On Friday, British American Tobacco (BAT) reported a 7% rise in full-year adjusted revenue, to £25.7 billion ($34.8 billion), helped by sales of e-cigarettes and oral nicotine.
The world’s second-largest tobacco company also announced a dividend increase of 1.0%, to 217.8 pence, and a £2 billion share repurchase programme for 2022.
It posted a 51% rise, to £2.05 billion, 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 noted that it was on track to report revenue of £5 billion 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 noted that 4.8 million more consumers than last year used non-combustible products, such as Vuse e-cigarettes, Glo heated tobacco, and Velo oral nicotine.
Global Tobacco Volumes
BAT noted that it expects global tobacco industry volumes to decline by around 2.5% this year.
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 by 0.8%, to 329.0 pence from 331.7 pence.
The maker of Lucky Strike and Camel cigarettes noted that it expects constant-currency revenue growth of 3%-5% this year, and high single-figure constant-currency adjusted EPS growth weighted towards the second half of the year.
BAT shares, which have risen by more than 20% in the past year, were flat in morning trade.