BAT on Track to Meet 2025 Revenue Target

BAT is making “excellent progress” toward its £5 billion ($6.62 billion) revenue target by 2025, CEO Jack Bowles said in a trading update. New category products are now a sizable contributor to group revenue growth and will continue to profit growth for the first time as their losses start to reduce, he noted.

 “We are building strong, fast-growing, global brands of the future, adding another 3.6 million consumers of noncombustible products in the first nine months of the year—more than in all of 2020,” said Bowles.

 “Our strong focus on cash flow and deleveraging continues. We recognize the clear value of a share buyback at the current valuation. We also continue to be clear on the need to deliver on our 2021 commitment to reduce leverage to circa three times adjusted net debt/adjusted EBITDA and expect to reach this by the year end. This will provide greater capital allocation flexibility as we enter 2022.”

 According to BAT, the company’s Vuse vapor cigarette is approaching nationwide leadership with a 31.4 percent value share of the U.S. vapor market. Glo Hyper reached a category volume share of 17.7 percent in the top nine tobacco-heating products markets.

 Meanwhile, the company continued to enjoy value growth in combustibles, with strong pricing partially offset by geographic mix and the absorption of about £260 million profit impact in Australia and New Zealand.