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“On track for a strong year”

26 Nov 2019. British American Tobacco (BAT) said its business continues to perform well and that it is on track for a strong financial performance on an adjusted basis, the company said in its second half pre-close trading update.

BAT said it now expects currency adjusted revenue to grow in the upper half of its 3-5 per cent long term guidance range and expects revenue growth in its new categories to be at the lower end of its 30-50 per cent increase, reflecting a slowdown in the US vapour market.

In vapour, Vuse is growing value share in the US, with Vuse Alto's share at 11.1 per cent in October, with total Vuse family value share at 17.5 per cent. Elsewhere, Vuse has continued to grow its market share at 11.8 per cent in the UK and 19.2 per cent in France, while the ePod device has been successfully launched in both European markets. In Canada, Vype is the fastest growing brand, reaching a value share of 27.6 per cent, up 570 basis points since July.

For the Tobacco Heating Products division, the glo product in Japan has held its volume share at 4.9 per cent for the year-to-date, with the launch of glo Pro and glo Nano despite a competitive market.

In Combustibles, global industry volumes are expected to be down around 3.5 per cent for the full-year, with BAT's volumes to be broadly in line with the industry.

Chief Executive Jack Bowles said: "We expect to deliver a strong performance in 2019, building on the good progress we made in the first half. Our focus on our global strategic brands is delivering share gains and strong price mix in combustibles, both globally and in the US. Increased investment and new product launches are delivering good New Category revenue growth in H2, despite the recent slowdown in the US vapour market. We believe that the issues around vaping in the US should lead to a better and stronger regulatory environment in which we are well placed to succeed. In summary, we are delivering on our priorities. We are driving value growth in combustibles, we are investing to deliver a step change in New Categories and we are transforming the business to create a stronger, simpler, more agile BAT. We are on track for a strong year."