British American Tobacco (BAT) reports its half-year results for the six months ended 30 June 2023, with revenue up 4.4%, with new tobacco performing well; Non-combustion products accounted for 16.6% of the Group’s total revenue; Reported operating profit rose 61.4 per cent. The financial performance of New tobacco has improved significantly, contributing £201 million to group profits, and the business is on track to achieve its profitability target by 2024.
New tobacco is performing strongly
In the report, BAT noted that its vaping e-cigarette brands Vuse and Velo continue to achieve strong revenue growth, while the launch of the glo Hyper X2 Air, a heat-not-burn product, lays the foundation for future innovation. New tobacco contributed about £201 million to the increase in profits.
BAT said its investment in non-combustion products is gradually paying off and it is now very close to breaking even, while the number of users of non-combustion products increased by 1.5 million from last year. But it also points out that progress in heating tobacco products needs more work.
BAT’s revenue, operating profit and earnings all grew, and in the US combustion tobacco market, the company achieved a gradually improving performance in the first half of 2023, especially in the high-end tobacco product segment.
“Revenue, operating profit and earnings are growing”
Tadeu Marroco, Chief executive Officer of BAT, said that despite the complex external environment, he was pleased with the company’s resilient performance in the first half of 2023 and the new dynamism within the organization.
New tobacco is playing an increasing role in the results, with revenue up 29% year-over-year and 1.5 million more users of non-combustion products than last year. He is confident of future contributions and expects positive growth in 2024. At the same time, he also said that the US market still needs to strengthen attention, but the gradual improvement in the high-end tobacco business since 2023 is encouraging.
BAT said it is actively responding to the challenges through management restructuring to enhance strategic capabilities and further consolidate a culture of cooperation and inclusion. BAT will continue its commitment to sustainable development and promote cooperation across the value chain to achieve sustainability goals, including three categories of emissions and biodiversity.
Previously, BAT shareholders had expressed frustration with its slow transition to e-cigarettes and other low-harm products.
reference
[1] Half-Year Report for the six months to 30 June 2023. [1] Half-Year Report for the six months to 30 June 2023