British American Tobacco has reported better-than-expected annual revenue and profit, benefiting from higher pricing and a relatively strong performance of its traditional tobacco business.
Shares of the world's No.2 tobacco company have risen over the past year, partly due to its low exposure to vaping in the United States, where a backlash against e-cigarettes has led a fall in their demand.
The company expects adjusted revenue growth for 2020 to be in the 3%-5% range, at constant rates of exchange, with results, mainly in its new category business, to be weighted to the second half of the year.
The Lucky Strike and Dunhill cigarettes maker's revenue rose 5.7% to £25.88 billion (€30.6 billion) for the year ended December 31.
Analysts on average were expecting revenue of £25.62 billion (€30.3 billion), according to Refinitiv data.
Revenue from its combustibles business grew 4.2% from higher pricing, mainly in the United States. BAT expects global industry cigarette and tobacco heating products' volumes to fall around 4% in 2020, with U.S. industry volumes sliding around 5%.
The company reported adjusted earnings per share of 321.6 pence, beating analysts' average estimate of 319.42 pence. It expects constant currency adjusted EPS growth for 2020 to be in high single digits.