British American Tobacco has put aside £6.2bn as it prepares for the end of a long-running lawsuit in Canada.
A Quebec court ordered British American Tobacco, alongside Philip Morris International and Japan Tobacco, in 2015 to pay billions of dollars to compensate smokers for their health problems. The companies have been negotiating a resolution ever since.
It is one of several headwinds facing the business as cigarettes and vapes fall under closer regulatory scrutiny. In Australia, new vaping regulations came into force last year to try and curb youth vaping while Bangladesh banned all vape imports in December, effectively constituting an outright ban.
“While we expect significant regulatory and fiscal headwinds in Bangladesh and Australia to impact our combustibles performance, I am confident that we will progressively build on our delivery,” said CEO Tadeu Marroco.
The maker of Lucky Strike and Dunhill cigarettes posted results for 2024, with revenue down 5.2% to £25.9bn, below expectations of £26.1bn. This was led by the sale of its businesses in Russia and Belarus in September 2023 and currency headwinds.
Adjusted profit was 362.5 pence per share, also below expectations of 362.2 pence.
Its share price fell 7% in early trading although remains up over 30% for the past 12 months.
The company said sales were still healthy, however, with organic revenue – removing the impact of currency – up 1.3% led by New Categories revenue up 8.9%.
Smokeless products now account for 17.5% of the group’s revenue after it added 3.6 million new shoppers last year.
“We are committed to building a smokeless world and becoming a predominantly smokeless business by 2035,” said Marroco.
“I am confident that we have the right strategy, science, innovation, breadth of capabilities and people to achieve this ambition and deliver long-term sustainable value for all our stakeholders.”
Combustibles organic revenue was up 0.1% with price rises of 5.3% offsetting 5.2% lower volume.
The business maintained its outlook for profit and sales for 2025 with revenue expected to grow about 1%.
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