The Transition to New Categories: A Critical Turning Point for British American Tobacco Stock

Sunday, 19 May 2024, 14:35

British American Tobacco faces challenges with its declining cigarette business while striving to increase its revenue from new product categories. Investors need to monitor the company's progress toward its target of 50% revenue contribution from new categories by 2035. The successful transition to non-combustible products is crucial for the company's survival amidst the shifting market dynamics.
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The Transition to New Categories: A Critical Turning Point for British American Tobacco Stock

British American Tobacco's Big Problem

British American Tobacco is undergoing a significant decline in its core business of selling cigarettes, witnessing a 21% decrease in production over the last five years.

The Company's Strategy

The company aims to shift its focus to new categories like vapes and pouches, with a goal of achieving 50% revenue contribution from these products by 2035.

  • Key Milestone: New Categories achieved profitability in 2023, two years ahead of the original target.
  • Risk: Continued decline in the cigarette business may pose a challenge to the company's future stability.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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