British American Tobacco named insider Jack Bowles to succeed Nicandro Durante as chief executive officer on Tuesday, giving him the task of adapting to new tobacco formats as smoking declines.
"I am confident that we will take full advantage of these opportunities as we accelerate the transformation of BAT into a stronger multi category tobacco and nicotine products company," Bowles said in a statement revealing his appointment.
Shares in the maker of Lucky Strike and Dunhill cigarettes fell by more than 2% and were the top loser on the UK bluechip index following the appointment of Bowles, who is chief operating officer of BAT's international business.
Bowles, 54, joined the world's second-biggest international tobacco company by revenue in 2004 and has worked in Western Europe, Americas and Asia-Pacific regions. He will become CEO designate on Nov. 1 and join the board on 1 Jan.
Durante plans to retire on April 1 next year, after nearly 37 years with BAT. Although its shares have risen by about 50% during his near eight-year tenure as CEO, they have fallen more than 23% in the past 12 months.
Jefferies analyst Owen Bennett said last week that he hoped the change would prompt improved disclosure and communication.
BAT said in July that it was confident of exceeding £1 billion in revenue from next generation products this year, as new launches should bolster growth in the second half after a slowdown in some key markets such as Japan and Korea.
It plans to test its new Eclipse tobacco heating device in the United States this year, seeking to overtake Philip Morris in the world's biggest vaping market.
Philip Morris leads in the global tobacco heating market with its IQOS device. Companies say these devices may be more satisfying to smokers than traditional e-cigarettes because they are made with tobacco rather than nicotine-laced liquid.
Rival British tobacco company Imperial Brands announced plans on Tuesday to launch a heated tobacco product early next year.