Half Year 2024 British American Tobacco plc Earnings Call Transcript
Key Points
- British American Tobacco PLC (BTI) added 1.4 million smokeless consumers, reaching a total of 26.4 million.
- Smokeless products now account for 18% of group revenue, up 1.4 percentage points from the previous year.
- The company reported a GBP165 million increase in new category contribution and a nearly 10 percentage point increase in category contribution margin.
- British American Tobacco PLC (BTI) initiated a sustainable share buyback program, enhancing financial flexibility.
- The company expects an acceleration in second-half performance, driven by new category launches and US investments gaining traction.
- Group revenue was down 0.8%, and profit from operations decreased by 0.9%, reflecting macroeconomic headwinds and targeted investments.
- The US market faced significant challenges, with total revenue down 7% due to the impact of illicit vapor products and declining combustibles performance.
- Volumes in combustibles declined by 6.9% on an organic basis, driven by wholesaler inventory movements in the US and supply chain disruptions in Sudan.
- The vapor category in the US was negatively impacted by illicit single-use vapor products, leading to a loss of market share.
- The company faced higher amortization and impairment charges following the decision to start amortizing US acquired combustible brands from January 2024.
Good morning, everyone. I'm delighted to welcome you to our 2024 interim results presentation. With me this morning is Soraya Benchikh, our new CFO, and Victoria Buxton, Group Head of Investors Relations.
I will begin with our transformation highlights and the progress we have made against our key areas of focus over the last 12 months. Soraya will then take you through our financial performance in more detail. I will then return to talk more about our performance outlook before we move to the Q&A session.
With that, I'd like to draw your attention to the disclaimers on slides 2 and 3. So let's begin by looking at the way forward. Our first half performance is in line with expectations, and we are on track to deliver our full year guidance. In the first half of this year, we have continued to transform our business.
We added 1.4 million smokeless consumers, reaching 26.4 million. Smokeless now accounts for 18% of group revenue, up 1.4 percentage points versus full year '23. Our focus
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