Tag: British American Tobacco

  • BAT Appoints Sustainability Officer

    BAT Appoints Sustainability Officer

    Photo: BAT

    BAT has appointed Mike Nightingale as its first chief sustainability officer to lead the company’s sustainability and ESG agenda.

    Nightingale has been the group head of investor relations for the past 10 years. Prior to that, he held senior leadership positions in sustainability, regulation and marketing.

    Additionally, to reflect BAT’s corporate intent and the increasing strategic importance of both ESG and sustainability for the group, the role of Kingsley Wheaton as chief marketing officer with responsibility for corporate affairs, will be redesignated as chief growth officer.

    Beyond overseeing the marketing efforts to drive value from combustibles while ensuring a step-change in New Categories performance, Kingsley has also led the initiatives to place ESG front and center of the group’s strategy.

    Nightingale will report to Kingsley in his new role as chief sustainability officer with effect from Sept. 1.

    Victoria Buxton, senior investor relations manager, will be promoted to the role of group head of investor relations and will report to Finance and Transformation Director Tadeu Marroco, also with effect from Sept. 1.

    “I am delighted that Mike has been appointed as our first chief sustainability officer,” said BAT CEO Jack Bowles in a statement. “Mike will lead us into a new era of sustainability ‘thought leadership.’ With his extensive experience of the business, most recently as group head of investor relations, he is uniquely suited to this challenge.

    “Likewise, Victoria has an excellent track record, both as a consumer sector equity analyst and, more recently, as a senior member of Mike’s team. Her promotion is testament to her energy, commitment and drive.”

  • Judge Boosts PM’s Infringement Award

    Judge Boosts PM’s Infringement Award

    Photo: New Africa

    R.J. Reynolds Vapor Co. owes Philip Morris Products more than $14 million after a federal judge on Aug. 17 increased a jury’s June patent-infringement award over vapor products to include prejudgment interest and supplemental damages, reports Bloomberg Law.

    Judge Leonie M. Brinkema amended the judgment entered June 15 in the U.S. District Court for the Eastern District of Virginia to reflect a total judgment amount of $10.9 million for infringement of one patent and $3.16 million for infringement of another.

    In its June 15 judgement, the jury found that RJR’s Vuse Solo and Alto devices infringe two Philip Morris patents covering parts of a vaping device for heating substances and preventing leaks. At the same time, the jury cleared Vuse Alto of infringing one of the patents.

    The verdict concerned counterclaims in RJR’s ongoing patent lawsuit over PMI’s IQOS heated-tobacco device. RJR won an order blocking IQOS imports at the U.S. International Trade Commission last November.

    Philip Morris succeeded earlier this year in invalidating parts of some patents RJR accused it of infringing at a U.S. Patent Office tribunal.

    RJR parent company BAT has also sued Philip Morris over IQOS in the United Kingdom, Germany and elsewhere. A PMI filing with the U.S. Securities and Exchange Commission earlier this year said IQOS patent lawsuits and challenges outside of the U.S. have “repeatedly and universally failed.”

    Altria has separately sued Reynolds for patent infringement in North Carolina over the Vuse line.

  • Study: Vaping Reduces Heart Risks Compared to Smoking

    Study: Vaping Reduces Heart Risks Compared to Smoking

    Photo: New Africa

    A new study carried out by the Center of Excellence for the Acceleration of Harm Reduction in Sicily confirms that vaping presents a lower risk to heart health than does smoking.

    The researchers replicated a 2017 BAT study, which demonstrated that the endothelial cell migration inhibition caused by cigarette smoke is not caused by e-cigarette aerosol exposure. (The endothelium is a membrane lining the heart and blood vessels).

    Using the Vype ePen3 and the heated-tobacco products Glo Pro and IQOS 3 Duo, the Replica study corroborated the findings of the BAT study.

    Riccardo Polosa

    “The interesting fact is that switching to combustion-free products reduces vascular damages and prevents the possibility of the onset of smoking-related diseases, such as arteriosclerosis and hypertension,” said Massimo Caruso, an author of the study. “Once again, our research has challenged the notion that e-cigarettes or heated tobacco cause similar damage to that of combustible cigarettes.”

    The study is part of the Replica Project, whose mission is to replicate studies conducted by tobacco companies—whose research is routinely dismissed as conflicted—in order to independently assess their scientific validity.

    “By replicating the findings generated by tobacco industry studies on e-cigarettes and heated tobacco products, we are proving that these results are robust and trustworthy,” CoEHAR founder Riccardo Polosa told Filter.

  • BAT Invests in Croatia

    BAT Invests in Croatia

    Photo: burnel11

    BAT recently inaugurated a HRK600 million ($82 million) production line for tobacco products at its Kanfanar factory in Croatia, reports Seenews.

    In May, 2021, BAT revealed it would be manufacturing heated-tobacco products at its Kanfanar facility.

    The investment has created 70 new jobs, and it’s expected to generate additional employment as production increases. Nearly 80 percent of the products manufactured on the new line are destined for export, according to BAT.

    The Kanfanar factory uses 100 percent renewable energy and recycles all of its wastewater.

    BAT said it plans to invest HRK22 million in environmental, social and governance activities at its Kanfanar facility as part of its efforts to become carbon neutral by 2030.

    The inauguration of the new production line follows the opening last week of a new BAT logistics and distribution center in Pitomaca, Croatia. It will collect leaf tobacco from 26 countries and supply BAT factories in Augustow, Poland; Bayreuth, Germany; and Pecs, Hungary.

  • Russia Exit Hits BAT Profits

    Russia Exit Hits BAT Profits

    Photo: BAT

    BAT took a £957 million ($1.15 billion) impairment charge related to the transfer of its Russian business, lowering its half-year earnings by a quarter.

    The London-based firm, which controlled almost a fourth of the Russian market, said earlier this year that it was in advanced talks with its distributor in the country to sell the business in the wake of Russia’s invasion of Ukraine.

    BAT reported a 25 percent drop in profit from operations on a reported basis to £3.68 billion for the six months to June 30 as a result of the charge. The company expects global tobacco industry volume to be down about 3 percent, partly because of the Russia-Ukraine crisis.

     

    In a press release announcing the half-year results, BAT emphasized the growth of its New Categories products and the performance of its combustible business, which continues to grow value share enabled by robust pricing.

    “I am very proud that our continued New Categories growth momentum is driving faster transformation, with revenue growth of 45 percent in the first half of 2022, on top of 51 percent growth in fiscal year 2021,” said BAT CEO Jack Bowles. “I am especially proud that the number of consumers using our noncombustible brands has passed the milestone of 20 million in the first half.”

    Noncombustible products now represent 14.6 percent of BAT’s revenue.

    While acknowledging the geopolitical and macroeconomic challenges, Bowles was upbeat about the outlook for BAT.

    “We are not immune, of course, to the increasing macroeconomic pressures, exacerbated by the conflict in Ukraine,” he said. “However, we are well positioned to navigate the current turbulent environment due to our powerful brands, operational agility and continued strong cash generation.”

  • BAT Launches Glo Hyper X2

    BAT Launches Glo Hyper X2

    Photo: BAT

    BAT unveiled its Glo Hyper X2 tobacco heating device in Tokyo on July 21.

    Building on the technology of Glo Hyper+, which launched in 2020, the Hyper X2 incorporates advanced induction heating technology encased in a smaller, lighter weight device. A separate boost function for faster heating, battery status LED indicator, a protective iris-shaped shutter and bold new colors complete the new hyper X2 offer, according to BAT.

    Hyper X2 works with existing consumables from the Glo Hyper series.

    “The launch of Glo Hyper X2—our newest, state-of-the-art heated tobacco product—marks another key milestone in our transformation as we build the brands of our future,” said Kingsley Wheaton, chief marketing officer at BAT, in a statement. “Since launching our first Glo product in Japan in 2016, we have built Glo into a billion-dollar global brand through our deep consumer insights, science and innovation.

    “Our multi-category portfolio offers the industry’s widest choice of scientifically substantiated, less risky and enjoyable products for adult smokers who are looking to switch. This is a further big step in accelerating our transformation into a consumer products business that defines itself by the consumer needs that we meet, rather than the products we sell.”

    “In addition, final results from our landmark one-year clinical study of Glo have provided important new data that adds to evidence supporting Glo as a reduced-risk product. In the study, people switching completely to Glo achieved significant and sustained improvements across many exposure and potential harm measures compared to those who continued to smoke, with many indicators similar to quitting.”

    Glo hyper X2 will be available in Glo stores across Japan and on the Glo and Velo official online store from July 25, 2022, and in convenience stores in Japan from August 2022.

    Glo products are available in 25 countries. The global rollout of Glo Hyper X2 will take place over the coming months.

  • Motley Fool: Juul Exit Would Crown BAT King

    Motley Fool: Juul Exit Would Crown BAT King

    Photo: BAT

    The removal of Juul products would hand the U.S. market to British American Tobacco, according to Motley Fool.

    Juul, which is partly owned by Altria Group, had been the undisputed e-cigarette leader, with a near-80 percent share of the market at the height of its success. The latest Nielsen data puts Vuse’s share at 35.1 percent compared to 33.1 percent for Juul. Third-place NJOY has a 3.1 percent share.

    Last year, the U.S. International Trade Commission ruled that Philip Morris International’s IQOS heated tobacco device infringed on BAT’s patents, and that device was prohibited from being imported and sold in the U.S. Altria had partnered with PMI to market and distribute IQOS in the U.S., but the ITC ruling disrupted those plans.

    Because Altria shelved its MarkTen e-cigarette brand in  favor of partnering with PMI, the ITC ruling leaves it without a vapor product. The FDA has all but wiped out the rest of its investment in Juul. In 2018, Altria paid $12.8 billion for a 35 percent in the vapor company. As of the end of the first quarter of 2022, Altria had reduced the fair value of its Juul position to just $1.6 billion.

    If the FDA is successful in eliminating Juul, BAT will essentially have no roadblocks in its way to market dominance.

    Vuse turned profitable in the U.S. for BAT in the second half of last year, and it’s been able to grow its share because it discounted the device and the consumables to attract users. Earlier this month, BAT said it was now ready to raise prices on both. With a major competitor removed from the market, this should provide the company with a big boost in profits.

    BAT’s vapor revenue grew 59 percent last year to £927 million ($1.14 billion), while its own heated tobacco products, marketed under the Glo brand, saw a 46 percent rise in sales to £853 million.

  • ‘BAT key beneficiary of Juul MDO’

    ‘BAT key beneficiary of Juul MDO’

    Photo: BAT

    The removal of Juul products from the U.S. market would boost the prospects of British American Tobacco, create opportunities for Philip Morris International but represent a problem for Altria Group, according to Morgan Stanley.

    In a letter to investors, the financial institution evaluated the impact of the U.S. Food and Drug Administration’s leaked plans to deny Juul Labs’ premarket tobacco product application (PMTA). While the FDA has not issued a formal statement yet, shares in Altria Group were down more than 9 percent in the immediate wake of the news. Altria owns about a third of Juul Labs.

    According to Morgan Stanley, Juul is Altria’s only exposure to the growing vapor category. While a Juul marketing denial order (MDO) would give Altria an opportunity to terminate its noncompete agreement with Philip Morris International, allowing it to step-up its vapor product research and development or acquire vapor technology, the company would not be coming from a position of negotiating leverage, according to the investment bank.

    “In addition, there are few larger scale independent e-vapor assets on the market,” wrote Morgan Stanley.

    The investment bank believes that removing market leader Juul from U.S. store shelves would create opportunities for other products, such as PMI’s IQOS heat-not-burn device, which has already received PMTA approval.

    The key beneficiary of a Juul MDO, however, would be British American Tobacco, according to Morgan Stanley.

    Several of the company’s products have already received PMTA authorizations, the investment bank points out. Though its Vuse brands, BAT recently overtook Juul as the leading U.S. e-cigarette player with a market share of more than 33 percent. The company has gained significant momentum in the category over the past 24 months and a Juul MDO could lead to further BAT market share gains, according to Morgan Stanley.

  • Jury Awards PMI $10.7 Million in Patent Case

    Jury Awards PMI $10.7 Million in Patent Case

    Photo: md3d

    A U.S. jury awarded Philip Morris International $10.7 million on June 15 after finding that R.J. Reynolds Vapor Co.’s Vuse e-cigarettes violate its patent rights, reports Reuters.

    The federal court jury in Alexandria, Virginia, said RJR’s Vuse Solo and Alto devices infringe two PMI patents covering parts of a vaping device for heating substances and preventing leaks. At the same time, the jury cleared Vuse Alto of infringing one of the patents.

    A Philip Morris spokesperson told Reuters the company was “grateful” for the verdict, which “rejects an attempt by BAT to free-ride on our hard work and investment.”

    A spokesman for RJR indicated it may appeal the June 14 verdict.

    The case is part of a multi-front patent dispute between PMI and RJR parent company British American Tobacco.

    The recent verdict concerned counterclaims in RJR’s ongoing patent lawsuit over PMI’s IQOS heated-tobacco device. RJR won an order blocking IQOS imports at the U.S. International Trade Commission last November.

    PMI succeeded earlier this year in invalidating parts of some patents RJR accused it of infringing at a U.S. Patent Office tribunal.

    BAT has also sued PMI over IQOS in the United Kingdom, Germany and elsewhere. A PMI filing with the U.S. Securities and Exchange Commission earlier this year said IQOS patent lawsuits and challenges outside of the U.S. have “repeatedly and universally failed.”

    Altria has separately sued RJR for patent infringement in North Carolina over the Vuse line, in another case that is still pending.

  • BAT Reiterates Full Year Guidance

    BAT Reiterates Full Year Guidance

    Photo: BAT

    British American Tobacco reiterated its revenue guidance of £5 billion ($6.27 billion) for 2022, anticipating that its diversification into noncombustible products will pay off.

    The new business line “is increasingly contributing to group performance, and we are confident in delivering our £5 billion New Category revenue and profitability targets by 2025”, said BAT CEO Jack Bowles in a statement, adding that the company continues to drive value through its combustibles business.

    The noncombustible product consumer base reached 19.4 million in the first quarter of the year, according to BAT. In the first half of the fiscal year, the company invested more than £1 billion to build its brands in this product segment. Its portfolio of non-combustible products includes vapor products, nicotine pouches, tobacco heating products and other oral products.

    BAT’s Vuse vapor cigarette now holds a value market share of 35.9 percent in the U.S., up 3.4 percentage points in the year to date versus 2021. Vuse debuted in the U.K. in May and the company anticipates further rollouts for the second half of 2022.

    BAT said it continues to enjoy volume share leadership in Modern Oral in Europe, with 69.3 percent of the market.

    We are confident in delivering on our current financial targets, irrespective of the timing of the transfer of our Russian business.

    Jack Bowles, CEO, BAT

    Like many multinationals, BAT has been impacted by the war in Ukraine, which has increased global uncertainty and disruption, further exacerbating inflationary pressures on supply chains. In March, BAT announced that its ownership of the business in Russia was no longer sustainable. The company is in the process of transferring its Russian business to a third party.

    “While we are not immune to these pressures, we are confident in delivering on our current financial targets, irrespective of the timing of the transfer of our Russian business,” said Bowles. “This is thanks to our well-established multi-category strategy, our strong portfolio of global brands and our resilient, highly cash generative business.”

    While considering BAT’s aspiration to reach £5 billion of sales and achieve profitability in its new products stream “achievable,” Ross Hindle, an analyst at Third Bridge, noted the significance of Russia and Ukraine to BAT. “Russia and Ukraine are very important heated tobacco markets, they are even more important for BAT than PMI, with 26 percent of their heated tobacco sales coming from the region historically,” he told Proactive.