TIDMBATS
RNS Number : 0180E
British American Tobacco PLC
03 November 2020
3 November 2020
BAT Strengthens its US New Category Portfolio:
Announces acquisition of Dryft Modern Oral business
-- This acquisition is a further step in BAT's societal
commitment to accelerate its transformation journey to build A
Better Tomorrow
-- This expands BAT's US portfolio in Modern Oral nicotine, a fast-growing category in the US
-- The products will be sold under BAT's global Modern Oral
nicotine brand, VELO, creating further brand synergies
-- This acquisition has no impact on BAT's commitment to previously stated deleverage targets
LONDON 3 November 2020 - British American Tobacco p.l.c today
announces that the US business of the BAT Group (BAT) has acquired
the nicotine pouch product assets of Dryft Sciences, LLC (Dryft), a
US-based Modern Oral nicotine product company.
New Category Portfolio Expansion in the US:
-- This acquisition expands BAT's Modern Oral portfolio in the
US, expanding from 4 to 28 product variants. It follows the
acceptance of Dryft's recent Pre-Market Tobacco Product Application
(PMTA) submission for filing by the US Food and Drug
Administration.
-- The enhanced portfolio will include a wider range of nicotine
strengths and flavours providing adult nicotine consumers with a
greater degree of choice, covering all key consumer preferences.
This will significantly strengthen BAT's portfolio in a
fast-growing nicotine category in the US.
-- BAT will rebrand Dryft's US portfolio under its global Modern
Oral brand, VELO, and expects to accelerate growth through superior
distribution, marketing and channel capabilities.
BAT's 'A Better Tomorrow' Corporate Purpose:
This acquisition is a further demonstration of BAT's continued
commitment to its purpose, to build A Better Tomorrow by reducing
the health impact of its global business, which entails:
-- Committing to providing adult consumers with a wide range of
enjoyable and less risky products
-- Continuing to be clear that combustible cigarettes pose
serious health risks, and the only way to avoid these risks is not
to start or to quit
-- Encouraging those who otherwise continue to smoke, to switch
completely to scientifically-substantiated, reduced-risk
alternatives
-- Tracking and sharing progress of our transformation
BAT aims to accelerate the growth of its New Category revenues
at a faster rate than its total revenue, reaching GBP5bn in 2025.
BAT has an ambition to reach 50 million consumers of
non-combustibles worldwide by 2030. Today, BAT's non-combustible
products are already available in more than 50 countries across the
globe.
Jack Bowles, CEO of BAT, said:
"Today's announcement underscores our societal commitment to
accelerate our transformation and build A Better Tomorrow. Our
multi-category strategy is key to our transformation.
"The addition of Dryft to our US Velo brand is a major step
forward, further enhancing our successful vaping and oral
portfolio."
Guy Meldrum, CEO of Reynolds American Inc., said:
"The modern oral category in the US is developing rapidly. We
are excited to expand the portfolio of Velo products to meet the
evolving preferences of adult consumers.
"We are confident that, leveraging our strong in-market
execution capability, the new Velo portfolio will contribute to
accelerated growth."
Jason Carignan, President of DRYFT Sciences, LLC, said:
"We're proud of the tremendous momentum we've built with Dryft
and thrilled that our strong product portfolio will now serve to
enhance the Velo brand. We remain confident that modern oral
innovations like Dryft and Velo will continue to find an adult
consumer base seeking alternatives to traditional products."
S
ENQUIRIES:
British American Tobacco Press Office: Lydia Meakin / Anna
Vickerstaff
+44 (0) 20 7845 2888 (24 hours) | @BATPress
British American Tobacco Investor Relations: Mike Nightingale /
Victoria Buxton / William Houston / John Harney +44 (0) 20 7845
1180/2012/1138/1263
NOTES TO EDITORS
The acquisition
The acquisition has been made through Modoral Brands Inc., an
indirect, wholly owned subsidiary of BAT's US subsidiary, Reynolds
American Inc.
The expanded US portfolio
The expanded US VELO portfolio will now include three nicotine
strengths (2mg, 4mg and 7mg) in 8 new flavours: Wintergreen;
Spearmint; Cinnamon; Dragon Fruit; Citrus Burst; Black Cherry;
Peppermint; and Coffee. These variants complement the existing US
VELO portfolio which is available in 2mg and 4mg nicotine strengths
in two flavours: Citrus; and Mint. None of these products have
received FDA clearance to make a claim of modified risk or modified
exposure.
About Modoral Brands Inc., and Reynolds American Inc.
Modoral Brands Inc. ("Modoral") is an operating company that is
indirectly, wholly owned by Reynolds American Inc. ("RAI"), a
member of the British American Tobacco Group. Today's adult
nicotine consumers have shifting preferences for product format and
experience, and Modoral is listening to these preferences and
delivering responsive products. Modoral is committed to responsibly
marketing its tobacco products, and its marketing communications
are designed for, and directed to, existing adult nicotine
consumers who are 21 and older.
About BAT
BAT is a leading, multi-category consumer goods business,
established in 1902. Our purpose is to build A Better Tomorrow by
reducing the health impact of our business through offering a
greater choice of enjoyable and less risky products for our
consumers. The company has announced a target of increasing the
number of its non-combustible product consumers from 11 million to
50 million by 2030; and to achieve at least GBP5 billion in New
Categories revenues in by 2025.
Forward Looking Statements
This announcement contains certain forward-looking statements,
including "forward-looking" statements made within the meaning of
Section 21E of the United States Securities Exchange Act of 1934.
These statements are often, but not always, made through the use of
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statements regarding our intentions, beliefs or current
expectations concerning, amongst other things, our results of
operations, financial condition, liquidity, prospects, growth,
strategies and the economic and business circumstances occurring
from time to time in the countries and markets in which the Group
operates.
All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual future financial condition,
performance and results to differ materially from the plans, goals,
expectations and results expressed in the forward-looking
statements and other financial and/or statistical data within this
announcement. Among the key factors that could cause actual results
to differ materially from those projected in the forward-looking
statements are uncertainties related to the following: the impact
of competition from illicit trade; the impact of adverse domestic
or international legislation and regulation; changes in domestic or
international tax laws and rates and the impact of an unfavourable
ruling by a tax authority in a disputed area; adverse litigation
and dispute outcomes and the effect of such outcomes on the Group's
financial condition; changes or differences in domestic or
international economic or political conditions; the impact of the
COVID-19 pandemic; adverse decisions by domestic or international
regulatory bodies; the impact of market size reduction and consumer
down-trading; translational and transactional foreign exchange rate
exposure; the impact of serious injury, illness or death in the
workplace; the ability to maintain credit ratings and to fund the
business under the current capital structure; the inability to
develop, commercialise and rollout New Categories; and changes in
the market position, businesses, financial condition, results of
operations or prospects of the Group.
It is believed that the expectations reflected in this
announcement are reasonable but they may be affected by a wide
range of variables that could cause actual results to differ
materially from those currently anticipated. Past performance is no
guide to future performance and persons needing advice should
consult an independent financial adviser. The forward-looking
statements reflect knowledge and information available at the date
of preparation of this announcement and the Group undertakes no
obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
No statement in this communication is intended to be a profit
forecast and no statement in this communication should be
interpreted to mean that earnings per share of BAT for the current
or future financial years would necessarily match or exceed the
historical published earnings per share of BAT.
Additional information concerning these and other factors can be
found in the Company's filings with the U.S. Securities and
Exchange Commission ("SEC"), including the Annual Report on Form
20-F filed on 26 March 2020 and Current Reports on Form 6-K, which
may be obtained free of charge at the SEC's website,
http://www.sec.gov, and the Company's Annual Reports, which may be
obtained free of charge from the British American Tobacco website
www.bat.com.
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