British American Tobacco: Business Transformation Provides Strong Financial Performance In Such Challenging Macroeconomic Environment

To successfully navigate a very challenging macroeconomic environment and deliver superior shareholder returns through our growing dividend policy and restated buyback program in 2022, as well as solid financials, BAT is transforming the company.

A multi-category approach that is functioning and accelerating the Group's transformation. 

BAT has reached the milestone of 20 million unburned consumers in the first half of the year in business transformation. That's more than 2 million since the start of the year. Moreover 4 million if you go back a year. Looking back over the previous three years, a compound annual growth rate of more than 30% in the number of non-combustible customers, resulted in extremely high revenue growth from these new categories. Revenue from these new categories is growing rapidly and has now reached 45%. This comes on top of a 51% increase in 2021. Without a doubt, BAT will undoubtedly retain its momentum from last year into 2022. 

In the first half of the year alone, the firm invested £1.1 billion in the new items and cut losses by half. 

BAT has a perfect financial performance. In constant FX, revenue is close to 4% and EPS is near to 6% - adjusted EPS is 6% in constant FX. 77% of earnings were converted to cash over the first half of the year. Typically, the conversion rate in the first half is lower than the entire year since BAT pays MSA in the United States； however, it is ten percentage points greater than the prior year, indicating the degree of emphasis and attention we are currently paying to cash generation. Regarding revenue projections, BAT anticipates 2% to 4% growth. As a result, we stand by what we announced earlier this year. EPS growth at the median. And consistent cash generation.

In the vapor market, BAT will also debut the first throwaway contemporary disposable product. It's known as Vuse Go. It has already been introduced in France, Ireland, Spain, and Germany, with ambitions to expand even further by the end of the year. Furthermore, small pouches make it more pleasant for the user to use. There are also several nicotine strength levels. There will be a lot of innovation in these three categories in the second half of the year.