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

From Product Innovation to Integrated Solutions: NEXTECH Expands Its Global Heated Tobacco Solutions
From Product Innovation to Integrated Solutions: NEXTECH Expands Its Global Heated Tobacco Solutions
NEXTECH launched its NEXE Pro circumferential-heating tobacco stick globally at InterTabac 2026, as the company expands from product innovation into broader heated tobacco solutions. Amid intensifying competition across global HTP markets, NEXTECH is strengthening its R&D, manufacturing and pre-launch support capabilities to serve different types of business customers.
Industry Insight
Sep.15
IKE Tech Launches IKE 2.0 Compliance Platform for Nicotine Products
IKE Tech Launches IKE 2.0 Compliance Platform for Nicotine Products
IKE Tech launched IKE 2.0 on September 28, initially targeting nicotine products with a platform that combines user identity verification, product authentication, configurable policy controls and data analytics. Products can be authenticated through direct device integration or NFC smart tags. IKE Tech was formed with participation from Ispire's Aspire North America, Berify and Chemular, with Ispire currently holding a 40% interest. Its age-verification component PMTA was accepted by the FDA in 2025 and remains under review. The company did not disclose customer names, commercial deployment volumes, pricing or revenue tied to IKE 2.0.
News
Sep.29 by 2Firsts Perspectives
FDA Authorizes JUUL2, Cites Adult Switching Amid Efforts to Speed PMTA Reviews
FDA Authorizes JUUL2, Cites Adult Switching Amid Efforts to Speed PMTA Reviews
The FDA authorized the JUUL2 device and tobacco- and menthol-flavored pods on Aug. 28, bringing the number of authorized e-cigarette products to 48. The agency highlighted complete switching among adult smokers, with six-week switching rates reaching 28.4%–49.3% for the menthol pod. The decision comes as FDA works to speed PMTA reviews, reduce application backlogs and expand authorized e-cigarette and nicotine-pouch products while maintaining enforcement priorities for unauthorized products.
Regulations
Aug.29
California Lawmakers Pass Disposable Nicotine Vape Ban, With Sales Prohibition Set for 2028
California Lawmakers Pass Disposable Nicotine Vape Ban, With Sales Prohibition Set for 2028
According to CBS Los Angeles on August 27, 2026, California lawmakers have passed Assembly Bill 762, which would phase out disposable, battery-embedded nicotine vapes in the state. If signed by Governor Gavin Newsom, manufacturing and importation of the covered products would be prohibited beginning January 1, 2027, followed by a sales ban on January 1, 2028. Driven primarily by concerns over electronic waste, lithium-battery fires and environmental pollution, the legislation would further shift California’s legal vape market toward rechargeable, refillable or replaceable-pod devices.
Aug.28
Ireland Raises Nicotine Product Taxes Again as Cigarettes Gain €1 and Vape Duty Is Set to Jump 40%
Ireland Raises Nicotine Product Taxes Again as Cigarettes Gain €1 and Vape Duty Is Set to Jump 40%
Ireland has increased tobacco excise under Budget 2027 and announced a further rise in its E-liquid Products Tax. From Oct. 7, the tax burden on a pack of 20 cigarettes in the most popular price category increased by €1, with pro-rata increases on other tobacco products. The government plans to raise EPT from €0.50 to €0.70 per millilitre from Jan. 1, 2027, a 40% increase applying to both nicotine-containing and nicotine-free e-liquids. The tobacco duty increase is expected to raise about €63.1 million in a full year.
Regulations
Oct.09
China Tobacco Zhejiang files patent for pressure-triggered, on-demand oral nicotine release
China Tobacco Zhejiang files patent for pressure-triggered, on-demand oral nicotine release
China Tobacco Zhejiang Industrial Co., Ltd. has filed a patent application for an oral nicotine delivery product designed to let users actively adjust nicotine release. The product embeds two types of nicotine reservoirs with different wall thicknesses and positions inside a deformable matrix. Pressure applied with the tongue or lips can rupture the reservoirs and accelerate nicotine release. In simulated oral tests, several patent examples showed sharply higher peak nicotine release rates as applied force increased from 0 N to 1 N and 3 N. The filing explores a shift from preset release profiles toward user-triggered nicotine delivery.
Sep.01