Chief Executive's review of the preliminary results for the year ended 31 December 2013

We’re delivering today and investing in tomorrow

British American Tobacco had another very good year in 2013, again meeting or exceeding our financial metrics. Revenue and market share continued to grow. Together our Global Drive Brands (GDBs) – Dunhill, Kent, Lucky Strike and Pall Mall – increased share and volume.

It was a challenging year for our people globally, but they responded with the enterprise and commitment I have come to expect. We adapted to changes in our business environment, faced some tough trading conditions and embraced a range of new opportunities, in both new product categories and new markets. We invested further in our existing key high growth markets, too.

We’re growing market share

In 2013 we successfully grew our market share in our key markets by 20 basis points, driven by the success of our GDBs, which were up by 60 basis points. Our share of the premium segment also grew, up by 80 basis points. However, cigarette volume from subsidiaries was lower by 2.7%, mainly as a result of industry declines.

Our international brands grew volume by 2.1%, of which our GDBs grew by 1.9%. Dunhill volume was up by 9.7% and Pall Mall grew by 4.4%. Kent’s was 2.9% lower while Lucky Strike volume was down by 6.5%. Collectively, our GDBs now account for 35% of our total volume. From 2014, we have added Rothmans to our portfolio of GDBs, recognising the brand’s strategic value to the Group.

Other tobacco products also performed very well, particularly Fine Cut tobacco, which was up 1.3% in Western Europe, driven by the continued success of Pall Mall and Lucky Strike. We also launched Vype, our first electronic cigarette, in the UK in 2013, making us the first international tobacco business to enter this new market.