British American Tobacco (BAT) will today outline plans to expand its next generation products (NGP) business.
The group plans to generate revenue of £500m from NGPs, which include e-cigarettes and tobacco heating products, this year, and double this to £1bn next year.
BAT said it would update investors on the performance of glo, its tobacco heating product, at today's capital markets day. The FTSE 100 firm said glo has "continued its excellent growth in Japan, already achieving a national share in a leading convenience chain of more than 1.8 per cent in only the second week of the national rollout".
The group said: "The pricing environment in a number of our markets has been more difficult, notably in Russia, although recent developments are more encouraging."
The firm, which recently bought rival Reynolds, also said it anticipates currency exchange tailwinds of 6.5 per cent on operating profit and 5.5 per cent on earnings per share if rates remain the same for the rest of the year.
"We are very pleased to be sharing more details on the opportunities for BAT in NGPs and combustibles, and to introduce our new US subsidiary just three months after the completion of the Reynolds acquisition," said BAT chief executive Nicandro Durante.
"We are proud to share our exciting future product pipeline across both the tobacco heating and vapour categories and to provide shareholders with an opportunity to experience the products first-hand. Our NGP business has real momentum and our confidence is reflected in the financial objectives we have set out."