Uk American Tobacco – Chairman’s AGM Statement – 2020 perspective
June 23, 2020
Chairman’s AGM Statement – 2020 outlook
30 April 2020
Our main focus continues to be the health insurance and wellbeing of our workers. To ensure safety that is best also to minimise the possibility of virus transmission, we now have implemented a few preventative wellness measures for the workers across the world, predicated on country-specific circumstances and federal government guidance. This is certainly particularly very important to our workers whoever jobs can’t be done from your home. I wish to thank most of our workers and lovers with regards to their tremendous efforts to help everyone’s wellbeing, plus the popularity of the business enterprise during this period.
Our ESG that is current priority giving an answer to the ‘whole of society’ approach called for because of the that, once we have outlined above. Having said that, i’d like to emphasize the more focus we’ve taken to ESG problems generally speaking during 2019.
Sustainability Front and Centre
As explained during the current Capital Markets Day in March, sustainability is front and centre of every thing we do, and then we currently have a definite purpose that is corporate produce “A Better Tomorrow” for several our stakeholders:
- For the customers through providing a higher range of enjoyable much less dangerous services and products
- For culture through reducing the health that is overall ecological effects of y our company
- For the workers by developing a powerful and purposeful spot to work, and
- For the investors by regularly delivering against our monetary commitments
At our Capital Markets Day, we announced committed brand new sustainability goals:
- To possess 50 million customers of non-combustible items by 2030
- To obtain carbon neutrality by that same 12 months, and
- To carry ahead our existing 2030 ecological targets to 2025
2019 Efficiency – a Operational that is strong Efficiency
2019 had been characterised by a solid performance that is operational we delivered on our three core priorities, to:
- Deliver value in combustibles
- Drive one step improvement in New groups
- Build a simpler, faster organisation
We delivered against all our economic goals:
- Strong reported income development up 5.7% at present prices and 5.6% on an adjusted constant price foundation, driven because of the exceptional performance from our combustibles profile, that was up 4.6% additionally for an adjusted constant price foundation
- This is running on our strategic combustibles brands, which, driven by continued volume that is strong value share development and strong price/mix of 9%, expanded adjusted revenue 5.6% at constant prices, and
- Continued deleveraging of this stability sheet, reducing Adjusted Net Debt**/Adjusted EBITDA*** by 0.5x to 3.5x
- A dividend of 210.4p per ordinary share, a 3.6% increase, keeping our 65% pay-out policy
This supported further increased investment in brand New groups, focussing on building international brands to guide our differentiated multi-category approach across vapour, tobacco-heating and modern oral products leading to:
- 32% constant money income development in New groups
- 11 million customers of non-combustible services and products, and
- New groups income of Ј1.2bn at constant prices, significantly more than doubling revenue from couple of years ago and supplying us with a vital platform for future development
Tomorrow Building A Better
Jack Bowles marked their very very very first year that is full CEO, delivering strong leads to 2019, and it is accelerating our aspiration to transform our company. The Board and we completely endorse the evolved “A Better Tomorrow” strategy he delivered in the Capital Markets Day along with its eyesight to simplify the Group, drive value from our combustibles profile, and better satisfy evolving customer choices with brand brand new and revolutionary possibly paid down risk products.
The simplification were only available in 2019 because of the very first stage of venture Quantum, a simple re-evaluation of how exactly we are organised, including:
- Redesigning administration levels and duplication that is eliminating
- Whilst entrenching accountability, and
- Creating capabilities that are new the organization
Venture Quantum may also launch funds that are valuable further reinvestment in future development. We announced an additional stage of this task at our present Capital Markets Day as well as in total we seek to deliver cost savings of Ј1bn over 2020- 2022. This phase that is further add:
- Operational efficiencies
- Route-to-market focus, and
- Supply chain efficiency
We remain invested in continuing the change of y our company in 2020.
I will be extremely pleased to welcome Jerry Fowden, whom brings extensive US encounter towards the Board. I would ike to thank Kieran Poynter our Independent that is senior Director whom appears down through the Board today. Dimitri Panayotopoulos can be Senior Independent Director after today’s conference.
And as you would expect offered my tenure as Chairman, the Board and Nominations Committee will likely be focussed on succession preparation for my part, from where we be prepared to retire at or before our 2021 AGM. Personally I think highly that my successor will inherit a small business that is in exemplary form, that I have always been confident will deliver growth that is sustainable a long time in the future.
Richard Burrows Chairman
2020 Outlook – Confirming High Single Figure EPS Growth and 65% Dividend Pay-out Policy
We’ve regularly delivered on our high solitary figure constant money profits development target so we continue steadily to keep this guidance for 2020.
We now have produced start that is strong the entire year driven by:
- Continued amount and value share growth of 40bps and 20bps correspondingly
- Good amount development (with a few take advantage of an escalation in trade and customer shares), and
- Strong cost mix, with prices in accordance with our plan