British American Tobacco (BAT) has reaffirmed its annual financial projections, anticipating stable demand for its vaping and oral nicotine offerings as well as increased pricing. This renowned manufacturer of Lucky Strike cigarettes foresees a 3% to 5% surge in organic revenue for the year 2023, based on constant currency rates, accompanied by mid-single digit growth in adjusted earnings per share.
However, BAT acknowledges that its reported revenue growth may be affected by the timing of the transfer of its Russian and Belarusian enterprises, slated for closure in 2023.
The company has thrived by strategically investing in alternatives such as e-cigarettes and heat-not-burn devices, capitalizing on the consumer shift towards tobacco-free products. Notably, BAT experienced a surge of 900,000 new users of non-combustible items in the first quarter. Unfortunately, growth in the combustibles market in the United States has been lackluster.
In response to this underwhelming performance in the U.S. combustibles sector, Tadeu Marroco, the newly appointed Chief Executive, expressed his disappointment in a statement. However, the company is taking proactive measures to rectify the situation. Although the implementation of their plans will require time and careful execution, BAT has observed sequential growth in its volume share since the beginning of the year.
