BAT revenue grows 4% in 9 months to end September

The revenue growth was driven by continued good pricing. Reported revenue was down 1%‚ adversely impacted by exchange rate movements and organic revenue growth at constant currency was 3%‚ the company said.

Releasing its Interim Management Statement on Wednesday‚ BAT said group volumes were down‚ after a low Q3‚ mainly driven by reduced industry volumes and a strong comparator‚ although the effect is expected to moderate by Q4.

Group volumes from subsidiaries were 517 billion‚ down 1.2%‚ while organic volumes were 1.8% lower as a result of the industry volume decline and the benefit in the comparative period of the one-off increase in sales volumes in Japan.

Industry volume was down in Brazil as a result of a significant excise increase which has led to a rise in illicit trade. The benefit to Group volumes from the acquisition of Protabaco in Colombia and the higher sales in Bangladesh‚ Vietnam‚ Pakistan and the GCC‚ was more than offset by decreases in Brazil‚ Japan‚ Italy‚ Turkey and Egypt.

Underlying market share grew with strong performances in the majority of the group's top 40 markets.

Chief Executive Nicandro Durante said economic recovery remains fragile this year and difficult trading conditions persist in many parts of the world.

"However‚ pricing remains strong‚ we are growing underlying market share and our Global Drive Brands continue to perform well. The trading performance of the Group is good and we are on track for another year of good earnings growth."

BAT noted that the four Global Drive Brands continued their good performance and achieved overall volume growth of 3 per cent. Kent was slightly up‚ growing in Russia‚ Ukraine and Azerbaijan but almost offset by the decline in Japan. Dunhill was 2 per cent higher than last year with good performances in the GCC‚ South Africa‚ Romania and Indonesia‚ partially offset by the adverse impact of competitive pricing activity in South Korea.

Good performances in Pakistan‚ Russia‚ Romania and Canada‚ partially offset by lower volumes in Chile‚ Spain and Italy‚ contributed to a 2 per cent increase in Pall Mall volumes. Lucky Strike grew 14 per cent following good growth in Poland‚ Germany‚ France‚ South Korea‚ Argentina and Chile.

Other tobacco products performed very well and market share grew strongly. Volumes were up 8 per cent to 10‚739 tonnes of Fine Cut in Western Europe‚ mainly in Germany‚ France‚ Hungary‚ the Netherlands‚ Spain and the United Kingdom. Pall Mall remains by far the largest Fine Cut brand in Western Europe.

Looking ahead‚ the group said the environment continues to be challenging‚ with industry volumes under pressure. In this environment the expansion of illicit trade remains a threat‚ driven by excise increases and pressure on consumers´ disposable income.

BAT said it resumed an on-market share buy-back programme from the end of February 2012. During the nine months to September 2012‚ 30 million shares were bought at a total cost of GBP978 million‚ excluding transaction costs.