BAT Raises Its Annual Revenue Growth Forecast

Tobacco giant British American Tobacco (BAT) has just hiked its sales growth outlook amid shift to electronic devices.

December 10, 2021

BAT aims to achieve annual revenues of £5bn from three new products – Vuse vapes, Velo oral nicotine pouches and Glo heated tobacco.

As BAT’s focus on its tobacco-heating devices and other e-cigarettes pays off, last week the tobacco company raised its annual revenue growth forecast, sending its shares up by 2%. The tobacco company explained it had expected revenue growth of over 5% at constant currencies, above its previous range of 3% to 5% for the year up to December, and stuck to its growth expectation for adjusted earnings per share in the mid-single digit range.

The London-based company said that sales of its “new category” reduced risk products are growing in all key markets, including the United States and Japan, with the company adding 1.4 million new customers in the first quarter. “The upgrade and delivery around reduced risk products is particularly encouraging,” said Jefferies analyst Owen Bennett.

1.4 million new customers of safer alternatives in the first quarter

The manufacturer of Vuse e-cigarettes and Glo heated tobacco products, said that the 1.4 million increase means that users of these products have now totaled 14.9 million. However this is less than a third of its target of reaching 50 million users of vaping products by 2025, and sales will have to continue picking up pace if BAT is to achieve this goal.

The company also aims to achieve annual revenues of £5bn from three new products – Vuse vapes, Velo oral nicotine pouches and Glo heated tobacco, by the same date. This will require significantly higher growth than it achieved last year, when it reported sales in that category of £1.4bn, up 15% year on year.

Meanwhile on the event of World Vape Day which fell on the 30th of May, the tobacco company published a comprehensive review on the scientific evidence for vaping products, and their potential in Tobacco Harm Reduction and decreasing smoking rates.

“This paper is a comprehensive summary of more than 300 peer-reviewed scientific papers and other evidence published by an estimated 50 institutions over the past decade,” said Dr David O’Reilly, Director of Scientific Research, Research and Development-British American Tobacco.