TOBACCO INDUSTRY CASE STUDY Junru li

1

CONTENTu 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 investment0

10000

20000

30000

40000

20142013201220112010200920082007

Duty and excise taxes

BAT IMT PMI

TOBACCO INDUSTRY OVERVIEW

Make it for a penny, sale it for a dollar, and it’s addictive.

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

TobaccoIncome

Duty,exciseandothertaxes Costofsales Profitfortheyear

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

TobaccoIncome

Duty,exciseandothertaxes Costofsales Profitfortheyear

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.

COMPANIES PROFILE

INTRODUCTIONAisa-Pacific

27%

Americas22%

Western Europe23%

Eastern Europe,

Middle East and Africa

28%

SHARE OF GROUP REVENUE

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

INTRODUCTION

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

INTRODUCTION

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

Ø EffectivenessØ EfficiencyØ Earning

COMPARISON AND FINANCIAL ANALYSIS

EFFECTIVENESS

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

201420132012201120102009200820072006

GROSS PROFIT MARGINBAT IMT PMI

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

201420132012201120102009200820072006

NET PROFIT MARGINBAT IMT PMI

EFFICIENCY

0.00

5.00

10.00

15.00

201420132012201120102009200820072006

INVENTORY TURNOVERBAT IMT PMI

0.00

10.00

20.00

30.00

201420132012201120102009200820072006

RECEIVABLE TURNOVERBAT IMT PMI

0.00

0.50

1.00

1.50

2.00

2.50

201420132012201120102009200820072006

TOTAL ASSETS TURNOVERBAT IMT PMI

EARNING

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

201420132012201120102009200820072006

RETURN ON TOTAL ASSETSBAT IMT PMI

0

50

100

150

200

250

201420132012201120102009200820072006

EARNING PER SHAREBAT IMT PMI

CONCLUSION