27th Nov 2019 08:01
(Alliance News) - British American Tobacco PLC said Wednesday it expects to report robust results in 2019, following a strong performance in the second half, particularly in the US.
In the US, the London & Johannesburg-listed tobacco firm said it delivered good revenue on a constant currency basis, supported by pricing and reduced discounting. BAT continues to expect US industry volumes for 2019 to be down by 5.5%, while for 2020 it expects a drop in the range of 4% to 6%.
In the Vapour division, Vuse is growing its value share in the US, with Vuse Alto's share at 11% in October, and the Vuse family value share at 18%.
Elsewhere, Vuse has continued to grow its market share at 12% in the UK and 19% in France, while the ePod product has been successfully launched in both European markets.
Meanwhile, for the Tobacco Heating Products division, the glo product in Japan has held its volume share at 4.9% for the year-to-date, with the launch of glo Pro and glo Nano despite a competitive market.
However, BAT's expected constant currency revenue growth for the New Categories segment is at the lower end of its guidance range of 30% to 50%, reflecting a slowdown in the US vapour market.
Finally, in Combustibles, global industry volumes are expected to be down around 3.5% for the full-year, with BAT's volumes to be broadly in line with the wider market.
Overall, BAT said it expects to report a rise in adjusted operating profit for 2019 in the upper half of its 5% to 7% guidance range.
Constant currency revenue for the year, meanwhile, is also expected to grow in the upper half of its guidance range, which is between 3% and 5%.
"We expect to deliver a strong performance in 2019, building on the good progress we made in the first half. Our focus on our global strategic brands is delivering share gains and strong price mix in combustibles, both globally and in the US. Increased investment and new product launches are delivering good New Category revenue growth in the second half, despite the recent slowdown in the US vapour market. We believe that the issues around vaping in the US should lead to a better and stronger regulatory environment in which we are well placed to succeed," said Chief Executive Jack Bowles.
Shares in British American Tobacco were up 1.4% at ZAR574.79 on Tuesday morning in Johannesburg, with the stock down 0.5% at 2,971.37 pence in opening trade in London.
By Dayo Laniyan; [email protected]
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