Consumer driven growth

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"The material in this presentation is provided for the purpose of giving information about us to investors and is not provided for tobacco product advertising, promotional or marketing purposes. This material does not constitute and should not be construed as constituting an offer to sell, or a solicitation of an offer to buy, any of our tobacco products. Our products are sold only in compliance with the laws of the particular jurisdictions in which they are sold".

Transcript of Consumer driven growth

"The material in this presentation is provided for the purpose of giving information about us to investors and is not provided for tobacco product advertising, promotional or marketing purposes. This material does not constitute and should not be construed as constitutingan offer to sell, or a solicitation of an offer to buy, any of our tobacco products. Our products are sold only in compliance with the laws of the particular jurisdictions in which they are sold".

Consumer driven growth

Jean-Marc Levy

This section covers:

CONSUMER DRIVEN GROWTH – Jean Marc Levy

HARM REDUCTION – David O’Reilly HARM REDUCTION – David O’Reilly

LEVERAGING OPERATIONS – Des Naughton

CAPSULE ROLLOUT – Mark Cobben INNOVATIONS PIPELINE IN ASIA PACIFIC – David Fell

CAPSULE ROLLOUT – Mark Cobben INNOVATIONS PIPELINE IN ASIA PACIFIC – David Fell

INNOVATIONS OVERVIEW – Jean Marc Levy

Q&A

Our ambition: Leadership via sustainable growth

VISION

STRATEGY

RESPONSIBILITY

WINNING ORGANISATION

ACHIEVELEADERSHIP

OF THE GLOBALTOBACCO INDUSTRY

PRODUCTIVITY GROWTH

CompetitionCompetition

The landscape: Challenges adding up!

ConsumerConsumer RegulationsRegulations

Superior Consumer insight

World Class Brands

Breakthrough Innovations

World Class Capabilities

Fit for purpose Trade Marketing and Distribution

Globally Integrated

EconomicsEconomics

Normalised choice

Prohibition

Over indulgenceDecreasing acceptanceDecreasing acceptance

IncreasingaspirationsIncreasingaspirations

SOCIETAL ACCEPTABILITY

The landscape: The evolving acceptability of smoking

“I’m in control, I choose when to smoke”SHARE OF WALLET

Wide coverage of regular general consumer surveys: 70+ markets, covering more than 95% of our salesInvestment in innovative ways to understand our consumer

Leadership in consumer insightsConsumer inspiration powers growth

OUR PHILOSOPHY

“We study every aspect of our consumers, they inspire everything we do”

Leadership in consumer insightsUnique insights example

Brand-Led Status

Necessity-Driven Consumers

Mature Materialism

Discerning Consumers

Traditional Masculinity New Masculinity

Local Brands Dominate Brand Substance

Limited Feminine Imagery Nuanced Feminine Imagery

Institutional Conformity Tribal Belonging

Myself First – Here and Now Self and Social Consideration

GLOBAL CONSUMER EVOLUTION

MARKET DEVELOPMENT

Leadership in brands:Brands have been and will always be what the consumer buys

NEW REALITYGOOD OLD TIMES

We continue to build a strong and well balanced portfolio

DRIVING OUR SUCCESS

… AND WELL BALANCED

STRONG …

Premium31%

VFM34%

Low

35%

*Sales in T40 2010

Leadership in innovations Innovation is key to create the brand USP

NANOTEK CONVERTIBLES* RELOC*

Vol bn sticks Vol bn sticks Vol bn sticks

* Capsules: total capsules volume include other brands (Kool, KENT). Reloc: pre 2009 Reloc vols not availble

OFFERS THAT CREATE CONSUMER TALK VALUE

Leadership in trade marketing & distribution

ADULT TOBACCO SHOPPER MARKETINGROUTE TO MARKET CUSTOMER MANAGEMENT

PAY & GO SHOP’N’BROWSE ENTERTAINMENT

30 seconds 3 minutes 30 minutes

“Excite adult tobacco shoppers to buy & customers to sell our brands”

Leadership in supply chain

GLOBAL PLANNING PROCESS STREAMLINED OPERATION FASTER ROUTE-TO-MARKET

EXCELLENCE IN OPERATIONS FROM SEED TO SMOKE

CONSUMER CONSIDERED IN EACH DECISION

SEED TOBACCO FACTORY DELIVERY POS CONSUMER

Reasons for successBRANDS

DISCIPLINE

PEOPLE & PASSION

MONEY