29th Apr 2015 06:20
LONDON (Alliance News) - British American Tobacco PLC Wednesday said revenue fell 5.8% in the first quarter of 2015 as exchange rates went against it, but it took market share, grew volumes of
it key growth brands, and said revenue would have risen 1.7% if exchange rates had remained constant as price increases offset overall volume declines.
It kept its guidance for "another good year of earnings growth" at constant exchange rates in 2015, and said it still expects its profit to be weighted to the second half of the year because the first half is up against strong comparative figures from 2014.
The tobacco company said the growth in revenue at constant exchange rates in the three months to end-March was driven by strong prices, particularly price hikes in markets with high inflation.
Its cigarette volume from subsidiaries fell by 3.6% on the year to 152 billion as the industry at large witnessed volume decline, particularly in Brazil, Russia and Vietnam. This offset a good volume performance in markets including in South and Central Asia and Mexico, with the company's market share up by 40 basis points driven by South Korea, Mexico, Bangladesh, Japan, France and Poland. It said the market share increase in South Korea will partially unwind, although it didn't say why.
Sales volumes of its five cigarette growth brands rose 5.7%, with Dunhill volume up 1.2% thanks to growth in Indonesia and Brasil, Kent volume down 1.6% as it suffered in Russia, Japan and Romania, and Lucky Strike volume up 5.0% thanks to increases in Mexico, France and Belgium. Pall Mall volume rose 2.4%, driven by growth in Pakistan, Poland and Mexico, while Rothmans volumes rose 36.9% thanks to a strong performance in markets including Russia, Australia, Kazakhstan, Turkey and Italy.
BAT also said its Vype e-cigarette was growing strongly in the UK, providing a platform for its launch elsewhere, while it remains on track to launch its nicotine inhalation product licensed as a medicine, Voke, in the UK later this year. It will also test market a tobacco heating product in 2015.
The Group is performing well and we are on track for another good year of earnings growth at constant rates of exchange. We continue to expect profit growth to be significantly weighted to the second-half of the year principally due to a strong first-half volume comparator and the timing of price increases.
By Steve McGrath; [email protected]; @stevemcgrath1
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