6th Jun 2023 08:49
(Alliance News) - British American Tobacco PLC will make no change to strategy under its new chief executive, Tadeu Marroco, he affirmed on Tuesday.
Marroco was providing his first trading update since taking over as CEO of the London-based maker of cigarettes and vaping products, following the sudden resignation of Jack Bowles in May.
Marroco, who had been BAT's finance director, said: "Let me address a frequently asked question: Will there be a change in our strategy?" No. I am clear that the strategy we created in 2019 is right. I am confident that we can execute it successfully."
That strategy centres around non-combustible "reduced-risk products" for smokers.
Marroco admitted the performance in US combustibles in the first half of 2023 has been "disappointing", and improving it will be a strategic focus.
BAT's tobacco heating product, glo, saw an "underwhelming" start to the year, but has since seen more encouraging momentum.
BAT said that for the first quarter of 2023, it saw an increase of 900,000 customers for its non-combustible products, which is part of its New Categories unit. It added it is on track to deliver its New Categories GBP5 billion revenue goal in 2025, with profitability in 2024. For 2022, BAT had reported New Categories revenue of GBP2.89 billion, up 41% annually from GBP2.05 billion.
BAT said it is maintaining is full-year 2023 guidance.
BAT expects global tobacco industry volumes to be down by around 3% this year. For itself, BAT expects 3% to 5% constant currency revenue growth, with a second half weighting. In 2022, revenue had grown 7.7% to GBP27.66 billion from GBP26.68 billion, or 2.3% on a constant currency basis.
For constant currency adjusted diluted earnings per share, BAT expects mid-single figure growth, with a 2% or so transaction foreign exchange headwind. In 2022, adjusted diluted earnings per share had increased 13% to 371.4 pence from 329.0p.
British American Tobacco shares were 0.1% higher at 2,572.00 pence each in London on Tuesday morning but down 0.5% to ZAR614.36 each in Johannesburg.
By Tom Budszus, Alliance News reporter
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