(Alliance News) - British American Tobacco PLC on Thursday expressed confidence in meeting its 2022 guidance, as its New Category business continued to drive strong volume, revenue and market share growth.
The London-based maker of cigarettes and vaping products said new product launches and innovations had enabled the group to add another 3.2 million consumers within its non-combustible franchise in the nine months that ended September 30, reaching 21.5 million.
The Dunhill and Kent maker said it was investing in New Categories, driving growth, while making progress in reducing operating losses.
"We expect growing contribution across all New Categories, and all Regions in 2022. We are confident in delivering our targets of GBP5 billion revenue, and profitability by 2025," it said.
New categories includes tobacco heating products and vapour.
In its combustibles business, BAT expects its targeted portfolio of brands across price tiers to deliver a robust performance across Asia-Pacific and Middle East, Americas and Sub-Saharan Africa, and Europe, driven by resilient volumes.
In the US, however, industry volumes remain under pressure due to ongoing macro-economic factors and post-Covid normalisation of consumption patterns, the company said.
BAT said it expected to deliver strong adjusted operating margin improvement despite increasing inflation in its supply chain.
In a pre-close trading statement, BAT Chief Executive Jack Bowles said the company was confident in delivering its 2022 guidance.
BAT guided for 2% to 4% growth in revenue at constant currency rates for all of 2022. It projects mid-single figure adjusted diluted earnings per share growth at constant currency, including a transactional currency headwind, of 2%.
For the year, net finance cost is estimated above GBP1.6 billion due to higher interest rate rates and the strong dollar.
BAT said it expects the full-year global tobacco industry volume to be 2% lower, after falling by 3% last year, driven by continued post C0vid-19 recovery in emerging markets.
Shares in BAT were 0.6% lower at ZAR710.65 in Johannesburg on Wednesday morning. They were down 2.0% at 3,341.50 pence in London.
By Artwell Dlamini, Alliance News reporter
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British American Tobacco (BATS)