Sales Growth Momentum

High quality growth through Total Tobacco

• Tobacco net revenue* up 4 per cent; stick equivalent volumes declined 2.7 per cent
• Excellent tobacco net revenue growth across our portfolio
  • + 13 per cent key strategic brands: Davidoff; Gauloises Blondes; West and JPS
  • + 13 per cent fine cut tobacco
  • + 10 per cent premium cigars
  • + 46 per cent snus

High margin profits

• Tobacco adjusted operating margin maintained at 42 per cent
• 8 per cent adjusted earnings per share growth
• Strategic investments driving quality growth

Maximising shareholder returns

• Returns to shareholders increased by 41 per cent in the year to £1.5 billion
• Full year dividend up 11 per cent; ongoing increase in payout ratio to 52.5 per cent
• £528 million shares bought; annualised £500 million share buyback ongoing

Spanish goodwill

• Non-cash impairment of £1.2 billion due to further deterioration in Spanish economic indicators; Spanish adjusted operating profit up 6 per cent

Alison Cooper, Chief Executive, said:

“We’re generating high quality growth by investing in total tobacco brands that will deliver long-term sustainable sales. Revenues were strong across the portfolio and I’m particularly pleased with the excellent performances from our key strategic brands Davidoff, Gauloises Blondes, West and JPS, with volumes up 7 per cent and revenues growing 13 per cent.

“Our portfolio offers consumers unrivalled choice and provides significant opportunities for further growth. Our focus on realising this growth potential, whilst effectively managing cost and cash, will continue to maximise value for our shareholders.”