News Release18 February 2021
BAT accelerates its enterprise transformation towards A Better Tomorrow™
Speaking today at the Consumer Analyst Group of New York (CAGNY) Conference, BAT’s Chief Executive, Jack Bowles, shared his growth plans and ambitions for the next phase in the company’s transformation.
With strong New Category momentum and a clear pathway to their 2025 profitability, Bowles called 2021 a ‘pivotal year’ for BAT, announcing an ambitious programme called QUEST to accelerate the company’s transformation to create the “Enterprise of the Future”.
Focusing on five strategic business areas – Quantum*, Unleashing innovation, Empowering the Organisation, Shaping Sustainability and Technology & Digital – QUEST will propel BAT’s continued evolution of its portfolio, structure, culture and ways of working.
BAT’s transformation is underpinned by its purpose: building A Better Tomorrow™ by reducing the health impact of its business. Central to its strategy is the company’s brands and portfolio of the future of reduced risk** products that target distinct areas beyond combustibles. These include vapour, tobacco heating products and modern oral products. BAT also offers products that go beyond nicotine, following the January launch of its new CBD vaping line, in a test market in Manchester.
In December 2020, BAT announced it had progressed its COVID-19 vaccine candidate into human trials - a significant milestone that further demonstrates the company’s commitment to innovation and science.
BAT has 13.5 million consumers of its non-combustible products, a growth of 3m in 2020. As BAT works towards its aim of achieving 50 million consumers of non-combustible products by 2030, the company will continue to target its offering in high growth future areas, including the beyond nicotine ‘on-the-go wellbeing and stimulation’ space.
Jack Bowles, Chief Executive at BAT, comments: “We are at a key moment in our transformation. We are accelerating our transformation towards A Better Tomorrow and committed to building The Enterprise of the Future.
“We have made great progress. We have invested in strong foundations for the future. We are building and driving new capabilities, with a clear focus on digital, and the sharpening of our science and innovation pipeline. And we have done this while consistently delivering financial returns.
“Our strategy, growth and investment priorities are building BAT into a sustainable, leading consumer-centric multi-category consumer products company of the future. Our transformation is moving us from a company that is known for tobacco, to one that is focused on technology and innovation.
“Our clear roadmap for the future is leveraging our strengths, new capabilities, innovation portfolio and brands with purpose to build A Better Tomorrow.”
* Quantum is BAT’s programme to drive simplification and efficiencies
** Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.
NOTES TO EDITORS
The presentation by Jack Bowles and Tadeu Marroco will be webcast from 5.30pm GMT on www.bat.com/investorpresentations. The Q&A session that follows is only available to be watched live by CAGNY members, however it will available for viewing 24 hours later on www.bat.com/investorpresentations. The presentation slides and a transcript of the webcast will be available for download following the presentation.
BAT is a leading, multi-category consumer products company, established in 1902. BAT’s purpose is to build A Better Tomorrow™ by reducing the health impact of its business, which entails:
- Committing to providing adult consumers with a wide range of enjoyable and less risky products
- Continuing to be clear that combustible cigarettes pose serious health risks, and the only way to avoid these risks is not to start or to quit
- Encouraging those who otherwise continue to smoke, to switch completely to scientifically- substantiated, reduced-risk alternatives
- Tracking and sharing progress of our transformation
BAT aims to increase the number of its non-combustible product consumers to 50 million by 2030; and to achieve at least £5 billion in New Categories revenues by 2025.
Forward looking statements
This communication 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. 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 British American Tobacco Group (the “Group”) operates, including the projected future financial and operating impacts of the COVID-19 pandemic.
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 communication are reasonable but they may be affected by a wide range of variables that could cause actual results 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; the impact of market size reduction and consumer down- trading; 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; and changes in the market position, businesses, financial condition, results of operations or prospects of the Group.
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 communication 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 communication is intended to be a profit forecast and no statement in this communication should be interpreted to mean that earnings per share of British American Tobacco p.l.c. (the “Company”) for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
Additional information concerning these and other factors can be found in BAT's 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 .