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British American Tobacco p.l.c. (NYSE:BTI) Q4 2023 Earnings Call Transcript February 8, 2024
British American Tobacco p.l.c. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Tadeu Marroco: Good morning, everyone. I'm delighted to welcome you to our 2023 Preliminary Results Presentation. With me this morning is [Technical Difficulty] Finance Director and Victoria Buxton, Group Head of Investor Relations. I will begin with our financial highlights and the progress we have made against our key areas of focus this year. Javed will then take you through our financial performance in more detail. I will return to talk more about our glidepath to Building a Smokeless World, before we move to the Q&A session. With that, I would like to draw your attention to the disclaimers on Slides 2 and 3. So let's begin with our 2023 performance. Our reported results reflect the impact of the non-cash impairment charge taken mainly against our acquired U.S. brands.
We will focus on constant currency adjusted results, unless otherwise stated. I am pleased that BAT has delivered a resilient performance, in line with our guidance, reflecting the benefit of our global multi-category strategy. The breadth and scale of our global footprint, enables us to consistently deliver balanced results. This is demonstrated by our strong performances in AME and APMEA, delivering combined double-digit revenue growth offsetting the U.S. Overall, we have delivered, organic revenue up 3.1%, which excludes Russia and Belarus from both periods. Profit from operations up 3.1%, or 3.9% organically and diluted EPS up 4%, with organic growth up 5.2%. I am particularly pleased with our performance in new categories, with revenue up nearly 18%, and 21% organically, with Vuse and Velo delivering strong volume led revenue growth.
Our consumer numbers reached 23.9 million, excluding 1.5 million consumers in Russia. We added over 3 million consumers year-on-year with 1.1 million in Q4 alone. At the half year, I shared a clear set of objectives to sharpen our execution and build a more modern and agile BAT. Over the last six months, working together with our broader teams, we have made good progress across these six areas of focus. I will now share some of the highlights. First, I am delighted that we have reached new category profitability two years ahead of our original target. This has been achieved, while continuing to invest an incremental 300 million pounds in 2023 for future growth. Our new categories are meaningfully contributing to group results, as we benefit from increased scale, with strong profitability gains driven by Vuse and Velo.