Note sull'episodio
- After two years of declining cigarette volumes, the revocation of the menthol ban should mitigate declining volumes, although negative volumes are still expected.
- Key points in the investment thesis are:
- Management states that illicit vapour in the US account for 60% of sales. The FDA is moving too slowly at the frustration of management. Aim for 50% smoke-free products by 2035.
- US cigarette sales surprised on the downside with volumes down in the low teens single digits in the past 18 months. This was against the expectation of 3-5%. Going forward it is expected at low single digits, and the revocation of the menthol ban should help.
- £900m in share buybacks expected in FY25. Net Debt/EBITDA expected to be below 2.5x upon results on 13 February which should prompt additional buyback plans.
- NGPs still growing strongly and have turned to a profit, and BATS has the highest market share in bo
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