BATS grows market share despite falling volumes

28th Apr 2011 08:34

While volumes at British American Tobacco (BATS) declined in the first quarter, the cigarette maker assured investors that it was able to grow market share across all its regions.Group volumes fell 2.4% in the three months ended 31 March, from 168bn to 164bn, while organic volumes showed a 1.8% decline, due to decreases in its Asia-Pacific and Americas markets.However, chief executive Nicandro Durante noted that "British American Tobacco has made a good start to the year and our rate of organic volume decline is slowing."Despite falling volumes, organic revenue in the period grew by 5% (on a constant currency basis) which BATS said was down to a continued good pricing environment.Organic revenus surpassed Nomura's expectations of a 3.8% increase, and the broker said that the volumes figures were "better than expected and cost save initiatives continue to progress." BATS's four 'global drive brands' (Kent, Pall Mall, Dunhill and Lucky Strike) showed a 9% increase in volumes, with Kent volumes growing by 16% driven by Russia, Japan South Korea, Romania and Ukraine."This good performance was achieved in trading conditions which remain challenging, with industry volumes markedly lower in a number of markets. However, the group's innovation strategy resulted in market share growth across all regions," the group said.---bc