British American Tobacco PLC's (LSE:BATS) (BAT) new boss has committed himself to the company's existing ‘A Better Tomorrow’ strategy, saying “smokers must have access to better choices.”
In his first trading update comments, BAT chief executive Tadeu Marroco said he was committed to the existing strategy and confident it could be executed successfully.
He said the aim was to reduce the health impact of its tobacco business through a multi-category portfolio of reduced-risk products.
Marroco added: “Put simply, smokers must have access to better choices. This is already a reality for smokers who have made the switch to our reduced-risk product.
“Our strategic aim is to progressively transform our portfolio by actively encouraging adult smokers to switch to less risky products, compared to smoking; a transformation delivering long-term multi-stakeholder value.”
In the first quarter, BAT increased the number of consumers of non-combustible products by a further 900,000 driving good revenue growth and further reducing losses in New Categories which means the FTSE 100-listed firm is on track to deliver its £5bn revenue ambition in 2025, with profitability in 2024.
It added that outside of the US, combustible brands have been performing well as we address portfolio gaps and optimise pricing.
The performance in US combustibles has been disappointing, however, and Marroco said returning combustibles to consistent value creation is critical to its strategy in the US.
Glo has had an underwhelming start to 2023, albeit recent momentum is more encouraging, the company noted.
BAT maintained its guidance for the financial year.