UNITED KINGDOM
BAT to increase production of Glo heating sticks

British American Tobacco, citing “good progress” in its reduced risk programme, is investing to boost production of the Kent Neostiks used in its Glo tobacco heating device, BAT said.

Announcing half-year results, the cigarette maker said its Next Generation Products, which includes tobacco heating devices and e-cigarettes, business has expanded to 15 markets worldwide. To meet demand, Neostik production expansion is underway in South Korea, where BAT previously said it would make the heat sticks at its Sacheon factory, and in Russia.
Offsetting NGP expansion, cigarette volume adjusted for acquisitions fell 5.8 per cent to 313 billion sticks. Acquisition of Reynolds American (RAI), completed on 25 July, fell outside the 30 June closing date for the earnings statement. The acquisition will make BAT the number two cigarette maker in the US, and give it control of RAI’s popular Vuse e-cigarette and other smokeless tobacco products.
Favourable exchange rates against a weak UK currency boosted revenue and operating profit, which respectively rose 15.7 per cent to GPB 7.7 billion (EUR 10 billion) and 16.3 per cent to GBP 2.6 billion, BAT said. Stripped of currency fluctuations, sales rose 3.5 per cent and operating profit 3.7 per cent. BAT market share in its key markets continued to grow, led by its Global Drive Brands.
“These are exciting times for the Group,” said BAT Chairman Richard Burrows. “The combustible business continued to perform well, against the backdrop of a strong volume comparator. The performance of Glo continues to exceed expectations, with new market launches showing encouraging early signs. The Group is the largest vapour company in the world and the successful completion of the Reynolds acquisition bolsters our leading position in both NGPs and combustibles

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