PMCR’s revenue ex consumer tax and VAT fell 3.3% to 2.79 bln. CZK on lower volumes and brand sales mix. Revenues in the CR declined by 12% in 1Q13 largely due to an overall decline of the cigarette market. The total cigarette market in the CR was down by 6.5% to 4.3 billion units in 1Q13, mainly reflecting the impact of excise tax-driven price increases in the first quarter. Market share was down by 0.9 points to 50.1% in 1Q13 principally reflecting continued share declines for lower-margin local brands. Revenue decline in the CR was partly offset by higher revenues from export (+2.9% y/y), which, however, is low-margin business for the company. Overall, we see selected 1Q13 figs as slightly negative mainly due to weaker sales in the CR. Nevertheless, we remain confident sales volumes in the CR will improve throughout 2013. We think a portion of the cigarette market decline in 1Q13 can be attributed to “pre-stocking” effect before the January tax hike.