BAT Earnings up Despite Covid-19

British American Tobacco (BAT) reported revenue of £25.78 billion ($35.69 billion) and profit of £9.96 billion in its preliminary announcement for 2020. The figures are down 0.4 percent and up 10.5 percent, respectively, over those of 2019. Operating margin improved 380 base points to 38.6 percent.

“As the largest, and only truly global company in our industry, we take seriously our role to transform ourselves and demonstrate thought leadership,” said BAT CEO Jack Bowles. “We have a clear purpose to reduce the harm footprint of our business. We are uniquely positioned to encourage the switch to reduced-risk products.

“We operate worldwide, including the U.S., which represents 40 percent of the global industry’s value. Our well-embedded consumer-centric, multi-category strategy is activated on a global scale, leveraging our insights on consumer satisfaction, innovation needs and taste preference. We are building the brands of the future—strong, global brands, specifically positioned in each target consumer segment.”

The number of people consuming BAT’s noncombustible products grew by 3 million to 13.5 million in 2020, doubling the rate of consumer adoption in the second half of 2020. A fifth consecutive year of value share growth in combustibles enables the company to increase its investment in “new category” products by £426 million compared to 2019.

Initiatives aimed at driving efficiencies and simplifying the company delivered £660 million of cost savings, putting BAT well on track to achieve its target of £1 billion of savings by 2022.

“We are committed to reducing the health impact of our business whilst delivering sustainable results that create long-term multi-stakeholder value,” said Bowles.