BAT sees growth in new product categories

British American Tobacco (BAT) is one of the largest tobacco suppliers in the world. With the decline of the tobacco industry, they have doubled their investment in new product categories, such as electronic cigarettes.

The London-listed company's revenue has grown over the past few months, despite a growing trend towards smoking cessation in Europe and the United States.

The Covid-19 pandemic on both sides of the Atlantic has accelerated a shift away from smoking, and bosses of the world's biggest tobacco companies (BAT) now predict that global tobacco sales will remain at around 2% for the entire year.

The company stated that they had originally anticipated a further decline in sales, but the recovery of tobacco sales was triggered by the Covid-19 resurgence in emerging markets.

The company added that British American Tobacco's revenue growth for the second quarter is expected to be between 2% and 4%, as it did not disclose a specific number prior to the upcoming financial update.

The CEO, Jack Bowers, stated that the company will continue to invest in its new category as they seek to reduce operational losses.

We anticipate an increase in contributions from all new categories and regions in 2022. We are confident that we will achieve our goal of reaching 5 billion pounds in revenue and profits by 2025," stated the individual in a released statement.

In the United States, sales in the industry are still facing pressure due to ongoing macroeconomic factors and the post-Covid normalization of consumer behavior. To counter early signs of industry-wide price reductions in the second half of the year, we have recently launched a commercial plan that spans specific brands, channels, and states.

Although our supply chain inflation rate continues to rise, we anticipate a strong improvement in our adjusted operating profit margin. This will be achieved through robust pricing, the scale of our brand, and an increasingly focused marketing investment. By the end of 2022, our three-year Quantum program is expected to save over £1.5 billion in costs annually.

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