British American Tobacco reported higher first-half sales on Thursday, despite a slowing market in Japan for heated tobacco devices.
The world's second-biggest international tobacco company by revenue said sales totalled £11.64 billion in the period, an increase of 57%.
The maker of Lucky Strike cigarettes said foreign exchange rates were a headwind of 8% in the first half of the year and are estimated to hurt sales by 5% to 6% for the full year.
Earnings per share fell 3.3% to 117.4 pence.
“Our strategy is to continue to grow our combustible business while investing in the exciting potentially reduced risk categories of THP (tobacco heating products), vapour and oral," said Nicandro Durante, chief executive. "As the Group expands its portfolio in these categories, we will continue to drive sustainable growth."
The company said it remains confident of exceeding £1 billion of reported revenue from next generation products this year, as new launches should reenergise growth in the back half of the year, following a slowdown in certain markets.
The company said it anticipates another good year of adjusted earnings growth at constant rates of exchange.
"Despite the recent slowdown in the THP category in some markets, including Japan and South Korea, we remain confident of exceeding £1 billion of reported revenue in NGP in 2018," Durante added, "as we expect a range of new launches to re-energise growth in THP in the second half of the year."
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.