BAT(BTI)2024-07-25 13:09Financial Performance - Net cash generated from operating activities declined by £210 million, impacted by a £267 million final payment related to settlement agreements[10] - The Group generated £4,122 million from operating activities in the six months ended 30 June 2024, a decrease of 8.9% compared to £4,522 million in 2023[14] - Net cash generated from operating activities was £3,165 million, down from £3,375 million, reflecting a decline of 6.2%[14] - The Group's total comprehensive income attributable to owners of the parent was £4,526 million, compared to a loss of £599 million in the same period last year[23] - The Group reported a profit for the period of £4,559 million for the six months ended 30 June 2024, compared to £4,035 million for the same period in 2023, representing an increase of 12.9%[34] - Total comprehensive income for the period was £4,590 million, which includes a profit of £4,492 million and other comprehensive income of £98 million[34] - The Group's total profit from operations was £4,258 million, down from £6,020 million in 2023, reflecting a decrease of 29.3%[158] - Profit from operations decreased by 28.3% to £4,258 million, with an operating margin of 34.5%, down 9.7 percentage points[58] - The profit for the period was £3,959 million, compared to £4,035 million in the previous period, reflecting a decrease of approximately 1.9%[45] - The Group's profit for the period for the six months ended June 30, 2024, was £275 million, a significant improvement from a loss of £277 million in the prior year[181] Revenue and Sales - Revenue for the six months ended 30 June 2024 was £12,340 million, down 8.2% from £13,441 million in 2023[53] - Reported revenue decreased by 8.2% to £12,340 million, primarily due to the sale of businesses in Russia and Belarus, lower organic Combustibles volume (down 6.9%), and a translational foreign exchange headwind of 4.5%[63] - Revenue from Combustibles fell by 10.1% to £9,856 million, with an organic revenue decline of 2.6% at constant exchange rates[97] - Revenue from New Categories was £1,651 million, down 0.4%, but up 7.4% on an organic constant rate basis[59] - Modern Oral revenue reported a growth of 41.9%, with volume growth of 50.0%, indicating strong market performance[74] - The Group's revenue from the AME region was £4,376 million, a decrease from £4,730 million in 2023, representing a decline of 7.5%[158] - The APMEA region reported revenue of £2,586 million, slightly up from £2,801 million in 2023, showing a modest increase of 10.4%[158] Cash Flow and Financing - Net cash from investing activities was £1,433 million, an improvement of £1,392 million from the previous year, primarily due to £1,577 million net proceeds from the partial monetisation of investment in ITC[10] - Net cash used in financing activities was an outflow of £3,358 million in 2024, compared to a £3,023 million outflow in the previous year[11] - The Group maintained investment-grade credit ratings from Moody's (Baa2), S&P (BBB+), and Fitch (BBB+), supporting its ability to access debt capital markets[9] - The Group had access to a £5.4 billion revolving credit facility, which was undrawn as of 30 June 2024[9] - The Group repurchased bonds prior to their maturity in a principal amount of £1.8 billion as part of a capped debt tender offer in May 2024[9] - The Group's liquidity remains strong, with an average debt maturity of 9.2 years and a fixed debt profile of 84%[69] - Closing net debt was £33,658 million, down from £38,345 million in June 2023, reflecting a significant reduction in financial liabilities[139] Impairments and Adjustments - The Group recognized an impairment of £472 million for Camel Snus due to a forecasted decline in cash flows, with a 5-year volume CAGR of -10.2%[16] - Amortization and impairment of trademarks and similar intangibles amounted to £1,295 million, significantly higher than £108 million in the same period last year[20] - Total adjusting items included in profit from operations reached £1,306 million, compared to £85 million in 2023, indicating a substantial increase[20] - The effect of impairment of intangibles and other assets was £373 million for the six months ended June 30, 2024, compared to £68 million in 2023, indicating increased impairment charges[171] Market and Consumer Trends - The number of consumers of smokeless products increased by 1.4 million to 26.4 million[58] - The company experienced robust combustibles pricing, with volume and value share gains in AME and APMEA, offset by declines in the U.S.[62] - Modern Oral revenue increased by 122%, driven by a 226% rise in volume following the refreshed Velo brand and the national roll-out of Grizzly Modern Oral[124] - The Group's share of post-tax results of associates and joint ventures showed a significant credit of £1,367 million in the first half of 2024, compared to a charge of £15 million in the same period of 2023[28] Tax and Legal Matters - The Group's tax rate was affected by adjusting items, with a total of £36 million in adjusting items included in taxation for the six months ended 30 June 2024[32] - The Group's exposure to tax obligations includes a provision for potential exposure to tax, interest, and penalties of BRL969 million (£138 million) for the 2020-2023 period due to ongoing tax audits[172] - The Group paid US$332 million (approximately £267 million) to the U.S. Department of Justice in June 2024 as a final settlement for a previously disclosed investigation[179] - As of June 30, 2024, the Group's subsidiaries faced 252 pending Engle progeny cases involving approximately 311 individual plaintiffs[182] Management and Governance - The company appointed Soraya Benchikh as Chief Financial Officer effective May 1, 2024, following changes in the Board[47] - The Group's management believes that value share is particularly useful for investors to understand the performance of BAT's brands relative to competitors in various categories and geographies[200]