Wrap Text
Half-year report to 30 June 2020
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")
31 July 2020
BRITISH AMERICAN TOBACCO p.l.c.
HALF-YEAR REPORT TO 30 JUNE 2020
JSE Short-Form Announcement
MULTI-CATEGORY STRATEGY DELIVERS GROWTH IN DIFFICULT TIMES
KEY FINANCIALS 30 June 2020 Change vs 30 June 2019
Current Current
rates rates
Revenue £12,271m +0.8%
Profit from operations £5,097m +16.4%
Basic earnings per share (EPS) 151.2p +22.7%
Headline earnings per share (HEPS) 151.9p +23%
Dividend per share (quarterly - see ‘Dividends’ section below) 52.6p +3.6%
Jack Bowles, Chief Executive said:
1
“The business is performing well in difficult circumstances as our continued focus on our three key priorities
has enabled us to rapidly adapt to the current environment.
1. We are building A Better Tomorrow
o 10% of our revenues come from non-combustible categories
o We are making good progress towards our target of 50 million non-combustibles consumers by
2030
o Invested an additional £250 million in New Categories marketing
2. We are continuing to deliver adjusted revenue, profit from operations and earnings growth at
constant rates
o Strong cigarette price/mix (8.5%) reflects the strength of our differentiated brand portfolio
o Which offsets lower cigarette and THP volume (down 6.3%)
o And the impact of COVID-19 of approximately -4% on adjusted revenue in the first six-months of
2020
3. Multi-category consumer acquisition drives share growth
o Our Non-Combustibles consumer base increased to 11.6 million (up 1.1 million from December
2019), being an increase of 2.7 million consumers on a rolling 12 month basis from June 2019
o New categories revenue grew 12.7% (at constant rates)
o We are growing volume share in THP and value share in Vapour, with Modern oral adjusted
revenue up 71% (at constant rates)
1. Three key priorities are “Driving value from Combustibles”, “Ensuring a step change in New Category performance” and “Simplifying the business”.
Chief Executive summary cont…
4. We are delivering excellent combustibles volume and value share growth
o Cigarette volume share (up 50 bps) and value share (up 20 bps)
o Driven by the strength of the Group’s differentiated cigarette portfolio
o Strategic cigarettes and THP portfolio now accounts for 66% of total cigarettes and THP volume
o US cigarette volume share up 10 bps and value share up 30 bps
5. We are navigating COVID-19 supported by a diverse market footprint
o Consumption trends in Developed Markets (75% of Group adjusted revenue) remain robust, with
good pricing and little evidence to date of accelerated down-trading
o In Emerging Markets, we are growing cigarette and THP volume share strongly, up 70 bps
o Volumes are strong where we see illicit trade reduction and can leverage our operational agility
o Weaker industry volume where there have been stricter lockdown measures (for instance South
Africa)
o We continue to anticipate a full year headwind of around 3% from COVID-19 on constant currency
adjusted revenue
6. We are committed
o We are on track to deliver against our 2020 guidance
o We maintain our medium-term post COVID-19 guidance of 3-5% constant currency adjusted
revenue growth and high-single figure constant currency adjusted diluted EPS growth
o We are committed to our 65% dividend pay-out ratio
I would like to thank our staff, customers, partners and suppliers for working tirelessly through this difficult
period. We expect the coming months to bring continued uncertainty. Nevertheless, we will continue to invest
in accelerating our strategy. Building on our excellent momentum, we are confident that we will exit this crisis
as a stronger and better business”
Jack Bowles, 31 July 2020
OTHER INFORMATION
DIVIDENDS
Declaration
On 27 February 2020, the Company announced that the Board had declared an interim dividend of 210.4p per
ordinary share of 25p, payable in four equal quarterly instalments of 52.6p per ordinary share in May 2020,
August 2020, November 2020 and February 2021.
The May 2020 dividend was paid to shareholders on the UK main register and South Africa branch register on
13 May 2020 and to holders of American Depositary Shares (ADSs) on 18 May 2020. The three remaining
quarterly dividends will be paid to shareholders registered on either the UK main register or the South Africa
branch register, and to holders of ADSs, each on the applicable record dates set out under the heading ‘Key
Dates’ below.
South Africa Branch Register
In accordance with the JSE Limited (JSE) Listing Requirements, the finalisation information relating to
shareholders registered on the South Africa branch register (comprising the amount of the dividend in South
African rand, the exchange rate and the associated conversion date) will be published on the dates stated
below, together with South Africa dividends tax information.
The quarterly dividends are regarded as ‘foreign dividends’ for the purposes of the South Africa Dividends Tax.
For the purposes of South Africa Dividends Tax reporting, the source of income for the payment of the
quarterly dividends is the United Kingdom.
Holders of ADSs
For holders of ADSs listed on the New York Stock Exchange (NYSE), the record dates and payment dates are
also set out below. The equivalent quarterly dividends receivable by holders of ADSs in US dollars will be
calculated based on the exchange rate on the applicable payment date. A fee of US$0.005 per ADS will be
charged by Citibank, N.A. in its capacity as depositary bank for the British American Tobacco American
Depositary Receipts (ADRs) programme in respect of each quarterly dividend payment.
General dividend information
The Group recognises interim dividends in the period that they are paid. Therefore, the results for the six-
months ended 30 June 2020 reflect the fourth quarterly dividend from the declaration made on 28 February
2019 (paid in February 2020) of 50.75p and the first quarterly dividend from the declaration made on 27
February 2020, of 52.6p per ordinary share as these were paid in February and May, respectively.
For the six-months ended June 2020
Pence per
US$ per ADS
share
Quarterly dividend – paid in February 50.75 0.657161
Quarterly dividend – paid in May 52.60 0.642403
103.35 1.299564
Key Dates
In compliance with the requirements of the London Stock Exchange (LSE), the NYSE and Strate, the electronic
settlement and custody system used by the JSE, the following salient dates for the remaining quarterly
dividend payments are applicable. All dates are 2020, unless otherwise stated.
Other Information
Event Payment No.2 Payment No.3 Payment No.4
Preliminary Announcement
(included declaration data 27 February 2020
required for JSE purposes)
Publication of finalisation 30 June* 21 September 7 December
information (JSE)
No removal requests 30 June to 21 September to 7 December to
permitted between the UK 10 July 2 October 18 December
main register and the South (inclusive) (inclusive) (inclusive)
Africa branch register
Last Day to Trade (LDT) cum- 7 July 29 September 14 December
dividend (JSE)
Shares commence trading ex- 8 July 30 September 15 December
dividend (JSE)
No transfers permitted 8 July to 30 September to 15 December to
between the UK main register 10 July 2 October 18 December
and the South Africa branch (inclusive) (inclusive) (inclusive)
register
No shares may be 8 July to 30 September to 15 December to
dematerialised or 10 July 2 October 18 December
rematerialised on the South (inclusive) (inclusive) (inclusive)
Africa branch register
Shares commence trading ex- 9 July 1 October 17 December
dividend (LSE and NYSE)
Record date 10 July 2 October 18 December
(JSE, LSE and NYSE)
Last date for receipt of 29 July 22 October 13 January 2021
Dividend Reinvestment Plan
(DRIP) elections (LSE)
Payment date (LSE and JSE) 19 August 12 November 3 February 2021
ADS payment date (NYSE) 24 August 17 November 8 February 2021
*JSE finalisation information published on 30 June 2020 can be found on the British American Tobacco website
www.bat.com.
SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the Directors of the Company. It is only a summary of
the information contained in the full Half-Year Report to 30 June 2020 (the “Results Announcement”) and does
not contain full or complete details. Any investment decisions should be based on consideration of the full
Results Announcement available via the JSE at
https://senspdf.jse.co.za/documents/2020/JSE/ISSE/BTI/BATHY20.pdf and on the Company’s website at
www.bat.com.
Copies of the full Results Announcement may also be obtained by contacting either the Company’s registered
office or the Company’s representative office in South Africa. Contact details are set out below.
SHAREHOLDER INFORMATION
FINANCIAL CALENDAR 2020
December 2020 Pre-close Trading Update
Thursday 18 February 2021 Preliminary Statement 2020
PROPOSED DATES FOR QUARTERLY DIVIDEND PAYMENTS FOR THE YEAR ENDING 31
DECEMBER 2020
Event Payment No. 1 Payment No. 2 Payment No. 3 Payment No. 4
Last day to trade 23 March 2021 6 July 2021 28 September 2021 21 December 2021
(JSE)
Ex-dividend date 24 March 2021 7 July 2021 29 September 2021 22 December 2021
(JSE)
Ex-dividend date 25 March 2021 8 July 2021 30 September 2021 23 December 2021
(LSE and NYSE)
Record date 26 March 2021 9 July 2021 1 October 2021 24 December 2021
(JSE, LSE and NYSE)
Payment date 12 May 2021 19 August 2021 11 November 2021 9 February 2022
(LSE and JSE)
ADS payment date 17 May 2021 24 August 2021 16 November 2021 14 February 2022
(NYSE)
Notes:
(1) A complete timetable for the quarterly dividend payments for the year ending 31 December 2020 and the
declared amount will be included in the Preliminary Results Announcement in February 2021.
(2) 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.
CORPORATE INFORMATION
Premium listing
London Stock Exchange (Share Code: BATS; ISIN: GB0002875804)
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ, UK
tel: 0800 408 0094; +44 370 889 3159
Share dealing tel: 0370 703 0084 (UK only)
Your account: www.computershare.com/uk/investor/bri
Share dealing: www.computershare.com/dealing/uk
Web-based enquiries: www.investorcentre.co.uk/contactus
Secondary listing
JSE (Share Code: BTI)
Shares are traded in electronic form only and transactions settled electronically through Strate.
Computershare Investor Services Proprietary Limited
Private Bag X9000, Saxonwold 2132, South Africa
tel: 0861 100 634; +27 11 870 8216
email enquiries: web.queries@computershare.co.za
Sponsor for the purpose of the JSE
UBS South Africa (Pty) Ltd
American Depositary Receipts (ADRs)
NYSE (Symbol: BTI; CUSIP Number: 110448107)
BAT’s shares are listed on the NYSE in the form of American Depositary Shares (ADSs) and these are evidenced by
American Depositary Receipts (ADRs), each one of which represents one ordinary share of British American Tobacco
p.l.c. Citibank, N.A. is the depositary bank for the sponsored ADR programme.
Citibank Shareholder Services
PO Box 43077, Providence, Rhode Island 02940-3077, USA
tel: +1 888 985 2055 (toll-free) or +1 781 575 4555
email enquiries: citibank@shareholders-online.com
website: www.citi.com/dr
Publications
British American Tobacco Publications
Unit 80, London Industrial Park, Roding Road, London E6 6LS, UK
tel: +44 20 7511 7797; facsimile: +44 20 7540 4326
e-mail enquiries: bat@team365.co.uk or the Company’s Representative office in South Africa using the contact
details shown below.
British American Tobacco p.l.c.
Registered office
Globe House, 4 Temple Place, London, WC2R 2PG, UK
tel: +44 20 7845 1000; facsimile: +44 20 7240 0555
British American Tobacco p.l.c. is a public limited company which is listed on the London Stock Exchange, New York
Stock Exchange and the JSE Limited in South Africa. British American Tobacco p.l.c. is incorporated in England and
Wales (No. 3407696) and domiciled in the UK.
British American Tobacco p.l.c.
Representative office in South Africa
Waterway House South
No 3 Dock Road, V&A Waterfront, Cape Town 8000
South Africa
PO Box 631, Cape Town 8000, South Africa
tel: +27 21 003 6712
ENQUIRIES
INVESTOR RELATIONS: PRESS OFFICE:
Mike Nightingale +44 (0)20 7845 1180 Press Office +44 (0)20 7845 2888
Victoria Buxton +44 (0)20 7845 2012
William Houston +44 (0)20 7845 1138
John Harney +44 (0)20 7845 1263
FORWARD-LOOKING STATEMENTS
This announcement contains certain forward-looking statements, including “forward-looking” statements made within the
meaning of Section 21E of the United States Securities Exchange Act of 1934. 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. These include statements 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. In particular, these forward
looking statements include statements regarding the BAT Group’s future financial performance, future regulatory developments,
planned product launches and the projected future financial and operating impacts of the COVID-19 pandemic.
All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors
that could cause actual future financial condition, performance and results to differ materially from the plans, goals, expectations
and results expressed in the forward-looking statements and other financial and/or statistical data within this announcement.
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 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 and the impact of an
unfavourable ruling by a tax authority in a disputed area; adverse litigation and dispute outcomes and the effect of such
outcomes on the Group’s financial condition; changes or differences in domestic or international economic or political conditions;
the impact of the COVID-19 pandemic; 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 and to fund the business under the current capital
structure; the inability to develop, commercialise and rollout New Categories; and changes in the market position, businesses,
financial condition, results of operations or prospects of the Group.
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. 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 the Group 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.
No statement in this communication is intended to be a profit forecast and no statement in this communication should be
interpreted to mean that earnings per share of BAT for the current or future financial years would necessarily match or exceed
the historical published earnings per share of BAT.
Additional information concerning these and other factors can be found in the Company’s filings with the U.S. Securities and
Exchange Commission (“SEC”), including the Annual Report on Form 20-F filed on 26 March 2020 and Current Reports on Form 6-
K, which may be obtained free of charge at the SEC’s website, http://www.sec.gov, and the Company’s Annual Reports, which
may be obtained free of charge from the British American Tobacco website www.bat.com.
Sponsor: UBS South Africa (Pty) Ltd
Date: 31-07-2020 08:00:00
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