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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Reynolds American (delisted) | NYSE:RAI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 65.40 | 0 | 01:00:00 |
|
|
AN EXCEPTIONALLY GOOD PERFORMANCE
|
KEY FINANCIALS
|
2016
|
2015
|
Change
|
||
Current
|
Constant
|
Current
|
Constant
|
||
rates
|
rates
|
rates
|
rates
|
||
Revenue
|
£14,751m
|
£14,008m
|
£13,104m
|
+12.6%
|
+6.9%
|
Adjusted profit from operations*
|
£5,480m
|
£5,197m
|
£4,992m
|
+9.8%
|
+4.1%
|
Profit from operations
|
£4,655m
|
£4,424m
|
£4,557m
|
+2.2%
|
-2.9%
|
Adjusted diluted earnings per share*
|
247.5p
|
230.0p
|
208.4p
|
+18.8%
|
+10.4%
|
Basic earnings per share
|
250.2p
|
230.9p
|
+8.4%
|
||
Dividends per share
|
169.4p
|
154.0p
|
+10.0%
|
||
*The non-GAAP measures, including adjusting items and constant currencies, are set out on page 19.
|
Richard Burrows, Chairman, commenting on the year ended 31 December 2016
|
CHIEF EXECUTIVE’S REVIEW
|
REGIONAL REVIEW
|
Adjusted profit from operations
|
Cigarette volume
|
||||||||||||||||||||
|
2016
|
2016
|
2015
|
2016
|
2015
|
||||||||||||||||
Current
|
Constant
|
As
|
|||||||||||||||||||
rates | Rates | reported | |||||||||||||||||||
₤m | ₤m | ₤m | Bns | Bns | |||||||||||||||||
Asia-Pacific
|
1,630
|
1,488
|
1,469
|
196
|
198
|
||||||||||||||||
Americas
|
1,172
|
1,202
|
1,169
|
113
|
124
|
||||||||||||||||
Western Europe
|
1,389
|
1,236
|
1,146
|
120
|
112
|
||||||||||||||||
EEMEA
|
1,289
|
1,271
|
1,208
|
236
|
229
|
||||||||||||||||
Total
|
5,480
|
5,197
|
4,992
|
665
|
663
|
||||||||||||||||
Total tobacco volume
|
689
|
689
|
·
|
Dunhill’s overall market share was flat. Volume fell by 3.3%, driven mainly by industry declines in Malaysia and Brazil, more than offsetting growth in South Korea, Romania and the continued growth in Indonesia;
|
·
|
Kent volume increased 1.0%, with market share up 10 bps, driven by Chile, Turkey and Japan;
|
·
|
Lucky Strike grew market share, higher by 10 bps, and volume, up 13.5%, with growth in Indonesia, Colombia Egypt, France, Germany and Croatia more than offsetting lower volume in Argentina and Russia;
|
·
|
Pall Mall market share grew 10 bps, with volume marginally higher than prior year as growth in Venezuela, Poland, Mexico and Romania more than offset reductions in Pakistan and the migration to Rothmans in Italy; and
|
·
|
Rothmans’ strong growth in volume (+36.9%) and market share (+70 bps) was driven by Russia, Ukraine, Italy, Nigeria, Turkey and South Korea.
|
Country
|
Performance at constant rates of exchange
|
Australia
|
Market share returned to growth, driven by Rothmans. Pricing in the second half of the year was offset by lower volume due to the market contraction and down-trading, leading to a reduction in profit.
|
Malaysia
|
Volume and profit were down as the tax-driven price increases led to a reduction in the total market and higher illicit trade. Market share fell despite good growth in Peter Stuyvesant as Dunhill was impacted by down-trading.
|
Japan
|
Market share of combustibles grew, driven by Kent. Lower volume and adverse foreign exchange movements affecting cost of sales led to a reduction in profit. glo
TM
, our Tobacco Heating Product, was launched in December 2016, with encouraging initial results.
|
New Zealand
|
Good pricing, an increase in market share and stable volume were more than offset by the adverse impact of foreign exchange on cost of sales, with profit marginally lower.
|
Bangladesh
|
Volume, market share and profit continued to increase strongly.
|
Pakistan
|
Profit increased significantly as a result of pricing and cost savings. Market share grew, driven by Pall Mall. Market contraction led to lower volume as illicit trade increased significantly following the excise-led price increases.
|
Vietnam
|
Higher profit was driven by an increase in volume, pricing and an enhanced mix. Market share was stable as State Express 555 continued to perform well in the premium segment.
|
South Korea
|
Profit was up, driven by higher volume, including in Dunhill, and productivity initiatives. Market share fell despite good growth in Rothmans.
|
Indonesia
|
Volume and market share grew, driven by Dunhill and Lucky Strike, with the enhanced mix and strong pricing leading to an improvement in financial performance.
|
Philippines
|
Market share was marginally higher, driven by Pall Mall. Pricing and productivity initiatives more than offset a decline in volume, leading to an improvement in financial performance.
|
Country
|
Performance at constant rates of exchange
|
Brazil
|
Lucky Strike grew market share, gaining segment leadership, with Dunhill growing within the premium segment. Total market share fell from an all-time high. Lower consumer disposable income, higher VAT and excise-led price increases drove market contraction and higher illicit trade, adversely impacting volume and profit.
|
Canada
|
Strong profit growth was driven by good pricing and cost reductions, which offset lower volume. Market share fell, despite growth in Pall Mall.
|
Chile
|
Pricing and an improvement in mix led to higher profit. Total volume fell but market share was up, driven by Kent following the successful migration from Belmont.
|
Venezuela
|
Pricing, to offset currency devaluation and inflation, led to higher profit. Pall Mall grew although, due to the reduction in consumer disposable income, total volume fell.
|
Mexico
|
Volume and market share were up, driven by the continued growth in Pall Mall. A delay in pricing led to stable profit.
|
Colombia
|
Higher volume, an improvement in market share and good pricing were more than offset by the adverse impact of foreign exchange on cost of sales, with profit down.
|
Argentina
|
Excise-led price increases drove a decrease in the total market and a decline in volume. Market share was marginally lower despite Rothmans growth following launch.
|
Country
|
Performance at constant rates of exchange
|
Germany
|
Profit grew strongly driven by pricing, with volume marginally lower. Market share was flat as a good performance by Lucky Strike was offset by declines in the local brands. Fine Cut volume and market share fell due to increased price competition. Vype
TM
was launched nationally, growing to over 7% category retail market share in 12 months.
|
Switzerland
|
Price discounting at retail led to down-trading in the market, lower volume, a fall in market share and a decline in profit.
|
France
|
Profit and volume were marginally higher. Market share was up, driven by the continued growth in Lucky Strike.
|
Romania
|
Profit grew very strongly, driven by good pricing and higher volume. Excellent market share growth was driven by Pall Mall and Dunhill, more than offsetting a decline in Kent.
|
Italy
|
Higher volume and pricing drove profit up. Growth in Rothmans market share was more than offset by declines in the rest of the local portfolio with total market share down. Vype
TM
distribution was expanded. Pebble
TM
was launched and the first flagship store was opened.
|
Country
|
Performance at constant rates of exchange
|
Russia
|
Profit was significantly higher, driven by good pricing and an increase in volume, more than offsetting the continuing adverse impact of foreign exchange on cost of sales. Market share continued to grow strongly, driven by another excellent performance by Rothmans, with Kent premium segment share increasing.
|
South Africa
|
Volume fell, driven by down-trading to the low-priced segment and higher illicit trade. Dunhill, Pall Mall and Benson & Hedges all grew market share although total market share fell. Profit was down due to lower volume and the adverse transactional impact of foreign exchange on cost of sales, partially offset by pricing.
|
GCC
|
Profit was flat as pricing and cost savings offset lower volume. Market share fell as Dunhill was impacted by down-trading following tax driven price increases.
|
Nigeria
|
Volume growth and pricing were offset by the adverse impact of foreign exchange on cost of sales, with profit in line with prior year.
|
Iran
|
Volume and profit were lower due to the retrospective application of an increase in excise.
|
Ukraine
|
Excellent volume and market share growth was driven by Rothmans. Geopolitical instability continued to impact the financial performance, with a significant deterioration in currency and intense price competition, leading to a decline in profit.
|
Turkey
|
Profit was up, driven by good pricing and higher volume. Market share grew as the excellent performance of Kent and Rothmans continued.
|
Algeria
|
Strong volume growth and pricing drove profit up.
|
Country
|
Performance at constant rates of exchange
|
Kazakhstan
|
Rothmans drove an increase in volume and market share. Profit improved as pricing and higher volume more than offset the effect of down-trading.
|
Egypt
|
An improvement in the financial performance was driven by higher volume, pricing and an enhanced mix.
|
REGIONAL INFORMATION
|
||||||||||||||||||||
Western
|
||||||||||||||||||||
For the year ended 31 December
|
Asia-Pacific
|
Americas
|
Europe
|
EEMEA
|
Total
|
|||||||||||||||
ASSOCIATES AND JOINT VENTURES
|
||||||||||||||||||||
Share of post-tax results of associates
and joint ventures (£m)
|
||||||||||||||||||||
2016 (at current)
|
342
|
1,880
|
3
|
2
|
2,227
|
|||||||||||||||
2015
|
302
|
933
|
-
|
1
|
1,236
|
|||||||||||||||
Change
|
+13.2
|
%
|
+102
|
%
|
n/a
|
+63.8
|
%
|
+80.3
|
%
|
|||||||||||
Share of adjusted post-tax results of associates
and joint ventures (£m)
|
||||||||||||||||||||
2016(at constant)
|
307
|
877
|
4
|
2
|
1,190
|
|||||||||||||||
2016 (at current)
|
331
|
991
|
3
|
2
|
1,327
|
|||||||||||||||
2015
|
286
|
656
|
-
|
1
|
943
|
|||||||||||||||
Change (at constant)
|
+7.4
|
%
|
+33.8
|
%
|
n/a
|
+62.5
|
%
|
+26.1
|
%
|
|||||||||||
Change (at current)
|
+15.8
|
%
|
+50.9
|
%
|
n/a
|
+63.8
|
%
|
+40.7
|
%
|
FINANCIAL INFORMATION AND OTHER
|
2016
|
2015
|
|||||||
|
£m
|
|
|
£m
|
|
|||
Finance costs
|
(681
|
)
|
(584
|
)
|
||||
Finance income
|
44
|
646
|
||||||
Net finance (costs)/income
|
(637
|
)
|
62
|
|||||
Less: adjusting items
|
108
|
(489
|
)
|
|||||
Make-whole provision re early redemption of bond, see below
|
101
|
-
|
||||||
Hedge ineffectiveness, see below
|
(18
|
)
|
-
|
|||||
Option cost and fees, see below
|
-
|
104
|
||||||
Deemed gain on investment in Reynolds American, see below
|
-
|
(601
|
)
|
|||||
Interest related to Franked Investment Income Group Litigation Order (FII GLO), see below
|
25
|
8
|
||||||
Net adjusted finance costs
|
(529
|
)
|
(427
|
)
|
||||
Comprising:
|
||||||||
Interest payable
|
(650
|
)
|
(582
|
)
|
||||
Interest and dividend income
|
68
|
79
|
||||||
Fair value changes - derivatives
|
458
|
245
|
||||||
Exchange differences
|
(405
|
)
|
(169
|
)
|
||||
Net adjusted finance costs
|
(529
|
)
|
(427
|
)
|
TAXATION
|
||||||||
2016
|
2015
|
|||||||
|
£m
|
|
|
£m |
|
|||
UK
|
||||||||
- current year tax
|
7
|
5
|
||||||
Overseas
|
||||||||
- current year tax expense
|
1,382
|
1,317
|
||||||
- adjustment in respect of prior periods
|
13
|
7
|
||||||
Current tax
|
1,402
|
1,329
|
||||||
Deferred tax
|
4
|
4
|
||||||
1,406
|
1,333
|
|||||||
Adjusting items (see below)
|
67
|
58
|
||||||
Adjusted tax charge
|
1,473
|
1,391
|
·
|
the financial statements, prepared in accordance with FRS 101 and IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the Group respectively; and
|
·
|
the Directors’ Report and the Strategic Report include a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties that they face.
|
Richard Burrows
|
Ben Stevens
|
Chairman
|
Finance Director
|
ENQUIRIES:
|
|||
INVESTOR RELATIONS:
|
PRESS OFFICE:
|
||
Mike Nightingale
|
020 7845 1180
|
Anna Vickerstaff
|
020 7845 2888
|
Rachael Brierley
|
020 7845 1519
|
||
Sabina Marshman
|
020 7845 1781
|
2016
|
2015
|
|||||||
|
£m
|
|
|
£m
|
|
|||
Gross turnover (including duty, excise and other taxes of £32,136 million (2015: £27,896 million))
|
46,887
|
41,000
|
||||||
Revenue
|
14,751
|
13,104
|
||||||
Raw materials and consumables used
|
(3,777
|
)
|
(3,217
|
)
|
||||
Changes in inventories of finished goods and work in progress
|
44
|
184
|
||||||
Employee benefit costs
|
(2,274
|
)
|
(2,039
|
)
|
||||
Depreciation, amortisation and impairment costs
|
(607
|
)
|
(428
|
)
|
||||
Other operating income
|
176
|
225
|
||||||
Other operating expenses
|
(3,658
|
)
|
(3,272
|
)
|
||||
Profit from operations
|
4,655
|
4,557
|
||||||
Analysed as:
|
||||||||
– adjusted profit from operations
|
5,480
|
4,992
|
||||||
– restructuring and integration costs
|
(603
|
)
|
(367
|
)
|
||||
– amortisation and impairment of trademarks and similar intangibles
|
(149
|
)
|
(65
|
)
|
||||
– Fox River
|
(20
|
)
|
-
|
|||||
– South Korea sales tax
|
(53
|
)
|
-
|
|||||
– Flintkote
|
-
|
(3
|
)
|
|||||
4,655
|
4,557
|
|||||||
Net finance (costs)/income
|
(637
|
)
|
62
|
|||||
Finance income
|
44
|
646
|
||||||
Finance costs
|
(681
|
)
|
(584
|
)
|
||||
Share of post-tax results of associates and joint ventures
|
2,227
|
1,236
|
||||||
Analysed as:
|
||||||||
– adjusted share of post-tax results of associates and joint ventures
|
1,327
|
943
|
||||||
– issue of shares and change in shareholding
|
11
|
22
|
||||||
– gain on disposal of assets
|
941
|
371
|
||||||
– other (see page 23)
|
(52
|
)
|
(100
|
)
|
||||
2,227
|
1,236
|
|||||||
Profit before taxation
|
6,245
|
5,855
|
||||||
Taxation on ordinary activities
|
(1,406
|
)
|
(1,333
|
)
|
||||
Profit for the year
|
4,839
|
4,522
|
||||||
Attributable to:
|
||||||||
Owners of the parent
|
4,648
|
4,290
|
||||||
Non-controlling interests
|
191
|
232
|
||||||
4,839
|
4,522
|
|||||||
Earnings per share
|
||||||||
Basic
|
250.2p
|
|
230.9p
|
|
||||
Diluted
|
249.2p
|
|
230.3p
|
|
||||
Adjusted diluted
|
247.5p
|
|
208.4p
|
|
2016
|
2015
|
|||||||
£m | £m | |||||||
Profit for the year (page 13)
|
4,839
|
4,522
|
||||||
Other comprehensive income
|
||||||||
Items that may be reclassified subsequently to profit or loss:
|
1,760
|
(849
|
)
|
|||||
Differences on exchange
|
||||||||
– subsidiaries
|
1,270
|
(1,006
|
)
|
|||||
– associates
|
1,425
|
336
|
||||||
Cash flow hedges
|
||||||||
– net fair value gains/(losses)
|
29
|
(99
|
)
|
|||||
– reclassified and reported in profit for the year
|
38
|
15
|
||||||
– reclassified and reported in net assets
|
(12
|
)
|
(45
|
)
|
||||
Available-for-sale investments
|
||||||||
– net fair value gains in respect of subsidiaries
|
-
|
14
|
||||||
– reclassified and reported in profit for the year
|
-
|
(10
|
)
|
|||||
– net fair value (losses)/gains in respect of associates net of tax
|
(10
|
)
|
1
|
|||||
Net investment hedges
|
||||||||
– net fair value losses
|
(837
|
)
|
(118
|
)
|
||||
– differences on exchange on borrowings
|
(124
|
)
|
42
|
|||||
Tax on items that may be reclassified
|
(19
|
)
|
21
|
|||||
Items that will not be reclassified subsequently to profit or loss:
|
(173
|
)
|
263
|
|||||
Retirement benefit schemes
|
||||||||
– net actuarial (losses)/gains in respect of subsidiaries
|
(228
|
)
|
283
|
|||||
– surplus recognition and minimum funding obligations in respect of subsidiaries
|
(1
|
)
|
-
|
|||||
– actuarial gains in respect of associates net of tax
|
20
|
3
|
||||||
Tax on items that will not be reclassified
|
36
|
(23
|
)
|
|||||
Total other comprehensive income for the year, net of tax
|
1,587
|
(586
|
)
|
|||||
Total comprehensive income for the year, net of tax
|
6,426
|
3,936
|
||||||
Attributable to:
|
||||||||
Owners of the parent
|
6,180
|
3,757
|
||||||
Non-controlling interests
|
246
|
179
|
||||||
6,426
|
3,936
|
2016
|
Attributable to owners of the parent
|
|||||||||||||||||||||||||||
Share
capital
£m
|
Share premium, capital redemption and merger reserves
£m
|
Other
reserves
£m
|
Retained earnings
£m
|
Total
attributable
to owners
of parent
£m
|
Non-controlling interests
£m
|
Total equity
£m
|
||||||||||||||||||||||
Balance at 1 January 2016
|
507
|
3,927
|
(1,294
|
)
|
1,754
|
4,894
|
138
|
5,032
|
||||||||||||||||||||
Total comprehensive income for the year (page 14)
|
-
|
-
|
1,707
|
4,473
|
6, 180
|
246
|
6,426
|
|||||||||||||||||||||
Profit for the year
|
-
|
-
|
-
|
4,648
|
4,648
|
191
|
4,839
|
|||||||||||||||||||||
Other comprehensive income for the year
|
-
|
-
|
1,707
|
(175
|
)
|
1,532
|
55
|
1,587
|
||||||||||||||||||||
Employee share options
|
||||||||||||||||||||||||||||
– value of employee services
|
-
|
-
|
-
|
71
|
71
|
-
|
71
|
|||||||||||||||||||||
– proceeds from shares issued
|
-
|
4
|
-
|
-
|
4
|
-
|
4
|
|||||||||||||||||||||
Dividends and other appropriations
|
||||||||||||||||||||||||||||
– ordinary shares
|
-
|
-
|
-
|
(2,910
|
)
|
(2,910
|
)
|
-
|
(2,910
|
)
|
||||||||||||||||||
– to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
(156
|
)
|
(156
|
)
|
|||||||||||||||||||
Purchase of own shares
|
||||||||||||||||||||||||||||
– held in employee share ownership
trusts
|
-
|
-
|
-
|
(64
|
)
|
(64
|
)
|
-
|
(64
|
)
|
||||||||||||||||||
Non-controlling interests – acquisitions
|
-
|
-
|
-
|
4
|
4
|
(4
|
)
|
-
|
||||||||||||||||||||
Other movements
|
-
|
-
|
-
|
3
|
3
|
-
|
3
|
|||||||||||||||||||||
Balance at 31 December 2016
|
507
|
3,931
|
413
|
3,331
|
8,182
|
224
|
8,406
|
|||||||||||||||||||||
2015
|
Attributable to owners of the parent
|
|||||||||||||||||||||||||||
Share
capital
£m
|
Share premium, capital redemption and merger reserves
£m
|
Other
reserves
£m
|
Retained earnings
£m
|
Total
attributable
to owners
of parent
£m
|
Non-controlling interests
£m
|
Total equity
£m
|
||||||||||||||||||||||
Balance at 1 January 2015
|
507
|
3,923
|
(498
|
)
|
1,578
|
5,510
|
304
|
5,814
|
||||||||||||||||||||
Total comprehensive income for the year (page 14)
|
-
|
-
|
(796
|
)
|
4,553
|
3,757
|
179
|
3,936
|
||||||||||||||||||||
Profit for the year
|
-
|
-
|
-
|
4,290
|
4,290
|
232
|
4,522
|
|||||||||||||||||||||
Other comprehensive income for the year
|
-
|
-
|
(796
|
)
|
263
|
(533
|
)
|
(53
|
)
|
(586
|
)
|
|||||||||||||||||
Employee share options
|
||||||||||||||||||||||||||||
– value of employee services
|
-
|
-
|
-
|
50
|
50
|
-
|
50
|
|||||||||||||||||||||
– proceeds from shares issued
|
-
|
4
|
-
|
-
|
4
|
-
|
4
|
|||||||||||||||||||||
Dividends and other appropriations
|
||||||||||||||||||||||||||||
– ordinary shares
|
-
|
-
|
-
|
(2,770
|
)
|
(2,770
|
)
|
-
|
(2,770
|
)
|
||||||||||||||||||
– to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
(238
|
)
|
(238
|
)
|
|||||||||||||||||||
Purchase of own shares
|
||||||||||||||||||||||||||||
– held in employee share ownership
trusts
|
-
|
-
|
-
|
(46
|
)
|
(46
|
)
|
-
|
(46
|
)
|
||||||||||||||||||
Non-controlling interests – acquisitions
|
-
|
-
|
-
|
(1,642
|
)
|
(1,642
|
)
|
(107
|
)
|
(1,749
|
)
|
|||||||||||||||||
Other movements
|
-
|
-
|
-
|
31
|
31
|
-
|
31
|
|||||||||||||||||||||
Balance at 31 December 2015
|
507
|
3,927
|
(1,294
|
)
|
1,754
|
4,894
|
138
|
5,032
|
2016
£m
|
2015
£m
|
|||||||
Assets
|
||||||||
Non-current assets
|
||||||||
Intangible assets
|
12,117
|
10,436
|
||||||
Property, plant and equipment
|
3,661
|
3,021
|
||||||
Investments in associates and joint ventures
|
9,507
|
6,938
|
||||||
Retirement benefit assets
|
455
|
408
|
||||||
Deferred tax assets
|
436
|
326
|
||||||
Trade and other receivables
|
599
|
248
|
||||||
Available-for-sale investments
|
43
|
37
|
||||||
Derivative financial instruments
|
596
|
287
|
||||||
Total non-current assets
|
27,414
|
21,701
|
||||||
Current assets
|
||||||||
Inventories
|
5,793
|
4,247
|
||||||
Income tax receivable
|
69
|
74
|
||||||
Trade and other receivables
|
3,884
|
3,266
|
||||||
Available-for-sale investments
|
15
|
35
|
||||||
Derivative financial instruments
|
375
|
209
|
||||||
Cash and cash equivalents
|
2,204
|
1,963
|
||||||
12,340
|
9,794
|
|||||||
Assets classified as held-for-sale
|
19
|
20
|
||||||
Total current assets
|
12,359
|
9,814
|
||||||
Total assets
|
39,773
|
31,515
|
2016
£m
|
2015
£m
|
|||||||
Equity
|
||||||||
Capital and reserves
|
||||||||
Share capital
|
507
|
507
|
||||||
Share premium, capital redemption and merger reserves
|
3,931
|
3,927
|
||||||
Other reserves
|
413
|
(1,294
|
)
|
|||||
Retained earnings
|
3,331
|
1,754
|
||||||
Owners of the parent
|
8,182
|
4,894
|
||||||
after deducting
|
||||||||
– cost of treasury shares
|
(5,053
|
)
|
(5,049
|
)
|
||||
Non-controlling interests
|
224
|
138
|
||||||
Total equity
|
8,406
|
5,032
|
||||||
Liabilities
|
||||||||
Non-current liabilities
|
||||||||
Borrowings
|
16,488
|
14,806
|
||||||
Retirement benefit liabilities
|
826
|
653
|
||||||
Deferred tax liabilities
|
652
|
563
|
||||||
Other provisions for liabilities and charges
|
386
|
296
|
||||||
Trade and other payables
|
1,040
|
1,029
|
||||||
Derivative financial instruments
|
119
|
130
|
||||||
Total non-current liabilities
|
19,511
|
17,477
|
||||||
Current liabilities
|
||||||||
Borrowings
|
3,007
|
2,195
|
||||||
Income tax payable
|
558
|
414
|
||||||
Other provisions for liabilities and charges
|
407
|
273
|
||||||
Trade and other payables
|
7,335
|
5,937
|
||||||
Derivative financial instruments
|
549
|
187
|
||||||
Total current liabilities
|
11,856
|
9,006
|
||||||
Total equity and liabilities
|
39,773
|
31,515
|
2016
£m
|
2015
£m
|
|||||||
Cash flows from operating activities
|
||||||||
Cash generated from operations (page 26)
|
4,893
|
5,400
|
||||||
Dividends received from associates
|
962
|
593
|
||||||
Tax paid
|
(1,245
|
)
|
(1,273
|
)
|
||||
Net cash generated from operating activities
|
4,610
|
4,720
|
||||||
Cash flows from investing activities
|
||||||||
Interest received
|
62
|
64
|
||||||
Purchases of property, plant and equipment
|
(586
|
)
|
(483
|
)
|
||||
Proceeds on disposal of property, plant and equipment
|
93
|
108
|
||||||
Purchases of intangibles
|
(88
|
)
|
(118
|
)
|
||||
Purchases of investments
|
(109
|
)
|
(99
|
)
|
||||
Proceeds on disposals of investments
|
22
|
45
|
||||||
Investment in associates and acquisitions of subsidiaries
|
(57
|
)
|
(3,508
|
)
|
||||
Proceeds from associate's share buy-back
|
23
|
-
|
||||||
Net cash used in investing activities
|
(640
|
)
|
(3,991
|
)
|
||||
Cash flows from financing activities
|
||||||||
Interest paid
|
(641
|
)
|
(596
|
)
|
||||
Proceeds from increases in and new borrowings
|
3,476
|
6,931
|
||||||
(Outflow)/inflow relating to derivative financial instruments
|
(26
|
)
|
201
|
|||||
Purchases of own shares held in employee share ownership trusts
|
(64
|
)
|
(46
|
)
|
||||
Reductions in and repayments of borrowings
|
(3,840
|
)
|
(2,028
|
)
|
||||
Dividends paid to owners of the parent
|
(2,910
|
)
|
(2,770
|
)
|
||||
Purchases of non-controlling interests
|
(70
|
)
|
(1,677
|
)
|
||||
Dividends paid to non-controlling interests
|
(147
|
)
|
(235
|
)
|
||||
Other
|
(7
|
)
|
1
|
|||||
Net cash used in financing activities
|
(4,229
|
)
|
(219
|
)
|
||||
Net cash flows (used in)/generated from operating, investing and financing activities
|
(259
|
)
|
510
|
|||||
Differences on exchange
|
180
|
(272
|
)
|
|||||
(Decrease)/Increase in net cash and cash equivalents in the year
|
(79
|
)
|
238
|
|||||
Net cash and cash equivalents at 1 January
|
1,730
|
1,492
|
||||||
Net cash and cash equivalents at 31 December
|
1,651
|
1,730
|
2016
|
2015
|
|||||||||||||||||||||||||||||||||||||||
Reported
|
Adj
Items
|
Adjusted
|
Exchange
|
Adjusted
at CC
1
|
Impact
of Acqs
|
Adj Organic
2
at CC
1
|
Reported
|
Adj
Items
|
Adjusted
|
|||||||||||||||||||||||||||||||
|
£m
|
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|
£m |
|
|||||||||||
Revenue
|
||||||||||||||||||||||||||||||||||||||||
Asia-Pacific
|
4,266
|
-
|
4,266
|
(496
|
)
|
3,770
|
-
|
3,770
|
3,773
|
-
|
3,773
|
|||||||||||||||||||||||||||||
Americas
|
2,868
|
-
|
2,868
|
146
|
3,014
|
-
|
3,014
|
2,720
|
-
|
2,720
|
||||||||||||||||||||||||||||||
Western Europe
|
3,867
|
-
|
3,867
|
(396
|
)
|
3,471
|
(154
|
)
|
3,317
|
3,203
|
-
|
3,203
|
||||||||||||||||||||||||||||
EEMEA
|
3,750
|
-
|
3,750
|
3
|
3,753
|
(53
|
)
|
3,700
|
3,408
|
-
|
3,408
|
|||||||||||||||||||||||||||||
Total Region
|
14,751
|
-
|
14,751
|
(743
|
)
|
14,008
|
(207
|
)
|
13,801
|
13,104
|
-
|
13,104
|
||||||||||||||||||||||||||||
Profit from Operations
|
||||||||||||||||||||||||||||||||||||||||
Asia-Pacific
|
1,432
|
198
|
1,630
|
(142
|
)
|
1,488
|
-
|
1,488
|
1,361
|
108
|
1,469
|
|||||||||||||||||||||||||||||
Americas
|
1,017
|
155
|
1,172
|
30
|
1,202
|
-
|
1,202
|
1,082
|
87
|
1,169
|
||||||||||||||||||||||||||||||
Western Europe
|
1,044
|
345
|
1,389
|
(153
|
)
|
1,236
|
(11
|
)
|
1,225
|
990
|
156
|
1,146
|
||||||||||||||||||||||||||||
EEMEA
|
1,182
|
107
|
1,289
|
(18
|
)
|
1,271
|
(12
|
)
|
1,259
|
1,127
|
81
|
1,208
|
||||||||||||||||||||||||||||
Total Region
|
4,675
|
805
|
5,480
|
(283
|
)
|
5,197
|
(23
|
)
|
5,174
|
4,560
|
432
|
4,992
|
||||||||||||||||||||||||||||
Fox River / Flintkote
3
|
(20
|
)
|
20
|
-
|
-
|
-
|
(3
|
)
|
3
|
-
|
||||||||||||||||||||||||||||||
Profit from operations
|
4,655
|
825
|
5,480
|
(283
|
)
|
5,197
|
4,557
|
435
|
4,992
|
|||||||||||||||||||||||||||||||
Net finance (costs)/income
|
(637
|
)
|
108
|
(529
|
)
|
35
|
(494
|
)
|
62
|
(489
|
)
|
(427
|
)
|
|||||||||||||||||||||||||||
Associates and joint ventures
|
2,227
|
(900
|
)
|
1,327
|
(137
|
)
|
1,190
|
1,236
|
(293
|
)
|
943
|
|||||||||||||||||||||||||||||
Profit before tax
|
6,245
|
33
|
6,278
|
(385
|
)
|
5,893
|
5,855
|
(347
|
)
|
5,508
|
||||||||||||||||||||||||||||||
Taxation
|
(1,406
|
)
|
(67
|
)
|
(1,473
|
)
|
47
|
(1,426
|
)
|
(1,333
|
)
|
(58
|
)
|
(1,391
|
)
|
|||||||||||||||||||||||||
Non-controlling interest
|
(191
|
)
|
1
|
(190
|
)
|
12
|
(178
|
)
|
(232
|
)
|
(3
|
)
|
(235
|
)
|
||||||||||||||||||||||||||
Profit attributable to shareholders
|
4,648
|
(33
|
)
|
4,615
|
(326
|
)
|
4,289
|
4,290
|
(408
|
)
|
3,882
|
|||||||||||||||||||||||||||||
Diluted number of shares (m)
|
1,865
|
1,865
|
1,865
|
1,863
|
1,863
|
|||||||||||||||||||||||||||||||||||
Diluted earnings per share (pence)
|
249.2
|
247.5
|
230.0
|
230.3
|
208.4
|
|||||||||||||||||||||||||||||||||||
(1)
|
CC: profit translated at constant rates of exchange. No adjustment is made for the transactional impact of currency movements on cost of sales, as described on page 19
|
|
(2)
|
Organic performance excludes the contribution from TDR, Sudan, Chic and Ten Motives
|
|
(3)
|
The Fox River and Flintkote charges have not been allocated to any segment as they neither relate to current operations nor to the tobacco business. They are not included in the segmental performance as reported to the chief operating decision maker.
|
2016
|
2015
|
|||||||
|
£m |
|
|
£m
|
|
|||
Employee benefit costs
|
240
|
159
|
||||||
Depreciation, amortisation and impairment costs
|
64
|
26
|
||||||
Other operating expenses
|
325
|
228
|
||||||
Other operating income
|
(26
|
)
|
(46
|
)
|
||||
Total
|
603
|
367
|
2016
|
2015
|
|||||||
|
£m
|
|
|
£m
|
|
|||
Net debt due within one year:
|
||||||||
Borrowings
|
3,007
|
2,195
|
||||||
Related derivatives
|
(498
|
)
|
(46
|
)
|
||||
Cash and cash equivalents
|
(2,204
|
)
|
(1,963
|
)
|
||||
Current available-for-sale investments
|
(15
|
)
|
(35
|
)
|
||||
290
|
151
|
|||||||
Net debt due beyond one year:
|
||||||||
Borrowings
|
16,488
|
14,806
|
||||||
Related derivatives
|
(11
|
)
|
(163
|
)
|
||||
16,477
|
14,643
|
|||||||
Total net debt
|
16,767
|
14,794
|
2016
|
2015
|
|||||||
|
£m
|
|
|
£m
|
|
|||
Profit from operations
|
4,655
|
4,557
|
||||||
Adjustments for:
|
||||||||
Depreciation, amortisation and impairment costs
|
607
|
428
|
||||||
Increase in inventories
|
(638
|
)
|
(520
|
)
|
||||
Decrease/(increase) in trade and other receivables
|
87
|
(508
|
)
|
|||||
Increase in amounts receivable in respect of the Quebec Class Action
|
(242
|
)
|
(55
|
)
|
||||
Increase in trade and other payables
|
428
|
732
|
||||||
FII GLO receipts (see page 34)
|
–
|
963
|
||||||
Decrease in net retirement benefit liabilities
|
(145
|
)
|
(191
|
)
|
||||
Increase in provisions for liabilities and charges
|
141
|
48
|
||||||
Other non-cash items
|
–
|
(54
|
)
|
|||||
Cash generated from operations
|
4,893
|
5,400
|
2016
|
2015
|
|||||||
|
£m
|
|
|
£m
|
|
|||
Cash and cash equivalents per balance sheet
|
2,204
|
1,963
|
||||||
Overdrafts and accrued interest
|
(553
|
)
|
(233
|
)
|
||||
Net cash and cash equivalents
|
1,651
|
1,730
|
2016
|
2015
|
|||||||
Pence
|
pence
|
|||||||
Earnings per share
|
||||||||
- basic
|
250.2
|
230.9
|
||||||
- diluted
|
249.2
|
230.3
|
||||||
Adjusted earnings per share
|
||||||||
- basic
|
248.4
|
208.9
|
||||||
- diluted
|
247.5
|
208.4
|
||||||
Headline earnings per share
|
||||||||
- basic
|
205.6
|
210.4
|
||||||
- diluted
|
204.8
|
209.8
|
2016
|
2015
|
|||||||
pence
|
pence
|
|||||||
Unadjusted diluted earnings per share
|
249.2
|
230.3
|
||||||
Effect of restructuring and integration costs
|
27.5
|
15.7
|
||||||
Effect of amortisation of trademarks and similar intangibles
|
6.3
|
3.0
|
||||||
Effect of South Korea sales tax challenge
|
2.6
|
-
|
||||||
Effect of Fox River
|
1.1
|
-
|
||||||
Effect of Flintkote
|
-
|
0.2
|
||||||
Effect of associates’ adjusting items
|
(48.3
|
)
|
(15.7
|
)
|
||||
Effect of adjusting items in net finance costs
|
5.8
|
(26.3
|
)
|
|||||
Effect of adjusting items in respect of deferred taxation
|
3.3
|
1.2
|
||||||
Adjusted diluted earnings per share
|
247.5
|
208.4
|
||||||
Effect of exchange rate movements
|
(17.5
|
)
|
-
|
|||||
Adjusted diluted earnings per share (at constant rates)
|
230.0
|
208.4
|
2016
|
2015
|
|||||||
pence
|
pence
|
|||||||
Unadjusted diluted earnings per share
|
249.2
|
230.3
|
||||||
Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets
|
4.9
|
1.1
|
||||||
Effect of gains on disposal of property, plant and equipment and held-for-sale assets
|
(1.6
|
)
|
(2.2
|
)
|
||||
Effect of associates’ gain on disposal of asset held-for-sale
|
(47.1
|
)
|
(18.7
|
)
|
||||
Effect of issue of shares and change in shareholding in associate
|
(0.6
|
)
|
(1.2
|
)
|
||||
Other
|
–
|
0.5
|
||||||
Diluted headline earnings per share
|
204.8
|
209.8
|
2016
|
2015
|
|||||||||||||||
Earnings
|
Shares
|
Earnings
|
Shares
|
|||||||||||||
|
£m
|
|
m |
|
|
£m |
|
m
|
|
|||||||
For earnings per share
|
||||||||||||||||
- basic
|
4,648
|
1,858
|
4,290
|
1,858
|
||||||||||||
- diluted
|
4,648
|
1,865
|
4,290
|
1,863
|
||||||||||||
For adjusted earnings per share
|
||||||||||||||||
- basic
|
4,615
|
1,858
|
3,882
|
1,858
|
||||||||||||
- diluted
|
4,615
|
1,865
|
3,882
|
1,863
|
||||||||||||
- diluted, at constant rates
|
4,289
|
1,865
|
||||||||||||||
For headline earnings per share
|
||||||||||||||||
- basic
|
3,819
|
1,858
|
3,909
|
1,858
|
||||||||||||
- diluted
|
3,819
|
1,865
|
3,909
|
1,863
|
2016
|
2015
|
|||||||||||||||
Pence per
Share
|
|
£
m
|
|
Pence per
share
|
|
£m
|
|
|||||||||
Ordinary shares
|
||||||||||||||||
Interim
|
||||||||||||||||
- 2016 paid 28 September 2016
|
51.3
|
961
|
||||||||||||||
- 2015 paid 30 September 2015
|
49.4
|
908
|
||||||||||||||
Final
|
||||||||||||||||
- 2016 payable 4 May 2017
|
118.1
|
2,194
|
||||||||||||||
- 2015 paid 5 May 2016
|
104.6
|
1,949
|
||||||||||||||
169.4
|
3,155
|
154.0
|
2,857
|
Event
|
Date 2017
|
|
Last Day to Trade (LDT) cum dividend (JSE)
|
Tuesday 14 March
|
|
Shares commence trading ex-dividend (JSE)
|
Wednesday 15 March
|
|
Shares commence trading ex-dividend (LSE)
|
Thursday 16 March
|
|
Record date (JSE and LSE)
|
Friday 17 March
|
|
Payment date
|
Thursday 4 May
|
|
No removal requests permitted between the UK main register and the South Africa branch register
|
Thursday 23 February to Friday 17 March (inclusive)
|
|
No transfers permitted between the UK main register and the South Africa branch register
|
Wednesday 15 March to Friday 17 March (inclusive)
|
|
No shares may be dematerialised or rematerialised
|
Wednesday 15 March to Friday 17 March (inclusive)
|
Average
|
Closing
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Australian dollar
|
1.824
|
2.036
|
1.707
|
2.026
|
||||||||||||
Brazilian real
|
4.740
|
5.101
|
4.022
|
5.831
|
||||||||||||
Canadian dollar
|
1.795
|
1.954
|
1.657
|
2.047
|
||||||||||||
Euro
|
1.224
|
1.378
|
1.172
|
1.357
|
||||||||||||
Indian rupee
|
91.022
|
98.070
|
83.864
|
97.508
|
||||||||||||
Japanese yen
|
147.466
|
185.012
|
144.120
|
177.303
|
||||||||||||
Russian rouble
|
91.026
|
93.591
|
75.429
|
107.646
|
||||||||||||
South African rand
|
19.962
|
19.522
|
16.898
|
22.839
|
||||||||||||
US dollar
|
1.355
|
1.528
|
1.236
|
1.474
|
Equivalent to one cigarette
|
|||
Roll-your-own (RYO)
|
0.8 grams
|
||
Make-your-own (MYO)
|
|||
-
|
Expanded tobacco
|
0.5 grams
|
|
-
|
Optimised tobacco
|
0.7 grams
|
|
Cigars
|
1 cigar
|
||
Snus
|
|||
-
|
Pouches
|
1 pouch
|
|
-
|
Loose snus
|
2.0 grams
|
Wednesday 26 April
|
Annual General Meeting at 11.30am
|
Milton Court Concert Hall, Silk Street, London EC2Y 9BH
|
|
Thursday 27 July
|
Half-Year Report
|
2017
|
|
Thursday 23 February
|
Dividend announced: amount of dividend per share in both sterling and rand; applicable exchange rate and conversion date – Tuesday 21 February 2017; plus additional applicable information as required in respect of South Africa Dividends Tax
(1)
.
|
Thursday 23 February to
Friday 17 March
|
From the commencement of trading on Thursday 23 February 2017 to Friday 17 March 2017 (inclusive), no removal requests in either direction between the UK main register and the South Africa branch register will be permitted.
|
Tuesday 14 March
|
Last Day to Trade or LDT (JSE)
|
Wednesday 15 March to Friday 17 March
|
From the commencement of trading on Wednesday 15 March 2017 to Friday 17 March 2017 (inclusive), no transfers between the UK main register and the South Africa branch register will be permitted; no shares may be dematerialised or rematerialised.
|
Wednesday 15 March
|
Ex-dividend date (JSE)
|
Thursday 16 March
|
Ex-dividend date (LSE)
|
Friday 17 March
|
Record date (LSE and JSE)
|
Monday 10 April
|
Last date for receipt of Dividend Reinvestment Plan (DRIP) elections (UK main register only)
|
Thursday 4 May
|
Payment date (sterling and rand)
|
(1)
|
Details of the applicable exchange rate and the South Africa Dividends Tax information can be found under the heading ‘Dividends’ on page 30.
|
Q: |
Let's start with the results. How would you assess the performance of the business over the year?
|
A: |
2016 was a great year for BAT, as you can see from the numbers. We have delivered very good revenue growth of 7%, mainly driven by the corporate share gains that we had in the market. We had slight growth in volume and market share growth of 50 basis points, and also a very good price mix for the year of around 6.5%. So a very good year indeed.
|
Q: |
Are there any markets that you are particularly excited about, or indeed, concerned about?
|
A: |
In general, we had a great performance in all the four regions in BAT and that's why we had such a fantastic underlying performance. But if you go region by region, if you take Asia, for example, we had Japan, another year of share growth, an outstanding result in the Japanese business. Kent has performed extremely well there. South Asia, for example, Pakistan – share growth, profit growth, outstanding numbers. And I think in general Asia had a good performance. We had the downside of Malaysia this year because we had a huge excise increase at the end of 2015 and you had huge declines in volumes last year because illicit trade went up. But, in general, the region performed extremely well.
|
Q: |
You mentioned the performance of the Global Drive Brands. How confident are you that you can maintain growth here and continue to take market share?
|
A: |
Well, that's a question that we are asked all the time because the Global Drive Brands (GDB) have performed very well for a number of years. If you take, for example, 2010 to 2015, GDBs were growing around 6% per year. That’s in an industry that was declining around 2%, 3%, so a great performance and we did it again in 2016. GDBs were growing 7.5%, 100 basis points in a very difficult environment. The industry was down 3%, even though the GDBs had this kind of performance.
|
Q: |
Last month you announced that you had reached agreement to acquire the remainder of Reynolds American that you don't already own. Can you explain the rationale for going back into the United States, a market you effectively exited some 12 years ago?
|
A: |
Well, in reality, just to clarify, we never left the United States. We had 42% in Reynolds, so we always had a big share of that organisation and we followed Reynolds very closely. That was important for our results as an associate. So we never left the United States. But we thought that it was the right moment, from a strategic point of view and a financial point of view, to go back and make a bid for the remaining 58% that should go for approval for shareholders in the third quarter of this year.
|
Q: |
Can you give us an update on your Next Generation Products? In particular, you recently launched glo in Japan, how is that going?
|
A: |
It is doing extremely well, above our expectation, to be very honest. We launched this in December (12
th
month), so 10 weeks ago. In 10 weeks in Sendai, Japan, in the biggest convenience store there, we have 5.4% market share. It is above what we were expecting, so extremely successful. In the second biggest convenience store, we are there for six weeks and we have 4.9% market share. Those two convenience stores, they are 40% of the volume of Sendai, so it is an outstanding start.
|
Q: |
Looking ahead, what's your outlook for the Next Generation Products category in general?
|
A: |
We entered the category because we think that there is a lot of potential there, so it is going to grow. It's going to grow from a very low base. You take vaping, for example, the CPTO consumer price turnover of 2016 is 60% higher than 2015. It’s a lower base, but it shows the potential and the growth. So nowadays, outside the United States, this is around $4 billion CPTO. It's very small for the whole tobacco business, but it's growing very fast. So I think that this is going to be an important category in the coming years, and I think that we are very well positioned with our portfolio in vaping and in tobacco hitting products to be successful there.
|
Q: |
How do you see the outlook for 2017?
|
A: |
It's going to be challenging because the currency trading conditions are challenging, but we are going into 2017 with good momentum. We are growing market share across the world. We are coming from a position of strength. It is always better to face the new year in a position of strength. We have a very good pipeline in the combustible business, some innovations that are coming to the market. In NGP (Next Generation Products), we have been very successful with our test market in Sendai, with glo. Vaping is growing. So I think that you are going to have another good year in 2017. But it is going to be skewed to the second half of the year because we are investing and launching some of these brands, some of these innovations in the first half. So it's going to be skewed to the second half. But I think that we have the products and the pipeline to drive another year of good earnings growth to meet our strategic metrics.
|
Q:
|
What for you are the key financial highlights of these results?
|
A:
|
I think these are an excellent set of results. Our net turnover organically is up by over 5% and our operating profit is up over 10%, if you strip out the adverse effect of transactional foreign exchange. Our operating margin is up 160 basis points on an underlying basis. Our earnings per share is up 19% and as a result of that we can reward our shareholders with a 10% growth in the dividend. Our operating cash flow conversion is up to 93% - 2 percentage points higher than it was last year. So altogether I think these are an outstanding set of results.
|
Q:
|
You mentioned the foreign exchange markets, how much of an impact has the volatility in those markets had over the last year?
|
A:
|
Well certainly Brexit had a major effect on sterling. So we were looking at an FX headwind for the first half of the year. This turned into a tailwind for the second half of the year. So overall, during the year we've got a 6% translational FX tailwind.
|
But of course on transactional FX it's more currencies against the dollar that count and we had a 6% headwind on transactional FX for the first half of the year and it was the same in the second half of the year so it came out at 6% headwind for the full year.
|
|
Margins
|
|
Q:
|
How much of an impact is transactional FX having on margins, and what do you see is the outlook here for 2017?
|
A:
|
Our underlying operating margin grew by 160 basis points which is a very, very good result. But of course we had to face the effect of transactional FX and that pulled operating margin down by 210 basis points. So the overall effect on operating margin, if you account for the transactional effects and the effect of our acquisition activity, there was a reported drop of 90 basis points. But underlying the growth was 160 basis points.
|
It's very early to talk about currency effects for the year 2017, but it looks at the moment as though, if currencies stay where they are, we'll be facing a transactional FX hit of around 2%.
|
Reynolds acquisition
|
|
Q:
|
Can you outline the financial rationale and benefits of the Reynolds American deal?
|
A:
|
Yes, I think the Reynolds American deal, if it’s voted for by shareholders will prove to be an excellent deal for BAT. It covers its cost of capital in year five, it gives us mid-single digit earnings growth by year three. So financially it's a very strong deal. But it also gives us control of the Reynolds cashflow which we can put to use in terms of further growing and developing the BAT business.
|
So, all in all, I think this will be a very, very strong acquisition for BAT.
|
|
Q:
|
With the Reynolds acquisition you will be taking on considerable debt. How will this be financed and how do you view the de-leveraging process that follows?
|
A:
|
We're taking on a combination of bridging loans and debt. There will be £20 billion of bridging loans that we will re-finance in the debt capital markets over a period of time. We've got flexibility to do that when we think it's most appropriate. That means our net debt to EBITDA will be approaching four by the end of this year, but it comes down pretty quickly with the cash that we generate so we think we can take about half a turn off that each and every year.
|
Outlook
|
|
Q:
|
You're increasing your dividend by 10% which means that your pay-out ratio will drop from 74% to 68%. What are your plans regarding future dividend policy and growth?
|
A:
|
Our constant currency earnings growth is over 10% this year, so I think it's appropriate we reward our shareholders with a significant growth in the dividend, 10% growth in the dividend. That does have the effect of reducing our pay-out ratio back towards our long-term ratio of 65%. And we intend, even post the Reynolds deal, if it goes ahead, to maintain that 65% pay-out ratio.
|
Q:
|
How do you see the outlook for 2017 overall?
|
A:
|
I think the business will continue to perform very, very well. Performance I think in 2017 will be weighted towards the second half, much as it was in 2016. So it’s a little bit early to be talking about currency yet, but if exchange rates stay where they are today it looks as though we will face something like a 2% hit on transactional FX but have a tailwind of around 9% on translational FX. And while trading conditions remain pretty tough out there, I'm still confident that we'll deliver another good year of earnings growth.
|
1. |
Nicandro Durante & Ben Stevens discuss our 2016 preliminary results – join the presentation webcast view-w.tv/453-454/19696/...
|
1 Year Reynolds Chart |
1 Month Reynolds Chart |
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