Investment idea: BAT

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PSG Financial Services

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Published on February 28, 2024 6:27:46 AM ● Video Link: https://www.youtube.com/watch?v=UXfzceLWrLg

Duration: 4:15

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On 8 February 2024, British American Tobacco released its FY23 results. Below are the key takeaways:
- Total sales declined by 1.3% y/y to £27.3 billion, after the company closed its business in Russia.
- Operating margins increased slightly to 45.7%.
- Total new categories (Vapour, THP, and Modern Oral) were up by 15.7%, while combustibles revenue was down by 3.2% due to a larger-than-expected volume decline in the US.
- Net Debt/EBITDA of 2.57x which was above the expected 2.5x, but the ITC partial sale will bring this below 2.5x.
Our research supports a buy recommendation.