BAT predicts fast growth in smoking alternatives for the next decade

A woman poses with a cigarette in front of BAT (British American Tobacco) logo in this illustration taken July 26, 2022. REUTERS

LONDON, Sept 29 (Reuters) – British American Tobacco expects revenue growth from smoking alternatives like vapes and ​nicotine pouches in the mid-teens in percentage ‌terms each year until 2030, it said on Tuesday.

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• The world’s second-largest tobacco maker by market value will host an ​investor day later on Tuesday, where it ​will outline its strategy for growth until the ⁠end of the decade
• It had already forecast ​mid-teens revenue growth from smoking alternatives for 2026 and ​now expects this to continue in the years ahead
• It also expects the “contribution margin” of these products — a measure of how ​profitable they are — to reach at least ​30% by 2030, against 13.3% in June 2026.
• BAT, which makes cigarette ‌brands ⁠like Dunhill and Lucky Strike, has been trying to grow revenues from other nicotine products amid long-term declines in smoking in some key markets
• Its ​rising ambitions reflect ​fast-growth in ⁠its nicotine pouch label Velo, after years of difficulties with its vape ​and heated tobacco brands
• The company also said ​it ⁠remains on track to deliver at the lower end of its guidance for revenue growth of between ⁠3% ​and 5% and growth of ​4% to 6% in adjusted profit from operations in its 2026 ​financial year

Reporting by Emma Rumney; Editing by Jan Harvey