Tag: British American Tobacco

  • BAT Took Big Hit on Russian Sale: CEO

    BAT Took Big Hit on Russian Sale: CEO

    Photo: Matvey Salivanchuk

    BAT took a big hit from the sale of its Russian and Belarussian assets, according to CEO Tadeu Marroco, reports Reuters.

    During a Dec. 6  trading update, Marroco said that the proceeds received by BAT represent only a fraction of the Russian and Belarussian businesses’ true value

    In September, BAT sold the assets to a consortium led by its Russian local management team, ending an 18-month long process to exit the world’s fourth-largest cigarette market following Russia’s invasion of Ukraine.

    At the time, BAT did not disclose the sale price or whether the deal included a clause allowing the company to buy back the businesses at a later date.

    Marroco noted that the company was unlikely to exercise the sales contract’s buyback option because Russian authorities restricted this to two years.

    The company had already recognized £629 million pounds ($792.35 million) in impairments and associated costs related to the sale by the time the deal was announced

  • PMI to produce BAT cigarettes in Switzerland

    PMI to produce BAT cigarettes in Switzerland

    Photo: PMI

    Philip Morris International and BAT have entered into a contract manufacturing agreement for cigarette production in Neuchatel, Switzerland, reports Le Temps.

    “[L]imited volumes of BAT cigarettes will take place in the PMI factory located in Neuchatel,” BAT wrote in a press note cited by the newspaper. “This is an agreement specific to the Swiss domestic market.”

    Only part of the cigarette volumes intended for the Swiss market will be produced in Neuchatel; the rest, as well as previously exported volumes, will be manufactured in other BAT factories.

    Six positions will be added at the Boncourt site, according to BAT, bringing the total number of positions at the site to about 20.

    BAT Switzerland announced this summer that it would maintain its warehouse and shipping department in Boncourt. The company’s head office remains in the canton of Jura.

  • Serpil Timuray joins BAT board

    Serpil Timuray joins BAT board

    Image: BAT

    Serpil Timuray has joined the board of BAT as an independent nonexecutive director and as a member of the nominations and remuneration committees.

    Timuray is currently the CEO of Europe Cluster and a member of the executive committee at Vodafone Group. She joined Vodafone in 2009 and has held a variety of executive roles being the group chief commercial operations and strategy officer in charge of areas including global strategy, marketing, innovation and digital transformation, the regional CEO for Africa, Middle East, Asia, Pacific, and the CEO of Turkiye.

    Prior to joining Vodafone, Timuray was the CEO of Danone Dairy Turkiye, having started her career in 1991 at Procter and Gamble, where she held several marketing roles. Timuray is currently nonexecutive director of TPG Telecom. She previously served as an independent nonexecutive director of Danone Group from 2015 to 2023 and as the chair of the corporate social responsibility committee.

    “I am pleased to welcome Serpil Timuray to our board,” said BAT Chair Luc Jobin in a statement. “Her extensive experience in growing consumer and enterprise product companies in technology and fast-moving consumer goods sectors and in managing global strategy, innovation and digital transformation will be beneficial to the board as we continue to accelerate our strategy to build ‘A Better Tomorrow.’”

  • BAT Urges Stricter Vape Rules

    BAT Urges Stricter Vape Rules

    Photo: BAT

    BAT is urging the U.K. to introduce new regulations that the company believes will help the country achieve its “smoke-free” ambitions.

    England wants to reduce smoking prevalence to 5 percent of less by 2030, with Wales targeting a similar timeline and Scotland four years later.

    Ahead of the consultation on the Tobacco and Vapes Bill that ends Dec. 6, BAT is now publishing proposals that seek to minimize the underage appeal of, and access to, vapor products, along with the environmental impact of single-use e-cigarettes.

    In addition to a ban on dessert and soft drink flavors for vapes, the company is calling for an end to marketing slogans and imagery involving toys, cartoons and sweets.

    “Vaping is the key to unlocking the U.K.’s smokefree target,” said Asli Ertonguc, BAT lead for the U.K., in a statement. “As the largest manufacturer of vaping products in the U.K., we are clear on our responsibilities and are urging the government to introduce more stringent vaping regulations. We believe that underage users should never vape, so we want confectionery, dessert and soft drink flavors to be banned and the introduction of a new regime for how and where vapes are sold.”

    In practice, this would mean requiring vape sellers to have a retail license, similar to that in place with alcohol and cigarettes, and which would be revoked if they were found to be selling to anyone underage, according to BAT. Retailers would also have to demonstrate to Trading Standards that they observe either Challenge 25 protocols or new technologies at point-of-sale locations which verify age, such as facial recognition cameras.

    In addition to tackling underage vaping, BAT also wants vapes to be made more environmentally responsible. BAT wants it to be mandatory for single use vapes to have removable batteries, to make recycling more straightforward.

    Five million single use vapes are thrown away each week in the U.K. according to 2023 research from recycling campaign group Material Focus—a fourfold increase since 2022. But only 17 percent of vapers recycle in the correct recycling bins, according to the same data. 

    Finally, according to BAT, products shipped to the U.K. should be subject to a mandatory testing program to ensure products are compliant with U.K. regulations before they can be sold. 

    “We recognize that some want single use vapes banned altogether, but we are concerned such a move would lead to unregulated sales, and less options for adult smokers looking to switch,” said Ertonguc. “Governments should wield their enforcement powers to help re-build confidence in vaping by ensuring adult consumers can buy legitimate products, and suitably penalizing those who fail to comply.”

  • UAE Firm Buys BAT’s St. Petersburg Assets

    UAE Firm Buys BAT’s St. Petersburg Assets

    Photo: Igor Sobolev

    BFI Holding of the United Arab Emirates has purchased the St. Petersburg asset of BAT, reports Kommersant, citing data from Russia’s Unified State Register of Legal Entities.

    According to the Abu Dhabi Global Market registry, one of BFI Holding’s owners is Faruk Ener, who previously was responsible for Russia, Turkiye, the Caucasus, Central Asia and Belarus at BAT.

    BAT started operating in Russia in 1991. Three years later, the company began producing its own tobacco products in St. Petersburg. After the start of hostilities in Ukraine in May 2022, BAT announced the suspension of investments in Russia and later transferred the business in Russia and Belarus to a consortium led by the Russian

  • Organigram Looking for New CFO

    Organigram Looking for New CFO

    Image: fizkes

    Derrick West will transition away from his role as chief financial officer at Organigram Holdings to focus on recovery following surgery later this month.

    Paolo De Luca, current chief strategy officer, has been appointed interim CFO while the company completes a search for a new permanent CFO. De Luca previously served as the company’s CFO between 2017 and 2020.

    “Derrick has left a legacy of stabilizing our financial processes along with the implementation of our ERP and has supported the company through a period of high growth including the acquisitions of our Winnipeg and Lac-Supérieur facilities,” said Organigram CEO Beena Goldenberg in a statement. “We are grateful for his contributions during his time on the board beginning in 2017 and since becoming CFO in 2020 and we wish him well.”

    Organigram Holdings is the parent company of Organigram, a licensed producer of cannabis, cannabis-derived products and cannabis infused edibles in Canada.

    Recently British American Tobacco increased its equity position in Organigram from 19 percent to 45 percent.

  • BAT Designer Urges Responsible Creations

    BAT Designer Urges Responsible Creations

    Photo: KFF

    Product designs should not center only on providing attractive appearance but also encompass meaning, value and responsibility, according to Ken Kim, head of design at the BAT Group.

    “The role of designers is changing, from simply designing products to assuming social and environmental responsibilities,” Kim said at the Design Korea conference, which took place Nov. 1-5, 2023, in Seoul. “This [new role] is not a choice for individual designers to make, but a common goal the industry and society must undertake together in order to move forward.”

    Kim is the first Korean to head BAT’s product design division. His portfolio includes tobacco heating products such as Vuse Epod 2, Glo Pro Slim and Glo Hyper X2. 

    During the conference, which was reported in The Korea Herald, Kim reviewed measures on how designs could address social issues such as carbon neutrality amid heightened regulations, emphasizing that designs could function as an important key to the tobacco industry’s sustainable future.

    He stressed the importance of designing products in ways that do not appeal to underage consumers. “We need a balanced design strategy that does not stimulate the curiosity of minors, through conducting analysis of design preferences by age groups,” he was quoted as saying. 

  • BAT Strengthens Organigram Partnership

    BAT Strengthens Organigram Partnership

    Image: weerapat1003

    BAT is investing some £74 million ($91.68 million) in its partnership with Organigram and increasing its equity position from 19 percent to 45 percent.

    This investment is intended to deepen the strategic relationship between Organigram Holdings and BAT, which has strengthened since BAT’s initial investment and the establishment of the Product Development Collaboration (PDC) in March 2021. The PDC was set up to leverage the expertise of both companies in order to develop the next generation of noncombustible cannabis products.

    In a statement, BAT said it has been pleased with Organigram’s performance and continues to be impressed by the careful financial governance of the company. “BAT also remains supportive of the category stewardship displayed by Organigram’s management team, particularly in response to tough market conditions,” BAT wrote. “These factors give BAT confidence that the new investment can position Organigram to capitalize on market opportunities and deliver incremental value for both companies.”

    The majority of the investment will be allocated for Organigram to establish a strategic investment pool, intended to be applied for emerging opportunities within the cannabis space to accelerate Organigram’s growth and to support geographic, technological and product expansion. According to BAT, the investment remains subject to customary conditions, including necessary approvals by the shareholders of Organigram.

    “This investment bolsters an already strong balance sheet and solidifies our position as a leading cannabis company. In addition, this deepens the strategic partnership between Organigram and BAT, and we look forward to continuing to leverage BAT’s global capabilities and scientific expertise,” said Organigram CEO Beena Goldenberg in a statement.

  • BAT Completes Sale of Russia Business

    BAT Completes Sale of Russia Business

    Photo: Matvey Salivanchuk

    BAT has completed the sale of its Russian and Belarusian businesses, the company announced its website. According to the multinational, the sale has been carried out in compliance with local and international laws and follows the receipt of all necessary approvals.

    “BAT Group announced conclusion of an agreement on sale of business in Russia and Belarus today. All trademarks being used now will remain in the ownership of the Russian business. Consequently, consumers will continue receiving high-quality products they are used to under familiar brands,” the press service of the company’s Russian office said.

    “Throughout the transfer process, same as after it, among the new owner’s key priorities are uninterrupted business processes, ensured employment of the staff and the implementation of the investment plan approved by the governmental subcommittee,” the company noted.

  • New Categories Boost BAT Half-Year Revenues

    New Categories Boost BAT Half-Year Revenues

    Photo: BAT

    British American Tobacco reported revenue of £13.44 billion ($17.35 billion) in the first six months of 2023, up 4.4 percent over the figure recorded in the comparable 2022 period. Growth was driven by the company’s “New Categories” segment. Revenue from noncombustible products now accounts for 16.6 percent of group revenue, up 180 base points (bps) versus fiscal year 2022.

    BAT’s Vuse and Velo brands enjoyed strong revenue growth, and New Categories’ financial delivery significantly improved, contributing a £201 million increase to group profit as losses reduced.

    Reported profit from operations was up 61.4 percent (with reported operating margin up 1,560 bps to 44.2 percent). Adjusted profit was up 3.6 percent at constant exchange rates. Adjusted operating margin was up 40 bps to 44.3 percent.

    “Having been in my new role for 10 weeks, I’m pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organization,” said BAT Tadeu Marroco, who assumed the top job in May. “It is a challenging external environment. High inflation and slower global growth are impacting consumers and business. Yet our revenue, profit from operations and earnings are all up.

    “We are making great progress in New Categories. Revenues are up by 29 percent, and we are now close to break[ing] even, with consumers of noncombustible products up by 1.5 million versus FY 2022. While it’s encouraging to see continued good performance in vapor and modern oral, we recognize more work is required in heated tobacco.

    “I remain confident that New Categories will deliver a positive contribution in 2024. However, we do not expect contribution growth to be linear, as levels of investment will align with the phasing of our big innovation platforms.

    “While more focus is required in the U.S., our sequential performance improvement in the critical premium U.S. combustibles business since January 2023 is encouraging.