LONDON - British American Tobacco (NYSE:BTI) PLC (BAT (LON:BATS)) has announced a strategic shift towards a predominantly smokeless business by 2035, as detailed in their Annual General Meeting (AGM) held today. The company’s refined strategy, unveiled in 2023, aims to adapt to the evolving consumer and regulatory landscape, emphasizing agility and precision in execution.
BAT reported a 5.2% decrease in group revenue on a reported basis for the year 2024, while organic revenue at constant currency rates climbed by 1.3%. The company’s New Categories business, which includes smokeless products, saw a £251 million increase in contribution, reaching a margin of 7.1%.
The company’s adjusted organic profit from operations rose by 1.4% at constant currency rates in 2024, with a strong operating cash conversion of 101%. BAT attributes these results to the resilience of its business and employees, despite global macroeconomic challenges.
In line with its commitment to creating a smoke-free future, BAT reported that 29.1 million adults now use its smokeless products, which account for 17.5% of the group’s revenue. The company is focusing on product innovation to meet consumer preferences responsibly and has achieved profitability in its New Categories business two years ahead of schedule.
BAT’s sustainability strategy has been refined to concentrate on five impact areas: Tobacco Harm Reduction, Climate, Nature, Circularity, and Communities. This approach has earned the company a Triple-A rating from CDP for its 2024 disclosures on Climate Change, Water Security, and Forests.
The company is actively engaging with stakeholders to promote Tobacco Harm Reduction and encourages the adoption of smokeless products. BAT has published Omni™, a manifesto for change, and has set out evidence-based solutions for its vapor devices, aiming to prevent underage use, enhance product safety, and improve device circularity.
For 2025, BAT anticipates a return to profit growth in the U.S. and expects to see revenue growth of around 1% and adjusted profit from operations growth of 1.5-2.5%, including a 1.5% transactional foreign exchange headwind. The company forecasts a translational foreign exchange headwind on adjusted profit from operations of 2% for the full year and 3% for the half year. BAT reaffirms its mid-term targets of 3-5% revenue growth and 4-6% growth in adjusted profit from operations on a constant currency basis.
BAT plans to generate over £50 billion in free cash flow between 2024 and 2030 and is committed to disciplined capital allocation, balancing investment in transformation with shareholder returns. The company has announced a 2% dividend increase and a £900 million share buy-back for the year.
The AGM also noted board changes, including the appointment of Soraya Benchikh as Chief Financial Officer and Director, and Uta Kemmerich-Keil as an Independent Non-Executive Director.
This news is based on a press release statement from BAT.
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