Half Year 2024 British American Tobacco plc Trading Statement 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. Thanks for taking my questions. Two for me, please. First one, on the US, you talked about signs, early signs of recovery in that market, but that it's slower than you had expected at the start of the year today. Can you talk a bit about what you're seeing on the ground, any change in consumer sentiment, and in terms of inventory moves, are they related to the commercial actions you've taken or just kind of normal phasing that you expect to unwind in H2? And then second question, I know obviously you reset expectations on Topline and EBIT for the next few years in December of last year. You've announced the CMD in October. I know it's a few months away, but can you give us a brief preview of what we can expect? Is it new targets, drawing out certain geographies, new categories, et cetera? Thank you.

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

Question: Faham Baig - UBS Investment Bank, - Analyst : Good morning team. Three questions from my side. The first one, just going back to the US, are you seeing any signs of a slowdown in the adoption rate of the vapor category in the US? And what do you estimate the current substitution impact is from the growth of the illicit vapor category?

Question: Faham Baig - UBS Investment Bank, - Analyst : And then just moving on to heated tobacco, where you seem to have stabilized your market share. Are you expecting that market share in heated tobacco to turn positive, particularly in the larger markets of Japan and Italy in the second half, where you've highlighted the innovations are now present? And if you could also share some of the consumer feedback on these new innovations relative to competitive products, that would help us.

Question: Faham Baig - UBS Investment Bank, - Analyst : Thanks. And then the final one, could you maybe discuss the combustibles performance outside of the US, both in terms of volume growth and pricing that you expect in the first half and also where you are on the market exit plan of 20 billion sticks that you highlighted early last year?

Question: Faham Baig - UBS Investment Bank, - Analyst : Thank you, Tadeu.

Question: Philip Spain - JPMorgan Chase & Co - Analyst : Good morning. Thanks very much for taking my questions. My first one was just going back to the US, and I appreciate all the color you've given already, but I just want to understand within your guidance for the second half, one level of improvements in the overall US combustibles industry. Are you assuming compared with the 9% decline here today? And then my second question is in Louisiana, where you've seen the new regulations come in. Can you talk about the level of volume declines you've seen within illicit? Any kind of numbers around that you give would be really helpful. And then in terms of what products customers are switching to -- within nicotine, whether it's switching to some of your vapes or to Modern Oral and as well within vape, whether customers are switching to tobacco flavors or menthol flavors, any kind of color you give around that would be really helpful. Thank you.

Question: Philip Spain - JPMorgan Chase & Co - Analyst : That's very helpful. Thanks very much.

Question: Rey Wium - SBG Securities - Analyst : Hi, Tadeu, just a clarification. You mentioned earlier on the US inventory situation in the first half of the impact of 2%. Is it 2%of US volumes or 2%at group level? So I just want to clarify that first.

Question: Rey Wium - SBG Securities - Analyst : Okay, awesome. Yeah, otherwise it's been dramatic. (multiple speakers) Excellent. And then I just want to know if you can talk a little bit about -- I mean, the talk last year was obviously about the imminent menthol ban in the US. And obviously it looks like it sort of suffered a political headwind or a tailwind I don't know if you can just talk a little bit more of your expectations there if we're going to see anything or is it going to be a situation that's going to be pushed beyond the elections?

Question: Rey Wium - SBG Securities - Analyst : Thank you very much.

Question: Richard Felton - Goldman Sachs Group Inc - Analyst : Thank you very much. Good morning. So it's a follow up on the illicit vapor category, please. So I believe that sort of both yourselves and your main competitor in the US had been talking about the growth of the illicit vapor category. Being roughly a 200 basis points headwind on combustible volume, volume growth. So my question is for this step, for Louisiana and the other states where you are seeing enforcement against the illicit vapor category, does that headwind so they get removed and you're seeing better combustible trends as well as illicit vapor consumers moving to views? Any sort of observations or learnings from those states and understanding sort of the interplay with the combustible category would be very helpful. Then my second question, are you able to share any more color on how this settlement with Philip Morris has impacted your ability to innovate in the THP category? And any specific examples of what you're able to do now that you previously weren't able to do would be very helpful. Thank you.

Question: Richard Felton - Goldman Sachs Group Inc - Analyst : Got it. Thank you, Tadeu. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 04, 2024 / 7:30AM, BATS.L - Half Year 2024 British American Tobacco plc Trading Statement Call

Question: Simon Hayles - Citi - Analyst : Thank you. Morning, everyone. So just two for me, please, today. Firstly, can you just talk a little bit more about the newly refreshed Velo brand in the US? Perhaps, what is the latest consumer feedback you're hearing relative to maybe some of the competitor offerings on the market? And you talked about the phase rollout in the US from here. Where are we at? How much [good] across the US do you expect to see by the end of the year? And that was the first question. And then secondly, I'm going to ask you a little bit more about just the share buyback program. You've clearly said again this morning you're committed to sustainable buyback. I appreciate you've outsourced the execution of the current share buyback program, but it looks to me that you're already halfway through the GBP700 million cash return this year. If you were to continue with the recent daily run rate of buyback, you could be complete with this buyback by sometime in July. How do we think about how you'll think about sustaining that buyback? Could we see you pull forward some of the 2025 buyback planning for the second half of this year? Or should we just expect perhaps a more evenly phased sort of buyback through the rest of this year with the current buyback plan?

Question: Simon Hayles - Citi - Analyst : Very helpful, thank you.