“Benefiting from continued strong performance in the new category, which is now a significant contributor to the group’s revenue growth, we are making excellent progress towards our revenue target ($6.62 billion) by 2025. .”
Bowles said that “by leveraging our increased scale, new categories will contribute to earnings growth for the first time as their losses begin to decline, a key milestone on our path to profitability by 2025.”
Part of Bowles’ optimism comes from the fact that BAT added 3.6 million new consumers of non-combustible products through September 30, which is more than it gained for all of 2020.
“It’s interesting to compare the profitability of cigarettes and newer products,” said David Sweanor, assistant professor of law at the University of Ottawa and author of several studies on e-cigarettes and health.
“BAT has been saying for a while that this category is a year or two away from profitability, but the market keeps changing and profitability is slipping away from them. The losses are still very significant.
Barclays analyst Jain Gaurav said on Tuesday that “with new category losses shrinking and a trend towards profitability and (potential) share buybacks of ($1.32 billion in 2022), we believe BAT can achieve EPS growth of 8% to 9% in fiscal 2022.