The ratings on U.K.-based British American Tobacco PLC (BAT) reflect Standard&Poor's Ratings Services' view of the group's "strong" business risk profile, as the world's second-largest international tobacco company, and its "intermediate" financial risk profile. BAT's key business strengths include its resilient profitability and cash generation, and its broad geographic diversification with more than 70% of the group's revenues coming from outside Western Europe in 2011. We see the group's brand equity, which acts as a barrier to entry, along with its relatively low capital intensity and exposure to rising incomes and populations in emerging markets, as major supports to cash flow generation. These strengths are offset to a degree by a structural decline in industry volumes, as well
