British American Tobacco expects strong sales of vaping products in H2; maintains guidance
Source - SMW
British American Tobacco said it was on track to deliver revenue growth in the mid-upper half of its long-term guidance range as new product launches were expected to drive stronger second-half sales in its new generation of tobacco products. The company maintained its full-year guidance and said it was on track for constant currency revenue growth in the mid-upper half of its long-term guidance range of 3-5%. Constant currency adjusted operating profit growth was expected in the upper half of its long-term guidance range of 5-7%. Full-year adjusted diluted earnings growth was also expected to benefit from a currency translation tailwind of around 1.0% for 2019, and 1.5% for the first half of 2019, at current exchange rates, the company added. 'We are on track for a good performance in 2019 with revenue and adjusted operating profit growth in line with our guidance and delivery of high single figure FY adjusted diluted EPS growth at constant rates of exchange,' the company said. First half new category revenue, which included THP, vapour and modern oral products – was approaching the company's full-year guidance range, with an expected acceleration in the second half leading to annual growth around the middle of the 30-50% range, on a constant currency basis, the company said. In combustibles, strategic brands and good pricing continued to drive growth. Strategic Combustible Brands market share was up 50 basis points year to date. 'Our Strategic Brands continue to take share, while new product launches and a sharpened focus on priority markets and products are expected to drive stronger New Category growth in the second half,' the company said. US sales to retail was down 5.3% year-to-date, but in-line with historic industry volume ranges. 'We expect FY industry volume to be down 4% to 5%, driven by earlier cigarette price increases and rising gas prices,' the company said.