British American Tobacco (BAT) outlined its strategy for next-generation products (NGP) and reduced- risk products during an investor meeting in London on Oct. 25.
According to Wells Fargo Securities, the company aims to increase NGP revenue to more than £1 billion in 2018 and more than £5 billion in 2022.
It expects to achieve break-even profits on NGPs by the end of 2018, followed by “substantial” profits by 2022.
The company expects NGPs to represent 30 percent of its revenue by 2030.
Margins on vapor products and tobacco-heating products are likely to be higher than those on combustible cigarettes, according to the company.
BAT is investing in multiple products across the vapor and heated-tobacco spectrum to satisfy increasingly diverse consumer preferences.
The company plans to submit a “substantial equivalence” application to the U.S. Food and Drug Administration for its Glo tobacco-heating device in 2018.