Delivering against our strategy
• Market share gains in most of our priority markets
• Strong results from Growth Brands, outperforming the market
• Constant currency results impacted by increased investment and a tough trading environment
• Second half improvement in volumes, net revenue and profitability
• Programme of new next generation products and market launches planned including heated tobacco trials
• Decisive action taken on costs to fund investment and mitigate a tough trading environment
• Capital discipline delivering 91% cash conversion and supporting 10% dividend growth
Headline Financials
|
Overview – Adjusted Basis |
Full Year Result |
Change |
||||
|
|
2017 |
2016 |
Actual |
Constant Currency1 |
||
|
Total tobacco volume |
bn SE |
265.2 |
276.5 |
-4.1% |
|
|
|
Growth Brand volume |
bn SE |
159.6 |
151.3 |
+5.5% |
|
|
|
Tobacco net revenue |
£m |
7,757 |
7,167 |
+8.2% |
-2.6% |
|
|
Tobacco adjusted operating profit |
£m |
3,595 |
3,360 |
+7.0% |
-2.4% |
|
|
Logistics adjusted operating profit |
£m |
181 |
176 |
+2.8% |
-8.0% |
|
|
Total adjusted operating profit |
£m |
3,761 |
3,541 |
+6.2% |
-3.2% |
|
|
Adjusted earnings per share |
pence |
267.0 |
249.6 |
+7.0% |
-2.2% |
|
|
Dividend per share |
pence |
170.7 |
155.2 |
+10.0% |
|
|
|
Adjusted net debt |
£m |
(12,147) |
(12,882) |
|
|
|
|
Overview – Reported Basis |
Full Year Result |
Change |
||||
|
|
2017 |
2016 |
Actual |
|
||
|
Revenue |
£m |
30,247 |
27,634 |
+9.5% |
|
|
|
Operating profit |
£m |
2,278 |
2,229 |
+2.2% |
|
|
|
Basic earnings per share |
pence |
147.6 |
66.1 |
+123.1% |
||
Alison Cooper, Chief Executive, commented
“This was an important year of progress. Building on the work we have done to strengthen the brand portfolio, we significantly increased investment behind our key brand equities and have delivered share gains in most of our priority markets. Our results benefited from the overall share momentum which supported improved second half net revenue despite a particularly tough industry backdrop. As anticipated, whilst the increased investment impacted current year revenue and profit it is strengthening the business to support improved top-line growth going forward from both tobacco and next generation products. Our Growth Brands performed well, reinforcing our focus on quality growth, which we will be building on in FY18. We will also be stepping up our activities in next generation products, with new e-vapour launches in new and existing markets and consumer trials of heated tobacco products. We have continued to take decisive cost action to mitigate a tough trading environment and to protect our investments. Cash conversion remains strong and this is our ninth consecutive year of 10% dividend growth. We are well placed to continue to enhance shareholder value by building on the momentum in our tobacco business and realising opportunities in next generation products.”