New Category Growth Drives BAT Revenue

BAT released its 2022 financial results, showing that revenue was up 2.3 percent, driven by new category growth and pricing. Adjusted profit from operations was up 4.3 percent, absorbing a negative transactional foreign currency impact of 1.5 percent.

For 2023, the company expects the global tobacco industry volume to be down about 2 percent. An organic constant currency revenue growth of 3 percent to 5 percent is expected, with reported growth impacted by the timing of the transfer of the Russian and Belarussian businesses expected to close in 2023.

“We continue to accelerate our ‘A Better Tomorrow’ transformation at speed,” said BAT CEO Jack Bowles. “Driven by our strong new category momentum, (with revenue approaching £3 billion), we are confident in our £5 billion ($6.09 billion) revenue target by 2025 and now expect new category profitability in 2024, one year ahead of plan.

“Our new category business delivered strong volume, revenue and market share growth and has become a significant contributor to the group’s financial delivery. In 2022, we invested more than £2 billion in new categories to drive long-term sustainable growth while making excellent progress in reducing operating losses by 62 percent.

“While reported results were impacted by a number of one-off charges, we achieved a 150 bps improvement in adjusted operating margin at current rates and another year of 100 percent operating cash conversion, demonstrating our ability to successfully navigate an increasingly challenging macroeconomic environment. This enabled us to return £6.9 billion to shareholders in 2022. I am proud of our people and their focus on delivery of our three strategic priorities, demonstrating once again the strength and resilience of our business.

“Looking forward, while we expect the macroeconomic environment to remain challenging, we will continue to deliver and further accelerate our transformation. We will leverage our well-established multi-category brand portfolio, our new regional structure to enable even greater collaboration and accelerated decision-making and our new market archetype model to guide our strategic choices and resource allocation to further enhance returns.”