British American Tobacco (BAT) anticipates stronger revenue growth in the second half of 2024, fueled by increased investments in the United States. This growth is expected across both its new category products, which include vapes and oral nicotine products, and traditional combustibles. The company, known for brands like Lucky Strike and Dunhill, reaffirmed its commitment to achieving its 2024 outlook of low-single-digit organic revenue and adjusted profit growth.
CEO Tadeu Marroco expressed optimism about the company’s strategic investments in the US over the past 18 months. He noted that these investments are yielding positive results, even amidst a challenging macroeconomic environment. This suggests that BAT’s strategy of focusing on the US market is proving effective in driving revenue growth.
BAT is also involved in a significant legal settlement in Canada. Along with Philip Morris and Japan Tobacco, the company is expected to pay C$32.5 billion (approximately $22.94 billion USD) to resolve a long-standing tobacco lawsuit. This settlement, proposed by a court-appointed mediator in October, represents a substantial financial commitment for the involved companies.
While the exact financial implications of the Canadian settlement remain unclear, BAT anticipates providing more detailed information when it releases its 2025 forecast in February. This suggests that the company is still assessing the full impact of the settlement on its long-term financial performance. The upcoming forecast will likely provide investors with greater clarity on how the settlement will affect BAT’s future profitability and growth prospects. The settlement underscores the ongoing legal and regulatory challenges faced by tobacco companies globally.
