British American Tobacco (BATS) Trading Update summary

2024 performance and outlook

• Performance is in line with expectations, with full-year guidance of low single-digit revenue and adjusted profit growth on an organic, constant currency basis.

• Second-half acceleration is driven by new category innovation, U.S. commercial actions, and inventory normalization.

• Improved new category revenue growth is expected in H2, with continued focus on profitability in heated products and modern oral.

• Macro environment remains mixed, but early signs of recovery and easing interest rates are anticipated to benefit 2025.

• Technical guidance updated for FX: 1.5% transactional and 4.5% translational headwinds on adjusted profit.

Combustibles and regional performance

• U.S. combustibles face challenging macro conditions and illicit vapor proliferation, but premium segment volume share is up 50 bps year-to-date.

• U.S. commercial actions in combustibles gaining traction, with volume share flat and value share down 30 bps; AME and APMEA regions show volume and value share gains.

• Robust pricing and share gains in AME and APMEA, with strong contributions from Brazil, Mexico, Pakistan, Sri Lanka, and Turkey.

• Outside the U.S., solid combustible performance continues, with supportive environments in Turkey, Brazil, Nigeria, and Japan.

• Expecting improved revenue growth in both New Category and Combustibles segments in H2 versus H1.

New categories: vapor, heated, and modern oral

• Maintains global vapor value share leadership at 40.3% in top markets; U.S. share at 50.7% but impacted by illicit products.

• Innovations like Vuse Go 2.0, Vuse Go Reload, and upcoming Vuse Ultra target premium vapor segment.

• Heated products see improved growth from glo Hyper Pro and new consumables, with premium positioning and recovery in Japan and Italy.

• Modern oral (Velo) shows strong growth, especially in non-traditional markets like the U.K. and Poland, and U.S. share up 180 bps year-to-date.

• Velo Plus national rollout underway in the U.S., targeting 110,000 outlets by Q1 2025.