Overview
Focus on driving quality total tobacco growth
o key strategic brand net revenue up 5 per cent, volumes up 1 per cent
o fine cut tobacco net revenue up 10 per cent, volumes up 9 per cent
Good results in the UK, Germany, Asia-Pacific and Africa and the Middle East
Interim dividend up 11 per cent
Overall performance impacted by EU weakness, dynamics in Russia, USA transition and higher investment
Portfolio and cost optimisation initiatives to strengthen second half performance
Expect to grow full year earnings per share at lower end of earnings model
Alison Cooper, Chief Executive said
"Our focus on quality growth has delivered further volume and revenue gains from our key strategic brands and fine cut tobaccos and good results in a number of markets across our footprint.
"The resilience we're showing in a deteriorating EU environment demonstrates the strength and versatility of our unique total tobacco portfolio. Further afield, excise-driven market dynamics in Russia and our transition to a new pricing strategy in the USA slowed our revenue and profit momentum in non-EU territories, masking the good growth we're generating in Asia-Pacific and Africa and the Middle East.
"In January we said these headwinds would affect our first half results and in line with our strategy we've been implementing portfolio and cost initiatives to strengthen delivery in the second half and into 2014. Leveraging our total tobacco brands and optimising costs will drive this stronger performance, supported by effective cash management, enabling us to continue to create sustainable value for our shareholders."
