Sparks - British American Tobacco

British American Tobacco (BAT) navigated a year of transformation in 2024, with its pivot towards a smokeless future gaining momentum. The company added 3.6 million new adult users of its smokeless products, with this segment now contributing 17.5% of group revenue. On an organic basis, revenue rose 1.3%, supported by an 8.9% increase in New Categories revenue including a good improvement in the second half of the year, as guided my management. Overall revenue declined by 5.2%, largely due to the exit from Russia and Belarus and foreign exchange headwinds.

Despite challenges in the US market, including illicit vapour products, BAT saw strong performance in modern oral nicotine, particularly in Europe. Its focus on profitability and cost management helped drive adjusted organic profit from operations up 1.4%.

With a £900m share buyback and dividend growth, BAT remains committed to shareholder returns. While regulatory pressures in Bangladesh and Australia pose headwinds for 2025, BAT’s strategy signals confidence in long-term growth as it continues shifting investment towards reduced-risk products. Management is guiding to a better year of growth in FY25, with c 1% growth in revenue and 1.5–2.5% in adjusted profit and it commits to growing the dividend in sterling.