Vapour products is one of British American Tobacco’s New Category products that is assisting the group to reach its goal of a predominantly smokeless business by 2035. File picture.
British American Tobacco (BAT) made a profit in 2024 versus a loss the previous year, driven by the phasing of its smokeless products and benefits of investment in the US, tied with the unwind of wholesaler inventory movements.
Dividend growth for the year to December 31 was 2% to 240.24 pence, with a £900 million (R20.79 billion) share buy-back was planned in 2025.
Profit from operations came to £2.74bn versus a £15.75bn loss in 2023, with 2024 including a provision of £6.2bn for a proposed settlement in Canada, while 2023 was negatively impacted by one-off impairments largely in the US.
Revenue fell 5.2%, driven by the sale of the group’s businesses in Russia and Belarus in September 2023 and translational foreign exchange headwinds. Organic revenue was up 1.3%, driven by New Categories revenue up 8.9%.
“2024 was an investment year with delivery in line with our guidance. We continued our transformation this year, adding 3.6 million adult consumers (to a total of 29.1 million) of our smokeless products, which now account for 17.5% of group revenue, an increase of 1 percentage point versus 2023,” Tadeu Marroco, the group CE, said in a statement Thursday.
On the outlook for the 2025 financial year, he said total tobacco industry volumes were expected to fall 2%. Group revenue was expected to increase by 1% at constant rates, as increased excise and VAT in Bangladesh and new tobacco regulations in Australia were navigated.
Adjusted profit from operations growth (adjusted for Canada) was expected to decline by between -1.5% and -2.5%, with performance again expected to be second half weighted as innovations throughout the year were deployed.
"We are committed to building a smokeless world and becoming a predominantly smokeless business by 2035,” said Marroco.
He said their focus on “quality growth” delivered better returns in 2024 on more targeted investments across all three new categories: Vapour Products, Tobacco Heating Products, and Modern Oral. In the US, targeted investments had strengthened the business, despite a challenging macro-economic backdrop and a growing presence of illicit single-use vapour products.
BUSINESS REPORT