BAT reports strong revenue growth in heated tobacco products
BAT reported revenue of GBP 13.44 billion (USD 17.35 billion) for the first six months of 2023, up 4.4% from the same period in 2022. Growth was driven by the company’s new categories division. Revenue from heated tobacco now accounts for 16.6% of group r
British American Tobacco reported revenue of £13.44 billion ($17.35 billion) for the first six months of 2023, a 4.4% increase compared to the same period in 2022. The growth was driven by the company's “new categories” segment. Revenue from heated tobacco now accounts for 16.6% of group revenue, an increase of 180 basis points (bps) from the 2022 fiscal year.
BAT's Vuse and Velo brands saw strong revenue growth, with significant improvements in revenue from new products, contributing £201 million to group profits while reducing losses.
Reported operating profit grew by 61.4% (with reported operating margin increasing by 1,560 basis points to 44.2%). On a constant currency basis, adjusted profit grew by 3.6%. Adjusted operating margin rose by 40 basis points to 44.3%.
Tadeu Marroco, who took over as CEO in May, stated: “Having been in the role for 10 weeks, I am pleased with BAT's resilient performance in the first half of 2023 and the renewed energy across the organization.” He added, “This is a challenging external environment. High inflation and global growth slowdowns are impacting consumers and businesses. However, our revenue, operating profit, and earnings are all growing.”
“We have made significant progress in new categories. Revenue grew by 29%, and we are now close to breakeven, with 1.5 million more consumers of heated tobacco products compared to the 2022 fiscal year. It is encouraging to see continued strong performance in vaping and oral tobacco products.”
“I still believe that new categories will make a positive contribution in 2024. However, we expect the growth contribution will not be linear, as investment levels will align with the phased rollout of our large innovation platforms.”
“While the U.S. needs more focus, we have seen encouraging continuous performance improvements in our key heated tobacco business in the U.S. since January 2023.”
