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Second half pre-close trading update 2017
British American Tobacco p.l.c.
Incorporated in England and Wales
(Registration number: 03407696)
Short name: BATS
Share code: BTI
ISIN number: GB0002875804
("British American Tobacco p.l.c." or "the Company")
13 DECEMBER 2017
BRITISH AMERICAN TOBACCO p.l.c.
SECOND HALF PRE-CLOSE TRADING UPDATE 2017
In 2014 the requirement for UK listed companies to produce an Interim Management Statement ("IMS") was
removed. In July 2016, it was announced that British American Tobacco p.l.c. would no longer publish a
quarterly IMS, and would instead issue short trading updates prior to the start of closed periods for the Interim
and the Full Year results.
Trading update - ahead of closed period commencing 1 January 2018
• The business continues to perform well and trading is in line with our expectations
• Confident of another year of good earnings growth at constant currency, with:
o Continued market share growth, driven by the Global Drive Brands (GDBs)
o H2 organic operating profit growth reflecting the benefit from the phasing of volume
shipments, offset by a more difficult pricing environment in some markets
o Reynolds American Inc. (RAI) integration on track, with the businesses performing strongly,
driven by good share growth and pricing
• Full year EPS to benefit from a reduced currency translation tailwind of 5%
Second half organic volume is expected to benefit from the phasing of shipments in a number of key markets,
including Pakistan, partly offset by the impact of the significant excise increase in the GCC. We anticipate full
year industry volume to be down around 4%, with BAT again outperforming the industry, driven by continued
good share growth.
Organic revenue in the second half benefits from growing NGP revenues and good overall pricing in most
markets, although organic price mix is expected to moderate in H2 due to downtrading in the GCC and a more
difficult pricing environment in some markets, notably in Russia. Full year organic price mix is expected to
remain within historic ranges.
Trading in our markets continues to reflect the trends discussed at the Interim Results in July and our more
recent Capital Markets Day, with Canada, Germany, Romania, Bangladesh and Ukraine performing well and
conditions remaining challenging in Russia, GCC, Brazil, South Africa and Malaysia.
The national rollout of glo in Japan is complete and glo has continued its excellent performance with national
share now at 2.7%. glo has also been successfully launched in Canada, Switzerland, South Korea and Russia and
is now available in a total of five countries. In vapour, our share in Western Europe continues to grow and the
performance of VUSE in the US remains strong.
FX
If exchange rates remained unchanged for the balance of the year, the translational currency tailwind would be
expected to be 6% on operating profit. The transactional headwind remains around 2% on operating profit.
Full year EPS is expected to benefit from a translational foreign exchange tailwind of 5%.
Changes to reporting structure
Following the acquisition of RAI, the Group will consolidate the results of RAI as a wholly owned subsidiary
from the acquisition date.
For clarity, the Group will show the 2017 results under the existing regional structure (EEMEA, ASPAC,
AMERICAS, WESTERN EUROPE and the USA) to enable an organic comparison.
To enable a like-for-like comparison of performance in 2018, the Group will also show 2017 results under the
new regional structure (EUROPE AND NORTH AFRICA, ASIA PACIFIC AND MIDDLE EAST, AMERICAS AND SUB-
SAHARAN AFRICA and the USA), including the impact of IFRS15 and as though the Group had owned RAI from 1
January 2017.
For further information, please contact:
British American Tobacco Press Office
+44 (0) 20 7845 2888 (24 hours) | @BATPress
British American Tobacco Investor Relations
Mike Nightingale / Rachael Brierley / Stephanie Brassinne
+44 (0) 20 7845 1180 / 1519/ 2012
Disclaimers
This announcement does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or
dispose of any British American Tobacco p.l.c. ("BAT") shares or other securities. This announcement contains
certain forward-looking statements, made within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, regarding our intentions, beliefs or current expectations concerning, amongst other
things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the economic
and business circumstances occurring from time to time in the countries and markets in which the Group
operates.
These statements are often, but not always, made through the use of words or phrases such as “believe,”
“anticipate,” “could,” “may,” “would,” “should,” “intend,” “plan,” “potential,” “predict,” “will,” “expect,”
“estimate,” “project,” “positioned,” “strategy,” “outlook”, “target” and similar expressions.
It is believed that the expectations reflected in this announcement are reasonable but they may be affected by
a wide range of variables that could cause actual results to differ materially from those currently anticipated.
Among the key factors that could cause actual results to differ materially from those projected in the forward-
looking statements are uncertainties related to the following: the failure to realize contemplated synergies and
other benefits from mergers and acquisitions; the effect of mergers, acquisitions and divestitures on BAT’s
operating results and businesses generally; the impact of competition from illicit trade; the impact of adverse
domestic or international legislation and regulation; changes in domestic or international tax laws and rates;
adverse litigation and dispute outcomes and the effect of such outcomes on BAT’s financial condition; changes
or differences in domestic or international economic or political conditions; the inability to obtain price
increases and the impact of price increases on consumer affordability thresholds; adverse decisions by
domestic or international regulatory bodies; the impact of market size reduction and consumer down-trading;
translational and transactional foreign exchange rate exposure; the impact of serious injury, illness or death in
the workplace; the ability to maintain credit ratings; the ability to develop, produce or market new alternative
products and to do so profitably; the ability to effectively implement strategic initiatives and actions taken to
increase sales growth; the ability to enhance cash generation and pay dividends and changes in the market
position, businesses, financial condition, results of operations or prospects of BAT.
Past performance is no guide to future performance and persons needing advice should consult an
independent financial adviser. The forward-looking statements reflect knowledge and information available at
the date of preparation of this announcement and BAT undertakes no obligation to update or revise these
forward-looking statements, whether as a result of new information, future events or otherwise. Readers are
cautioned not to place undue reliance on such forward-looking statements.
Additional information concerning these and other factors can be found in BAT’s and Reynolds American Inc.’s
(“RAI”) filings with the U.S. Securities and Exchange Commission (“SEC”), including RAI’s most recent Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and BAT’s
registration statement on Form F-4, which was declared effective by the SEC on June 14, 2017, and Current
Reports on Form 6-K, which may be obtained free of charge at the SEC’s website, http://www.sec.gov, and
BAT’s Annual Reports, which may be obtained free of charge from BAT’s website www.bat.com.
Sponsor: UBS South Africa (Pty) Ltd
Date: 13/12/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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