BAT hikes sales growth outlook amid shift to e-cigarettes

imageStock Markets12 hours ago (Jun 08, 2021 11:26)

© Reuters. FILE PHOTO: Lucky Strike cigarettes are seen during the manufacturing process in the British American Tobacco Cigarette Factory (BAT) in Bayreuth, Germany, April 30, 2014. REUTERS/Michaela Rehle


(Reuters) -British American Tobacco raised its annual revenue growth forecast on Tuesday as the cigarette maker’s focus on e-cigarettes and tobacco-heating devices pays off, sending its shares up 2%.

The London-listed company said it expected revenue growth of more than 5% at constant currencies, above its previous range of 3% to 5% for the year to December. It stuck to its growth expectation for adjusted earnings per share in the mid-single digit range.

The maker of Lucky Strike and Newport cigarettes said its “new category” reduced risk products had gained share in all key markets, including the United States and Japan, with the company adding 1.4 million new customers in the first quarter.

The company, which sells Vuse e-cigarettes and glo tobacco heating products, said users of its new category products now totaled 14.9 million.

“The upgrade and delivery around reduced risk products is particularly encouraging”, Jefferies analyst Owen Bennett wrote.

BAT (LON:BATS)’s comments show more customers in the United States are switching to e-cigarettes before a possible U.S. ban on menthol cigarettes and flavoured cigars.

BAT said it expected its full-year sales volumes to show a better performance than the broader industry, which is expected to see a 3% slide this year. BAT said it expected sales to be boosted by a recovery in markets such as Bangladesh, Pakistan and Vietnam.

The outlook for the U.S. industry volumes remained unclear, BAT said, blaming “macro-economic and fiscal” uncertainties.

The company also said it was seeing strong uptake of its oral nicotine products in Sweden and Norway, where it now controls more than 50% volume share in both markets.

“We continue to expect 2021 to be a pivotal year for the business, with accelerating new category revenue growth (and) a clear pathway to new category profitability,” BAT Chief Executive Jack Bowles said in a statement.

BAT has invested nearly 500 million pounds ($707 million) in its new category products business last year and has set a target of achieving 5 billion in sales for the business by 2025 and 50 million customers by 2030.

($1 = 0.7075 pounds)

BAT hikes sales growth outlook amid shift to e-cigarettes

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Please enter your comment!
Please enter your name here