Bluehole Publishes an Industry Comment on BAT 2021 Preliminary Results

China’s leading vaping media, Bluehole New Consumption, today publishes an industry comment on BAT 2021 Preliminary Results

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By February 15, the 4 major tobacco companies, including British America Tobacco(BAT), Altria, Philip Morris International and Japan Tobacco International, have announced their 2021 full-year results. BAT reported a revenue of £25.68 billion ($34.82 billion), a 6.9% increase in 2021, being the top among the four major tobacco companies in revenue.

BAT's revenue rise is also largely driven by the strong sales growth of new tobacco products, including vapor, heated tobacco and oral products.

In 2021, BAT recorded an "accelerating New Category revenue growth" of 50.9%, with 59% revenue surge in vapor products. By the end of 2021, there are more than 18.3 million adult consumers using BAT non-combustible products, with over 8.4 million vapers around the world.

"Continued growth in new categories is a cornerstone of BAT's long-term plans for success," said Ross Hindle, analyst at Third Bridge. "With over 1.1 billion smokers still using combustibles, the opportunity to convert consumers towards New Categories is highly attractive."

Committed to building a better tomorrow, BAT has been transforming its business by providing a variety of reduced-risk products. It is expected to reach the business targets of £5 billion revenue in New Categories products by 2025 and 50 million global consumers of non-combustible products by 2030. In 2021, BAT converted over 4.8 million adult smokers to non-combustible products, such as its vapor brand Vuse.

In September 2021, BAT announced that Vuse has become the number one global vaping brand. Since 2018, Vuse has witnessed a steady growth in global market share, as it partnered with SMOORE, a global leader in atomization technology. By virtue of its FEELM ceramic coils, SMOORE accounted for 18.9% of the total global market share in 2020. FEELM, the atomization tech brand belonging to SMOORE, has been the strategic provider of technology and manufacturing of Vuse.

As a global vapor leader, Vuse reached a full year value share of 33.5% in the top five vapor markets (the U.S, Canada, France, Germany and the UK), which account for approximately 75% of total industry vapor revenue (closed-system).

In the most important market, Vuse has continued its growth momentum in the U.S., as it closed 27% value share point gap in 2 years. With market leadership in 27 out of 50 states, Vuse's U.S. value share reached 35.9% in December 2021. With only 0.1% value share difference with Juul(36%), Vuse is about to be the leader in the U.S. market.

BAT announced its business transformation to build a better tomorrow, and it has been actively encouraging smokers to switch to reduced risk products. Meanwhile, Vuse has developed third-party age verification processes for online sales and worked with retail partners to ensure their products are only available to adult consumers. However, Juul is stuck in controversy, accused of marketing to minors in the U.S. In 2021, Juul agreed to pay $40 million to the state of North Carolina and $14.5 million to the state of Arizona to settle lawsuits over youth marketing.

In terms of atomization coil, Juul is still using traditional cotton coils while Vuse’s flagship product, Vuse Alto is one of the first major vapor products adopting FEELM ceramic coils, which have largely improved harm reduction performance and quality. As a driving force of growth, Vuse Alto accounted for over 90% of Vuse revenues in the U.S. in 2021.

Moreover, the U.S. Food and Drug Administration (FDA) authorized the sales of the first vape in the U.S, Vuse Solo in October 2021, and underscored its public health benefits and scientific substantiation, thereby significantly boosting Vuse's consumer recognition and Q4 sales in the U.S. It also sends positive message to the approval of other Vuse products, such as Vuse Alto, its flagship vapor product equipped with ceramic coils. The Premarket Tobacco Application (PMTA) of Vuse Alto was submitted a year after Vuse Solo.

According to Daiwa Securities, Vuse is superior to Juul for it is the first vapor brand to receive the marketing authorization from the U.S. FDA. It is likely that Vuse Alto will be approved for sales by the FDA as well, underpinned by years of scientific research of BAT and its technology provider SMOORE.

The following are the links to access BAT 2021 preliminary results:

https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOCBHNFN/$file/FY_2021_Presentation_Slides.pdf

https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOCBHNFN/$file/FY_2021_Announcement.pdf

To read the original article, please visit: https://bluehole.com.cn/news/detail/48439

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Contact information

Bluehole New Consumption
Cheng Bianji, (86)13530848319