British American Tobacco Sees GBP25 Billion Impairment on US Brands Pressure -- Update
06 Dezembro 2023 - 5:25AM
Dow Jones News
By Joe Hoppe
British American Tobacco said it expects a one-off impairment of
around 25 billion pounds ($31.49 billion) this year due to market
pressure on some of its combustibles brands in the U.S. as it tries
to increase revenue from nontraditional tobacco products.
The FTSE 100 cigarette maker--which houses the Kent, Dunhill and
Lucky Strike brands among its portfolio--said macroeconomic
pressures on its combustibles performance in the U.S. and
investments in its noncombustibles business would lead to an
accounting noncash adjusting impairment charge of around GBP25
billion.
It said the adjustment mainly relates to some of its acquired
U.S. combustibles brands, and it will now assess their carrying
value and useful economic lives over an estimated period of 30
years. It plans to start amortization of the remaining value of its
U.S. combustibles brands from January.
BATs said it targets a revenue share of up to 50% for
noncombustibles revenue by 2035, and would continue to invest in
the sector into 2024.
On the back of the strategy shift and U.S. pressures, it expects
low single-digit growth in revenue and adjusted profit from
operations on an organic basis for the upcoming year.
It then expects a progressive improvement to 3%-5% revenue
growth and mid single-digit adjusted profit from operations by
2026.
"I am confident that the choices we are making today will drive
our long-term success and deliver sustainable value for all of our
stakeholders," Chief Executive Tadeu Marroco said.
For this year, the company said it expects revenue growth at the
low end of its previously guided 3%-5% range at constant currency.
It further expects mid single-figure adjusted diluted earnings per
share growth on a constant-currency basis, including around a 2%
transactional foreign-exchange headwind.
It reported strong volume and revenue growth in new categories,
which it expects to be broadly breakeven, two years ahead of
schedule.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
December 06, 2023 03:10 ET (08:10 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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