Exhibit
|
Description
|
|
Exhibit 1
|
Press Release entitled “Preliminary Results — British American Tobacco p.l.c. — Year ended 31 December 2020” dated February 17, 2021.
|
British American Tobacco p.l.c.
|
||||
By:
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/s/ Paul McCrory
|
|||
Name:
|
Paul McCrory
|
|||
Title:
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Company Secretary
|
17 February 2021 – PRELIMINARY RESULTS
|
|
BRITISH AMERICAN TOBACCO p.l.c.
YEAR ENDED 31 DECEMBER 2020
‘ACCELERATING TRANSFORMATION’
|
|
GROWTH IN NEW CATEGORIES AND GROUP EARNINGS DESPITE COVID-19 |
PERFORMANCE HIGHLIGHTS | REPORTED | ADJUSTED | |||
Current
|
Vs 2019
|
Current
|
Vs 2019
|
||
rates
|
Rates
|
(constant)
|
|||
Cigarette and THP volume share
|
+30 bps
|
||||
Cigarette and THP value share
|
+20 bps
|
||||
Non-Combustibles consumers1
|
13.5m
|
+3.0m
|
|||
Revenue (£m)
|
£25,776m
|
-0.4%
|
£25,776m
|
+3.3%
|
|
Profit from operations (£m)
|
£9,962m
|
+10.5%
|
£11,365m
|
+4.8%
|
|
Operating margin (%)
|
+38.6%
|
+380 bps
|
+44.1%
|
+100 bps2
|
|
Diluted EPS (pence)
|
278.9p
|
+12.0%
|
331.7p
|
+5.5%
|
|
Net cash generated from operating activities (£m)
|
£9,786m
|
+8.8%
|
|||
Free cash flow after dividends (£m)
|
£2,550m
|
+32.7%
|
|||
Cash conversion (%)2
|
98.2%
|
-160 bps
|
103.0%
|
+650 bps
|
|
Borrowings3 (£m)
|
£43,968m
|
-3.1%
|
|||
Adjusted Net Debt (£m)
|
£39,451m
|
-5.3%
|
|||
Dividend per share (pence)
|
215.6p
|
+2.5%
|
Delivering today
|
Building A Better TomorrowTM
|
|||||
●
|
Revenue, profit from operations and earnings growth* absorbing estimated 2.5% COVID-19 revenue headwind
|
●
|
13.5m consumers of our non-combustible products1, adding 3m in 2020. On track to 50m by 2030
|
|||
● | Combustible revenue up 2.8%* with volume down 4.5% offset by strong price/mix of 7.3% | ● | New Categories revenue up 15%*, accelerating through the second half | |||
● |
Cigarette value share up 20 bps driven by the Strategic portfolio up 40 bps
|
● | Incremental £426m New Categories investment in 202 | |||
●
|
£660m annualised cost savings, driven by Quantum |
●
|
Volume (of consumables) up 52% in Vapour
|
|||
●
|
Adjusted profit from operations up 4.8%* | ● | Volume (of consumables) up 19% in THP (or 29% excluding glo Sens withdrawal) | |||
●
|
Adjusted operating margin up 100 bps |
●
|
Volume up 62% in Modern Oral
|
|||
●
|
Adjusted diluted EPS up 5.5%*
|
●
|
Acquisition of Dryft assets in the US expanding our US portfolio from 4 to 28 product variants
|
|||
●
|
Operating cashflow conversion of 103%, >90% target.
|
●
|
Ahead of schedule to deliver £1bn annualised savings by 2022 to fund investment in New Categories and in developing new operational capabilities
|
|||
● | £2.6bn FCF generation driving deleverage to 3.3x adjusted net debt / adjusted EBITDA | |||||
● | Full Year dividend 215.6p up 2.5% | |||||
●
|
65% dividend pay-out ratio
|
|
|
● |
Global tobacco industry volume expected to be down around 3%. US market dependent on COVID-19 uncertainties.
|
● |
Constant currency revenue growth of 3%-5%, and continued progress towards our New Categories revenue target of £5bn in 2025.
|
● |
Mid-single figure constant currency adjusted EPS growth reflecting continued COVID-19 impacts. Expected FX headwind of around 7% on full year adjusted EPS growth.
|
● |
Operating cashflow conversion in excess of 90%, Adj Net debt/Adj EBITDA around 3.0x.
|
● |
Accelerating growth in New Categories, fuelled by
|
● |
Value growth in combustibles and
|
● |
Benefitting from a faster, simpler, more agile business.
|
● |
Committing to providing adult consumers with a wide range of enjoyable and less-risky products**;
|
● |
Continuing to be clear that combustible cigarettes pose serious health risks, and the only way to avoid these risks is not to start or to quit;
|
● |
Encouraging those who otherwise continue to smoke, to switch completely to scientifically-substantiated, reduced-risk alternatives**; and
|
● |
Tracking and sharing progress of our transformation.
|
● |
Were named in the Dow Jones Sustainability Indices (DJSI) for the 19th consecutive year;
|
● |
Increased our scores with respected ESG ratings agencies, including Sustainalytics and Vigeo Eiris;
|
● |
Were awarded the prestigious ‘A’ score’ for climate change by the Carbon Disclosure Project (CDP);
|
● |
Maintained our BBB MCSI rating; and
|
● |
Were named as a Global Top Employer for the fourth year running by the Top Employers Institute.
|
For year ended 31 December
|
Volume (unit)
|
Reported Revenue (£m)
|
Adjusted Revenue (£m)
|
|||||||
2020
|
Change
|
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
|
Unit
|
%
|
£m
|
£m
|
%
|
£m
|
£m
|
£m
|
£m
|
%
|
|
New Categories
|
1,443
|
1,255
|
+14.9%
|
-
|
6
|
1,449
|
1,255
|
+15.4%
|
||
Vapour (10ml units / pods mn)
|
344
|
+51.9%
|
611
|
401
|
+52.3%
|
-
|
4
|
615
|
401
|
+53.4%
|
THP (sticks bn)
|
11
|
+18.9%
|
634
|
728
|
-12.9%
|
-
|
2
|
636
|
728
|
-12.7%
|
Modern Oral (pouches mn)
|
1,934
|
+62.0%
|
198
|
126
|
+57.1%
|
-
|
-
|
198
|
126
|
+57.1%
|
Traditional Oral (stick eq bn)
|
8
|
-0.9%
|
1,160
|
1,081
|
+7.2%
|
-
|
5
|
1,165
|
1,081
|
+7.7%
|
Total Non-Combustibles
|
2,603
|
2,336
|
+11.3%
|
-
|
11
|
2,614
|
2,336
|
+11.9%
|
||
Cigarettes (sticks bn)
|
638
|
-4.6%
|
||||||||
OTP incl RYO/MYO (stick eq bn)
|
20
|
-1.7%
|
||||||||
Total Combustibles
|
658
|
-4.5%
|
22,752
|
23,001
|
-1.1%
|
-
|
842
|
23,594
|
22,951
|
+2.8%
|
Other
|
421
|
540
|
-21.7%
|
-
|
41
|
462
|
540
|
-14.4%
|
||
Total
|
25,776
|
25,877
|
-0.4%
|
-
|
894
|
26,670
|
25,827
|
+3.3%
|
||
Strategic
|
19,535
|
18,793
|
+4.0%
|
-
|
571
|
20,106
|
18,793
|
+7.0%
|
||
Non-strategic
|
6,241
|
7,084
|
-11.9%
|
-
|
323
|
6,564
|
7,034
|
-6.7%
|
||
Total
|
25,776
|
25,877
|
-0.4%
|
-
|
894
|
26,670
|
25,827
|
+3.3%
|
||
Cigarettes and THP (sticks bn)
|
649
|
-4.3%
|
Reported PfO (£m)
Operating Margin (%)
|
Adjusted PfO (£m)
Adjusted operating margin (%)
|
|||||||||
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
|||
Profit from Operations (PfO)
|
9,962
|
9,016
|
+10.5%
|
1,403
|
296
|
11,661
|
11,130
|
+4.8%
|
||
Operating Margin
|
38.6%
|
34.8%
|
+380 bps
|
43.7%
|
43.1%
|
+60 bps
|
For year ended 31 December
|
Volume (unit)
|
Reported Revenue (£m)
|
Adjusted Revenue (£m)
|
|||||||
2020
|
Change
|
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
|
Unit
|
%
|
£m
|
£m
|
%
|
£m
|
£m
|
£m
|
£m
|
%
|
|
New Categories
|
1,443
|
1,255
|
+14.9%
|
-
|
6
|
1,449
|
1,255
|
+15.4%
|
||
Vapour (10ml units / pods mn)
|
344
|
+51.9%
|
611
|
401
|
+52.3%
|
-
|
4
|
615
|
401
|
+53.4%
|
THP (sticks bn)
|
11
|
+18.9%
|
634
|
728
|
-12.9%
|
-
|
2
|
636
|
728
|
-12.7%
|
Modern Oral (pouches mn)
|
1,934
|
+62.0%
|
198
|
126
|
+57.1%
|
-
|
-
|
198
|
126
|
+57.1%
|
Traditional Oral (stick eq bn)
|
8
|
-0.9%
|
1,160
|
1,081
|
+7.2%
|
-
|
5
|
1,165
|
1,081
|
+7.7%
|
Total Non-Combustibles
|
2,603
|
2,336
|
+11.3%
|
-
|
11
|
2,614
|
2,336
|
+11.9%
|
● |
Vuse/Vype fastest growing vapour brand reaching 26% total vapour value share in the top five markets*
|
● |
Vuse/Vype value share leader in four of the top five markets
|
● |
Vuse gained market leadership in Canada in migration year with 46.1% value share (up 2,220 bps vs 2019)
|
● |
Vuse closed system device volume share leader in the US
|
● |
maintained our leadership positions by total vapour value share in the UK and France;
|
● |
built on the momentum from 2019 to become market leader (by value) in Germany; and
|
● |
became the market leader (by value share) in Canada in the second half of 2020, whilst simultaneously migrating from Vype to our global brand Vuse.
|
● |
Device volumes +33% and consumable volumes +19% (or +29% excluding Sens)
|
● |
Successful launch of Hyper in April driving glo to 14% volume share of category in key (T9) markets, an increase of 30 bps on 2019
|
● |
glo reached total volume share in Japan at 5.9% (December 2020) driven by glo Hyper, up 85 bps on 2019
|
● |
E-commerce sales up over 200%, leveraging digital capabilities and adapting to COVID-19 challenges
|
● |
Further market rollouts and strong innovation pipeline driving good momentum into 2021
|
● |
Strong global volume and revenue growth, up 62% and 57%, respectively
|
● |
Consolidating Modern Oral category leadership in Scandinavia and growing share of total oral market
|
● |
US portfolio strengthened by the acquisition of Dryft, with national rollout continuing in early 2021
|
● |
Future opportunity in Emerging Markets as affordable New Category proposition
|
● |
Strategic cigarette brands delivering value share growth of 40bps
|
● |
Group value share growth of 20 bps
|
● |
Strong pricing, with combustibles price/mix +7.3%
|
● |
Dunhill’s volume share was down 20 bps as growth in Romania and Netherlands was more than offset by declines in Saudi Arabia, Indonesia, Brazil, South Africa and Malaysia. Volume was 17% lower, largely due to the impact of the tax
increases and minimum retail price compliance in Indonesia, the impact of COVID-19 on both South Africa (temporary sales ban in the year) and on our GTR business, and the ongoing challenging operating environment in Malaysia;
|
● |
Kent’s volume share was up 10 bps as growth in Brazil, Saudi Arabia, Turkey and Russia more than offset lower volume share in Romania and Japan. Volume was up 2.0% as growth in Brazil, across the Middle East (including Saudi Arabia),
Russia and Turkey more than offset lower volume in Japan;
|
● |
Lucky Strike’s volume share grew 10 bps, as growth across AMSSA (particularly Brazil, Colombia and Argentina) and in Japan more than offset lower volume share in Indonesia, Spain and France. Volume declined 2.0% driven by the impact of the
tax increases and minimum retail price compliance in Indonesia and lower volume in France and Spain. These more than offset the higher volume in Brazil, Japan and Argentina. Lucky Strike was reintroduced in the US in the final quarter of the
year;
|
● |
Rothmans’ volume share was 20 bps higher as growth in Brazil, Colombia, New Zealand, Malaysia, Russia and Ukraine was partly offset by Pakistan and Turkey. Volume was 6.1% higher as growth in Brazil, Pakistan and Bulgaria more than offset
lower volume in Ukraine and Turkey;
|
● |
Pall Mall’s volume share was stable as growth in Pakistan, Australia, Mexico, South Africa, Chile and Canada was offset by lower volume share in New Zealand, Saudi Arabia, the US and Argentina. Volume was 6.0% lower, largely driven by
Pakistan, Saudi Arabia and South Africa; and
|
● |
The Group’s US domestic strategic combustibles portfolio performed well:
|
● |
Newport volume share increased 40 bps, while volume grew 2.3%, driven by both menthol and non-menthol variants;
|
● |
Natural American Spirit performed well with volume share up 10 bps on 2019. Volume was up 6.0% against 2019; and
|
● |
Camel’s volume share declined 10 bps with volume ahead of the same period of 2019 by 1.2%.
|
Volume (unit)
|
Reported Revenue (£m)
|
Adjusted Revenue (£m)
|
||||||||
For year ended 31 December
|
2020
|
Change
|
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
Unit
|
%
|
£m
|
£m
|
%
|
£m
|
£m
|
£m
|
£m
|
%
|
|
New Categories
|
394
|
217
|
+81.9%
|
-
|
2
|
396
|
217
|
+82.9%
|
||
Vapour (10ml units / pods mn)
|
174
|
+69.7%
|
383
|
207
|
+85.1%
|
-
|
2
|
385
|
207
|
+86.1%
|
THP (sticks bn)
|
-
|
-%
|
1
|
1
|
0.0%
|
-
|
-
|
1
|
1
|
+0.5%
|
Modern Oral (pouches mn)
|
162
|
+45.0%
|
10
|
9
|
+13.5%
|
-
|
-
|
10
|
9
|
+14.1%
|
Traditional Oral (stick eq bn)
|
7.5
|
-1.3%
|
1,126
|
1,052
|
+7.0%
|
-
|
5
|
1,131
|
1,052
|
+7.6%
|
Total Non-Combustibles
|
|
|
1,520
|
1,269
|
+19.8%
|
-
|
7
|
1,527
|
1,269
|
+20.4%
|
Total Combustibles (sticks bn)
|
73
|
+0.5%
|
9,926
|
9,078
|
+9.3%
|
-
|
54
|
9,980
|
9,078
|
+9.9%
|
Other
|
27
|
26
|
+4.6%
|
-
|
2
|
29
|
26
|
+5.1%
|
||
Total
|
11,473
|
10,373
|
+10.6%
|
-
|
63
|
11,536
|
10,373
|
+11.2%
|
||
Reported PfO (£m)
Margin (%)
|
Adjusted PfO (£m)
Adjusted operating margin (%)
|
|||||||||
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
|||
Profit from Operations (PfO)
|
4,975
|
4,410
|
+12.8%
|
809
|
32
|
5,816
|
5,036
|
+15.5%
|
||
Operating Margin
|
43.4%
|
42.5%
|
+90 bps
|
50.4%
|
48.5%
|
+190 bps
|
● |
Vuse revenue growth of over 80% in a recovering market
|
● |
Portfolio strengthened in Modern Oral through Dryft acquisition
|
● |
Strong cigarette pricing and cigarette volume driving revenue growth
|
● |
Value and volume share gains in combustibles led by premium brands
|
Volume (unit)
|
Reported Revenue (£m)
|
Adjusted Revenue (£m)
|
||||||||
For year ended 31 December
|
2020
|
Change
|
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
Unit
|
%
|
£m
|
£m
|
%
|
£m
|
£m
|
£m
|
£m
|
%
|
|
New Categories
|
|
|
514
|
675
|
-24.0%
|
-
|
(7)
|
507
|
675
|
-25.0%
|
Vapour (10ml units / pods mn)
|
6
|
+385%
|
15
|
4
|
+255%
|
-
|
-
|
15
|
4
|
+260%
|
THP (sticks bn)
|
7.4
|
-6.5%
|
497
|
671
|
-26.0%
|
-
|
(7)
|
490
|
671
|
-27.1%
|
Modern Oral (pouches mn)
|
86
|
N/M
|
2
|
-
|
N/M
|
-
|
-
|
2
|
-
|
N/M
|
Traditional Oral (stick eq bn)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total Non-Combustibles
|
|
|
514
|
675
|
-24.0%
|
-
|
(7)
|
507
|
675
|
-25.0%
|
Total Combustibles (sticks bn)
|
200
|
-7.2%
|
3,935
|
4,387
|
-10.3%
|
-
|
113
|
4,048
|
4,387
|
-7.7%
|
Other
|
|
|
88
|
91
|
-1.3%
|
-
|
1
|
89
|
91
|
-0.4%
|
Total
|
|
|
4,537
|
5,153
|
-11.9%
|
-
|
107
|
4,644
|
5,153
|
-9.9%
|
Reported PfO (£m)
Margin (%)
|
Adjusted PfO (£m)
Adjusted operating margin (%)
|
|||||||||
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
|||
Profit from Operations (PfO)
|
1,472
|
1,753
|
-16.0%
|
381
|
56
|
1,909
|
2,059
|
-7.3%
|
||
Operating Margin
|
32.4%
|
34.0%
|
-160 bps
|
41.1%
|
40.0%
|
+110 bps
|
● |
glo volume growth, driven by Hyper launch, offset by Japan excise increase
|
● |
COVID-19 lockdowns impacted revenue across the region
|
● |
Gradual recovery following the easing of lockdown restrictions in H2 2020
|
● |
Quantum programme and cost savings enable adjusted operating margin expansion
|
Volume (unit)
|
Reported Revenue (£m)
|
Adjusted Revenue (£m)
|
||||||||
For year ended 31 December
|
2020
|
Change
|
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
Unit
|
%
|
£m
|
£m
|
%
|
£m
|
£m
|
£m
|
£m
|
%
|
|
New Categories
|
|
|
66
|
44
|
+51.3%
|
-
|
2
|
68
|
44
|
+57.1%
|
Vapour (10ml units / pods mn)
|
31
|
+118%
|
65
|
43
|
+52.8%
|
-
|
3
|
68
|
43
|
+58.6%
|
THP (sticks bn)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Modern Oral (pouches mn)
|
19
|
+142%
|
1
|
1
|
-49.8%
|
-
|
(1)
|
0
|
1
|
-47.3%
|
Traditional Oral (stick eq bn)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total Non-Combustibles
|
|
|
66
|
44
|
+51.3%
|
-
|
2
|
68
|
44
|
+57.1%
|
Total Combustibles (sticks bn)
|
149
|
-3.8%
|
3,535
|
3,992
|
-11.4%
|
-
|
508
|
4,043
|
3,992
|
+1.3%
|
Other
|
|
|
171
|
225
|
-24.3%
|
-
|
39
|
210
|
225
|
-7.2%
|
Total
|
|
|
3,772
|
4,261
|
-11.5%
|
-
|
549
|
4,321
|
4,261
|
+1.4%
|
Reported PfO (£m)
Margin (%)
|
Adjusted PfO (£m)
Adjusted operating margin (%)
|
|||||||||
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
|||
Profit from Operations (PfO)
|
1,553
|
1,204
|
+29.0%
|
65
|
178
|
1,796
|
1,842
|
-2.5%
|
||
Operating Margin
|
41.2%
|
28.3%
|
+1,290 bps
|
41.6%
|
43.2%
|
-160 bps
|
● |
Revenue growth of over 50% in New Categories, led by Vuse
|
● |
Vuse reaches leading value share in key Canadian vapour market
|
● |
COVID-19 lockdown impact on combustibles volumes across the region – with South Africa revenue rapidly recovering from sales suspension
|
Volume (unit)
|
Reported Revenue (£m)
|
Adjusted Revenue (£m)
|
||||||||
For year ended 31 December
|
2020
|
Change
|
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
Unit
|
%
|
£m
|
£m
|
%
|
£m
|
£m
|
£m
|
£m
|
%
|
|
New Categories
|
|
|
469
|
319
|
+46.7%
|
-
|
9
|
478
|
319
|
+49.6%
|
Vapour (10ml units / pods mn)
|
133
|
+23.0%
|
148
|
147
|
+0.4%
|
-
|
(1)
|
147
|
147
|
+0.2%
|
THP (sticks bn)
|
3.3
|
+203%
|
136
|
56
|
+143%
|
-
|
9
|
145
|
56
|
+159%
|
Modern Oral (pouches mn)
|
1,667
|
+55.6%
|
185
|
116
|
+58.5%
|
-
|
1
|
186
|
116
|
+59.3%
|
Traditional Oral (stick eq bn)
|
0.9
|
+2.8%
|
34
|
29
|
+16.2%
|
-
|
-
|
34
|
29
|
+14.2%
|
Total Non-Combustibles
|
|
|
503
|
348
|
+44.1%
|
-
|
9
|
512
|
348
|
+46.6%
|
Total Combustibles (sticks bn)
|
236
|
-4.1%
|
5,356
|
5,544
|
-3.4%
|
-
|
167
|
5,523
|
5,494
|
+0.5%
|
Other
|
|
|
135
|
198
|
-31.6%
|
-
|
(1)
|
134
|
198
|
-31.7%
|
Total
|
|
|
5,994
|
6,090
|
-1.6%
|
-
|
175
|
6,169
|
6,040
|
+2.1%
|
Reported PfO (£m)
Margin (%)
|
Adjusted PfO (£m)
Adjusted operating margin (%)
|
|||||||||
2020
|
2019
|
Change
|
Adj
|
FX
|
2020 cc
|
2019
|
Change
|
|||
Profit from Operations (PfO)
|
1,962
|
1,649
|
+19.0%
|
148
|
30
|
2,140
|
2,193
|
-2.4%
|
||
Operating Margin
|
32.7%
|
27.1%
|
+560 bps
|
34.7%
|
36.3%
|
-160 bps
|
● |
50% New Categories revenue growth at constant currencies
|
● |
glo Hyper launch drives more than doubling of THP revenue
|
● |
Immaterial impact of EU Menthol ban on combustibles
|
● |
Significant New Categories investment leads to adjusted operating margin contraction
|
2020
|
2019
|
|||||||
For year ended 31 December
|
Reported
|
Adj Items1
|
Adjusted
|
Exchange
|
Adjusted at CC2
|
Reported
|
Adj Items1
|
Adjusted
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Profit from Operations
|
||||||||
US
|
4,975
|
809
|
5,784
|
32
|
5,816
|
4,410
|
626
|
5,036
|
APME
|
1,472
|
381
|
1,853
|
56
|
1,909
|
1,753
|
306
|
2,059
|
AMSSA
|
1,553
|
65
|
1,618
|
178
|
1,796
|
1,204
|
638
|
1,842
|
ENA
|
1,962
|
148
|
2,110
|
30
|
2,140
|
1,649
|
544
|
2,193
|
Total Region
|
9,962
|
1,403
|
11,365
|
296
|
11,661
|
9,016
|
2,114
|
11,130
|
Net finance costs
|
(1,745)
|
153
|
(1,592)
|
(20)
|
(1,612)
|
(1,602)
|
80
|
(1,522)
|
Associates and joint ventures
|
455
|
(13)
|
442
|
26
|
468
|
498
|
(25)
|
473
|
Profit before tax
|
8,672
|
1,543
|
10,215
|
302
|
10,517
|
7,912
|
2,169
|
10,081
|
Taxation
|
(2,108)
|
(322)
|
(2,430)
|
(63)
|
(2,493)
|
(2,063)
|
(438)
|
(2,501)
|
Non-controlling interests
|
(164)
|
(8)
|
(172)
|
(16)
|
(188)
|
(145)
|
(17)
|
(162)
|
Profit attributable to shareholders
|
6,400
|
1,213
|
7,613
|
223
|
7,836
|
5,704
|
1,714
|
7,418
|
Diluted number of shares (m)
|
2,295
|
2,295
|
2,295
|
2,291
|
2,291
|
|||
Diluted earnings per share (pence)
|
278.9
|
331.7
|
341.4
|
249.0
|
323.8
|
(1) | Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence. |
(2)
|
CC: constant currency – measures are calculated based on a re-translation, at the prior year’s exchange rates, of the current year’s results of the Group and, where applicable, its segments. |
● |
higher finance costs in respect of a change in mix of borrowings towards US dollar during the year as the Group issued bonds totalling US$8.7 billion, €1.7 billion and £0.5 billion; and
|
● |
the net impact of the charges incurred in relation to the redemptions and tender offer to repurchase certain bonds undertaken in 2020 to de-risk the Group’s future financing programme.
|
For year ended 31 December
|
|||
2020
|
2019
|
Change
|
|
£m
|
£m
|
%
|
|
Net cash generated from operating activities
|
9,786
|
8,996
|
+8.8%
|
Operating cash flow conversion
|
103%
|
97%
|
|
Free cash flow – before payment of dividends
|
7,295
|
6,519
|
+11.9%
|
Free cash flow – after payment of dividends
|
2,550
|
1,921
|
+32.7%
|
As at 31 December
|
|||
2020
|
2019
|
Change
|
|
£m
|
£m
|
%
|
|
Borrowings (including lease liabilities)
|
43,968
|
45,366
|
-3.1%
|
Adjusted net debt
|
39,451
|
41,726
|
-5.5%
|
As at 31 December
|
|||
2020
|
2019
|
Change
|
|
£m
|
£m
|
%
|
|
Borrowings (including lease liabilities)
|
(43,968)
|
(45,366)
|
-3.1%
|
Derivatives in respect of net debt
|
346
|
143
|
+142%
|
Cash and cash equivalents
|
3,139
|
2,526
|
+24.3%
|
Current investments held at fair value
|
242
|
123
|
+96.7%
|
Net debt
|
(40,241)
|
(42,574)
|
-5.5%
|
Maturity profile of net debt:
|
|||
Net debt due within one year
|
(635)
|
(4,947)
|
-87.2%
|
Net debt due beyond one year
|
(39,606)
|
(37,627)
|
+5.3%
|
Net debt
|
(40,241)
|
(42,574)
|
-5.5%
|
As at 31 December
|
|||
2020
|
2019
|
Change
|
|
£m
|
£m
|
%
|
|
Opening net debt
|
(42,574)
|
(44,351)
|
-4.0%
|
Lease liabilities (adoption of IFRS 16)
|
-
|
(607)
|
-100%
|
Opening net debt (including IFRS 16)
|
(42,574)
|
(44,958)
|
-5.3%
|
Free cash inflow (after dividends)
|
2,550
|
1,921
|
+32.7%
|
Other cash payments
|
(210)
|
(312)
|
-32.5%
|
Net debt acquired
|
95
|
-
|
n/m
|
Other non-cash movements
|
(171)
|
(98)
|
+74.5%
|
Foreign exchange
|
69
|
873
|
-92.1%
|
Closing net debt |
(40,241) | (42,574) | -5.5% |
As at 31 December
|
|||
2020
|
2019
|
Change
|
|
£m
|
£m
|
%
|
|
Net debt
|
(40,241)
|
(42,574)
|
-5.5%
|
Purchase price allocation (PPA) adjustment to acquired debt
|
790
|
848
|
-6.8%
|
Adjusted net debt
|
(39,451)
|
(41,726)
|
-5.5%
|
Exchange
|
(46)
|
-
|
|
Adjusted net debt at constant rates
|
(39,497)
|
(41,726)
|
-5.3%
|
Event (2021 unless stated)
|
Payment No. 1
|
Payment No. 2
|
Payment No. 3
|
Payment No. 4
|
Record date (JSE, LSE and NYSE)
|
26 March
|
9 July
|
1 October
|
24 December
|
Payment date (LSE and JSE)
|
12 May
|
19 August
|
11 November
|
9 February 2022
|
ADS payment date (NYSE)
|
17 May
|
24 August
|
16 November
|
14 February 2022
|
1. |
Vaccine development
|
2. |
Supporting employee wellbeing
|
● |
Online medical consultations;
|
● |
Counselling services; and
|
● |
Mental health support.
|
3. |
Delivering in a time of crisis
|
● |
Plans to deleverage the balance sheet remain on track and are forecasted to be around 3x adjusted net debt to adjusted EBITDA by the end of 2021;
|
● |
Operating cashflow conversion of 103% is ahead of 2019 despite the volatility in the supply chain and the associated impacts in working capital;
|
● |
Capital expenditure and investment plans have been largely unaffected by COVID-19; and
|
● |
The Group acted to de-risk future financing by:
|
o |
accessing the US dollar and European debt capital markets during 2020, raising a total of £8.9 billion and locking in favourable interest rates;
|
o |
repurchasing and redeeming, ahead of maturity, £3.1 billion of bonds with maturities in 2021/2022;
|
o |
refinancing its £6 billion revolving credit facility consisting of a £3 billion 364-day tranche (with two one-year extension options and a one-year term-out option), and a £3 billion five-year tranche (with two one-year extension
options). The facility no longer contains a financial covenant. Subsequent to the year-end, in February 2021, the Group extended £2.85 billion of the 364-day tranche from March 2021 to March 2022 and £2.85 billion of the five-year tranche
from March 2025 to March 2026 (with £3 billion of this tranche remaining available until March 2025). As at 31 December 2020, the facility remains undrawn;
|
o |
arranging short-term bilateral facilities with core relationship banks with £3.4 billion available at 31 December 2020. These bilateral facilities were undrawn at 31 December 2020; and
|
o |
maintaining the US$4 billion commercial paper and £3 billion euro commercial paper programmes, under which no commercial paper was outstanding drawn at 31 December 2020 (2019: £1,056 million drawn).
|
4. |
Testing and logistical support
|
● |
Loaned testing equipment to the UK government;
|
● |
Provided access to 3D printers to help produce protective face shields;
|
● |
Manufactured and distributed medical and hygiene equipment to vulnerable communities; and
|
● |
Donated to many funds around the world focussing on supporting local COVID-19 responses.
|
5. |
Supporting suppliers and communities
|
Average
|
Closing
|
||||||
2020
|
2019
|
2020
|
2019
|
||||
Australian dollar
|
1.862
|
1.836
|
1.771
|
1.885
|
|||
Brazilian real
|
6.616
|
5.035
|
7.100
|
5.329
|
|||
Canadian dollar
|
1.720
|
1.694
|
1.741
|
1.718
|
|||
Euro
|
1.125
|
1.140
|
1.117
|
1.180
|
|||
Indian rupee
|
95.097
|
89.898
|
99.880
|
94.558
|
|||
Japanese yen
|
137.017
|
139.234
|
141.131
|
143.967
|
|||
Russian rouble
|
92.844
|
82.623
|
101.106
|
82.282
|
|||
South African rand
|
21.099
|
18.437
|
20.079
|
18.525
|
|||
US dollar
|
1.284
|
1.277
|
1.367
|
1.325
|
●
|
Competition from illicit trade;
|
|
●
|
Tobacco, New Categories and other regulation interrupts the growth strategy;
|
|
●
|
Disputed taxes, interest and penalties;
|
|
●
|
Inability to develop, commercialise and deliver the New Categories strategy;
|
|
●
|
Market size reduction and consumer down-trading;
|
|
●
|
Litigation;
|
|
●
|
Significant increases or structural changes in tobacco, nicotine and New Categories related taxes;
|
|
●
|
Foreign exchange rate exposures;
|
|
●
|
Geopolitical tensions;
|
|
●
|
Solvency and liquidity; and
|
|
●
|
Injury, illness or death in the workplace.
|
●
|
Kieran Poynter retired, as planned, from the Board following the AGM in April 2020;
|
|
●
|
Karen Guerra joined the Board as an independent Non-Executive Director and member of the Nominations and Remuneration Committees on 14
September 2020; and
|
|
●
|
Darrell Thomas joined the Board as an independent Non-Executive Director and member of the Nominations and Audit Committees on 7
December 2020.
|
Year
|
Award/rating
|
Environmental
|
Social
|
Governance
|
2020
|
Dow Jones Sustainability Indices (DJSI): World Index & Industry leader
|
✔
|
✔
|
✔
|
Disability Confident Committed employer under the UK Government’s accreditation scheme
|
✔
|
|||
MSCI: BBB rating
|
✔
|
✔
|
✔
|
|
Vigeo Eiris: 88% score
|
✔
|
✔
|
✔
|
|
Sustainalytics: 27.8 score
|
✔
|
✔
|
✔
|
|
Corporate Reporting Awards (CRRA): Openness and Transparency
|
✔
|
|||
Carbon disclosure Project (CDP): Climate A and Water A-
|
✔
|
|||
S&P Global Sustainability Yearbook Award: Gold Class
|
✔
|
✔
|
✔
|
|
Sustainability, Environmental Achievement and Leadership (SEAL) Awards: top 50 companies
|
✔
|
✔
|
✔
|
|
Global Top Employer
|
✔
|
|||
FT Leader in Diversity
|
✔
|
|||
Gartner Supply Chain Award: top 25 companies
|
✔
|
|||
Corporate Equality Index: best place to work for LGBTQ equality (Reynolds American Inc. and its operating companies)
|
✔
|
|||
Undergraduate Employability Awards: top Medium-sized Undergraduate Scheme (UK only)
|
✔
|
|||
Product of the Year: Vype ePod best e-cigarette
|
✔
|
|||
2019
|
DJSI: World Index & Industry leader
|
✔
|
✔
|
✔
|
RobecoSAM Sustainability Award: Gold Class
|
✔
|
✔
|
✔
|
|
MSCI: BBB rating
|
✔
|
✔
|
✔
|
|
Vigeo Eiris: 83% score
|
✔
|
✔
|
✔
|
|
CDP: Climate A and Water B
|
✔
|
|||
Global Child Forum benchmark: leader status
|
✔
|
|||
Global Top Employer
|
✔
|
|||
Workforce Disclosure Initiative (WDI): industry leader
|
✔
|
|||
International Women’s Day: best practice winner
|
✔
|
|||
Product of the Year: Vype ePod best e-cigarette
|
✔
|
|||
2018
|
DJSI: World Index & Industry leader
|
✔
|
✔
|
✔
|
RobecoSAM Sustainability Award: Gold Class
|
✔
|
✔
|
✔
|
|
MSCI: A rating
|
✔
|
✔
|
✔
|
|
CDP: Climate B and Water B-
|
✔
|
|||
Global Top Employer
|
✔
|
|||
WDI: industry leader
|
✔
|
|||
International Women’s Day: best practice winner
|
✔
|
|||
Fortune best workplaces: best in manufacturing and production (Reynolds American Inc and its operating companies)
|
✔
|
|||
dotCOMM Awards: best ebook for Science & Technology Report
|
✔
|
|||
2017
|
DJSI: World Index & Industry leader
|
✔
|
✔
|
✔
|
RobecoSAM Sustainability Award: Silver Class
|
✔
|
✔
|
✔
|
|
MSCI: A rating
|
✔
|
✔
|
✔
|
|
CDP: Climate A- and Water A-
|
✔
|
|||
Thomas Reuters Diversity & Inclusion Index
|
✔
|
|||
Most engaged workplaces: ‘Elite 8’ Top Category Winner for “Vision & Values” (Reynolds American Inc and its operating companies)
|
✔
|
|||
Modern Slavery ranking: top 5 in the FTSE for disclosure and action
|
✔
|
|||
PETA International Science Consortium: significant contribution to help advance non-animal testing
|
✔
|
|||
2016
|
DJSI: Europe Index
|
✔
|
✔
|
✔
|
RobecoSAM Sustainability Award: Gold Class
|
✔
|
✔
|
✔
|
|
MSCI: BBB rating
|
✔
|
✔
|
✔
|
|
CDP: Climate A- and Water B
|
✔
|
|||
Thomas Reuters Diversity & Inclusion Index
|
✔
|
|||
Institute of Director’s Good Governance report: no.1 ranking in the FTSE
|
✔
|
INVESTOR RELATIONS:
|
PRESS OFFICE:
|
||
Mike Nightingale
Victoria Buxton
William Houston
John Harney
|
+44 (0)20 7845 1180
+44 (0)20 7845 2012
+44 (0)20 7845 1138
+44 (0)20 7845 1263
|
Press Office
|
+44 (0)20 7845 2888
|
Standard International Access: +44 (0) 33 0551 0200
|
SA (toll free): 0 800 980 512
|
UK (toll free): 0808 109 0700
|
US (toll free): + 1 866 966 5335
|
For the years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Revenue 1
|
25,776
|
25,877
|
|
Raw materials and consumables used
|
(4,583)
|
(4,599)
|
|
Changes in inventories of finished goods and work in progress
|
445
|
162
|
|
Employee benefit costs
|
(2,744)
|
(3,221)
|
|
Depreciation, amortisation and impairment costs
|
(1,450)
|
(1,512)
|
|
Other operating income
|
188
|
163
|
|
Loss on reclassification from amortised cost to fair value
|
(3)
|
(3)
|
|
Other operating expenses
|
(7,667)
|
(7,851)
|
|
Profit from operations
|
9,962
|
9,016
|
|
Net finance costs
|
(1,745)
|
(1,602)
|
|
Finance income
|
50
|
84
|
|
Finance costs
|
(1,795)
|
(1,686)
|
|
Share of post-tax results of associates and joint ventures
|
455
|
498
|
|
Profit before taxation
|
8,672
|
7,912
|
|
Taxation on ordinary activities
|
(2,108)
|
(2,063)
|
|
Profit for the year
|
6,564
|
5,849
|
|
Attributable to:
|
|||
Owners of the parent
|
6,400
|
5,704
|
|
Non-controlling interests
|
164
|
145
|
|
6,564
|
5,849
|
||
Earnings per share
|
|||
Basic
|
280.0p
|
249.7p
|
|
Diluted
|
278.9p
|
249.0p
|
For the years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Profit for the year (page 26)
|
6,564
|
5,849
|
|
Other comprehensive expense
|
|||
Items that may be reclassified subsequently to profit or loss:
|
(2,997)
|
(3,216)
|
|
Differences on exchange
|
(2,597)
|
(2,967)
|
|
Cash flow hedges
|
|||
– net fair value losses
|
(257)
|
(246)
|
|
– reclassified and reported in profit for the year
|
90
|
53
|
|
Net investment hedges
|
|||
– net fair value (losses)/gains
|
(16)
|
21
|
|
– differences on exchange on borrowings
|
(163)
|
(18)
|
|
Associates – share of OCI, net of tax
|
(98)
|
(115)
|
|
Tax on items that may be reclassified
|
44
|
56
|
|
Items that will not be reclassified subsequently to profit or loss:
|
55
|
(507)
|
|
Retirement benefit schemes
|
|||
– net actuarial gains/(losses)
|
105
|
(582)
|
|
– surplus recognition
|
10
|
(7)
|
|
Associates – share of OCI, net of tax
|
(34)
|
7
|
|
Tax on items that will not be reclassified
|
(26)
|
75
|
|
Total other comprehensive expense for the year, net of tax
|
(2,942)
|
(3,723)
|
|
Total comprehensive income for the year, net of tax
|
3,622
|
2,126
|
|
Attributable to:
|
|||
Owners of the parent
|
3,474
|
2,000
|
|
Non-controlling interests
|
148
|
126
|
|
3,622
|
2,126
|
2020
|
Attributable to owners of the parent
|
||||||
Share
capital
|
Share premium, capital redemption and merger reserves
|
Other
reserves
|
Retained
earnings
|
Total attributable
to owners
of parent
|
Non-controlling
interests
|
Total equity
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Balance at 1 January 2020
|
614
|
26,609
|
(3,555)
|
40,234
|
63,902
|
258
|
64,160
|
Total comprehensive (expense)/income for the year comprising: (page 27)
|
-
|
-
|
(3,012)
|
6,486
|
3,474
|
148
|
3,622
|
Profit for the year (page 26)
|
-
|
-
|
-
|
6,400
|
6,400
|
164
|
6,564
|
Other comprehensive (expense)/income for the year (page 27)
|
-
|
-
|
(3,012)
|
86
|
(2,926)
|
(16)
|
(2,942)
|
Other changes in equity
|
|||||||
Cash flow hedges reclassified and reported in total assets
|
-
|
-
|
(33)
|
-
|
(33)
|
-
|
(33)
|
Employee share options
|
|||||||
– value of employee services
|
-
|
-
|
-
|
88
|
88
|
-
|
88
|
– proceeds from new shares issued
|
-
|
2
|
-
|
-
|
2
|
-
|
2
|
– treasury shares used for share option schemes
|
-
|
7
|
-
|
(7)
|
-
|
-
|
-
|
Dividends and other appropriations
|
|||||||
– ordinary shares
|
-
|
-
|
-
|
(4,747)
|
(4,747)
|
-
|
(4,747)
|
– to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
(141)
|
(141)
|
Purchase of own shares
|
|||||||
– held in employee share ownership trusts
|
-
|
-
|
-
|
(17)
|
(17)
|
-
|
(17)
|
Other movements non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
17
|
17
|
Other movements
|
-
|
-
|
-
|
4
|
4
|
-
|
4
|
Balance at 31 December 2020
|
614
|
26,618
|
(6,600)
|
42,041
|
62,673
|
282
|
62,955
|
2019
|
Attributable to owners of the parent
|
||||||
Share
capital
|
Share premium, capital redemption and merger reserves
|
Other
reserves
|
Retained
earnings
|
Total attributable
to owners
of parent
|
Non-controlling
interests
|
Total equity
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Balance at 1 January 2019
|
614
|
26,606
|
(333)
|
38,557
|
65,444
|
244
|
65,688
|
Total comprehensive (expense)/income for the year comprising: (page 27)
|
-
|
-
|
(3,190)
|
5,190
|
2,000
|
126
|
2,126
|
Profit for the year (page 26)
|
-
|
-
|
-
|
5,704
|
5,704
|
145
|
5,849
|
Other comprehensive expense for the year (page 27)
|
-
|
(3,190)
|
(514)
|
(3,704)
|
(19)
|
(3,723)
|
|
Other changes in equity
|
|||||||
Cash flow hedges reclassified and reported in total assets
|
-
|
-
|
(32)
|
-
|
(32)
|
-
|
(32)
|
Employee share options
|
|||||||
– value of employee services
|
-
|
-
|
-
|
115
|
115
|
-
|
115
|
– proceeds from new shares issued
|
-
|
3
|
-
|
-
|
3
|
-
|
3
|
Dividends and other appropriations
|
|||||||
– ordinary shares
|
-
|
-
|
-
|
(3,476)
|
(3,476)
|
-
|
(3,476)
|
– to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
(148)
|
(148)
|
Purchase of own shares
|
|||||||
– held in employee share ownership trusts
|
-
|
-
|
-
|
(117)
|
(117)
|
-
|
(117)
|
Other movements non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
36
|
36
|
Other movements
|
-
|
-
|
-
|
(35)
|
(35)
|
-
|
(35)
|
Balance at 31 December 2019
|
614
|
26,609
|
(3,555)
|
40,234
|
63,902
|
258
|
64,160
|
As at 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Assets
|
|||
Non-current assets
|
|||
Intangible assets
|
115,343
|
118,787
|
|
Property, plant and equipment
|
5,060
|
5,518
|
|
Investments in associates and joint ventures
|
1,796
|
1,860
|
|
Retirement benefit assets
|
714
|
430
|
|
Deferred tax assets
|
534
|
424
|
|
Trade and other receivables
|
242
|
248
|
|
Investments held at fair value
|
22
|
12
|
|
Derivative financial instruments
|
367
|
452
|
|
Total non-current assets
|
124,078
|
127,731
|
|
Current assets
|
|||
Inventories
|
5,998
|
6,094
|
|
Income tax receivable
|
79
|
122
|
|
Trade and other receivables
|
3,721
|
4,093
|
|
Investments held at fair value
|
242
|
123
|
|
Derivative financial instruments
|
430
|
313
|
|
Cash and cash equivalents
|
3,139
|
2,526
|
|
13,609
|
13,271
|
||
Assets classified as held-for-sale
|
3
|
3
|
|
Total current assets
|
13,612
|
13,274
|
|
Total assets
|
137,690
|
141,005
|
|
The accompanying notes on pages 32 to 43 form an integral part of this condensed consolidated financial information.
|
As at 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Equity – capital and reserves
|
|||
Share capital
|
614
|
614
|
|
Share premium, capital redemption and merger reserves
|
26,618
|
26,609
|
|
Other reserves
|
(6,600)
|
(3,555)
|
|
Retained earnings
|
42,041
|
40,234
|
|
Owners of the parent
|
62,673
|
63,902
|
|
Non-controlling interests
|
282
|
258
|
|
Total equity
|
62,955
|
64,160
|
|
Liabilities
|
|||
Non-current liabilities
|
|||
Borrowings
|
39,927
|
37,804
|
|
Retirement benefit liabilities
|
1,524
|
1,459
|
|
Deferred tax liabilities
|
16,314
|
17,050
|
|
Other provisions for liabilities
|
387
|
388
|
|
Trade and other payables
|
1,064
|
1,034
|
|
Derivative financial instruments
|
41
|
287
|
|
Total non-current liabilities
|
59,257
|
58,022
|
|
Current liabilities
|
|||
Borrowings
|
4,041
|
7,562
|
|
Income tax payable
|
868
|
683
|
|
Other provisions for liabilities
|
598
|
670
|
|
Trade and other payables
|
9,693
|
9,727
|
|
Derivative financial instruments
|
278
|
181
|
|
Total current liabilities
|
15,478
|
18,823
|
|
Total equity and liabilities
|
137,690
|
141,005
|
|
The accompanying notes on pages 32 to 43 form an integral part of this condensed consolidated financial information.
|
For the years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Cash flows from operating activities
|
|||
Cash generated from operating activities (page 36)
|
11,567
|
10,948
|
|
Dividends received from associates
|
351
|
252
|
|
Tax paid
|
(2,132)
|
(2,204)
|
|
Net cash generated from operating activities
|
9,786
|
8,996
|
|
Cash flows from investing activities
|
|||
Interest received
|
48
|
80
|
|
Purchases of property, plant and equipment
|
(511)
|
(664)
|
|
Proceeds on disposal of property, plant and equipment
|
44
|
34
|
|
Purchases of intangibles
|
(244)
|
(151)
|
|
Purchases of investments
|
(343)
|
(191)
|
|
Proceeds on disposals of investments
|
184
|
339
|
|
Investment in associates and acquisitions of other subsidiaries net of cash acquired
|
39
|
(86)
|
|
Net cash used in investing activities
|
(783)
|
(639)
|
|
Cash flows from financing activities
|
|||
Interest paid
|
(1,737)
|
(1,601)
|
|
Interest element of lease liabilities
|
(26)
|
(32)
|
|
Capital element on lease liabilities
|
(164)
|
(154)
|
|
Proceeds from increases in and new borrowings
|
9,826
|
4,247
|
|
Outflows relating to derivative financial instruments
|
(283)
|
(564)
|
|
Purchases of own shares held in employee share ownership trusts
|
(18)
|
(117)
|
|
Reductions in and repayments of borrowings
|
(10,633)
|
(5,640)
|
|
Dividends paid to owners of the parent
|
(4,745)
|
(4,598)
|
|
Capital injection from non-controlling interests
|
17
|
20
|
|
Dividends paid to non-controlling interests
|
(136)
|
(157)
|
|
Other
|
2
|
3
|
|
Net cash used in financing activities
|
(7,897)
|
(8,593)
|
|
Net cash flows from/(used in) operating, investing and financing activities
|
1,106
|
(236)
|
|
Differences on exchange
|
(253)
|
(57)
|
|
Increase/(decrease) in net cash and cash equivalents in the year
|
853
|
(293)
|
|
Net cash and cash equivalents at 1 January
|
2,035
|
2,328
|
|
Net cash and cash equivalents at year end
|
2,888
|
2,035
|
|
Cash and cash equivalents per balance sheet
|
3,139
|
2,526
|
|
Overdrafts and accrued interest
|
(251)
|
(491)
|
|
Net cash and cash equivalents at year end
|
2,888
|
2,035
|
Years ended 31 December | 2020 | 2019 | |||||||
Reported
|
Adj Items1
|
Adjusted
|
Exchange
|
Adjusted at CC2
|
Reported
|
Adj Items1
|
Adjusted
|
||
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
||
Revenue
|
|||||||||
US
|
11,473
|
-
|
11,473
|
63
|
11,536
|
10,373
|
-
|
10,373
|
|
APME
|
4,537
|
-
|
4,537
|
107
|
4,644
|
5,153
|
-
|
5,153
|
|
AMSSA
|
3,772
|
-
|
3,772
|
549
|
4,321
|
4,261
|
-
|
4,261
|
|
ENA
|
5,994
|
-
|
5,994
|
175
|
6,169
|
6,090
|
(50)
|
6,040
|
|
Total Region
|
25,776
|
-
|
25,776
|
894
|
26,670
|
25,877
|
(50)
|
25,827
|
|
Profit from Operations
|
|||||||||
US
|
4,975
|
809
|
5,784
|
32
|
5,816
|
4,410
|
626
|
5,036
|
|
APME
|
1,472
|
381
|
1,853
|
56
|
1,909
|
1,753
|
306
|
2,059
|
|
AMSSA
|
1,553
|
65
|
1,618
|
178
|
1,796
|
1,204
|
638
|
1,842
|
|
ENA
|
1,962
|
148
|
2,110
|
30
|
2,140
|
1,649
|
544
|
2,193
|
|
Total Region
|
9,962
|
1,403
|
11,365
|
296
|
11,661
|
9,016
|
2,114
|
11,130
|
(1)
|
Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence.
|
(2)
|
CC: constant currency – measures are calculated based on a re-translation, at the prior year’s exchange rates, of the current year’s results of the Group and,
where applicable, its segments.
|
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Restructuring and integration costs
|
408
|
565
|
|
Amortisation and impairment of trademarks and similar intangibles
|
339
|
481
|
|
Impairment of goodwill
|
209
|
194
|
|
(Credit)/charge in respect of an excise dispute in Russia
|
(40)
|
202
|
|
Charge in respect of Quebec Class Action
|
-
|
436
|
|
Charge in respect of MSA liabilities related to brands sold to a third party
|
400
|
-
|
|
Other adjusting items (largely other litigation including Engle)
|
87
|
236
|
|
Total adjusting items included in profit from operations
|
1,403
|
2,114
|
|
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Employee benefit costs
|
91
|
364
|
|
Depreciation, amortisation and impairment costs
|
151
|
63
|
|
Other operating expenses
|
166
|
145
|
|
Other operating income
|
-
|
(7)
|
|
Total
|
408
|
565
|
|
●
|
Impairment of goodwill of £209 million (2019: £194 million) within “depreciation, amortisation and impairment costs”. The charge in 2020 largely relates to Malaysia (£197 million) due to the ongoing challenging
operating environment, including the continued level of illicit trade and an £11 million charge in respect of Twisp in South Africa. The charge in 2019 related to Indonesia from the Bentoel acquisition (£172 million),
VapeWild (£12 million) and Highendsmoke (£10 million);
|
|
●
|
Other costs of £487 million (2019: £236 million) primarily includes litigation costs. In 2020, this included charges recognised in the year in respect of developments in cases
regarding payment obligations under the state settlement agreements with Florida, Texas, Minnesota and Mississippi for brands
previously sold to a third party. A total of £400 million was recognised following a decision in the Florida court (with respect to which the Group will continue to pursue indemnification remedies in a Delaware
court) and following settlement discussions with other manufacturers and the states of Texas, Minnesota and Mississippi. The
charge also includes £87 million (2019: £236 million) predominantly related to other litigation costs including Engle progeny;
|
|
●
|
Partly offset by a credit in 2020 of £40 million, recognised in relation to the excise dispute in Russia for which a charge of £202 million was recognised, and disclosed, in 2019.
|
●
|
net finance costs of £142 million (being interest costs of £157 million partly offset by fair value gains of £15 million) in relation to the early redemption and repurchase of bonds. A tender offer in October
of £2,653 million was followed by a “make-whole” redemption of £462 million in November in respect of certain bonds;
|
|
●
|
interest of £21 million (2019: £28 million) in relation to the Franked Investment Income Group Litigation Order (FII GLO), as described on page 43; and
|
|
●
|
a net credit of £10 million (2019: charge of £50 million) largely in respect of the Russia excise dispute as disclosed in 2019.
|
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Profit from operations
|
9,962
|
9,016
|
|
Depreciation, amortisation and impairment
|
1,450
|
1,512
|
|
Increase in inventories
|
(144)
|
(371)
|
|
Decrease in receivables related to the charge in respect of the Quebec Class Action
|
-
|
436
|
|
Decrease/(increase) in trade and other receivables
|
300
|
(699)
|
|
Increase/(decrease) in provision for MSA
|
369
|
(124)
|
|
(Decrease)/Increase in trade and other payables
|
(320)
|
730
|
|
Decrease in net retirement benefit liabilities
|
(96)
|
(40)
|
|
Increase in other provisions
|
-
|
382
|
|
Other non-cash items
|
46
|
106
|
|
Cash generated from operating activities
|
11,567
|
10,948
|
|
Dividends received from associates
|
351
|
252
|
|
Tax paid
|
(2,132)
|
(2,204)
|
|
Net cash generated from operating activities
|
9,786
|
8,996
|
●
|
accessing the debt capital markets, raising a total of US$8.7 billion in the US market and €1.7 billion and £0.5 billion in the European market (in aggregate £8.9 billion);
|
|
● |
repurchasing and redeeming £3.1 billion of debt maturing in 2021 and 2022, reducing the “tower” of debt maturing in 2022;
|
|
●
|
refinancing its £6 billion revolving credit facility consisting of a £3 billion 364-day tranche (with two one-year extension options and a one-year term-out option), and a £3 billion five-year tranche
(with two one-year extension options). The facility no longer contains a financial covenant. At 31 December 2020 the facility remained undrawn. Subsequent to the year-end, in February 2021, the Group
extended £2.85 billion of the 364-day tranche from March 2021 to March 2022 and £2.85 billion of the five-year tranche from March 2025 to March 2026 (with £3 billion of this tranche remaining available
until March 2025); and
|
|
●
|
signing bilateral bank facilities to act as a back stop contingency, with total facilities available, and undrawn, at 31 December 2020 of £3.4 billion.
|
Years ended 31 December
|
2020
|
2019
|
|
pence
|
pence
|
||
Earnings per share
|
|||
- basic
|
280.0
|
249.7
|
|
- diluted
|
278.9
|
249.0
|
|
Adjusted earnings per share
|
|||
- basic
|
333.0
|
324.8
|
|
- diluted
|
331.7
|
323.8
|
|
Headline earnings per share
|
|||
- basic
|
295.5
|
268.1
|
|
- diluted
|
294.4
|
267.3
|
Years ended 31 December
|
2020
|
2019
|
|
pence
|
pence
|
||
Diluted earnings per share
|
278.9
|
249.0
|
|
Effect of restructuring and integration costs
|
14.9
|
20.3
|
|
Effect of amortisation and impairment of goodwill, trademarks and similar intangibles
|
20.5
|
24.5
|
|
Effect of Quebec Class Action charge
|
-
|
13.6
|
|
Effect of the Russian excise dispute
|
(1.1)
|
8.1
|
|
Effect of retrospective guidance on overseas withholding tax
|
(1.8)
|
-
|
|
Effect of other adjusting items
|
16.7
|
8.1
|
|
Effect of associates’ adjusting items
|
(0.6)
|
(1.1)
|
|
Effect of other adjusting items in net finance costs
|
5.1
|
3.5
|
|
Effect of adjusting items in respect of deferred taxation
|
(0.9)
|
(2.2)
|
|
Adjusted diluted earnings per share
|
331.7
|
323.8
|
Years ended 31 December
|
2020
|
2019
|
|
pence
|
pence
|
||
Diluted earnings per share
|
278.9
|
249.0
|
|
Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets (net of tax)
|
17.0
|
19.1
|
|
Effect of losses on disposal of property, plant and equipment, held-for-sale assets, partial/full implementation of IFRS 16 Leases and sale and
leaseback (net of tax)
|
(0.8)
|
0.3
|
|
Issue of shares and changes in shareholding of associates
|
(0.7)
|
(1.1)
|
|
Diluted headline earnings per share
|
294.4
|
267.3
|
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Earnings
|
6,400
|
5,704
|
|
Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets (net of tax)
|
391
|
439
|
|
Effect of losses on disposal of property, plant and equipment, held-for-sale assets, partial/full implementation of IFRS 16 Leases and sale and
leaseback (net of tax)
|
(18)
|
6
|
|
Issue of shares and changes in shareholding of associates
|
(17)
|
(25)
|
|
Headline earnings
|
6,756
|
6,124
|
Years ended 31 December
|
2020
|
2019
|
|||||
Earnings
|
Shares
|
Earnings
|
Shares
|
||||
£m
|
m
|
£m
|
m
|
||||
Earnings per share
|
|||||||
- basic
|
6,400
|
2,286
|
5,704
|
2,284
|
|||
- diluted
|
6,400
|
2,295
|
5,704
|
2,291
|
|||
Adjusted earnings per share
|
|||||||
- basic
|
7,613
|
2,286
|
7,418
|
2,284
|
|||
- diluted
|
7,613
|
2,295
|
7,418
|
2,291
|
|||
Headline earnings per share
|
|||||||
- basic
|
6,756
|
2,286
|
6,124
|
2,284
|
|||
- diluted
|
6,756
|
2,295
|
6,124
|
2,291
|
|
2020
|
2019
|
|||
Dividends declared:
|
Pence per share
|
USD per ADS
|
Pence per share
|
USD per ADS
|
|
Quarterly payment 1 (paid May 2020)
|
52.60
|
0.6424030
|
50.75
|
0.6596990
|
|
Quarterly payment 2 (paid August 2020)
|
52.60
|
0.6889020
|
50.75
|
0.6155970
|
|
Quarterly payment 3 (paid November 2020)
|
52.60
|
0.6895860
|
50.75
|
0.6521370
|
|
Quarterly payment 4 (paid February 2021)
|
52.60
|
0.7178320
|
50.75
|
0.6571610
|
|
210.4
|
2.738723
|
203.0
|
2.5845940
|
Event
|
Payment No. 1
|
Payment No. 2
|
Payment No. 3
|
Payment No. 4
|
Preliminary announcement (includes declaration data required for JSE purposes)
|
17 February
|
|||
Publication of finalisation information (JSE)
|
15 March
|
29 June
|
20 September
|
13 December
|
No removal requests permitted between the UK main register and the South Africa branch register
|
15 March–
26 March (inclusive)
|
29 June–
9 July (inclusive)
|
20 September–
1 October (inclusive)
|
13 December–
24 December (inclusive)
|
Last Day to Trade (LDT) cum dividend (JSE)
|
23 March
|
6 July
|
28 September
|
21 December
|
Shares commence trading ex-dividend (JSE)
|
24 March
|
7 July
|
29 September
|
22 December
|
No transfers permitted between the UK main register and the South Africa branch register
|
24 March–
26 March (inclusive)
|
7 July–
9 July (inclusive)
|
29 September –
1 October (inclusive)
|
22 December–
24 December (inclusive)
|
No shares may be dematerialised or rematerialised on the South Africa branch register
|
24 March–
26 March (inclusive)
|
7 July–
9 July (inclusive)
|
29 September–
1 October (inclusive)
|
22 December–
24 December (inclusive)
|
Shares commence trading ex-dividend (LSE and NYSE)
|
25 March
|
8 July
|
30 September
|
23 December
|
Record date
(JSE, LSE and NYSE) |
26 March
|
9 July
|
1 October
|
24 December
|
Last date for receipt of Dividend Reinvestment Plan (DRIP) elections (LSE)
|
20 April
|
29 July
|
21 October
|
19 January 2022
|
Payment date (LSE and JSE)
|
12 May
|
19 August
|
11 November
|
9 February 2022
|
ADS payment date (NYSE)
|
17 May
|
24 August
|
16 November
|
14 February 2022
|
(1) |
The dates set out above may be subject to any changes to public holidays arising and changes or revisions to the LSE, JSE and NYSE timetables. Any confirmed changes to the dates will be
announced.
|
-
|
Factory made cigarettes (FMC) – sticks, regardless of weight or dimensions;
|
-
|
Roll-Your-Own / Make-Your-Own – kilos, converted to a stick equivalent based upon 0.8 grams (per stick equivalent) for Roll-Your-Own and between 0.5 and 0.7 grams
(per stick equivalent) for Make-Your-Own;
|
-
|
Traditional oral – pouches (being 1:1 conversion to stick equivalent) and kilos, converted to a stick equivalent based upon 2.8 grams (per stick equivalent) for
Moist Snuff, 2.0 grams (per stick equivalent) for Dry Snuff and 7.1 grams (per stick equivalent) for other oral;
|
-
|
Modern Oral – pouches, being 1:1 conversion to stick equivalent;
|
-
|
Tobacco Heat sticks – sticks, being 1:1 conversion to stick equivalent; and
|
-
|
Vapour – pods and 10 millilitre bottles. There is no conversion to a stick equivalent.
|
Definition: Revenue before the impact of adjusting items.
|
|||
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Revenue
|
25,776
|
25,877
|
|
Less: Excise on goods bought-in on short-term arrangements
|
-
|
(50)
|
|
Adjusted revenue
|
25,776
|
25,827
|
|
Impact of translational foreign exchange
|
894
|
-
|
|
Adjusted revenue re-translated at constant exchange rates
|
26,670
|
25,827
|
Definition: Revenue before the impact of adjusting items derived from the Strategic Portfolio. This measure enables users of the financial statements to better compare the Group’s business performance across periods
and with reference to the Group’s investment activity.
|
||||||||
Years ended 31 December
|
2020
|
Adj
items
|
Impact of
exchange
|
2020 adj at
2019 CC
|
2019
|
Adj
items
|
2019
adjusted
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
||
Strategic Portfolio
|
||||||||
Strategic Combustibles
|
16,992
|
-
|
559
|
17,551
|
16,515
|
-
|
16,515
|
|
Vapour
|
611
|
-
|
4
|
615
|
401
|
-
|
401
|
|
THP
|
634
|
-
|
2
|
636
|
728
|
-
|
728
|
|
Modern Oral
|
198
|
-
|
-
|
198
|
126
|
-
|
126
|
|
New Categories
|
1,443
|
-
|
6
|
1,449
|
1,255
|
-
|
1,255
|
|
Strategic Traditional Oral
|
1,100
|
-
|
6
|
1,106
|
1,023
|
-
|
1,023
|
|
Total Strategic Revenue
|
19,535
|
-
|
571
|
20,106
|
18,793
|
-
|
18,793
|
|
Non-Strategic Portfolio
|
||||||||
Combustibles
|
5,760
|
-
|
283
|
6,043
|
6,486
|
(50)
|
6,436
|
|
Traditional Oral
|
60
|
-
|
(1)
|
59
|
58
|
-
|
58
|
|
Other
|
421
|
-
|
41
|
462
|
540
|
-
|
540
|
|
Total Non-Strategic Revenue
|
6,241
|
-
|
323
|
6,564
|
7,084
|
(50)
|
7,034
|
|
Total Revenue
|
25,776
|
-
|
894
|
26,670
|
25,877
|
(50)
|
25,827
|
Definition: Profit from operations before the impact of adjusting items (described on pages 33 to 35) and adjusted profit from operations as a percentage of adjusted revenue.
|
|||
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Profit from operations
|
9,962
|
9,016
|
|
Restructuring and integration costs
|
408
|
565
|
|
Amortisation and impairment of trademarks and similar intangibles
|
339
|
481
|
|
Impairment of goodwill (including Malaysia in 2020 and Indonesia in 2019)
|
209
|
194
|
|
(Credit)/charge in respect of an excise dispute in Russia
|
(40)
|
202
|
|
Charge in respect of Quebec Class Action
|
-
|
436
|
|
Charge in respect of MSA liabilities related to brands sold to a third-party
|
400
|
-
|
|
Other adjusting items (including Engle)
|
87
|
236
|
|
Adjusted profit from operations
|
11,365
|
11,130
|
|
Impact of translational foreign exchange on adjusted profit from operations
|
296
|
||
Adjusted profit from operations re-translated at constant exchange rates
|
11,661
|
||
Operating margin (Profit from operations as % of revenue)
|
38.6%
|
34.8%
|
|
Adjusted operating margin (Adjusted profit from operations as a % of adjusted revenue)
|
44.1%
|
43.1%
|
Definition: Net finance costs before the impact of adjusting items (described on page 35). | |||
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Finance costs
|
(1,795)
|
(1,686)
|
|
Finance income
|
50
|
84
|
|
Net finance costs
|
(1,745)
|
(1,602)
|
|
Less: Adjusting items in net finance costs
|
153
|
80
|
|
Net adjusted finance costs
|
(1,592)
|
(1,522)
|
|
Comprising:
|
|||
Interest payable
|
(1,654)
|
(1,718)
|
|
Interest and dividend income
|
50
|
84
|
|
Fair value changes – derivatives
|
217
|
(367)
|
|
Exchange differences
|
(205)
|
479
|
|
Net adjusted finance costs
|
(1,592)
|
(1,522)
|
|
Impact of translational foreign exchange
|
(20)
|
||
Net adjusted finance costs (at constant rates of exchange)
|
(1,612)
|
Definition: Taxation before the impact of adjusting items (described on page 35)
|
|||
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
UK
|
|||
- current year tax
|
38
|
41
|
|
- adjustment in respect of prior periods
|
-
|
(33)
|
|
Overseas
|
|||
- current year tax
|
2,369
|
2,074
|
|
- adjustment in respect of prior periods
|
18
|
(27)
|
|
Current tax
|
2,425
|
2,055
|
|
Deferred tax
|
(317)
|
8
|
|
Taxation on ordinary activities
|
2,108
|
2,063
|
|
Adjusting items
|
322
|
438
|
|
Net adjusted tax charge
|
2,430
|
2,501
|
Definition: Tax rate incurred before the impact of adjusting items (described on page 35) and to adjust for the inclusion of the Group’s share of post-tax results of associates and joint ventures within the Group’s pre-tax results. | |||
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Profit before taxation (PBT)
|
8,672
|
7,912
|
|
Less: Share of post-tax results of associates and joint ventures
|
(455)
|
(498)
|
|
Adjusting items within profit from operations
|
1,403
|
2,114
|
|
Adjusting items within finance costs
|
153
|
80
|
|
Adjusted PBT, excluding associates and joint ventures
|
9,773
|
9,608
|
|
Impact of translational foreign exchange
|
276
|
||
Adjusted PBT, excluding associates and joint ventures (at constant rates)
|
10,049
|
||
Taxation on ordinary activities
|
(2,108)
|
(2,063)
|
|
Adjusting items within taxation and taxation on adjusting items
|
(322)
|
(438)
|
|
Adjusted taxation
|
(2,430)
|
(2,501)
|
|
Impact of translational foreign exchange on adjusted taxation
|
(63)
|
||
Adjusted taxation (at constant rates)
|
(2,493)
|
||
Underlying tax rate
|
24.9%
|
26.0%
|
|
Underlying tax rate (constant rates)
|
24.8%
|
26.0%
|
|
Effective tax rate
|
24.3%
|
26.1%
|
Definition: diluted earnings per share before the impact of adjusting items, presented in the prior year’s rate of exchange
|
|||
Years ended 31 December
|
2020
|
2019
|
|
pence
|
pence
|
||
Diluted earnings per share
|
278.9
|
249.0
|
|
Effect of restructuring and integration costs
|
14.9
|
20.3
|
|
Effect of amortisation and impairment of goodwill, trademarks and similar intangibles
|
20.5
|
24.5
|
|
Effect of Quebec Class Action
|
-
|
13.6
|
|
Effect of Russia excise dispute
|
(1.1)
|
8.1
|
|
Effect of retrospective guidance on overseas withholding tax
|
(1.8)
|
-
|
|
Effect of other adjusting items
|
16.7
|
8.1
|
|
Effect of associates’ adjusting items
|
(0.6)
|
(1.1)
|
|
Effect of other adjusting items in net finance costs
|
5.1
|
3.5
|
|
Effect of adjusting items in respect of deferred taxation
|
(0.9)
|
(2.2)
|
|
Adjusted diluted earnings per share
|
331.7
|
323.8
|
|
Impact of translational foreign exchange
|
9.7
|
||
Adjusted diluted earnings per share, at constant exchange rates
|
341.4
|
Definition: net cash generated from operating activities before the impact of adjusting items and dividends from associates and excluding trading loans to third-parties, pension short fall funding,
taxes paid and after net capital expenditure, as a proportion of adjusted profit from operations.
|
|||
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Net cash generated from operating activities
|
9,786
|
8,996
|
|
Cash related to adjusting items
|
732
|
564
|
|
Dividends from associates
|
(351)
|
(252)
|
|
Tax paid
|
2,132
|
2,204
|
|
Net capital expenditure
|
(605)
|
(774)
|
|
Trading loans to third parties
|
9
|
4
|
|
Other
|
1
|
-
|
|
Operating cash flow
|
11,704
|
10,742
|
|
Adjusted profit from operations
|
11,365
|
11,130
|
|
Operating cash flow conversion ratio
|
103%
|
97%
|
|
Cash conversion ratio
|
98%
|
100%
|
|
Cash conversion is net cash generated from operating activities as a proportion of profit from operations
|
Definition: net cash generated from operating activities before the impact of trading loans provided to a third-party and after dividends paid to non-controlling interests, net interest paid
and net capital expenditure. This measure is presented before and after dividends paid to shareholders.
|
|||
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Net cash generated from operating activities
|
9,786
|
8,996
|
|
Dividends paid to non-controlling interests
|
(136)
|
(157)
|
|
Net interest paid
|
(1,759)
|
(1,550)
|
|
Net capital expenditure
|
(605)
|
(774)
|
|
Trading loans to third-parties
|
9
|
4
|
|
Free cash flow (before dividends paid to shareholders)
|
7,295
|
6,519
|
|
Dividends paid to shareholders
|
(4,745)
|
(4,598)
|
|
Free cash flow (after dividends paid to shareholders)
|
2,550
|
1,921
|
Years ended 31 December
|
2020
|
2019
|
|
£m
|
£m
|
||
Borrowings (excluding lease liabilities)
|
43,493
|
44,787
|
|
Lease liabilities
|
475
|
579
|
|
Total borrowings (including lease liabilities)
|
43,968
|
45,366
|
|
Derivatives in respect of net debt
|
(346)
|
(143)
|
|
Cash and cash equivalents
|
(3,139)
|
(2,526)
|
|
Current assets held at fair value
|
(242)
|
(123)
|
|
Total net debt
|
40,241
|
42,574
|
|
Purchase price adjustment (PPA) to Reynolds American Inc. debt
|
(790)
|
(848)
|
|
Adjusted net debt
|
39,451
|
41,726
|
|
Profit for the year
|
6,564
|
5,849
|
|
Taxation on ordinary activities
|
2,108
|
2,063
|
|
Net finance costs
|
1,745
|
1,602
|
|
Depreciation, amortisation and impairment costs
|
1,450
|
1,512
|
|
Share of post-tax results of associates and joint ventures
|
(455)
|
(498)
|
|
Other adjusting items (excluding depreciation, amortisation and impairment)
|
704
|
1,376
|
|
Adjusted EBITDA
|
12,116
|
11,904
|
|
Adjusted net debt to adjusted EBITDA
|
3.3x
|
3.5x
|
|
Translational foreign exchange impact to adjusted net debt
|
46
|
||
Adjusted net debt at constant rates
|
39,497
|
||
Translational foreign exchange impact to adjusted EBITDA
|
323
|
||
Adjusted EBITDA at constant rates
|
12,439
|
||
Adjusted net debt to adjusted EBITDA (at constant exchange rates)
|
3.2x
|
Equivalent to one cigarette
|
|
Tobacco Heat sticks
|
1 heat stick
|
Cigars
|
1 cigar (regardless of size)
|
Oral
|
|
- Pouch
|
1 pouch
|
- Moist Snuff
|
2.8 gram
|
- Dry Snuff
|
2.0 gram
|
- Loose leaf, plug, twist
|
7.1 gram
|
Pipe tobacco
|
0.8 gram
|
Roll-your-own
|
0.8 gram
|
Make-your-own
|
|
-Expanded tobacco
|
0.5 grams
|
- Optimised tobacco
|
0.7 grams
|
Wednesday 28 April
|
Annual General Meeting at 11.30am
|
|
Details of the venue and business to be proposed at
the meeting will be set out in the Notice of AGM, which
will be made available to all shareholders and published
on www.bat.com.
The format for the 2021 AGM will be contingent on applicable UK Government health and safety restrictions in place at that time.
|
||
Friday 30 July
|
Half-Year Report
|
|
Term
|
Definition
|
AMSSA
|
Americas (excluding US) and Sub-Saharan Africa. The key markets are:
Argentina, Brazil, Canada, Chile, Colombia, Mexico, Nigeria, South Africa
|
APME
|
Asia Pacific and Middle East. The key markets are:
Australia, Bangladesh, Gulf Cooperation Council, Indonesia, Iran, Iraq, Japan, Malaysia, New Zealand, Pakistan, South Korea, Taiwan, Vietnam
|
British American Tobacco, BAT, Group, we, us and our
|
When the reference denotes an opinion, this refers to British American Tobacco p.l.c. and when the reference denotes tobacco business activity this refers to British American
Tobacco Group operating companies, either collectively or individually, as the case may be.
|
Cigarette
|
Factory made cigarettes (FMC) and includes products that have similar characteristics and are manufactured in the same manner, but due to specific features may not be recognised as
cigarettes for regulatory, duty or similar reasons.
|
Combustibles
|
Cigarettes and OTP
|
Constant Currency / Constant rates
|
Presentation of results in the prior year’s exchange rate, removing the potentially distorting effect of translational foreign exchange on the Group’s results. The Group does not
adjust for normal transactional gains or losses in profit from operations which are generated by exchange rate movements
|
Developed Markets
|
As defined by the World Economic Outlook as Advanced Economies and those within the European Union
|
Emerging Markets
|
Those markets not defined as Developed Markets
|
ENA
|
Europe and North Africa. The key markets are:
Algeria, Belgium, Czech Republic, Egypt, Denmark, France, Germany, Italy, Kazakhstan, Morocco, the Netherlands, Poland, Romania, Russia, Spain, Switzerland, Turkey, United Kingdom,
Ukraine
|
Key markets
|
The key markets are:
Argentina, Brazil, Canada, Chile, Colombia, Mexico, Nigeria, South Africa, Australia, Bangladesh, Gulf Cooperation Council, Indonesia, Iran, Iraq, Japan, Malaysia, New Zealand,
Pakistan, South Korea, Taiwan, Vietnam, Algeria, Belgium, Czech Republic, Egypt, Denmark, France, Germany, Italy, Kazakhstan, Morocco, the Netherlands, Poland, Romania, Russia, Spain, Switzerland, Turkey, United Kingdom, Ukraine
and the United States.
|
Modern Oral
|
Includes EPOK, Lyft, Velo and other modern white snus
|
New Categories
|
Includes Vapour, THP and Modern Oral
|
Non-Combustibles
|
New Categories plus Traditional Oral
|
OTP
|
Other Tobacco Products, including make-your-own, roll-your-own, Pipe and Cigarillos
|
Project Quantum
|
Review of the Group’s operating model to drive increased agility and efficiency
|
Reduced risk
|
Based on the available science, products within “New Categories” and “Traditional Oral” have been shown to be reduced-risk; are likely to be reduced-risk; or may have the potential
to be reduced-risk, in each case if switched to exclusively as compared to continuing to smoke cigarettes.
|
Strategic combustible and THP brands
|
Includes Kent, Dunhill, Lucky Strike, Pall Mall, Rothmans, Newport, Natural American Spirit (US), Camel (US), glo and Neo
|
Strategic Portfolio
|
Comprised on strategic combustibles, strategic traditional oral and New Categories – and Includes Kent, Dunhill, Lucky Strike, Pall Mall, Rothmans, Newport, Natural American Spirit
(US), Camel (US), Vype, Vuse, glo, Neo, Ten Motives, Velo, EPOK, Lyft, Granit, Mocca, Grizzly, Camel Snus, Kodiak
|
Top 5 / T5 vapour markets
|
Being the top 5 markets for industry vapour sales by revenue – US, Canada, UK, France and Germany. These markets represent an estimated 75% of Global industry vapour revenue (closed
systems).
|
Top 6 / T6 modern oral markets
|
Being the top 6 markets for industry modern oral sales by revenue – US, Germany, Sweden, Norway, Denmark and Switzerland. These markets represent an estimated 90-95% of Global
industry modern oral revenue.
|
Top 9 / T9 THP markets
|
Being the top 9 markets for industry THP sales by revenue – Japan, South Korea, Russia, Italy, Romania, Germany, Ukraine, Poland and Czech Republic. These markets represent an
estimated 90-95% of Global industry THP revenue.
|
THP
|
Tobacco heating products (i.e., the devices, which include glo and our hybrid products) or Tobacco heated products (i.e., the consumables used by Tobacco heating product devices)
|
Traditional Oral
|
Moist Snuff (Granit, Mocca, Grizzly, Kodiak) and other traditional snus products (including Camel Snus and Lungrens)
|
US
|
United States of America (a key market)
|
Value share
|
Value share is the retail value of units bought by consumers of a particular brand or combination of brands, as a proportion of the total retail value of units bought by consumers
in the industry, category or other sub-categorisation in discussion.
|
Volume share
|
Key market offtake volume share, as independently measured by retail audit agencies (including Nielsen and Marlin) and scanner sales to consumers, where possible or based on
movements within the supply chain (such as sales to retailers) to generate an estimate of shipment share, based upon latest available data. The Group’s key markets represent over 80% of the Group’s cigarette volume.
|
Vapour
|
Rechargeable, battery-powered devices that heat liquid formulations – e-liquids – to create a vapour which is inhaled. Vapour products include Vype, Vuse, Chic, ViP and Ten Motives
|
Volume (unit)
|
||||||||||
For year ended 31 December
|
US
|
APME
|
AMSSA
|
ENA
|
Group
|
|||||
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
|
New Categories
|
||||||||||
Vapour
|
174
|
+69.7%
|
6
|
+385%
|
31
|
+118%
|
133
|
+23.0%
|
344
|
+51.9%
|
THP
|
-
|
+0.0%
|
7.4
|
-6.5%
|
-
|
-
|
3.3
|
+203%
|
10.7
|
+18.9%
|
Modern Oral
|
162
|
+45.0%
|
86
|
N/M
|
19
|
+142%
|
1,667
|
+55.6%
|
1,934
|
+62.0%
|
Traditional Oral
|
7.5
|
-1.3%
|
0.0
|
+0.0%
|
0.0
|
+0.0%
|
0.9
|
+2.8%
|
8.4
|
-0.9%
|
Total Non-Combustibles
|
|
|
|
|
|
|
|
|
|
|
Cigarettes
|
73.1
|
+0.5%
|
197.5
|
-7.3%
|
146.7
|
-3.9%
|
220.3
|
-4.2%
|
637.6
|
-4.6%
|
OTP
|
0.2
|
+8.2%
|
2.1
|
+3.3%
|
1.8
|
-1.7%
|
16.1
|
-2.5%
|
20.2
|
-1.7%
|
Total Combustibles
|
73.3
|
+0.5%
|
199.6
|
-7.2%
|
148.5
|
-3.8%
|
236.4
|
-4.1%
|
657.8
|
-4.5%
|
Memo: Cigarettes and THP
|
73.1
|
+0.4%
|
204.9
|
-7.2%
|
146.7
|
-3.9%
|
223.6
|
-3.2%
|
648.3
|
-4.3%
|
Revenue- reported at current rates (£m)
|
||||||||||
For year ended 31 December
|
US
|
APME
|
AMSSA
|
ENA
|
Group
|
|||||
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
|
New Categories
|
394
|
+81.9%
|
514
|
-24.0%
|
66
|
+51.3%
|
469
|
+46.7%
|
1,443
|
+14.9%
|
Vapour
|
383
|
+85.1%
|
15
|
+255.1%
|
65
|
+52.8%
|
148
|
+0.4%
|
611
|
+52.3%
|
THP
|
1
|
-0.0%
|
497
|
-26.0%
|
-
|
-
|
136
|
+143%
|
634
|
-12.9%
|
Modern Oral
|
10
|
+13.5%
|
2
|
N/M
|
1
|
-49.8%
|
185
|
+58.5%
|
198
|
+57.1%
|
Traditional Oral
|
1,126
|
+7.0%
|
-
|
+0.0%
|
-
|
+0.0%
|
34
|
+16.2%
|
1,160
|
+7.2%
|
Total Non-Combustibles
|
1,520
|
+19.8%
|
514
|
-24.0%
|
66
|
+51.3%
|
503
|
+44.1%
|
2,603
|
+11.3%
|
Total Combustibles
|
9,926
|
+9.3%
|
3,935
|
-10.3%
|
3,535
|
-11.4%
|
5,356
|
-3.4%
|
22,752
|
-1.1%
|
Other
|
27
|
+4.6%
|
88
|
-1.3%
|
171
|
-24.3%
|
135
|
-31.6%
|
421
|
-21.7%
|
Total
|
11,473
|
+10.6%
|
4,537
|
-11.9%
|
3,772
|
-11.5%
|
5,994
|
-1.6%
|
25,776
|
-0.4%
|
Of which:
|
|
|
|
|
|
|
|
|
|
|
Strategic
|
10,818
|
+11.4%
|
2,349
|
-12.9%
|
2,040
|
-2.9%
|
4,328
|
+1.1%
|
19,535
|
+4.0%
|
Non-strategic
|
655
|
-0.4%
|
2,188
|
-10.9%
|
1,732
|
-19.9%
|
1,666
|
-7.8%
|
6,241
|
-11.9%
|
11,473
|
+10.6%
|
4,537
|
-11.9%
|
3,772
|
-11.5%
|
5,994
|
-1.6%
|
25,776
|
-0.4%
|
|
Revenue- adjusted at constant rates (£m)
|
||||||||||
For year ended 31 December
|
US
|
APME
|
AMSSA
|
ENA
|
Group
|
|||||
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
2020
|
% change
|
|
New Categories
|
396
|
+82.9%
|
507
|
-25.0%
|
68
|
+57.1%
|
478
|
+49.6%
|
1,449
|
+15.4%
|
Vapour
|
385
|
+86.1%
|
15
|
+260%
|
68
|
+58.6%
|
147
|
+0.2%
|
615
|
+53.4%
|
THP
|
1
|
+0.5%
|
490
|
-27.1%
|
-
|
-
|
145
|
+159%
|
636
|
-12.7%
|
Modern Oral
|
10
|
+14.1%
|
2
|
N/M
|
0
|
-47.3%
|
186
|
+59.3%
|
198
|
+57.1%
|
Traditional Oral
|
1,131
|
+7.6%
|
-
|
+0.0%
|
-
|
+0.0%
|
34
|
+14.2%
|
1,165
|
+7.7%
|
Total Non-Combustibles
|
1,527
|
+20.4%
|
507
|
-25.0%
|
68
|
+57.1%
|
512
|
+46.6%
|
2,614
|
+11.9%
|
Total Combustibles
|
9,980
|
+9.9%
|
4,048
|
-7.7%
|
4,043
|
+1.3%
|
5,523
|
+0.5%
|
23,594
|
+2.8%
|
Other
|
29
|
+5.1%
|
89
|
-0.4%
|
210
|
-7.2%
|
134
|
-31.7%
|
462
|
-14.4%
|
Total
|
11,536
|
+11.2%
|
4,644
|
-9.9%
|
4,321
|
+1.4%
|
6,169
|
+2.1%
|
26,670
|
+3.3%
|
Of which:
|
|
|
|
|
|
|
|
|
|
|
Strategic
|
10,876
|
+12.0%
|
2,404
|
-10.8%
|
2,363
|
+12.5%
|
4,463
|
+4.2%
|
20,106
|
+7.0%
|
Non-strategic
|
660
|
+0.1%
|
2,240
|
-8.9%
|
1,958
|
-9.4%
|
1,706
|
-2.9%
|
6,564
|
-6.7%
|
11,536
|
+11.2%
|
4,644
|
-9.9%
|
4,321
|
+1.4%
|
6,169
|
+2.1%
|
26,670
|
+3.3%
|
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