British American Tobacco 2024 Earnings report: Revenue down 5.2% to £25.8 billion Cigarette business volume growth of 55%

British American Tobacco 2024 Earnings report: Revenue down 5.2% to £25.8 billion Cigarette business volume growth of 55%

British American Tobacco 2024 revenue of 25.867 billion pounds, down 5.2% year-on-year, new tobacco product users increased to 29.1 million, accounting for 17.5% of revenue. The heated tobacco products and modern oral tobacco businesses performed strongly, with e-cigarette sales down 5.9%.

On February 13, British American Tobacco (BAT) released its annual results for the year ended December 31, 2024 on its website.

For the year ended December 31, 2024, BAT revenue was £25.867 billion, down 5.2% from the same period in 2023;
Operating profit of £2.736 billion, of which £6.2 billion was included in 2024 for a proposed settlement in Canada, while 2023 was primarily negatively impacted by a one-off impairment charge in the United States;
The new category brought in £3.432 billion. Among them, new tobacco revenue accounted for 17.5% of the company's total revenue, an increase of 1% over the 2023 fiscal year. The number of new tobacco users reached 29.1 million, an increase of 3.6 million from the end of 2023.

The core contents of the report are as follows:

Revenue decreased 5.2% due to the sale of the Russian and Belarusian operations in September 2023, as well as unfavorable foreign exchange rates.
Organic revenue grew 1.3% (in constant currency), driven by an 8.9% increase in new category revenue.
Total fuel organic product revenue increased 0.1% (in constant currency) as a 5.3% increase in organic product price/mix was offset by a 5.2% decrease in volume.
Adjusted organic operating profit increased 1.4% on a constant rate basis, driven by AME and APMEA.
At adjusted organic and constant exchange rates, the new category contribution increased by £251 million and the category contribution margin is now 7.1%, up 7.1% from 2023.
Free cash flow of £7.901 billion; Adjusted net debt/Adjusted EBITDA decreased 0.13 times to 2.44 times (down 0.3 times on a fixed rate basis).
Dividend increased by 2.0% to 240.24 pence, with a planned share buyback of 900 million pounds in 2025.
Launched Omni™ to help achieve a smoke-free world.

BAT2024 Full Year Results (for the year ended 31 December 2024) |

E-cigarette sales fell 5.9 percent, while adjusted revenue fell 2.5 percent to 1.765 billion pounds. In the US market, the value share of e-cigarettes was 50.2%, down 2.0% from 2023. This is mainly due to the growth of illegal single-use e-cigarette products in the United States and Canada, as well as the lack of enforcement of illegal sales of products following the Quebec ban.

The volume of heated tobacco products sold in 2024 fell 11.6% and revenue fell 7.6%, but at organic constant exchange rates, revenue grew 5.8% to £972 million. The market share was 16.7%, down 40 basis points from 2023. The improved organic financial performance was driven by the new glo Hyper Pro product.

In 2024, Hyundai Mouth products volume increased by 55.0% and revenue increased by 46.6%, increasing by 51.0% at organic constant exchange rates to £814 million. In the US market, the market share of modern oral tobacco was 6.6%, an increase of 2.1% from 2023

BAT new product category performance | Figure source: BAT official website

BAT CEO Tadeu Marroco said,

"2024 was a year of investment for our company and the performance was in line with expectations. We continued our transformation this year with 3.6 million new adult users of new tobacco products, bringing the total number of new tobacco product users to 29.1 million, representing 17.5% of the company's total revenue, an increase of 1% over the previous fiscal year. Our sales accelerated in the second half of the year, driven by innovation in new product categories and business investment targeting the US market, as well as the release of related wholesaler inventory changes."

"Our focus on quality growth delivered higher returns through more targeted investments in all three new product categories, resulting in a transformational improvement in business performance in Europe. We made further progress in improving profitability in our new product categories, with a particularly strong performance in modern oral products."

"In the United States, despite the challenging macroeconomic environment and the challenge of illegal disposable e-cigarette products, our targeted investments have strengthened the business. Through our commercial actions, we strengthened our execution and began to improve our performance, particularly in modern dental products, where we also identified untapped growth opportunities."