Full Year 2024 British American Tobacco plc Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rashad Kawan - Morgan Stanley - Analyst : Hey, good morning guys. Thank you for taking my questions. Two for me, please. So, first one, I know it's still relatively early, but you reiterated your getting to your midterm guide by 2026. I guess what gives you confidence in being able to achieve that, how much of an improvement does that assume in US combustibles volumes and enforcement and illicit Vapour? And then second question, talked about sustainable buybacks again Tadeu and again as you think about 2026, should we assume buybacks will continue irrespective of the Canadian settlement? I know you obviously have some flex from the ITC hotel stake, but potentially could you also look to monetize more of the ITC stake there to fund future buy back. I guess just any thoughts around how that fits within your capital allocation priorities would be helpful. Thank you.

Question: Rashad Kawan - Morgan Stanley - Analyst : Thank you very much, very clear.

Question: Gaurav Jain - Barclays - Analyst : Hi, good morning, Tadeu. Good morning Soraya. Three questions from me as well. So one is, on the ITC hotel stage, you want directly 15%, I think, of that company. What would be your plans, for that?

Question: Gaurav Jain - Barclays - Analyst : Sure, thank you. The second is, just on heated products background, I hear the comments that, there's a new platform getting launched this year, but -- I mean, and if -- and I know there was a, diversitude of Russia and Ukraine. Which has been impact to report the numbers the way we see it, but if we just look at, the APMEA numbers which largely Japan and Korea, it is like flat when competitors are clearly grown much, higher. So do you believe that you will be able to accelerate this growth to in line with market growth?

Question: Gaurav Jain - Barclays - Analyst : Sure, and my last question is on the US. So you know this year, in FY24 year revenues declined 3.5% and your cigarette volume is down 10%, your revenue is down 4%, so your price is clearly lagged, what the industry, leader there was taking. So when you are saying that if FY25 US revenues will be flat. It's more or less that now the pricing on combustibles will start aligning with the industry leader. Is that how I should think about it?

Question: Gaurav Jain - Barclays - Analyst : Thank you so much.

Question: Rey Wium - Anchor (SA) - Analyst : Good day, Tadeu and Soraya. I just want to maybe just quickly just, focus on the Canadian situation. This question, I just want to know whether the annual settlements that will come through and I appreciate it's a bit early, but will those be tax deductible for these cap?

Question: Rey Wium - Anchor (SA) - Analyst : Good. Now, the other interesting question that I have is, the total settlement amount of it is CAD32 billion, obviously needs to be, paid over the years through profits. Is there a minimum liability that you face? Let's say for instance, the cigarette industry, declines at such a rapid rate that Canada goes smoke-free, let's say after 10 years and the total payments, let's say at a mass to about CAD20 billion. Is there a top up that you will need to do, let's say for industry-wise for the other fi CAD12 billion for instance?

Question: Rey Wium - Anchor (SA) - Analyst : Excellent. And have you sort of finalized what your share will be of these payments, between the main industry players?

Question: Rey Wium - Anchor (SA) - Analyst : It's okay. And I guess --

Question: Rey Wium - Anchor (SA) - Analyst : Yeah, I just want to quickly stop, the situation in Australia, that the market has declined at a material rate in recent years. I mean, I think, based on what your competitors said that the market was like basically 5 billion sticks in 2024. I just want to know what -- I mean, is Australia still profitable for you? And, how long can you continue to operate in such a diminishing market until you, maybe decide also to exit that market? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 9:30AM, BATS.L - Full Year 2024 British American Tobacco plc Earnings Call

Question: Rey Wium - Anchor (SA) - Analyst : Okay, thank you very much

Question: Damian McNeela - Deutsche Numis - Analyst : Hi, morning, Tadeu. Morning, Soraya. I know we've had a couple of questions already on the US, but I just wanted to clarify because I think some of the things, that need to go best for you in the US are a function of things that are outside of your control like, US, consumer, and the illicit trade. I just wanted to clarify in your FY26 sort of return to -- the sort of the growth outgo at the bottom end of the range that's being driven by everything that you can control in the US, but at the top end of the range that would benefit from things that are outside of your control. Is the first question. Second question is on, can you provide any quantitative or qualitative data around what drove the improvement in new category profit contribution in the period by sort of subcategory please, and they're my two questions.

Question: Damian McNeela - Deutsche Numis - Analyst : Very clear, thank you very much.

Question: Richard Felton - Goldman Sachs - Analyst : Thank you very much. Good morning, guys. Three questions for me, please. The first one is on the illicit Vapour category outside of the US. I'd be interested to know any thoughts or observations on what you're seeing across your markets in terms of the growth of illicit Vapour. I know there's a lot of attention on the US, but are there any other markets which are following a similar pattern? And does that have any implications for your appetite to invest in that category? Second question, is there anything on your guidance in terms of phasing that you can call out? I know in the statement you say second half weighted, but is there any quantification that you can provide around that? And then the third one, apologies if I missed it, but could you just remind us what the new tobacco regulation actually is in Australia? Thank you.