British American Tobacco Boosts Revenue Forecast Amid Shift to Vapes and Nicotine Pouches
BAT banks on growing demand for vapes and nicotine pouches

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British American Tobacco (BAT) has increased its revenue forecast for smoking alternatives, anticipating mid-teens growth in its 'New Categories' segment, which includes vapes and nicotine pouches. The company aims to be predominantly smokeless by 2035, as traditional cigarette volumes decline.
- 01BAT's 'New Categories' business, including nicotine pouches and vapes, is expected to see mid-teens percentage revenue growth.
- 02The company aims to be predominantly smokeless by 2035, with smokeless products comprising 18% of total revenues last year.
- 03Revenue growth has been driven by the Velo nicotine pouch and Vuse vape brand.
- 04BAT maintains a full-year revenue growth forecast of 3 to 5%, while adjusted profits are expected to rise by 4 to 6%.
- 05Global cigarette volumes are projected to decline by 2.5% this year, a revision from an earlier forecast of 2%.
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British American Tobacco (BAT) has raised its revenue forecast for its 'New Categories' segment, which includes vapes and nicotine pouches, expecting growth in the mid-teens percentage range. This adjustment reflects the company's ongoing transition from traditional tobacco products as it aims to become predominantly smokeless by 2035. Currently, smokeless products account for approximately 18% of BAT's total revenues, with significant contributions from its Velo nicotine pouch and Vuse vape brand. Despite these positive developments, BAT's overall revenue growth forecast remains at the lower end of 3 to 5%, and adjusted profits are projected to increase by 4 to 6%. The company anticipates a 2.5% decline in global cigarette volumes this year, which is a steeper drop than previously expected. BAT's CEO, Tadeu Marroco, expressed confidence in the company's financial trajectory, which supports its £1.3 billion share buyback program and progressive dividend policy, despite a 3.1% drop in shares during early trading.
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The shift towards smokeless products may lead to changes in consumer choices and market dynamics in the tobacco industry.
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