Poland Market Survey Top Lines Empty Discarded Pack Collection April/May 2017 Conducted on behalf: British American Tobacco Imperial Tobacco Group Japan Tobacco International Philip Morris International Prepared by: ALMARES Institute for Consulting and Market Research ul. Swietokrzyska 31/33a 00-049 Warszawa, Poland 1
Survey Methodology Empty Discarded Pack (EDP) collection Random collection from streets and public bins Any brand and market variant Total 70 cities (40 largest cities and 30 smaller towns) Target main sample: 17,000 packs City sample quotas proportional to population Fieldwork conducted 4 24.04.2017 Limitations Homes and workplaces are not covered No information on counterfeit incidence of non- products Caution The survey is designed to focus on trends rather than incidence at a single point in time 3
Sampling Plan Russia Lithuania Gdynia Gdansk Braniewo Lidzbark Warminski Olecko Suwalki Gryfice Koszalin Pomorskie Tczew Starogard Gdanski Elblag Warmiòsko-Mazurskie Warmińsko-Mazurskie Olsztyn Elk Podlaskie Sokolka Germany Zachodniopomorskie Szczecin Stargard Szczecinski Gorzow Wielkopolski Miedzyrzecz Lubuskie Wielkopolskie Czech Republic Bialystok Grudziadz Lomza Ostroleka Zlotow Stupsk Zielona Gora Leszno Kalisz Ostrow Wielkopolski Glogow Lubin Legnica Zlotoryja Pila Chodziez Oborniki Szamotuly Poznan Bogatynia Jelenia Gora Swidnica Walbrzych Dolnoslaskie Kujawsko-Pomorskie Torun Bydgoszcz Inowroclaw Wloclawek Plock Gniezno Kutno Konin Wroclaw Namyslow Opolskie Slaskie Lodzkie Poland Zgierz Lodz Pabianice Lask Tomaszow Mazowiecki Opole Zawiercie Strzelce Opolskie Tarnowskie Gory Krapkowice Piekary Slaskie Kedzierzyn-Kozle Gliwice Bytom Dabrowa Gornicza Siemianowice Zabrze Bedzin Chorzow Slaskie Sosnowiec Ruda Swietochlowice Slaska Katowice Tychy Myslowice Jaworzno Krakow Raciborz Rybnik Zory Wodzislaw Slaski Mazowieckie Sokolow Podlaski Legionowo Siedlce Biala Podlaska Warszawa Pruszkow Milanowek Piotrkow Trybunalski Belchatow Skarzysko-Kamienna Starachowice Ostrowiec Swietokrzyski Radomsko Swietokrzy skie Kielce Stalowa Wola Czestochowa Jedrzejow Staszow Nisko Tarnobrzeg Malopolskie Bielsko-Biala Nowy Sacz Lubelskie Kozienice Pulawy Radom Lublin Chelm Mielec Lancut Przeworsk Ropczyce Tarnow Rzeszow Przemysl Jaslo Radzyn Podlaski Podkarpackie Belarus Krasnystaw Hrubieszow Zamosc Ukraine Slovakia 4
All Packs Collected Incidence of Non-domestic Packs Non-Domestic 13.8% Includes 1,1% of Domestic 86.2% N= 342,198 weighted sticks 8
All Packs Collected Non-domestic Packs Incidence Evolution 100% Includes 2,2% of Includes 2,5% of Includes 1,7% of Includes 2,6% of Includes 2,5% of Includes 1,6% of Includes 3,1% of Includes 2,2% of Includes 1,1% of 90% 17.0% 17.3% 19.0% 17.8% 18.2% 17.2% 16.4% 14.3% 13.8% 80% 70% 60% 50% 40% 83.0% 82.7% 81.0% 82.2% 81.8% 82.8% 83.6% 85.7% 86.2% 30% 20% 10% 0% Q3 2014 Q4 2014 Q2 2015 Q3 2015 Q4 2015 Q2 2016 Q3 2016 Q4 2016 Q2 2017 N= 344,256 N= 343,885 N= 343,132 N= 343,800 N= 343,423 N= 342,488 Figures are given in weighted sticks. Domestic Packs Non-domestic Packs N= 342,494 N= 342,366 9 N= 342,198
Incidence of Non-domestic Packs by Nielsen Region Poland national incidence of non-domestic packs: 13.8% 2,7% 9,6% 5,4% Warsaw 19,9%* 9,5% Q.3. 2016 Warsaw 25.4% Central 21.8% East 41.3% North 5.5% South 12.7% South-East 15.2% South-West 7.5% West 2.7% 19,8%* 33,5% 13,1% Q.4. 2016 Warsaw 21.9% Central 17.4% East 33.6% North 6.0% South 10.6% South-East 18.3% South-West 4.5% West 3.0% Q.3. 2014 Warsaw 21.9% Central 26.3% East 46.7% North 7.7% South 13.0% South-East 12.7% South-West 6.2% West 3.9% Q.2. 2015 Warsaw 32.7% Central 19.6% East 49.1% North 5.9% South 14.1% South-East 17.3% South-West 3.9% West 10.2% Q.4. 2015 Warsaw 27.8% Central 23.9% East 43.3% North 7.0% South 16.1% South-East 16.0% South-West 7.4% West 2.4% Q.4. 2014 Warsaw 26.9% Central 24.9% East 39.8% North 6.1% South 13.0% South-East 16.7% South-West 10.0% West 2.8% Q.3. 2015 Warsaw 28.0% Central 21.5% East 35.2% North 7.0% South 17.6% South-East 20.4% South-West 6.0% West 2.8% Q.2. 2016 Warsaw 26.8% Central 21.2% East 44.3% North 6.6% South 16.3% South-East 11.3% South-West 6.1% West 1.9% 18 All data: calculated in cigarettes (single) weighted by localization populations and smoking incidence
Incidence of Non-domestic Packs by City Largest 40 cities Poland national incidence of non-domestic packs: 13.8% N= 342,198 weighted sticks Koszalin (2,6%) Gdynia (1,8%) Gdańsk (3,2%) Elbląg (39,8%) Olsztyn (14,6%) Small Towns Szczecin (6,2%) Gorzów Wielkopolski (9,2%) Zielona Góra (8,6%) Legnica (6,0%) Wałbrzych (7,9%) Poznań (0,2%) Wrocław (11,8%) Bydgoszcz (9,2%) Opole (5,3%) Ruda Śląska (4,8%) Toruń (7,9%) Kalisz (0,0%) Grudziądz (2,7%) Włocławek (7,9%) Łódź (15,2%) Częstochowa (13,4%) Zabrze (7,9%) Rybnik Gliwice (10,6%) (7,5%) Katowice (8,2%) Sosnowiec Chorzow (16,5%) (8,0%) Tychy (10,6%) Bytom (7,0%) Bielsko Biała (8,9%) Płock (42,7%) Dąbrowa Górnicza (6,6%) Kraków (12,1%) Warszawa (19,9%) Radom (18,8%) Kielce (13,3%) Tarnów (15,9%) Rzeszów (12,5%) Białystok (33,4%) Lublin (33,9%) REGION CITY INCIDENCE East Sokółka 47,9% Braniewo 54,4% Lidzbark Warmiński 52,0% Krasnystaw 72,7% Hrubieszów 45,8% Olecko 36,0% Radzyń Podlaski 66,7% South-East Nisko 16,0% Jasło 28,6% Ropczyce 10,7% Przeworsk 15,9% Łańcut 14,6% Jędrzejów 6,0% Staszów 12,6% Central Radomsko 39,2% Łask 13,9% Milanówek 13,3% Kozienice 16,6% Sokołów Podlaski 21,3% West Międzyrzecz 18,8% Złotów 0,0% Oborniki 1,3% Szamotuły 0,0% Chodzież 0,0% South-West Złotoryja 7,9% Strzelce Opolskie 4,1% Krapkowice 6,8% Bogatynia 3,9% Namysłów 6,2% North Gryfice 5,9% 19
Incidence of Non-domestic Packs Comparison of Results in Large Cities Vs. Results in Smaller Towns 100.0% 90.0% 80.0% 70.0% 60.0% 13.8% 13.3% 23.9% N= 342,198 weighted sticks 50.0% Non-domestic 40.0% 86.2% 86.7% 76.1% Domestic 30.0% 20.0% 10.0% 0.0% 70 cities (40 largest cities + 30 smaller towns) Largest 40 cities 95,2% out of total 100% sample 30 smaller towns 4,8% out of total 100% sample N= 342,198 N= 325,665 N= 16,534 20
Szczeci n G r yf ice Stargard Szczecinski G orzow Wi el kopol ski Bogat ynia M iedzyr zecz Zielona Gora Jelenia Gora Koszal i n Zlot or yja G logow Lubin Legni ca Wal brzych Pila Szam ot uly Leszno Poznan Swidnica Chodziez O bor niki Zlot ow Wrocl aw G niezno G dyni a Bydgoszcz G dansk O st r ow Wielkopolski Nam yslow Starogard Gdanski I nowr oclaw Kal i sz Konin O pol e Kr apkowice Tczew G rudzi adz Torun Strzelce Opolskie Kedzier zyn- Kozle Racibor z Wl ocl aw ek Rybni k Wodzislaw Slaski El bl ag Kut no Tarnowskie Gory Czest ochow a Lodz Belchat ow Pl ock Dabrowa Gornicza Byt om Bedzin G l i wzabrze i ce Siemianowice Slaskie Chorzow Swiet ochlowice Sosnow i ec Ruda Slaska Kat ow i ce Zor y Lask Br aniewo Piekary Slaskie Zgier z Pabianice M yslowice Jawor zno Tychy Bi el sko- Bi al a Radom sko Piot r kow Tr ybunalski Zawier cie Lidzbark Warminski O l szt yn St upsk Tom aszow M azowiecki Krakow Pr uszkow Jedr zejow M ilanowek Legionowo Skar zysko- Kam ienna Ki el ce O st r oleka Warszaw a Radom St ar achowice Nowy Sacz Tarnow Lom za Elk Ostrowiec Swietokrzyski St aszow O lecko Kozienice M ielec Sokolow Podlaski Pulawy Tar nobr zeg Ropczyce Jaslo Siedlce Suwalki Stalowa Wola Rzeszow Bi al yst ok Radzyn Podlaski Nisko Lubl i n Lancut Sokolka Biala Podlaska Pr zewor sk Kr asnyst aw Pr zem ysl Zam osc Chelm Hr ubieszow ALMARES Non-domestic Incidence by Voivodship Russia Lithuania Zachodniopomorskie Pomorskie 2.7% Warmińsko-Mazurskie Warmiòsko-Mazurskie 28.2% Podlaskie 34.3% 5.5% Kujawsko-Pomorskie Belarus 7.8% Mazowieckie 21.0% Germany Lubuskie 9.6% Wielkopolskie 0.2% Lodzkie 19.9% Poland 16.6% Warsaw Lubelskie 37.7% >30% >15% <30% Czech Republic Dolnoslaskie 10.4% Opolskie 5.4% Slaskie 9.5% Swietokrzy skie Malopolskie 12.6% 12.7% Podkarpackie 15.0% Ukraine >2% <15% < 2% Slovakia (*): Mazowieckie including Warsaw N= 342,198 weighted sticks 21
Non-domestic Incidence by Voivodship N= 342,198 weighted sticks Q3 2014 Q4 2014 Q2 2015 Q3 2015 Q4 2015 Q2 2016 Q3 2016 Q4 2016 Q2 2017 WARSAW 21.9% 26.9% 32.7% 28.0% 27.8% 26.8% 25.4% 21.9% 19.9% Voivodships LUBELSKIE 37.5% 33.8% 35.2% 28.7% 30.8% 38.5% 35.0% 38.0% 37.7% PODLASKIE 44.2% 43.0% 43.3% 38.1% 36.8% 36.3% 34.9% 35.0% 34.3% WARMINSKO-MAZURSKIE 59.4% 43.7% 70.3% 40.1% 63.6% 58.3% 54.4% 27.3% 28.2% MAZOWIECKIE 23.8% 26.3% 30.4% 28.1% 27.6% 25.7% 25.2% 20.5% 21.0% LODZKIE 23.5% 25.3% 19.1% 18.0% 22.4% 21.2% 20.5% 18.9% 16.6% PODKARPACKIE 27.2% 25.6% 29.2% 34.1% 33.8% 30.9% 28.6% 27.0% 15.0% SWIETOKRZYSKIE 11.7% 9.1% 9.2% 7.4% 6.0% 11.8% 12.9% 10.5% 12.7% MALOPOLSKIE 8.2% 15.9% 15.6% 19.3% 12.8% 4.7% 11.4% 17.5% 12.6% DOLNOSLASKIE 6.6% 10.0% 3.7% 6.0% 7.5% 6.0% 7.8% 4.0% 10.4% LUBUSKIE 7.6% 4.6% 8.3% 5.1% 6.9% 7.3% 9.1% 9.0% 9.6% SLASKIE 13.0% 13.0% 14.1% 17.6% 16.1% 16.3% 12.7% 10.6% 9.5% KUJAWSKO-POMORSKIE 14.6% 10.2% 11.6% 15.7% 12.4% 7.5% 9.8% 8.8% 7.8% ZACHODNIOPOMORSKIE 6.6% 5.8% 5.3% 3.0% 7.9% 10.9% 4.8% 8.8% 5.5% OPOLSKIE 4.4% 10.2% 4.6% 5.8% 6.9% 6.7% 6.1% 7.0% 5.4% POMORSKIE 0.9% 1.8% 0.1% 0.6% 0.4% 2.4% 1.3% 0.9% 2.7% WIELKOPOLSKIE 2.7% 2.1% 10.8% 1.9% 0.8% 0.0% 0.4% 0.9% 0.2% Total Poland 17.0% 17.3% 19.0% 17.8% 18.2% 17.2% 16.4% 14.3% 13.8% (*): Mazowieckie including Warsaw 22
Non-domestic Incidence by Voivodship N= 342,198 weighted sticks (*): Mazowieckie including Warsaw >30% >15% <30% >2% <15% < 2% 23
Szczeci n G r yf ice Stargard Szczecinski G orzow Wi el kopol ski Bogat ynia M iedzyr zecz Zielona Gora Jelenia Gora Koszal i n Zlot or yja G logow Lubin Legni ca Wal brzych Pila Szam ot uly Leszno Poznan Swidnica Chodziez O bor niki Zlot ow Wrocl aw G niezno G dyni a Bydgoszcz G dansk O st r ow Wielkopolski Nam yslow Starogard Gdanski I nowr oclaw Kal i sz Konin O pol e Kr apkowice Tczew G rudzi adz Torun Strzelce Opolskie Kedzier zyn- Kozle Racibor z Wl ocl aw ek Rybni k Wodzislaw Slaski El bl ag Kut no Tarnowskie Gory Czest ochow a Lodz Pl ock Dabrowa Gornicza Byt om Bedzin G l i wzabrze i ce Siemianowice Slaskie Chorzow Swiet ochlowice Sosnow i ec Ruda Slaska Kat ow i ce Zor y Lask Br aniewo Piekary Slaskie Zgier z Pabianice Belchat ow M yslowice Jawor zno Tychy Bi el sko- Bi al a Radom sko Piot r kow Tr ybunalski Zawier cie Lidzbark Warminski O l szt yn St upsk Tom aszow M azowiecki Krakow Pr uszkow Jedr zejow M ilanowek Legionowo Skar zysko- Kam ienna Ki el ce O st r oleka Warszaw a Radom St ar achowice Nowy Sacz Tarnow Lom za Elk Ostrowiec Swietokrzyski St aszow O lecko Kozienice M ielec Sokolow Podlaski Pulawy Tar nobr zeg Ropczyce Jaslo Siedlce Suwalki Stalowa Wola Rzeszow Bi al yst ok Radzyn Podlaski Nisko Lubl i n Lancut Sokolka Biala Podlaska Pr zewor sk Kr asnyst aw Pr zem ysl Zam osc Chelm Hr ubieszow non-domestic incidence 13,8% includes 1.1% of counterfeit ALMARES CF Incidence by Voivodship Russia Lithuania Zachodniopomorskie Pomorskie 0.0% Warmińsko-Mazurskie Warmiòsko-Mazurskie 0.3% Podlaskie 0.5% Kujawsko-Pomorskie 0.0% Belarus 1.1% Mazowieckie Germany Lubuskie 0.7% Wielkopolskie 0.0% Dolnoslaskie 1.0% Lodzkie Poland 2.0% Swietokrzy skie Lubelskie 1.4% 1.0% Opolskie Slaskie 0.5% >30% >15% <30% Czech Republic 0.1% 2.1% Malopolskie 1.1% Podkarpackie 0.1% Ukraine >2% <15% < 2% Slovakia (*): Mazowieckie including Warsaw N= 342,198 weighted sticks 24