Business Context and Reporting Period
This Form 6-K, filed on October 2, 2018, by British American Tobacco p.l.c. (BAT), provides revised financial statements and information superseding the Annual Report on Form 20-F for the fiscal year ended December 31, 2017. The revisions reflect changes in reportable operating segments effective January 1, 2018, and the retrospective adoption of International Financial Reporting Standard 15 (IFRS 15). The filing also includes unaudited pro forma financial information related to the acquisition of RAI.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it serves as a cover document referencing updated exhibits (Exhibits 99.1, 99.2, and 99.3) which contain the revised financial statements and pro forma data. The document notes that the pro forma income statement is for illustrative purposes only and does not represent actual financial results.
Material Changes Versus Prior Period
- Segment Reporting: Effective January 1, 2018, BAT reorganized its geographic segments from five to four: United States; Americas and Sub-Saharan Africa; Europe and North Africa; and Asia-Pacific and Middle East.
- Accounting Principles: The Company adopted IFRS 15 on a fully retrospective basis, requiring updates to the income statement, financial review, and selected financial information.
- Pro Forma Data: The filing includes unaudited pro forma condensed combined income statements for the year ended December 31, 2017, assuming the RAI acquisition was completed on January 1, 2017.
Guidance, Outlook, and Risks
The document contains forward-looking statements regarding BAT's results of operations, financial condition, and strategies. Management cautions that actual results may differ materially due to various risks, including:
- Competition from illicit trade and market size reduction.
- Adverse domestic or international legislation, regulation, and tax law changes.
- Adverse litigation outcomes and regulatory decisions.
- Foreign exchange rate exposure (translational and transactional).
- Challenges in maintaining credit ratings and funding the business.
- Ability to lead the development and roll-out of Next Generation Products.
No specific profit forecasts or earnings per share targets are provided in this text.
Important Facts for Investor Verification
- Verify the specific numerical impacts of the IFRS 15 adoption and segment reorganization by reviewing the updated financial statements in Exhibit 99.2.
- Review the unaudited pro forma income statement in Exhibit 99.3 to understand the hypothetical financial impact of the RAI acquisition.
- Confirm that this filing does not reflect events occurring after the March 15, 2018, Form 20-F filing date; subsequent developments are in later Form 6-K reports.
- Note that the pro forma data is based on assumptions and is not indicative of future results or actual historical performance.