BAT's 2023 Financial Report: New Categories Drive Revenue Growth

BAT by 2FIRSTS.ai
Feb.09.2024
BAT's 2023 Financial Report: New Categories Drive Revenue Growth
BAT Releases 2023 Financial Report: Non-combustible category revenue now accounts for 16.5% of group revenue, increasing 170 basis points from 2022.

British American Tobacco (BAT) released its financial report for the year 2023 on February 8. The report highlights the robust sales of Vuse and Velo, which have driven the revenue growth in new categories including vaporization, heat-not-burn (HNB), and oral products. The income from non-combustible categories now accounts for 16.5% of the group's total revenue, representing an increase of 170 basis points compared to the fiscal year 2022.

 

Other key points are as follows:

 

The conglomerate's revenue has decreased by 1.3%, with an organic growth of 3.1% (measured at constant exchange rates), driven by a significant increase of 21.0% in organic revenue from new categories.

 

A new category, including atomized, HNB, and oral products, achieved profitability in 2023, surpassing the original goal by two years. This led to an increase in the group's profits by £398 million.

 

The conglomerate has reached a global settlement with Philip Morris International (PMI), resolving all ongoing patent infringement lawsuits between the two parties in relation to heated products (HP) and aerosol products.

 

The overall revenue for combustible products witnessed a marginal increase of 0.6%, while the organic price/composition experienced a positive growth of +6.1%. However, due to the macroeconomic pressures in the United States, there was a decline in total sales, specifically in the high-end market segment, affecting both geographic composition and sales volume.

 

AME (America and Europe Market) and APMEA (Asia Pacific Middle East Market) have demonstrated strong performance. The report shows that the new categories, including aerosol, heat-not-burn, and oral products, have achieved profits of 1.67 billion pounds and 610 million pounds respectively in these two markets.

 

The reported operating loss amounted to £15.751 billion (with a decline of 95.8 percentage points in the reported operating profit margin, reaching -57.7%), primarily influenced by a non-cash impairment charge of £27.6 billion associated with the US operations (£273 billion).

 

Adjusted organic operating profit increased by 3.9% at constant exchange rates, while the adjusted organic operating profit margin rose by 40 basis points to reach 45.6%.

 

According to the report, the diluted earnings per share amounted to -646.6 pence. However, after adjusting for organic factors, the diluted earnings per share saw a growth of 5.2% at a constant exchange rate.

 

The operating cash flow conversion rate has reached 100%, indicating that the company efficiently converts its operating cash flow into positive cash flow. However, the adjusted net debt-to-EBITDA ratio has declined to 2.6 times, reflecting a decrease in the company's financial leverage after adjusting for organic factors.

 

The dividend has grown by 2.0% to 235.52 pence, in line with the gradual increase in dividends.

 

Sustained ESG Progress - MSCI Rating Upgraded to A Grade in 2023 (2022: BBB) Two Years Ahead of Schedule, Exceeding Water Consumption and Waste Generation Targets.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

Retail Case Study | Wisconsin Vape Market One Year After New Regulations: Johnny Vapes Reports 80% Sales Decline as Consumers Shift Online and Across State Lines
Retail Case Study | Wisconsin Vape Market One Year After New Regulations: Johnny Vapes Reports 80% Sales Decline as Consumers Shift Online and Across State Lines
According to WNCY on August 24, 2026, some independent vape retailers in Wisconsin say they have faced significant business pressure one year after new vape regulations took effect. Johnny Vapes, a retailer operating in northeast Wisconsin, said its store count fell from seven locations to four, sales declined by about 80%, and roughly 90% of its inventory was affected. Retailers said some consumers have shifted to online purchases or traveled to neighboring Michigan to buy vape products. The case highlights how local regulations can reshape retail operations, inventory management and consumer purchasing patterns.
Aug.28
Bret Koplow Takes Permanent Charge of FDA Tobacco Center After Pushing Faster PMTA Reviews, as HHS Emphasizes Innovation and Access to Lower-Risk Alternatives
Bret Koplow Takes Permanent Charge of FDA Tobacco Center After Pushing Faster PMTA Reviews, as HHS Emphasizes Innovation and Access to Lower-Risk Alternatives
The U.S. Department of Health and Human Services has named Bret Koplow permanent director of the FDA’s Center for Tobacco Products, ending his period as acting chief. Koplow has spent years working on tobacco regulation, law and policy inside the FDA and, while serving as acting director, pushed for faster PMTA reviews and nicotine pouch review pilots. HHS also said CTP will prioritize innovation and access to less harmful alternatives for adult smokers while continuing efforts to protect youth.
Sep.09
Italy and Greece Oppose Ireland’s Nicotine Product Bill, Raising EU Regulatory Concerns
Italy and Greece Oppose Ireland’s Nicotine Product Bill, Raising EU Regulatory Concerns
Italy and Greece have opposed Ireland’s proposed nicotine product regulations, arguing that the measures could affect EU market coordination and the free movement of products. Ireland plans to introduce stricter rules covering nicotine products including vapes and nicotine pouches, with measures involving packaging, marketing and sales controls. The dispute highlights differences among EU member states between stronger public health protections and maintaining regulatory consistency within the bloc’s single market.
Jul.29
Reuters Tracks Big Tobacco’s Shift Beyond Cigarettes as Nicotine Pouches Vie for the Next Growth Curve
Reuters Tracks Big Tobacco’s Shift Beyond Cigarettes as Nicotine Pouches Vie for the Next Growth Curve
As cigarette markets face long-term pressure, major tobacco companies are increasingly turning to nicotine pouches in search of growth beyond combustible tobacco. Reuters has examined whether nicotine pouches can become the next strategic growth platform for companies including Philip Morris International, British American Tobacco and Japan Tobacco. PMI strengthened its position through the acquisition of Swedish Match and its ZYN brand, while BAT and JTI continue expanding their own nicotine pouch portfolios. The category has gained attention because of its smoke-free, device-free format, but regulation, youth-use concerns and market scale will determine whether it can become a long-term growth engine.
Regulations
Aug.18 by 2Firsts Perspectives
Special Report | China Opens Draft Mandatory Heated Cigarette Standard for Comment, Multiple Heating Technologies Remain in Scope
Special Report | China Opens Draft Mandatory Heated Cigarette Standard for Comment, Multiple Heating Technologies Remain in Scope
China’s State Tobacco Monopoly Administration (STMA) has released a draft mandatory national standard for heated cigarettes, setting out detailed requirements for tobacco sticks, heating devices and aerosols. The proposal treats the stick and device as parts of the same product system, focuses on minimum safety and quality requirements, and leaves several heating architectures within scope.
Special Report
Jul.29
BAT's VELO Partners With McLaren F1 Team for Global Fan Campaign to Expand Nicotine Pouch Brand Reach
BAT's VELO Partners With McLaren F1 Team for Global Fan Campaign to Expand Nicotine Pouch Brand Reach
BAT-owned nicotine pouch brand VELO and the McLaren Mastercard Formula 1 Team have launched a global fan engagement campaign offering motorsport enthusiasts opportunities to win exclusive team-related experiences. The initiative aims to connect racing culture, fan interaction and VELO’s brand experience across global markets. The partnership reflects BAT’s broader strategy of expanding modern nicotine product brands beyond traditional tobacco categories through lifestyle and cultural marketing.
Jul.23