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British American Tobacco p.l.c.
Incorporated in England and Wales
(Registration number: 03407696)
Short name: BATS
Share code: BTI
ISIN number: GB0002875804
("British American Tobacco p.l.c." or "the Company")
2023 H1 Pre-Close Trading Update: On track to meet full year guidance
06 June 2023
Trading update - ahead of closed period commencing 26 June 2023
Tadeu Marroco, Chief Executive:
'I am delighted to provide this first trading update since becoming Chief Executive.
Firstly, let me address a frequently asked question: Will there be a change in our strategy' No. I am clear
that the strategy we created in 2019 is right. I am confident that we can execute it successfully.
Our commitment to building A Better TomorrowTM, by reducing the health impact of our business through
a multi-category portfolio of reduced-risk products*' remains. Put simply, smokers must have access to
better choices. This is already a reality for smokers who have made the switch to our reduced-risk products*'.
It also represents a commitment to our consumers who continue to smoke and are yet to make that
transition.
I often hear A Better TomorrowTM being referred to as our strategy, when in fact it is our purpose. They are
not one and the same. Our strategic aim is to progressively transform our portfolio by actively encouraging
adult smokers to switch to less risky products*' compared to smoking; a transformation delivering long-
term multi-stakeholder value.
We have reached a point in our transformation where sharper execution and greater emphasis on fewer,
bigger priorities that deliver meaningful returns is required. We will use our market archetype model, which
identifies different stages of New Category maturity to guide us, ensuring our priorities deliver on our
strategy and are well articulated with clear business outcomes defined.
I am pleased with our performance in a number of key areas. We increased the number of consumers of
non-combustible products1 by a further 900,000 in Q1, driving good revenue growth and further reducing
losses of New Categories means we are on track to deliver our #5bn revenue ambition in 2025, with
profitability in 2024, irrespective of the timing of the transfer of our Russian and Belarusian businesses.
Outside the U.S., combustible brands have been performing well as we address portfolio gaps and optimise
pricing. Consistently driving value from our combustibles brands is critical, as they deliver substantial cash
returns and generate value to fund New Categories and our transformation.
We are also making good progress towards de-leveraging our balance sheet, supporting our ambition to
sustainably return excess cash to shareholders.
That said, there are operational issues that will have my focus. Our performance in U.S. combustibles has
been disappointing. Returning combustibles to consistent value creation is critical to our multi-category
strategy in the U.S. We are taking action, and while it will take some time to carefully and thoroughly
implement our plans, our volume share has grown sequentially since the start of the year.
glo has had an underwhelming start to 2023, albeit recent momentum is more encouraging. glo Hyper Air
is a step forward in what promises to be an exciting pipeline ahead.
I am determined to manage external risks thoughtfully and transparently through continuing to increase
our engagement with regulators, policymakers, and relevant stakeholders. I have made it clear to my senior
management team and the organisation that we must operate to the highest ethical standards, and this
topic must remain a priority for both our employees and business partners.
2023 is going to be complex and exciting in equal measure. BAT has a wonderful heritage. I am committed
to building a new, modern BAT ' one that is agile and progressive, inclusive and collaborative. It is our
exceptionally talented people, our pipeline of innovation and portfolio of winning brands, that will ensure
we perform and transform simultaneously. I have great confidence this can be achieved.
We continue to maintain our full year 2023 guidance.'
Trading update detail
Sharpening execution in combustibles and the U.S.
o Group cigarette volume share up 10 bps and value share down 40 bps, mainly due to the
implementation of commercial plans in the U.S.
o Outside the U.S., we have been performing well with reinvigorated portfolios, refreshed brands and
sharpened execution supported by optimised pricing offset by some geographic mix
o The U.S. industry premium segment shows early signs of stabilisation with our premium volume
share sequentially growing since the start of the year
o In California, the longer-term impact of the flavour ban currently remains difficult to assess.
Menthol products are reportedly still being sold illicitly due to lack of enforcement; and we have
also seen elevated flavoured volume in surrounding states
o Our full year volume performance will be second-half weighted in the U.S., given the H1 volume
impact of SAP-related inventory phasing
We have extended Vuse's global leadership2
o Vuse value share up 2.8 ppts, reaching 38.8% in key Vapour markets3, driven by extended volume
and value share U.S. leadership
o Continuing to approach the growing modern disposables segment in a responsible way; Vuse Go
is now available in 40 markets
o Establishing Vuse platforms in Emerging Markets, including Colombia and Peru, with encouraging
early results
glo performance improvement after a disappointing Q1
o glo THP category volume share down 1.1 ppts to 18.2% in key markets4
o Continued category volume share momentum in some key European THP markets offset by the
highly competitive markets in Japan and Italy
o As part of our enhanced innovation pipeline, we recently launched our glo Hyper Air platform in
four key European THP markets, with further roll-outs planned for H2
Velo cements European leadership, good progress in Emerging Markets
o Velo remains Modern Oral volume share leader in 15 European markets, with Velo Mini and Velo
Max continuing to demonstrate our commitment to innovation
o Velo volume share of Total Oral was up 70 bps, while volume share of Modern Oral was down 1.8
ppts to 28.5% in key markets5 mainly driven by the U.S.
o Pakistan growth continues and we have rolled-out nationally in Kenya
Full year 2023 guidance
o Global tobacco industry volume expected to be down c.3%
o 3-5% organic6 constant currency revenue growth, with performance expected to be H2 weighted;
reported growth impacted by timing of the transfer of the Russian and Belarusian businesses
expected to close in 2023
o Strong New Category revenue growth with further improvement in category contribution
alongside incremental investment
o Mid-single figure constant currency adj. diluted EPS growth, with c.2% transactional FX headwind
o Translational foreign exchange is expected to be c.-1% headwind7 on full year adjusted diluted EPS
growth, and c.4% tailwind7 on half year adjusted diluted EPS growth
o Operating cash flow conversion in excess of 90%
For further information, please contact:
Media Centre
+44 (0) 20 7845 2888 (24 hours) | @BATplc
Investor Relations
Victoria Buxton: +44 (0)20 7845 2012
John Harney: +44 (0)20 7845 1263
Webcast and Conference call - The conference call will begin at 9.15am (BST).
You can access the audio webcast via our website. You can also listen via conference call by dialling the
numbers below, using the password: BAT
UK Toll-Free: 0808 109 0700
UK-Toll: +44 (0) 33 0551 0200
South Africa Toll-Free: 0 800 980 512
USA Toll Free: +1 866 580 3963
USA Local: +1 786 697 3501
A playback facility for the conference call will be available online via www.bat.com.
BAT attends Deutsche Bank Global Consumer Conference on 7 June 2023
Tadeu Marroco, Chief Executive, will be participating in a fireside chat at the conference at 8.15am UK /
9.15am CEST on 7 June. The event will be streamed live, audio-only, via our website www.bat.com.
A playback facility will also be available online.
Market share and volume data YTD April 2023, share growth v FY2022.
* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products
are not risk free and are addictive.
'
Our vapour product Vuse (including Alto, Solo, Ciro and Vibe), and certain products, including Velo, Grizzly,
Kodiak, and Camel Snus, which are sold in the U.S., are subject to FDA regulation and no reduced-risk claims
will be made as to these products without agency clearance.
1
The number of consumers of Non-Combustible products is defined as the estimated number of Legal
Age (minimum 18 years, U.S.: 21 years) consumers of the Group's Non-Combustible products. In markets
where regular consumer tracking is in place, this estimate is obtained from adult consumer tracking
studies conducted by third parties (including Kantar). In markets where regular consumer tracking is not
in place, the number of consumers of Non-Combustible products is derived from volume sales of
consumables and devices in such markets, using consumption patterns obtained from other similar
markets with adult consumer tracking (utilising studies conducted by third parties including Kantar). The
number of consumers is adjusted for those identified (as part of the consumer tracking studies
undertaken) as using more than one BAT Brand - referred to as 'poly users'. Target market for acquisition
is existing adult smokers/nicotine users.
The number of consumers of Non-Combustible products is used by management to assess the number of
consumers regularly using the Group's New Category products as the increase in Non-Combustible
products is a key pillar of the Group's ESG ambition and is integral to the sustainability of our business.
The Group's management believes that this measure is useful to investors given the Group's ESG ambition
and alignment to the sustainability of the business with respect to the Non-Combustibles portfolio.
2
Based on Vuse estimated value share from reduced-risk products in measured retail for Vapour (i.e., total
Vapour category value in retail sales) in the Top 5 Vapour markets.
3
Top 5 Vapour markets: U.S. - Marlin, Canada - Scan Data, UK ' Nielsen IQ, France - Strator, Germany '
Nielsen IQ. These five markets cover an estimated c.80% of global closed system revenue.
4
Top 12 THP markets: Japan - CVS-BC, South Korea - CVS, Italy ' Nielsen IQ, Greece ' Nielsen IQ, Hungary -
NDN, Kazakhstan ' Nielsen IQ, Ukraine ' Nielsen IQ, Poland ' Nielsen IQ, Switzerland ' IMS, Romania '
Nielsen IQ, Malaysia - IPSOS, Czech Republic ' Nielsen IQ. The THP 12 Top markets were adjusted in H1 2023,
with more established THP markets Kazakhstan, Romania, Switzerland and Malaysia introduced and Russia
removed in advance of the planned exit this year. Accordingly, glo's category volume share for 2022 was
rebased on the new T12 definition (excluding Russia) from 19.4% to 19.2%. The T12 THP markets account for
c.80% of total industry THP revenue.
5
Top 5 Modern Oral markets: U.S. ' Marlin, Sweden ' Nielsen IQ, Denmark ' Nielsen IQ, Norway ' Nielsen
IQ, Switzerland ' Scan Data (excl. SPAR, Top CC and Alligro). These five markets cover an estimated c.80% of
total industry Modern Oral revenue.
6
To supplement the Group's results presented in accordance with International Financial Reporting
Standards (IFRS), the Group's Management Board, as the chief operating decision maker, reviews certain of
its results, including volume, revenue, adjusted profit from operations and adjusted operating margin, at
constant rates of exchange, prior to the impact of businesses sold or held-for-sale. Although the Group does
not believe that these measures are a substitute for IFRS measures, the Group does believe that such results
excluding the impact of businesses sold or to be held-for-sale provide additional useful information to
investors regarding the underlying performance of the business on a comparable basis and in the case of
the expected sale of the Group's businesses in Russia and Belarus, the impact these businesses have on
revenue and profit from operations. Accordingly, the organic financial measures appearing in this document
should be read in conjunction with the Group's results as reported under IFRS. We also provide in this release
the reconciliations of volume to organic volume, revenue to organic revenue at constant rates of exchange,
profit from operations to organic adjusted profit from operations at constant rates of exchange and
operating margin to organic adjusted operating margin at constant rates of exchange. In 2021, the Group
sold its Iranian business. However, as the Iranian business was not significant to the user's understanding of
that year's or subsequent years' financial performance, management did not treat the sale of Iranian
business as an organic adjustment.
7
Based on current exchange rates of USD/GBP 1.24825 as at close on 2 June 2023.
Share growth refers to volume share for THP and Modern Oral and value share for Vapour
As used herein, volume share refers to the estimated retail sales volume of the product sold as a proportion of
total estimated retail sales volume in that category and value share refers to the estimated retail sales value of
the product sold as a proportion of total estimated retail sales value in that category. Please refer to the 2022
Annual Report on Form 20-F for a full description of these measures, together with a description of other Key
Performance Indicators (KPIs), on pages 322 and 323.
New Categories comprises Tobacco Heating Products (THP), Vapour and Modern Oral. Our products as sold in
the US, including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to Food and Drug Administration
(FDA) regulation and no reduced-risk claims will be made as to these products without FDA clearance.
New regional structure restatements
The Group's results for the six-month period ended 30 June 2022 and year ended 31 December 2022, are
presented below to reflect the implementation of the previously announced regional structure. This will
provide a consistent basis for the organic performance measurements of the Group for the six-month period
ending 30 June 2023 and year ending 31 December 2023. These are provided prior to the announcement of
the Group's half-year report for the period ending 30 June 2023 (due to be released on 26 July 2023).
The information provided also includes the Group's results on an organic basis, reflecting the ongoing
expectation with regards to the transfer of the Group's operations in Russia and Belarus.
While these reclassifications affect the presentation of regional results, they do not affect the Group's
reported income statement, balance sheet, or cash flow.
SUMMARY ANALYSIS OF REVENUE AND PROFIT FROM OPERATIONS BY SEGMENT
Six months ended 30 June 2022
Reported Exchange At CC2 Inorganic Organic at
CC2
Revenue #m #m #m #m #m
U.S. 5,934 (388) 5,546 ' 5,546
AME 4,243 85 4,328 (368) 3,960
APMEA 2,692 65 2,757 ' 2,757
Total Region 12,869 (238) 12,631 (368) 12,263
Reported Adj Items1 Adjusted Exchange Adjusted1 Inorganic Adj organic
at CC2 at CC2
Profit from Operations #m #m #m #m #m #m #m
U.S. 2,801 335 3,136 (218) 2,918 ' 2,918
AME 508 975 1,483 43 1,526 (92) 1,434
APMEA 369 657 1,026 20 1,046 ' 1,046
Total Region 3,678 1,967 5,645 (155) 5,490 (92) 5,398
Year ended 31 December 2022
Reported Exchange At CC2 Inorganic Organic at
CC2
Revenue #m #m #m #m #m
U.S. 12,639 (1,281) 11,358 ' 11,358
AME 9,287 (168) 9,119 (813) 8,306
APMEA 5,729 67 5,796 ' 5,796
Total Region 27,655 (1,382) 26,273 (813) 25,460
Reported Adj Items1 Adjusted Exchange Adjusted1 Inorganic Adj organic
at CC2 at CC2
Profit from Operations #m #m #m #m #m #m #m
U.S. 6,205 630 6,835 (740) 6,095 ' 6,095
AME 2,926 422 3,348 (80) 3,268 (276) 2,992
APMEA 1,392 833 2,225 38 2,263 ' 2,263
Total Region 10,523 1,885 12,408 (782) 11,626 (276) 11,350
Notes to the analysis of revenue and profit from operations above:
1. Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence.
2. CC: constant currency ' measures are calculated based on a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.
REGIONAL REVIEW
The performances of the regions are discussed below. The following discussion is based upon the Group's
internal reporting structure. For further information on regional performance by category, see "Additional
Information on Revenue by Category by Region.
UNITED STATES (U.S.):
Six months ended 30 June 2022 Volume (unit) Revenue (#m)
Reported Inorganic Organic Reported Exchange Reported Inorganic Organic
at CC2 at CC2 at CC2
Unit Unit Unit #m #m #m #m #m
New Categories 414 (27) 387 ' 387
Vapour (10ml units/pods mn) 166 ' 166 402 (26) 376 ' 376
THP (sticks bn) ' ' ' ' ' ' ' '
Modern Oral (pouches mn) 179 ' 179 12 (1) 11 ' 11
Traditional Oral (stick eq bn) 3.5 ' 3.5 580 (38) 542 ' 542
Total Non-Combustibles 994 (65) 929 ' 929
Total Combustibles (sticks bn) 30 ' 30 4,928 (322) 4,606 ' 4,606
Other 12 (1) 11 ' 11
Total 5,934 (388) 5,546 ' 5,546
Adjusted PfO (#m)
Adjusted Adjusting margin Adjusted1
Reported operatingExchange (%) Inorganic Adj
items1 at CC2 at CC2 organic
at CC2
Profit from Operations (PfO) 2,801 335 (218) 2,918 ' 2,918
Operating Margin 47.2% 52.6% 52.6%
Year ended 31 December 2022 Volume (unit) Revenue (#m)
Reported Inorganic Organic Reported Exchange Reported Inorganic Organic
at CC2 at CC2 at CC2
Unit Unit Unit #m #m #m #m #m
New Categories 949 (95) 854 ' 854
Vapour (10ml units/pods mn) 320 ' 320 913 (92) 821 ' 821
THP (sticks bn) ' ' ' ' ' ' ' '
Modern Oral (pouches mn) 301 ' 301 36 (3) 33 ' 33
Traditional Oral (stick eq bn) 6.6 ' 6.6 1,174 (119) 1,055 ' 1,055
Total Non-Combustibles 2,123 (214) 1,909 ' 1,909
Total Combustibles (sticks bn) 59 ' 59 10,470 (1,061) 9,409 ' 9,409
Other 46 (6) 40 ' 40
Total 12,639 (1,281) 11,358 ' 11,358
Adjusted PfO (#m)
Adjusted Adjusting margin Adjusted1
Reported operatingExchange (%) Inorganic Adj
items1 at CC2 at CC2 organic
at CC2
Profit from Operations (PfO) 6,205 630 (740) 6,095 ' 6,095
Operating Margin 49.1% 53.7% 53.7%
Notes to the analysis of revenue and profit from operations above:
1. Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence.
2. CC: constant currency measures are calculated based on a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.
REGIONAL REVIEW
AMERICAS AND EUROPE (AME):
Six months ended 30 June 2022 Volume (unit) Revenue (#m)
Reported Organic Reported Exchange Reported Inorganic Organic
at CC2 at CC2 at CC2
Unit Unit Unit #m #m #m #m #m
New Categories 578 10 588 (60) 528
Vapour (10ml units/pods mn) 112 ' 112 189 (1) 188 ' 188
THP (sticks bn) 5.7 (2.3) 3.4 240 6 246 (58) 188
Modern Oral (pouches mn) 1,337 (21) 1,316 149 5 154 (2) 152
Traditional Oral (stick eq bn) 0.4 ' 0.4 18 1 19 ' 19
Total Non-Combustibles 596 11 607 (60) 547
Total Combustibles (sticks bn) 143 (22) 121 3,485 82 3,567 (308) 3,259
Other 162 (8) 154 ' 154
Total 4,243 85 4,328 (368) 3,960
Adjusted PfO (#m)
Adjusted Adjusting margin Adjusted1
Reported operatingExchange (%) Inorganic Adj
items1 at CC2 at CC2 organic
at CC2
Profit from Operations (PfO) 508 975 43 1,526 (92) 1,434
Operating Margin 12.0% 35.3% 36.2%
Year ended 31 December 2022 Volume (unit) Revenue (#m)
Reported Inorganic Organic Reported Exchange Reported Inorganic Organic
at CC2 at CC2 at CC2
Unit Unit Unit #m #m #m #m #m
New Categories 1,300 (18) 1,282 (138) 1,144
Vapour (10ml units/pods mn) 261 ' 261 465 (10) 455 ' 455
THP (sticks bn) 12.0 (5.2) 6.8 494 (12) 482 (133) 349
Modern Oral (pouches mn) 3,083 (49) 3,034 341 4 345 (5) 340
Traditional Oral (stick eq bn) 0.8 ' 0.8 35 2 37 ' 37
Total Non-Combustibles 1,335 (16) 1,319 (138) 1,181
Total Combustibles (sticks bn) 294 (43) 251 7,588 (125) 7,463 (669) 6,794
Other 364 (27) 337 (6) 331
Total 9,287 (168) 9,119 (813) 8,306
Adjusted PfO (#m)
Adjusted Adjusting margin Adjusted1
Reported operatingExchange (%) Inorganic Adj
items1 at CC2 at CC2 organic
at CC2
Profit from Operations (PfO) 2,926 422 (80) 3,268 (276) 2,992
Operating Margin 31.5% 35.8% 36.0%
Notes to the analysis of revenue and profit from operations above:
1. Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence.
2. CC: constant currency measures are calculated based on a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.
REGIONAL REVIEW
ASIA-PACIFIC, MIDDLE EAST AND AFRICA (APMEA)
Six months ended 30 June 2022 Volume (unit) Revenue (#m)
Reported Inorganic Organic Reported Exchange Reported Inorganic at Organ
at CC2 CC2 ic at
Unit Unit Unit #m #m #m #m CC
#m 2
New Categories 291 14 305 ' 305
Vapour (10ml units/pods mn) 14 ' 14 26 ' 26 ' 26
THP (sticks bn) 5.3 ' 5.3 257 14 271 ' 271
Modern Oral (pouches mn) 254 ' 254 8 ' 8 ' 8
Traditional Oral (stick eq bn) ' ' ' ' ' ' ' '
Total Non-Combustibles 291 14 305 ' 305
Total Combustibles (sticks bn) 139 ' 139 2,361 52 2,413 ' 2,413
Other 40 (1) 39 ' 39
Total 2,692 65 2,757 ' 2,757
Adjusted PfO (#m)
Adjusted Adjusting margin Adjusted1
Reported operatingExchange (%) Inorganic at Adj
items1 at CC2 CC2 organ
ic at
Profit from Operations (PfO) 369 657 20 1,046 ' 1,046 2
CC
Operating Margin 13.7% 38.0% 38.0%
Year ended 31 December 2022 Volume (unit) Revenue (#m)
Reported Inorganic Organic Reported Exchange Reported Inorganic Organic
at CC2 at CC2 at CC2
Unit Unit Unit #m #m #m #m #m
New Categories 645 32 677 ' 677
Vapour (10ml units/pods mn) 31 ' 31 58 (1) 57 ' 57
THP (sticks bn) 12.0 ' 12.0 566 33 599 ' 599
Modern Oral (pouches mn) 626 ' 626 21 ' 21 ' 21
Traditional Oral (stick eq bn) ' ' ' ' ' ' ' '
Total Non-Combustibles 645 32 677 ' 677
Total Combustibles (sticks bn) 268 ' 268 4,972 44 5,016 ' 5,016
Other 112 (9) 103 ' 103
Total 5,729 67 5,796 ' 5,796
Adjusted PfO (#m)
Adjusted Adjusting margin Adjusted1
Reported operatingExchange (%) Inorganic Adj
items1 at CC2 at CC2 organic
at CC2
Profit from Operations (PfO) 1,392 833 38 2,263 ' 2,263
Operating Margin 24.3% 39.0% 39.0%
Notes to the analysis of revenue and profit from operations above:
1. Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence.
2. CC: constant currency measures are calculated based on a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.
Additional Information on Revenue by Category by Region
Six months ended 30 June 2022
Volume (unit)
U.S. AME APMEA Group
2022 % change 2022 % change 2022 % change 2022 % change
New Categories
Vapour 166 +19.4% 112 +11.4% 14 +112.5% 292 +18.6%
THP ' ' 5.7 +51.4% 5.3 +13.8% 11.0 +30.4%
Modern Oral 179 -55.7% 1,337 +26.1% 254 +78.9% 1,770 +10.1%
Traditional Oral 3.5 -4.4% 0.4 -8.9% ' ' 3.9 -4.9%
Total Non-Combustibles
Cigarettes 30.0 -13.4% 135.4 -1.5% 138.0 -4.1% 303.4 -4.0%
OTP 0.1 -18.8% 7.2 -12.0% 0.9 -1.5% 8.2 -11.0%
Total Combustibles 30.1 -13.4% 142.6 -2.1% 138.9 -4.1% 311.6 -4.2%
Memo: Cigarettes and THP 30.0 -13.4% 141.1 -0.1% 143.3 -3.6% 314.4 -3.1%
Revenue - reported at current rates (#m)
U.S. AME APMEA Group
2022 % change 2022 % change 2022 % change 2022 % change
New Categories 414 +70.4% 578 +51.8% 291 +12.7% 1,283 +45.4%
Vapour 402 +71.1% 189 +28.9% 26 +62.1% 617 +55.2%
THP ' ' 240 +99.2% 257 +8.1% 497 +38.6%
Modern Oral 12 +50.7% 149 +31.2% 8 +84.0% 169 +34.2%
Traditional Oral 580 +7.9% 18 -10.8% ' ' 598 +7.2%
Total Non-Combustibles 994 +27.4% 596 +48.6% 291 +12.7% 1,881 +30.7%
Total Combustibles 4,928 +3.3% 3,485 +3.2% 2,361 -0.9% 10,774 +2.3%
Other 12 -13.4% 162 +11.8% 40 -19.0% 214 +2.9%
Total 5,934 +6.7% 4,243 +8.2% 2,692 +0.1% 12,869 +5.7%
Of which:
Strategic 5,621 +6.7% 3,091 +14.5% 1,441 +2.2% 10,153 +8.3%
Non-strategic 313 +6.0% 1,152 -5.7% 1,251 -2.2% 2,716 -2.9%
5,934 +6.7% 4,243 +8.2% 2,692 +0.1% 12,869 +5.7%
Revenue - organic at constant rates (#m)
U.S. AME APMEA Group
2022 % change 2022 % change 2022 % change 2022 % change
New Categories 387 +59.2% 528 +54.1% 305 +18.1% 1,220 +45.0%
Vapour 376 +59.9% 188 +28.0% 26 +60.4% 590 +48.2%
THP ' ' 188 +104.1% 271 +14.1% 459 +44.2%
Modern Oral 11 +40.9% 152 +34.9% 8 +86.3% 171 +37.0%
Traditional Oral 542 +0.9% 19 -5.2% ' ' 561 +0.6%
Total Non-Combustibles 929 +19.0% 547 +51.1% 305 +18.1% 1,781 +24.5%
Total Combustibles 4,606 -3.4% 3,259 +5.6% 2,413 +1.3% 10,278 +0.6%
Other 11 -19.0% 154 +6.2% 39 -21.1% 204 -1.9%
Total 5,546 -0.3% 3,960 +10.3% 2,757 +2.5% 12,263 +3.7%
Of which:
Strategic 5,254 -0.3% 3,156 +16.9% 1,482 +5.1% 9,892 +5.5%
Non-strategic 292 -1.0% 804 -4.2% 1,275 -0.3% 2,371 -2.1%
5,546 -0.3% 3,960 +10.3% 2,757 +2.5% 12,263 +3.7%
Year ended 31 December 2022
Volume (unit)
U.S. AME APMEA Group
2022 % change 2022 % change 2022 % change 2022 % change
New Categories
Vapour 320 +10.0% 261 +15.3% 31 +73.2% 612 +14.3%
THP ' 0.0% 12.0 +42.7% 12.0 +12.3% 24.0 +25.6%
Modern Oral 301 -50.1% 3,083 +30.5% 626 +89.0% 4,010 +21.7%
Traditional Oral 6.6 -8.1% 0.8 -9.8% ' ' 7.4 -8.3%
Total Non-Combustibles
Cigarettes 58.7 -15.4% 279.5 -2.5% 266.4 -5.2% 604.6 -5.1%
OTP 0.2 -17.8% 14.6 -10.5% 1.7 -6.8% 16.5 -10.3%
Total Combustibles 58.9 -15.5% 294.1 -2.9% 268.1 -5.2% 621.1 -5.2%
Memo: Cigarettes and THP 58.7 -15.4% 291.5 -1.2% 278.4 -4.6% 628.6 -4.2%
Revenue - reported at current rates (#m)
U.S. AME APMEA Group
2022 % change 2022 % change 2022 % change 2022 % change
New Categories 949 +68.7% 1,300 +47.0% 645 +6.3% 2,894 +40.9%
Vapour 913 +62.9% 465 +41.4% 58 +55.1% 1,436 +54.9%
THP 0 -69.1% 494 +68.8% 566 +1.1% 1,060 +24.3%
Modern Oral 36 n/m 341 +29.9% 21 +114.4% 398 +45.3%
Traditional Oral 1,174 +8.9% 35 -12.3% ' ' 1,209 +8.2%
Total Non-Combustibles 2,123 +29.5% 1,335 +44.4% 645 +6.3% 4,103 +29.4%
Total Combustibles 10,470 +4.5% 7,588 +5.7% 4,972 +2.8% 23,030 +4.5%
Other 46 +27.9% 364 +7.0% 112 +2.8% 522 +7.6%
Total 12,639 +8.1% 9,287 +10.0% 5,729 +3.2% 27,655 +7.7%
Of which:
Strategic 12,018 +8.5% 6,768 +15.5% 3,099 +2.5% 21,885 +9.6%
Non-strategic 621 +1.4% 2,519 -2.5% 2,630 +4.0% 5,770 +0.8%
12,639 +8.1% 9,287 +10.0% 5,729 +3.2% 27,655 +7.7%
Revenue - organic at constant rates (#m)
U.S. AME APMEA Group
2022 % change 2022 % change 2022 % change 2022 % change
New Categories 854 +51.6% 1,144 +45.1% 677 +11.5% 2,675 +37.0%
Vapour 821 +46.4% 455 +38.4% 57 +53.0% 1,333 +43.8%
THP 0 -72.3% 349 +64.7% 599 +7.0% 948 +26.7%
Modern Oral 33 n/m 340 +31.6% 21 +111.9% 394 +45.6%
Traditional Oral 1,055 -2.1% 37 -7.7% ' ' 1,092 -2.3%
Total Non-Combustibles 1,909 +16.3% 1,181 +42.8% 677 +11.5% 3,767 +19.4%
Total Combustibles 9,409 -6.1% 6,794 +4.0% 5,016 +3.8% 21,219 -0.6%
Other 40 +14.9% 331 -1.3% 103 -4.3% 474 -0.8%
Total 11,358 -2.8% 8,306 +8.0% 5,796 +4.4% 25,460 +2.3%
Of which:
Strategic 10,799 -2.5% 6,664 +13.7% 3,162 +4.6% 20,625 +3.3%
Non-strategic 559 -8.9% 1,642 -5.0% 2,634 +4.2% 4,835 -1.3%
11,358 -2.8% 8,306 +8.0% 5,796 +4.4% 25,460 +2.3%
Note on Non-GAAP Measures
The Group's Management Board regularly reviews the measures used to assess and present the financial
performance of the Group and, as relevant, its geographic segments, and believes that these measures
provide additional useful information to investors. Certain of our measures are presented based on an
adjusted basis and on a constant currency basis. Please refer to the 2022 Annual Report on Form 20-F for a
full description of each measure alongside non-financial measures, pages 322 to 336.
One non-GAAP measure which the Group uses and that is contained in this announcement is adjusted
diluted earnings per share which is before the impact of adjusting items and is derived from diluted
earnings per share. This announcement also contains operating cash conversion, a non-GAAP measure
defined as net cash generated from operating activities before the impact of adjusting items and
dividends from associates and excluding trade loans to third-parties, pension short fall funding, taxes paid
and after net capital expenditure, as a proportion of adjusted profit from operations.
Adjusting items, as identified in accordance with the Group's accounting policies, represent certain items
of income and expense which the Group considers distinctive based on their size, nature or incidence.
These include significant items in, profit from operations, net finance costs, taxation and the Group's share
of the post-tax results of associates and joint ventures which individually or, if of a similar type, in
aggregate, are relevant to an understanding of the Group's underlying financial performance. Although
the Group does not believe that these measures are a substitute for IFRS measures, the Group does
believe such results excluding the impact of adjusting items provide additional useful information to
investors regarding the underlying performance of the business on a comparable basis.
The Group's Management Board reviews a number of our IFRS and non-GAAP measures for the Group and
its geographic segments at constant rates of exchange. This allows comparison of the Group's results, had
they been translated at the previous year's average rates of exchange. The Group does not adjust for the
normal transactional gains and losses in operations that are generated by exchange movements.
Although the Group does not believe that these measures are a substitute for IFRS measures, the Group
does believe that such results excluding the impact of currency fluctuations year-on-year provide
additional useful information to investors regarding the operating performance on a local currency basis.
Forward looking statements
References in this announcement to 'BAT', 'Group', 'we', 'us' and 'our' when denoting opinion refer to British
American Tobacco p.l.c. (BAT PLC) and when denoting business activity refer to BAT Group operating
companies, collectively or individually as the case may be.
This announcement does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or
dispose of any BAT PLC shares or other securities. This announcement contains certain forward-looking
statements, including 'forward-looking' statements made within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use
of words or phrases such as 'believe,' 'anticipate,' 'could,' 'may,' 'would,' 'should,' 'intend,' 'plan,'
'potential,' 'predict,' 'will,' 'expect,' 'estimate,' 'project,' 'positioned,' 'strategy,' 'outlook', 'target' and
similar expressions. In particular, these forward-looking statements include statements regarding the
Group's ambition to reach #5bn of New Categories revenue in 2025 and profitability in 2024, the Group's
combustibles full year volume performance being second-half weighted, further glo Air rollouts in the
second half of the year, statements under the heading "Full year guidance" and the Group's results on an
organic basis, reflecting the ongoing expectation with regards to the transfer of the Group's
operations in Russia and Belarus. These include statements regarding our intentions, beliefs or current
expectations concerning, amongst other things, our results of operations, financial condition, liquidity,
prospects, growth, strategies and the economic and business circumstances occurring from time to time in
the countries and markets in which the Group operates.
All such forward-looking statements involve estimates and assumptions that are subject to risks,
uncertainties and other factors. It is believed that the expectations reflected in this announcement are
reasonable but they may be affected by a wide range of variables that could cause actual results and
performance to differ materially from those currently anticipated.
Among the key factors that could cause actual results to differ materially from those projected in the
forward-looking statements are uncertainties related to the following: the impact of competition from
illicit trade; the impact of adverse domestic or international legislation and regulation; the inability to
develop, commercialise and deliver the Group's New Categories strategy; adverse litigation and dispute
outcomes and the effect of such outcomes on the Group's financial condition; the impact of significant
increases or structural changes in tobacco, nicotine and New Categories related taxes; translational and
transactional foreign exchange rate exposure; changes or differences in domestic or international
economic or political conditions; the ability to maintain credit ratings and to fund the business under the
current capital structure; the impact of serious injury, illness or death in the workplace; adverse decisions
by domestic or international regulatory bodies; changes in the market position, businesses, financial
condition, results of operations or prospects of the Group; and direct and indirect adverse impacts
associated with climate change and the move towards a circular economy.
Past performance is no guide to future performance and persons needing advice should consult an
independent financial adviser. The forward-looking statements reflect knowledge and information available
at the date of preparation of this announcement and BAT undertakes no obligation to update or revise these
forward-looking statements, whether as a result of new information, future events or otherwise. Readers are
cautioned not to place undue reliance on such forward-looking statements.
No statement in this announcement is intended to be a profit forecast and no statement in this
announcement should be interpreted to mean that earnings per share of BAT PLC for the current or future
financial years would necessarily match or exceed the historical published earnings per share of BAT PLC.
Additional information concerning these and other factors can be found in BAT PLC filings with the U.S.
Securities and Exchange Commission (SEC), including the Annual Report on Form 20-F and Current
Reports on Form 6-K, which may be obtained free of charge at the SEC's website, http://www.sec.gov, and
the Group's Annual Reports, which may be obtained free of charge from the British American Tobacco
website http://www.bat.com.
6 June 2023
Sponsor: Merrill Lynch South Africa (Pty) Ltd t/a BofA Securities
Date: 06-06-2023 08:00:00
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