• British American Tobacco is a leading, multi-category consumer goods business, founded in 1902.
  • BTA has 150 million consumer interactions every day and distribution to over 11 million points of sale across more than 175 markets.
  • The company's transformation is backed by clear and measurable targets to reach £5 billion in New Category revenues by 2025 and increase consumers of its non-combustible products to 50 million by 2030.
  • The company make high-quality products in manufacturing facilities all over the world. BAT owned 75 manufacturing facilities globally.


Company Overview

BAT (NYSE:BTI, LSE:BATS) is a leading, multi-category consumer goods business, was founded in 1902 and was first listed on the London Stock Exchange in 1912. A constituent of the FTSE 100 since its creation in 1984, BAT has evolved, becoming the only truly global company in its sector.

BAT is a leading FTSE company with truly international credentials. Spread across six continents, its regions are the United States of America; Americas and Sub-Saharan Africa; Europe; and Asia-Pacific and Middle East.1

Few consumer goods companies can claim over 150 million consumer interactions every day and distribution to over 11 million points of sale across more than 175 markets.

There are more than 52,000 BAT people worldwide. Although BAT has had to adapt how and where the company work from since the start of 2020, many of it are based in offices, factories, tech hubs and R&D centres, but lots of it also spend its time out on the road, helping and advising tobacco farmers, and the retailers who sell its products; both valued partners who have always played a major part in its success.

The company's heritage – and the foundation of its success – is in cigarettes.

However, the company recognise the world is changing. The company now have a clear purpose to build A Better Tomorrow by reducing the health impact of its business.


Company History

BAT was founded in 1902 – find out we’ve evolved since then2



When the UK’s Imperial Tobacco Company and the American Tobacco Company of the United States form a joint venture, the British American Tobacco Company. James ‘Buck’ Duke becomes the company’s first chairman. His strategy is to devise a superior product, hire the best people to make it, price it as low as possible, and mechanise production.
190-1911A period of rapid expansion sees it develop markets in the West Indies, India, Ceylon, Egypt, Holland, Belgium, Sweden, Norway, Finland, Indonesia, East Africa and Malaya.
1905The acquisition of a majority share in Cairo-based cigarette manufacturer, Maspero Freres Company, allows it to expand its export trade of cigarettes made from Turkish tobacco into India and Europe.
1912The American Tobacco Company divests its shares in the joint venture and BAT is listed on the London Stock Exchange for the first time.
1921Cigarrera Bigott Sucs is formed in Venezuela and, in the following few years, acquisitions are made in Chile, Mexico and Central America.
1927The company's 25th anniversary. BAT has become one of the UK’s leading companies, with 120 subsidiaries.
1961-1965The company begin to diversify with moves into the paper, cosmetics and food industries.
1966The company acquire cigar manufacturer Henri Wintermans and company profits exceed £100 million for the first time.
1970-1973The company move into retailing with acquisitions, including Argos in the UK and Saks Fifth Avenue in the USA.
1984-1989BAT Industries acquires Eagle Star, Allied Dunbar and Farmers Group to become the largest UK-based insurance group.
1992Hungary’s Pecsi Dohanygyar is acquired. Acquisitions and joint ventures follow rapidly in Ukraine, Uzbekistan, the Czech Republic, Russia, Romania and Poland.
1994The prestigious Lucky Strike and Pall Mall brands are now added to its portfolio, with the acquisition of the American Tobacco Company.
1998BAT Industries divests its financial services businesses. British American Tobacco becomes a separately quoted company on the London Stock Exchange.
1999Following a global merger with Rothmans International the company gain several major brands, including Dunhill.
2004Brown & Williamson and RJ Reynolds Tobacco Company combine and Reynolds American is formed – a stronger, more sustainable business in which BAT has a 42% share.
2008The company acquire the assets of Tekel, the Turkish state tobacco company.
2011Major acquisition of Protabaco in Colombia for US$452 million. The Group establishes Nicoventures Limited, a company to focus exclusively on the development and commercialisation of innovative, regulatory approved nicotine products.
2012UK-based company CN Creative, who specialise in the development of electronic cigarette (e-cigarette) technologies, are acquired.
2013CTBAT International Limited, a joint investment of subsidiaries of China National Tobacco Corporation and British American Tobacco commences trading. The Group launches its first e-cigarette product, Vype, in the UK.
2014The Group announces it will invest US$4.7 billion as part of Reynolds American Inc.'s acquisition of Lorillard. The deal means the company will maintain its 42% stake in the enlarged and substantially stronger Reynolds American business in the US.
2015The company complete a number of investments and strategic partnerships focused on future growth. The Group acquires TDR in Croatia, the leading independent cigarette manufacturer in Central Europe. The company also acquire the remaining shares in its Brazilian subsidiary, Souza Cruz, that the company don’t already own.
2016BAT makes proposal to acquire remaining 57.8% of Reynolds American Inc. it doesn’t already own.
The company's commitment to Next Generation Products continues with the acquisition of Ten Motives, a UK e-cigarette company.
Vype Vapour Products become available in new markets and its first Vype-branded flagship store opens in Milan.
BAT launches glo, a new-to-world Tobacco Heating Product, in Sendai, Japan.
2017January – BAT announces agreement to acquire Reynolds American Inc.
The company's glo Tobacco Heating Product launches in Switzerland and Canada
July – BAT completes acquisition of Reynolds American Inc.


Product Portfolio

BAT is a leading consumer-centric, multi-category consumer goods business dedicated to stimulating the senses of adult consumers worldwide. The company's portfolio reflects its commitment to meeting the evolving and varied needs of today’s consumer who seeks sensorial enjoyment for different moods and moments.3

The company's transformation is backed by clear and measurable targets to reach £5 billion in New Category revenues by 2025 and increase consumers of its non-combustible products to 50 million by 2030. We’re making significant progress, with New Category revenue growth increasing by 42% compared to 2020 – reaching a total of £2.1 billion for 2021. The company also added 4.8 million consumers, its highest ever increase, to its non-combustible product consumer base – reaching a total of 18.3 million. This demonstrates its accelerated transformation driven by its multi-category portfolio, with continued key market share gains in all three New Categories.

These are its key brands in both the combustible and non-combustible categories. This ensures focus and investment on the brands and categories that will underpin the Group’s future performance.

The company also have many international and local cigarette brands which, although not part of its Strategic Portfolio, remain popular in many countries in which the company operate. These brands include Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, State Express 555 and Shuang Xi.



The company make high-quality products in manufacturing facilities all over the world. The company continue to optimise its manufacturing footprint and at the end of 2021, BAT owned 75 manufacturing facilities globally. BAT has facilities that are making its new categories of reduced-risk products and are co-located with cigarette factories, as well as two factories producing modern oral products and one making vapour liquids.

These strategically placed factories enable it to maximise efficiency and ensure products are where they need to be at the right time.

The company's production facilities producing cigarettes and the sticks for its tobacco heating products are designed to meet the needs of an agile and flexible supply chain, providing a world-class operational base that is fit for the future.

The company's new categories of reduced-risk products are manufactured in a mix of its own and third-party factories. The company expect its contract manufacturers to comply with the same high standards that exist on its own sites.

Recent factory expansions in Romania and South Korea to accommodate new opportunities in new categories, specifically the production of sticks for its glo tobacco heating product, show how its sourcing is responsive to help it deliver its commitment to offer adult consumers reduced-risk products. This complements substantial investment in device capacity, which is also taking place in response to increased consumer demand for glo.

BTA immensely proud of expanding the number of carbon neutral sites to 16 in 2021. The journey includes green leaf threshing and manufacturing sites in the U.S. (2), Brazil (2), Argentina, Chile, Switzerland, Jordan, Malaysia, Sri Lanka (2), Hungary, Sweden, and commercial sites in Australia, Sri Lanka, and Switzerland (boundaries: Scopes 1 and 2 for all, except Australia, which followed specific National Climate Active requirements).


Financial Highlights

In 2021, revenue was £25,684 million (down 0.4%), with 2020 also marginally lower (down 0.4%) than 2019 at £25,776 million. New Categories performed well in both years with revenue up 42.4% in 2021 and 14.9% in 2020. Strong pricing in combustibles drove price/mix of 4.3% in 2021 (2020: 7%), with 2021 lower than 2020 due to negative geographic mix as markets began to recover from COVID-19, an estimated £260 million impact in Australasia (due to a structural change in excise and competitive pricing environment) and the negative impact of the sale of the Group’s operations in Iran, partially offset by an estimated £200 million benefit from trade inventory movements in the U.S. mainly linked to the timing of price increases and uncertainty about a potential excise increase. Cigarette volume was largely in line with 2020 at 637 billion sticks (2020: 4.6% decline to 638 billion sticks).4

COVID-19 was a headwind in 2020 of approximately 2.5%, largely due to restrictions in South Africa and a number of other markets across the Group, including the Group’s Global Travel Retail (GTR) business. During 2021, GTR continued to be impacted by the ongoing global travel restrictions.

Profit from operations increased 2.7% to £10,234 million, compared to an increase of 10.5% to £9,962 million in 2020, largely driven by a translational foreign exchange headwind due to the relative strength of sterling compared to the Group’s operating currencies, including the US dollar. During 2021, Project Quantum (the Group’s restructuring and efficiency programme) delivered savings of £595 million in 2021, following £660 million in 2020.

Raw materials and other consumables costs decreased 0.9% to £4,542 million in 2021, following a decline of 0.3% to £4,583 million in 2020. In 2021, its raw material costs were negatively impacted by a transactional foreign exchange headwind of 1.7%, offset by savings and translational tailwind (on costs). The decrease in 2020 was mainly due to the end of the contract manufacturing agreement which, due to excise recognition on bought-in products under that arrangement, led to an increase (in prior years) in revenue and in raw materials and other consumables costs.

Depreciation, amortisation and impairment costs decreased by £374 million to £1,076 million in 2021 compared to a decrease of £62 million to £1,450 million in 2020. This includes the amortization and impairment charges of £306 million (2020: £339 million) largely related to the trademarks and similar intangibles capitalised following recent acquisitions. Also included were goodwill impairment charges of £54 million in Peru and £3 million following the exit from Myanmar (both in 2021) and £197 million (in 2020) in respect of Malaysia, recognised due to the ongoing operational challenges in those markets.

Other operating expenses declined by £199 million to £7,468 million (2020: decrease of £184 million to £7,667 million). The Group continued to incrementally increase the investment behind New Categories, with an increase in 2021 (compared to 2020) of £377 million, itself an increase on 2019 of £346 million, in part funded by the efficiencies delivered by Quantum.

Expenditure on research and development was £304 million in 2021 (2020: £307 million) with a focus on products that could potentially reduce the risk associated with smoking conventional cigarettes.

Adjusted profit from operations is the Group’s profit from operations before adjusting items referred to above. Adjusted profit from operations fell 1.9% to £11,150 million, driven by the foreign exchange headwind. On a constant currency basis this would have been an increase of 5.2%. In 2020, adjusted profit from operations grew 2.1% to £11,365 million, being an increase of 4.8% on a constant currency basis.

Operating margin in 2021 increased by 120 bps to 39.8% largely driven by lower charges in respect of items such as trademark amortisation, goodwill impairment, litigation and Quantum in 2021 compared to 2020, despite the impact of Iran described earlier. In 2020, operating margin was 38.6%, an increase of 380 bps as 2019 was impacted by a number of items (including Quebec and Russia) that did not repeat. These are described in note 6 in the Notes on the Accounts.

In 2021, net finance costs were £1,486 million, a decrease of £259 million on 2020 which, at £1,745 million, were £143 million higher than 2019.

In 2021, the tax charge in the income statement was £2,189 million, compared to £2,108 million in 2020 and £2,063 million in 2019.

Profit for the year was £6,974 million, a 6.2% increase compared to £6,564 million in 2020 (itself an increase of 12.2% on 2019). While the Group was impacted by foreign exchange headwinds, a good operational performance in both years was enhanced by efficiencies realised through Quantum and from a lower effective tax rate. Both 2021 and 2020 were impacted by a number of charges as described earlier with the improvement in profit for the year in 2020 (compared to 2019) also due to charges in relation to Quebec and Russia in 2019.


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Created by Asif Farooqui on 2022/06/13 08:55

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