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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER STAPLES
The market leader in non-combustibles exposure (the growing stuff) has given strong Q2 results. We said yesterday we were worried for combustibles heavy (think Altria and Imperial) co's given pricing was fading for many staples - PM says otherwise. Firm growth and deleveraging target on BS makes it hard not to like the fundamentals of PM and curve trading inside Tesco and in-line with Carlsberg already reflects that. We see more value in BAT on the 5Y and out (>20bp pickup) - it brings earnings on Thursday.
- Net revenues were $9.5b (+9.6%yoy) in the 2Q with smoke-free making up 38%/$3.6b and growing +18%.
- Combustibles also edged out growth at +4.8% to $5.9b in sales, driven by "high single-digit pricing" and "resilient industry volumes" (cigarette shipments +0.4%). It says pricing helped it reverse 7-conseuctive quarters of gross margin falls with a 40bp expansion this qtr.
- Group EBIT was $3.4b up +12.5% in organic and +34% on reported. Margin was at 36%.
- Market share was up +0.1ppt to 28.7% across its group in 2Q and +0.4ppt to 28.3% in 1H. 1H market share losses in Europe and EM regions was offset by strong gains in Australia, Japan and South Korea. It still has a 32% share in Russia.
- Qtrly dividend $1.3/share ($2b) and in-line with recent.
- FY guidance has upgrades: net revenue growth +7.5-9% (prev 6-8.5%), organic EBIT +11-13% (prev. 10-12%), smoke-free revenue and gross profit to surpass last year's rate (+13% last year on revenue), operating cash flow of ~$11b (prev. $10-$11b), capex of $1.3-$1.4b (prev. $1.2b), net leverage improvement of 0.3-0.5x and 2x by '26 (unch) and no buybacks (unch).
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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