News and stories25 February 2022
Entering the next stage of our transformation
BAT is entering the next phase of its transformation journey towards A Better Tomorrow™ – Faster Transformation – our Chief Executive, Jack Bowles told analysts and investors this week.
Jack was speaking at the Consumer Analyst Group of New York (CAGNY) annual conference - a leading consumer goods conference in the U.S., which was held virtually this year.
He told the audience BAT had delivered a pivotal year in 2021 and how we had built a high-growth New Category business worth more than £2 billion in a few short years. He noted how BAT had doubled revenue from non-combustible products over the last three years to more than 12% of Group revenue.
Jack said New Category contribution to Group revenue will continue to grow and is expected to more than double from £2 billion to £5 billion by 2025 - as we continue to encourage more smokers to switch to our reduced-risk*† products.
The conference heard how, as we leverage our increasing scale and reduce losses, New Category contribution to Group profit growth is expected to accelerate. And with our new, more active capital allocation framework, we are committed to delivering enhanced long-term value for shareholders.
Jack also pointed to BAT’s New Category revenue growth in 2021 of 51%** and the fact that we added a record 4.8million non-combustible product consumers*** in 2021, taking the total to 18.3m.
Jack said: “With our multi-category strategy and portfolio, we are uniquely positioned to drive the transformation of the industry by reducing the health impact of our business. This sits at the heart of our strategy and is a deeply embedded commitment to society.”
Also speaking at the conference were BAT’s Chief Marketing Officer, Kingsley Wheaton, and Finance and Transformation Director, Tadeu Marroco.
Kingsley discussed BAT’s unique multi-category model, led by our three New Category global drive brands – Vuse, glo and VELO. He also pointed to the science behind these products and how accelerating our ESG performance remains a key focus.
He said: “We are leveraging our established strengths, new capabilities and global New Category drive brands to transform our business. This transformation is well underway.”
Tadeu told the conference how BAT’s pivotal year was delivered alongside robust results in 2021 and that we are changing rapidly, powered by unique consumer insights, strong brands, established capabilities and our great people.
He added: “We are committed to transforming BAT to a high-growth, multi-category, consumer-led company with a reduced impact on public health and with ESG at its core – creating value for all our stakeholders.”
Watch a playback of the conference at bat.com/investorpresentations.
* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.
† 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.
**at constant rates of exchange
***Target market for new consumers is existing adult smokers/nicotine users.