Compare financial performance of 3 tobacco giants in the world. Analysis trends and relevant ratios to come to investment advices.

1. TOBACCO INDUSTRY CASE STUDY Junru li
1

2. CONTENT
u Tobacco industry overview
Ø Industrial Definition
Ø Market Condition
u Companies Profile
Ø British American Tobacco
Ø Imperial Tobacco
Ø Philip Morris International
u Comparison and Financial Analysis
Ø Effectiveness
Ø Efficiency
Ø Return on investment
0
10000
20000
30000
40000
20142013201220112010200920082007
Duty and excise taxes
BAT IMT PMI

3. TOBACCO INDUSTRY OVERVIEW
Make it for a penny, sale it for a dollar, and it’s addictive.

4. TOBACCO INDUSTRY OVERVIEW
Make it for a penny, sale it for a dollar, and it’s addictive.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
BAT IMT PMI
Tobacco Income
Duty, excise and other taxes Cost of sales Profit for the year

5. TOBACCO INDUSTRY OVERVIEW
Make it for a penny, sale it for a dollar, and it’s addictive.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
BAT IMT PMI
Tobacco Income
Duty, excise and other taxes Cost of sales Profit for the year

6. Video (“Secrets of the tobacco industry”) — “Devil moving into emerging market”
1. PMI’s marketing in Indonesia: before government, young generation
2. Activist in Indonesia: their poor situation facing with the tobacco machinery
3. The increasing performance in developing countries
4. Partially explained why those tobacco giant target to the emerging market: regulations
TOBACCO INDUSTRY OVERVIEW
Make it for a penny, sale it for a dollar, and it’s addictive.

7. COMPANIES PROFILE

8. INTRODUCTION
Aisa-Pacific
27%
Americas
22%
Western
Europe
23%
Eastern
Europe,
Middle East
and Africa
28%
SHARE OF GROUP REVENUE

9. STRATEGY
81%
9%
10%
Common-size
Duty, excise and
other taxes
Cost of sales
Profit for the year
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
201420132012201120102009200820072006
CURRENT RATIO

10. INTRODUCTION

11. STRATEGY
74%
15%
11%
Common-size
Duty, excise and
other taxes
Cost of sales
Profit for the year
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
201420132012201120102009200820072006
CURRENT RATIO

12. INTRODUCTION

13. STRATEGY
74%
15%
11%
Common-size
Duty, excise and
other taxes
Cost of sales
Profit for the year
0.00%
50.00%
100.00%
150.00%
200.00%
20142013201220112010200920082007
CURRENT RATIO

14. Ø Effectiveness
Ø Efficiency
Ø Earning
COMPARISON AND FINANCIAL ANALYSIS

15. EFFECTIVENESS
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
201420132012201120102009200820072006
GROSS PROFIT MARGIN
BAT IMT PMI
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
201420132012201120102009200820072006
NET PROFIT MARGIN
BAT IMT PMI

16. EFFICIENCY
0.00
5.00
10.00
15.00
201420132012201120102009200820072006
INVENTORY TURNOVER
BAT IMT PMI
0.00
10.00
20.00
30.00
201420132012201120102009200820072006
RECEIVABLE TURNOVER
BAT IMT PMI
0.00
0.50
1.00
1.50
2.00
2.50
201420132012201120102009200820072006
TOTAL ASSETS TURNOVER
BAT IMT PMI

17. EARNING
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
201420132012201120102009200820072006
RETURN ON TOTAL ASSETS
BAT IMT PMI
0
50
100
150
200
250
201420132012201120102009200820072006
EARNING PER SHARE
BAT IMT PMI

18. CONCLUSION