British American Tobacco (LON:BATS) maintained its full-year earnings guidance on Wednesday and said its deleveraging plans remain on track.
The world’s second-biggest international tobacco company said it still plans to exceed its target for high single-digit growth in adjusted earnings per share for 2018, excluding a currency impact of around 6%.
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The maker of Lucky Strike cigarettes said its US business was performing well with volumes in line with expectations. US industry volume decline remains in line with historical ranges down 4.4% in the year-to-date and it continues to expect an industry decline of around 4.0-4.5% for 2018.
The company said adjusted revenue and operating profit growth would be weighted toward the second half of the year.
It said its deleveraging remained on track and that at current exchange rates net debt/adjusted EBITDA is expected to be around 3.9x by the end of 2018.
BAT said the potential regulation of menthol in cigarettes in the US should be developed through a comprehensive rule-making process, be based on a thorough review of the science and consider the unintended consequences, in order to withstand judicial review. The company said it was “constructively engaging” regulators and supporting evidence-based regulation
"We remain on track for a strong performance in 2018 - driven by both our combustible and PRRP businesses,” CEO Nicandro Durante said in a statement.
“In the US, we are performing well, with positive pricing and continued value share growth. Our de-leveraging remains on track and we remain committed to a dividend payout ratio of at least 65%. We expect to exceed our high single figure adjusted diluted EPS growth at constant rates of exchange."
BAT added that Lionel Nowell would retire from its board with effect from 12 December 2018.