UK: BAT''s Volumes down over Nine Months

Source from:  Tobacco Reporter  10/29/2013

British American Tobacco's cigarette volumes during the nine months to the end of September, at 501 billion, were down by 3.2 per cent on those of the nine months to the end of September 2012.

According to an interim management statement posted on the company's website, volumes were down in all of the company's regions with the exception of the Asia Pacific, where they rose by about 5.7 per cent to 149 billion.

In the Americas, volumes were down by about 6.7 per cent to 97 billion; in Western Europe they were down by about 8.4 per cent to 87 billion; and in Eastern Europe, the Middle East and Africa they were down by about 5.1 per cent to 168 billion.

Total tobacco volumes, incorporating OTPs calculated as stick-equivalents, were down by 3.0 per cent to 521 billion.

The overall cigarette volume was said to be down because of industry volume declines, excise-driven trade inventory movements in Brazil and the leap year comparator.

Nevertheless, BAT said that its overall market share had grown, and that its global drive brands volumes had risen by 1.9 per cent, pushing these brands' market share up strongly in the group's top 40 markets.

'Dunhill volume increased by 9.6 per cent, with good growth in Indonesia, South Korea and the GCC,' the statement said. 'Kent was 4.0 per cent lower, driven by market declines in Russia, Romania and Ukraine. Lucky Strike volume was down by 5.3 per cent, with increases in the Philippines, Brazil and Poland, more than offset by market declines in Spain and lower volume in the Middle East. Pall Mall was up by 5.2 per cent, largely as a result of growth in Pakistan, Romania, Chile and Argentina, partially offset by declines in Russia, Uzbekistan, Germany and Spain.'

Other tobacco products were said to have performed well, with fine-cut tobacco growing, driven by a 3.3 per cent increase in Western Europe. Sales of Pall Mall, described as the biggest fine-cut brand in Western Europe, were up by 10.7 per cent with growth in Belgium, Spain, France, Italy and Germany.

Group revenue for the nine months to the end of September, at constant rates of exchange, grew by 3.5 per cent on that of the nine months to the end of September 2012, driven by strong pricing. At current exchange rates, revenue grew by 0.7 per cent, as movements in some of the group's key trading currencies continued to adversely impact reported revenues.

"The Group continued its good performance against a backdrop of adverse exchange rate movements, lower industry volume and instability in some parts of the world," said chief executive Nicandro Durante.

"We have grown revenue and market share, our pricing momentum remains strong and our global drive brands continue to perform well.

"During the period, the group launched its first next generation product, Vype, and early signs are encouraging. We remain on track for a year of solid earnings growth." Enditem