Core net sales excluding tax increased by 9.2% to US$4,970 million (2009:US$4,552 million). The increase was driven by pricing as well as favorable currency exchange movements. At constant rates of exchange, core net sales excluding tax increased 3.8% to US$4,727 million, with an accelerated growth rate in the second quarter (April-June).
Market share continued to grow in most key markets including Russia, Italy, France, the United Kingdom and Turkey.
Total sales volume and GFB sales volume decreased by 5.2% to 204.7 billion cigarettes and 2.5% to 118.3 billion cigarettes respectively due to industry contraction in a number of markets, most notably in Russia, Ukraine, Spain, Romania, Italy and Taiwan; and the ongoing unstable operating environment in Iran. In the second quarter (April-June), volume declines for total sales volume and GFB sales volume were more moderate than the first quarter (January-March).
Core net sales per thousand cigarettes excluding tax increased by 15.3% to US$24.5. At constant rates of exchange, core net sales per thousand cigarettes, excluding tax, increased by 9.6% to US$23.3.
South and West Europe: Total sales volume decreased 6.1%. This was due to inventory adjustments in the first quarter last year in Spain and Italy as well as industry contraction. GFB sales volume declined by 4.9%. Market share increased in Italy, France and Greece.
North and Central Europe: Total sales volume increased 5.4% driven by the continued growth in the United Kingdom and Poland. GFB sales volume increased 13.7%. Market share grew in the United Kingdom, Ireland, Sweden and Poland.
CIS+: Total sales volume decreased 8.4% due to continued industry contraction in Russia. According to AC Nielsen, industry volume declined by 10.9 % in the first half of this year. In Romania and Ukraine, sales volumes were adversely affected by industry contraction resulting from excise-led price increases. GFB sales volume declined 5.3%. Market share increased in Russia, from 36.3% to 36.9%, and Kazakhstan, from 39.5% to 41.6%.
Rest of the World: Total sales volume decreased 3.3%. Volume increases in Canada and the Middle East did not compensate for the decrease in Iran due to the ongoing unstable operating environment and slow recovery in Taiwan. Market share grew in Turkey, Malaysia, Korea and Canada.