic basis and at constant exchange rates, increased 7 percent from last year on continued good pricing, even though volumes edged down amid challenging market conditions. Looking ahead, Chief Executive Nicandro Durante said the company is on track for another year of good earnings growth. Durante said, "While the challenging economic conditions continued to impact consumers in some markets, other markets are showing signs of recovery. Excise-driven price increases in a few markets will continue to affect industry volumes. However, we have grown our Global Drive Brands and achieved good growth in revenue and profit." In an interim management statement for the nine months ended September 30, the company said it performed well with the Group increasing overall market share across its top 40 markets and with continued growth in the Global Drive Brands. Meanwhile, volumes from subsidiaries edged down 0.6 percent to 523 billion from 526 billion last year. Organic volumes reduced 0.4 percent. According to the company, the benefit from exceptional sales in Japan was offset by industry volume decline following the significant excise-driven price increases in that market last year. Cigarette volumes in Asia-Pacific remained flat at 141 billion for the none-month period, while volume in the Americas fell to 105 billion from last year's 110 billion. Western Europe's volume edged down to 100 billion from 101 billion a year ago, while volume in EEMEA (Eastern Europe, Middle East, Africa) region grew to 177 billion from 174 billion in the previous year. Four Global Drive Brand volumes grew 8 percent in the period. Kent's volume rose 9 percent with growth in all of its top ten markets. Dunhill grew slightly as strong performances in many markets were offset by the adverse impact of pricing activity in South Korea. Pall Mall volumes climbed 12 percent driven by good performances in Pakistan, Russia, Germany and Romania, while the growth was 9 percent in Lucky Strike following good growth in Germany, France, Argentina and Chile. Regarding the current trading, British American Tobacco noted that the environment continues to be challenging due to the current economic climate although there are some signs that the impact on volume is moderating. "However, the expansion of illicit trade remains a threat, driven by shock excise increases and pressure on consumers' disposable income," it said. In addition, a number of currencies weakened against sterling during the quarter. The company added that it continues to improve its operating margin by addressing the cost base through factory rationalization, systems standardization and productivity savings. Enditem