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Preliminary Results for the year ended 30 September 2019


“2019 has been a challenging year with results below our expectations due to tough trading in Next Generation Products (NGP). We are implementing actions to drive a stronger performance in the coming year.

“Our resilient tobacco value creation model continues to produce high margin sales growth and is well-placed to deliver sustained profitable growth in the years ahead.

“Although we grew NGP revenues by around 50 per cent, this was below the level we expected to deliver. Our delivery was also impacted by an increasingly competitive environment and regulatory uncertainty in the USA. Growth in Europe was also slower, despite achieving leading retail shares in several markets. We have taken the learnings from this year to reset our NGP investment plans for 2020, prioritising the markets and categories with the highest potential for sustainable, profitable growth. We will scale up investment as the visibility on returns and regulatory uncertainties improves.

“Our priority going forward is to optimise the profit and cash generation from our tobacco assets, while improving growth in NGP with greater discipline and a more tightly focused business model that will create long-term value for shareholders.”

Alison Cooper
Chief Executive

Overview - Adjusted Basis Full Year Result Change
  2019 2018 Actual Constant Currency1
Total tobacco volume bn SE 244.2 255.5 -4.4% -4.4%
Tobacco net revenue2 £m 7,713 7,510 +2.7% +1.1%
NGP net revenue2 £m 285 187 +52.4% +48.1%
Tobacco & NGP net revenue2 £m 7,998 7,697 +3.9% +2.2%
Asset Brand net revenue2 £m 5,269 4,977 +5.9% +4.4%
Tobacco & NGP adjusted operating profit £m 3,531 3,557 -0.7% -2.8%
Distribution adjusted operating profit £m 232 212 +9.4% +9.9%
Total adjusted operating profit £m 3,749 3,766 -0.5% -2.4%
Adjusted earnings per share pence 273.3 272.2 +0.4% -1.6%
Adjusted net debt £m (11,376) (11,474)    
Overview - Reported Basis Full Year Result Change
  2019 2018 Actual  
Revenue2 £m 31,594 30,524 +5.1%  
Operating profit £m 2,197 2,407 -8.7%  
Basic earnings per share pence 106.0 143.6 -26.2%  
Dividend per share pence 206.6 187.8 +10.0  
Reported net debt £m (11,970) (11,899)    

See page 3 for basis of preparation and page 13 for the reconciliation between reported and adjusted measures.
1 Constant currency removes effect of exchange rate movements on the translation of the results of our overseas operations.
2 2018 revenue restated following adoption of IFRS 15.

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