Category: Financial

  • BAT on Track To Deliver Fiscal Year Guidance

    BAT on Track To Deliver Fiscal Year Guidance

    Image: BAT

    British American Tobacco said it is on track to deliver its fiscal year guidance, with 2024 investment driving positive momentum toward long-term sustainable growth

    “Our second-half performance acceleration is driven by the phasing of new categories innovation, the benefits of investment in U.S. commercial actions and the unwind of wholesaler inventory movements,” said BAT CEO Tadeu Marroco in a statement.

    “In October, I was delighted to host our capital markets day together with our management team in our Innovation Centre in Southampton. This event demonstrated how BAT’s science, innovation, breadth of capabilities and people can combine to achieve a smokeless world and deliver long-term sustainable value for all our stakeholders. We continue to make progress towards our ambition of becoming a predominantly smokeless business by 2035.

    “Our ‘quality growth’ imperative is delivering higher returns on more targeted investments across all three new categories, and that prioritization and focus is already transforming our business in Europe. We are making further progress increasing profitability across new categories, and I am particularly pleased with the improvements in heated products and modern oral.

    “In the U.S., I am encouraged that our investment approach, taken over the last 18 months to strengthen our business, is working, despite a challenging macro-economic backdrop. Through our commercial actions, we have invested in our portfolio and improved our executional capabilities. With these previously announced plans now completed, we can prioritize driving sharper execution and opening incremental white space, related to modern oral.

    “We continue to prioritize shaping a sustainable future and call for more appropriate regulation and enforcement of new categories, including vapor in the U.S. and Canada.

    “We are making good progress and while there is still more to do, I believe that the choices we have made and the actions we are taking through this investment year are the right way forward for BAT.”

  • Stingfree Completes SEK5 Million Share Issue

    Stingfree Completes SEK5 Million Share Issue

    Photo: Stingfree

    Stingfree, a snus startup based in Sweden, has completed a new share issue of SEK5 million ($460,000) in November, resulting in a company valuation of SEK40.6 million.

    Demonstrating his confidence in the company’s future, billionaire entrepreneur Erik Selin increased his ownership stake from 15.8 percent to 21.9 percent.

    Stingfree offers a patented integrated gum protection product, effectively reducing burning, corrosion and irritation of the gums and thus enabling nicotine pouch use without discomfort.

    A spring 2024 pilot study in Sweden revealed significant declines in snus- and pouch-related oral health problems, such as oral lesions and inflamed gums after participants switched from their regular brands to a Stingfree nicotine pouch product for five weeks.

    Twenty out of the 23 dentists participating in the study now recommend Stingfree nicotine pouches to pouch using patients who cannot or do not wish to quit.

    “Injuries to the oral mucosa and gums are a common consequence of pouch use, regardless of whether the snus contains tobacco or is tobacco-free (nicotine pouches). Independent dental studies in Sweden and Norway published in 2022-2023 indicate that the prevalence of snus lesions affects as many as 70-90 percent of all users, which corresponds to over 1.2 million users in just Sweden and Norway.

    Our goal is for Stingfree nicotine pouches to become a new alternative standard for this category of oral nicotine products, as natural as light beverages are for soft drinks and GoreTex is for clothing and shoes.

    Daniel Wiberg, CEO, Stingfree

    “While other manufacturers compete on flavor and strength, we offer something truly unique—a solution that can actually improve the user’s oral health,” said CEO Daniel Wiberg.

    “Our goal is for Stingfree nicotine pouches to become a new alternative standard for this category of oral nicotine products, as natural as light beverages are for soft drinks and GoreTex is for clothing and shoes,” he added.

    “Our surveys with over 1,000 participating Swedish snus and nicotine pouch users also show that 67 percent of women and 53 percent of men dislike the burning sensation and the irritation on the gums” said Stingfree founder Bengt Wiberg.

    Tobacco Reporter profiled Stingfree in its July 2017 issue (see “Patching the Pouch“).

  • Imperial Releases Full-Year Results

    Imperial Releases Full-Year Results

    Imperial Brands has released its full-year results for the year ended Sept. 30, 2024.

    The company’s net revenue was up 4.6 percent from tobacco and next-generation products. It saw aggregate market share gains in its five priority markets with four out of five markets in share growth.

    Next-generation product net revenue was up 26 percent with growth from all three regions and improved gross margins. Growth at Logista reflected strong tobacco pricing and benefits of prior-year acquisitions.

    Adjusted earnings per share were up 10.9 percent, driven by profit growth and share count reduction. Reported earnings per share were up 19.1 percent.

    The company saw a free cash flow of £2.4 billion.

    Capital returns of approximately £2.8 billion are underway for full-year 2025 with £1.25 billion buyback and full-year 2024 dividend up 4.5 percent.

    “As we enter the final year of our current strategy, the investment we have made in consumer capabilities, cultural transformation and agile ways of working has supported another year of accelerated financial delivery and growing capital returns,” said Stefan Bomhard, CEO. “These results demonstrate how we are fulfilling our role as an effective challenger for the industry, able to deliver consistently against operational and financial expectations.

    “In tobacco, investment in our brands and sales force initiatives have delivered aggregate market share gains across our five priority markets while delivering strong pricing. This was supported by an encouraging stabilization in German market share for the first time under our strategy.

    “In next-generation products (NGP), we continue to build scale across our footprint with net revenues up 26.4 percent at constant currency driven by growth from all three regions and market share growth in all three categories. Our partnership approach to product innovation has enabled us to launch new products across all three categories during the year. This included our successful entry to the fast-growing modern oral category in the U.S. with our brand Zone.

    “Our operational delivery coupled with consistently strong cash flow generation has supported enhanced shareholder returns with increases to both our ordinary dividend and share buyback. We are on track to deliver five-year capital returns of c. £10 billion, representing 67 percent of our market capitalization in January 2021 when we launched our strategy. We look forward to presenting the next phase of our strategy at a Capital Markets Day on 26 March 2025.”

  • 22nd Century Net Loss Widens

    22nd Century Net Loss Widens

    Photo: crizzystudio

    22nd Century Group reported net revenues of $5.9 million for the quarter that ended Sept. 30, 2024, down from $7.9 in last year’s comparable quarter. Net loss increased to $3.6 million, compared with $2.2 million in the 2023 quarter.

    “Having joined this company just under a year ago, we have transitioned from a purely financial focus to the next phase of 22nd Century Group’s turnaround plans, which includes deploying our extensive asset base of manufacturing, brand, customer relationship and distribution resources to build a sustainable and self-funding growth business,” said Chairman and CEO Larry Firestone in a statement.  

    “While the third quarter results reflect the operational adjustments that I spoke to on our last report intended to address underperforming results in the filtered cigar business, we remain focused on our goal of EBITDA breakeven results in the first quarter of 2025. We expect that the changes in our core CMO business will drive revenue growth going forward at appropriate margin levels.

    “I am also excited to announce that we are now moving ahead on our plans to launch additional products, including VLN SKUs within key customer brand families, as part of our drive to expand the distribution of reduced nicotine content cigarettes manufactured by 22nd Century.

    “Adding VLN within other brand families is a straightforward way to reduce our time to market, increase consumer awareness and expand the VLN footprint. This is really the beginning for 22nd Century as the synchronicity between the CMO business and VLN is progressing as planned and is the foundation for our growth plans for 2025 and beyond.”

  • Net Sales up at Scandinavian Tobacco

    Net Sales up at Scandinavian Tobacco

    Image: STG

    Scandinavian Tobacco Group (STG) reported a 7.1 percent increase in net sales to DKK2.4 billion ($338.94 million) for the third quarter of 2024, with an EBITDA margin before special items at 23.4 percent. In a like-for-like comparison and excluding exchange rate developments, organic net sales decreased by 0.1 percent.

    Discontinuation of distribution of third-party nicotine pouches in the U.S. impacted growth negatively by 1 percent. Growth in the company’s machine-rolled cigars and smoking tobacco and next generation products (NGP) segment was partly offset by a decline in STG’s handmade cigars and accessories business.

    The NGP brand XQS increased 72 percent, though the absence of the distribution of nicotine pouches reduced category growth to 2 percent.

    The decrease in the EBITDA margin was a result of STG’s investment to support growth of our its NGP portfolio, the currently lower profitability in Mac Baren and the comparison to a strong third quarter 2023.

    With the acquisition of Mac Baren, we are in 2024 on track to surpass DKK9 billion in net sales for the first time ever.

    Niels Frederiksen, CEO, Scandinavian Tobacco Group

    “With the acquisition of Mac Baren, we are in 2024 on track to surpass DKK9 billion in net sales for the first time ever and we expect the Mac Baren acquisition to deliver significant synergies as we implement the integration plan, said STG CEO Niels Frederiksen in a statement.

    “In the third quarter market share in machine-rolled cigars in Europe stabilized and began to improve and in particular France showed promising progress. XQS performed well in both Sweden and in U.K. as well as in Denmark where the brand has recently been introduced. The remainder of the growth enablers also delivered growth.

    “We remain committed to enhancing shareholder returns and we are about to complete our current share buyback, after which we will have returned almost DKK1.5 billion to shareholders over the course of 2024.”

  • Pyxus International Posts ‘Solid’ Quarter

    Pyxus International Posts ‘Solid’ Quarter

    Photo: AOI

    Pyxus International announced results for its fiscal quarter ended Sept. 30, 2024.

    “We are pleased to report a solid first half, establishing the necessary foundation to achieve strong full-year results,” said Pyxus President and CEO Pieter Sikkel in a statement.

    The company reported second-quarter sales and other operating revenues of $566.3 million compared to $624.3 million for the prior fiscal year’s second quarter. The change versus the prior year primarily reflects a shift in timing of certain shipments, a portion of which were accelerated into the company’s first quarter of the current fiscal year, with shipments being delayed out of the second quarter being expected to benefit second-half results.

    The 9.3 percent reduction in second-quarter revenue compared to the prior-year second quarter was the result of a volume decline of 23 percent, partially offset by a 14.5 percent improvement from pricing driven by cost increases.

    The company’s reported gross profit was $75.4 million in the second quarter compared to $88.7 million in the second quarter of fiscal 2024. This reduction was associated with the shipment of inventory purchased during El Nino market conditions in South America.

  • Illicit Trade Hurts PTC’s Sales

    Illicit Trade Hurts PTC’s Sales

    Image: Ali Sher

    Competition from illicit tobacco products caused Pakistan Tobacco Co.’s (PTC) sales to drop by 11.26 percent in the first quarter of the current fiscal year as compared to 2023-2024.

    “The legitimate tobacco industry in Pakistan faces continued challenges as illicit cigarette sales have reached alarming levels,” PTC’s senior regulatory affairs manager, Qasim Tariq, was quoted as saying by the Associated Press of Pakistan.

    During the period under review, PTC sold 6.3 billion cigarettes, against 7.1 billion in the comparable 2023 quarter.

    PTC is not the only organization impacted by illicit trade. In a recent statement to the Senate Standing Committee, the Federal Board of Revenue (FBR) revealed that 50 percent of cigarettes were being sold in Pakistan illegally, causing the government to miss out on much-needed tax revenue.

    Tariq attributes the problem, in part, to excessive tobacco taxation levels. In February 2023, the government increased the Federal Excise Duty by more than 150 percent, driving many smokers to purchase their tobacco on the black market instead. “As a result, there is an estimated PKR300 billion loss to government revenue which is essential for public services, infrastructure and economic development initiatives,” he remarked.

    While commending the FBR for its enforcement efforts against illicit tobacco trade, Tariq emphasized that isolated measures would not be enough to address the problem. He believes that the market for illicit products remains strong due the FBR’s limited resources and inconsistent enforcement at the retail level.

    “PTC strongly advocates for the full and consistent implementation of a track-and-trace system in all regions, including Azad Jammu and Kashmir, to enable authorities to identify and monitor products, reduce tax evasion and ensure only legitimate products reach consumers,” he said.

  • Ispire Net Loss Widens to $5.6 Million

    Ispire Net Loss Widens to $5.6 Million

    Image: Nawarit

    Ispire Technology reported revenue of $39.3 million for the first quarter of 2025, down from  $42.9 million in the comparable 2024 quarter. Gross profit increased 13.2 percent to $7.7 million. Net loss was $5.6 million as compared to net loss of $1.3 million in the fiscal first quarter of 2024.

    “Our results from the fiscal first quarter of 2025 reflect our commitment to our growth strategy of becoming the leading innovative vaping technology and precision dosing solutions company worldwide,” said Inspire Co-CEO Michael Wang in a statement.

    “While our financial results were slightly impacted due to the strategic shifts we have made in our U.S. business to focus on high-quality customers and to improve payment terms and gross profit, I am pleased with our team’s overall performance given the challenging macroeconomic environment and look forward to the remainder of fiscal 2025 and the opportunities that lay ahead.”

    According to Wang, Ispire continues to make progress with its point-of-use age gating technology. He also expressed excitement about the recent expansion of Ispire’s global reach through a five-year master distributor agreement with ANDS for the Middle East and North Affrica region and global duty-free markets

    “The results from our fiscal first quarter were in line with our internal projections as we shifted our U.S. strategy while we also had a few delayed shipments which impacted our quarterly results,” said Ispire Chief Financial Officer Jim McCormick.

    “As we head into the remainder of fiscal 2025, we are confident that we are well-positioned to continue delivering value to our shareholders as we advance our mission of becoming a global leading provider of innovative vaping technology and precision dosing solutions.”

  • Sales and Profits up at TPB

    Sales and Profits up at TPB

    Stoker’s MST continued to grow share while FRE sales more than quadrupled versus last year’s quarter.

    Turning Point Brands (TPB) announced financial results for the third quarter ended Sept. 30, 2024.

    Total consolidated net sales increased 3.8 percent to $105.6 million compared to the third quarter of 2023. Zig-Zag product net sales increased 5.5 percent during the same period. Stoker’s product net sales increased 12.1 percent. Creative Distribution Solutions net sales decreased 17.4 percent.

    Gross profit increased 4 percent to $53.7 million compared to 2023. Net income increased 14.3 percent to $12.4 million. Adjusted net income increased 9.8 percent to $15.9 million. Adjusted EBITDA increased 11.3 percent to $27.2 million.

    “We were pleased by our third-quarter results,” said TPB president and CEO Graham Purdy in a statement. “We believe Zig-Zag is on a sustainable growth trajectory. Stoker’s MST continued to grow market share while FRE sales more than quadrupled versus year-ago and grew 26 percent sequentially as we continue to expand our national footprint.”

  • Haypp Group Sales up by a Quarter

    Haypp Group Sales up by a Quarter

    Image: Haypp Group

    The Haypp Group reported net sales of SEK944.2 million ($87.98 million) for the third quarter of 2024, up 23 percent over the comparable 2023 period. At constant currency exchange rates, net sales increased by 25 percent.

    Gross profit increased to SEK134.8 million, while adjusted EBIT for the third quarter increased to SEK33.1 million. In terms of volume, the company’s nicotine pouch business grew 42 percent.

    “Haypp Group retained its strong business momentum in the third quarter of 2024 with net sales growth of 23 percent, the highest rate over the last two years driven by strong performances from all three divisions,” said Haypp Groups CEO Gavin O’Dowd in a statement.

    “Moreover, the Insights business continues to develop as brand owners leverage Haypp Group’s unique and powerful consumer data.”

    The company’s third quarter report is here.