Delivering against our strategy
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 market 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 over the medium term 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.”
Headline Financials
| Overview - Adjusted Basis | Full Year Results | 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% |
| Bassic earnings per share | pence | 147.6 | 66.1 | 123.1% |
See page [5] for basis of preparation and page [13] for the reconciliation between reported and adjusted measures.
1 Change at constant currency removes the effect of exchange rate movements on the translation of the results of our overseas operations
Basic EPS up 123.1% to 147.6p primarily due to gains on the fair value of derivatives in finance costs and favourable foreign exchange translation.
