British American Tobacco (BAT) maintained its annual revenue and profit forecasts on Tuesday and said its performance would be weighted towards the second half, betting on steady demand for its vaping and oral nicotine products and higher prices.
The Lucky Strike cigarette maker expects a 3% to 5% rise in 2023 organic revenue at constant currency rates and mid-single digit growth in adjusted earnings per share.
However, reported revenue growth would be impacted by the timing of the transfer of its Russian and Belarusian businesses, which is expected to close in 2023, BAT said.
Ramping Up Investment
BAT has benefited from its decision to ramp up investment in alternatives like e-cigarettes and so-called heat-not-burn devices, as consumers switch to tobacco-free products.
The company said the number of consumers of non-combustible products grew by 900,000 in the first quarter, but growth in the U.S. combustibles market staggered.
"Our performance in US combustibles has been disappointing," newly appointed chief executive Tadeu Marroco said in a statement.
"We are taking action, and while it will take some time to carefully and thoroughly implement our plans, our volume share has grown sequentially since the start of the year."