BAT’s big bet on new categories delivers buoyant revenue
The world’s second-largest tobacco company grew revenue 7% in its year to end-December, helped by sales of e-cigarettes and oral nicotine
11 February 2022 - 11:28
byRicha Naidu and Siddharth Cavale
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British American Tobacco (BAT) on Friday reported a 7% rise in full-year adjusted revenue to £25.7bn ($34.8bn), helped by sales of e-cigarettes and oral nicotine.
The world’s second-largest tobacco company also announced a dividend increase of 1% to 217.8p and a £2bn share repurchase programme for 2022.
It posted a 51% rise to £2.05bn in adjusted sales of its “new categories” product line which includes e-cigarettes, heated tobacco and oral nicotine.
Though the division has yet to turn a profit, BAT said it was on track to report revenue of £5bn and profitability by 2025.
“Continued growth in new categories is a cornerstone of BAT's long-term plans for success,” Third Bridge analyst Ross Hindle said.
“With over 1.1-billion smokers still using combustibles, the opportunity to convert consumers towards ‘new categories’ is highly attractive.”
The company said 4.8-million more consumers than last year used non-combustible products such as Vuse e-cigarettes, glo heated tobacco and Velo oral nicotine
BAT said it expected global tobacco industry volumes to decline about 2.5% in 2022.
For 2021, the company had estimated those volumes to remain flat. Before adjusting items and including the dilutive effect of employee share schemes, adjusted diluted earnings per share (EPS) fell 0.8% to 329p from 331.7p .
The maker of Lucky Strike and Camel cigarettes said it expected constant currency revenue growth of 3%-5% in 2022, and high-single figure constant currency adjusted EPS growth, weighted towards the second half of the year.
BAT shares, which have risen more than 20% in the past year, were flat in morning trade.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
BAT’s big bet on new categories delivers buoyant revenue
The world’s second-largest tobacco company grew revenue 7% in its year to end-December, helped by sales of e-cigarettes and oral nicotine
British American Tobacco (BAT) on Friday reported a 7% rise in full-year adjusted revenue to £25.7bn ($34.8bn), helped by sales of e-cigarettes and oral nicotine.
The world’s second-largest tobacco company also announced a dividend increase of 1% to 217.8p and a £2bn share repurchase programme for 2022.
It posted a 51% rise to £2.05bn in adjusted sales of its “new categories” product line which includes e-cigarettes, heated tobacco and oral nicotine.
Though the division has yet to turn a profit, BAT said it was on track to report revenue of £5bn and profitability by 2025.
“Continued growth in new categories is a cornerstone of BAT's long-term plans for success,” Third Bridge analyst Ross Hindle said.
“With over 1.1-billion smokers still using combustibles, the opportunity to convert consumers towards ‘new categories’ is highly attractive.”
The company said 4.8-million more consumers than last year used non-combustible products such as Vuse e-cigarettes, glo heated tobacco and Velo oral nicotine
BAT said it expected global tobacco industry volumes to decline about 2.5% in 2022.
For 2021, the company had estimated those volumes to remain flat. Before adjusting items and including the dilutive effect of employee share schemes, adjusted diluted earnings per share (EPS) fell 0.8% to 329p from 331.7p .
The maker of Lucky Strike and Camel cigarettes said it expected constant currency revenue growth of 3%-5% in 2022, and high-single figure constant currency adjusted EPS growth, weighted towards the second half of the year.
BAT shares, which have risen more than 20% in the past year, were flat in morning trade.
Reuters
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