BAT To Launch New Disposable E-cigarette Vuse Go 2.0, Sales Revenue Expected To Accelerate Growth in The Second Half Of The Year

BAT to launch new disposable e-cigarette Vuse Go 2.0, sales revenue expected to accelerate growth in the second half of the year

British American Tobacco (BAT) released an update on its first-half performance in 2024, expecting that performance will accelerate in the second half of the year driven by new product launches and investments in the US market, achieving 3-5% revenue growth by 2026, while brands such as Vuse, glo and Velo performed strongly, and expected good financial performance for the full year.

On June 4, British American Tobacco (BAT) released a pre-close trading update for the first half of 2024. The company revealed that operating performance in the first half of this year was in line with expectations, and it is expected to accelerate in the second half of the year, thanks to the launch of innovative products in new business areas, as well as the benefits of US commercial action investments and related wholesaler inventory flows.

The company's CEO Tadeu Marroco said:

"The company's performance so far is consistent with our expectations. We will achieve single-digit growth in revenue and operating profit on an organic and sustained currency basis in 2024, and 3-5% revenue growth and mid-single-digit adjusted operating profit growth by 2026 (on an organic and constant exchange rate basis)."

The company said that its e-cigarette brand Vuse maintained a 41.1% share in the global e-cigarette market and remained in a leading position. It has a 51.5% market share in the US market, but its performance will be affected by the growth of illegal disposable e-cigarettes. The company emphasized that Vuse will promote the new disposable e-cigarette Vuse Go 2.0 in 2024, and sales and revenue are expected to accelerate in the second half of the year.

In addition, since January, the sales share of glo, the heated tobacco category, in major markets has gradually recovered, mainly due to the positive response of consumers to the new product glo Hyper Pro and improved consumables; its market share in Japan and Italy is stable, and the AME market (Asia Middle East Africa), Poland and the Czech Republic are strong; in addition, the non-tobacco consumables series veo is now available in 17 markets and plans to promote it further during the year. The company expects glo's market share momentum to continue and drive revenue improvement in the second half of the year.

Velo's overall oral product share in key markets rose to 10.3%, and its modern oral product share stabilized at 27.0%; it leads the AME market (Asia Middle East Africa), including mature markets such as Sweden, Denmark and Norway, and emerging markets such as the UK and Poland; the relaunched Velo brand in the United States performed well in the early stages, with the New York pilot market share rising to 13.5%. BAT expects Velo to continue to achieve strong financial performance in the first half and full year of 2024.

"As previously highlighted, we expect our results to increase in the second half of the year, primarily due to wholesaler inventory movements, our continued commercial investments in the U.S. market and the phasing of new product launches. However, revenue and adjusted operating profit are expected to decline by single digits in the first half of the year due to macroeconomic pressures and the lack of effective enforcement of the illegal e-cigarette market. Our focus on quality growth is starting to drive higher returns in all three new categories, especially in heated tobacco and modern oral products. As a result, we expect profitability in the new categories to further improve in the first half and full year."