British American Tobacco to take impairment charge mainly on U.S. brands

British American Tobacco (BTI) CEO Tadeu Marroco said: “Consistent with our vision to ‘Build a Smokeless World’, and in combination with the current macro-economic headwinds impacting the U.S. combustibles industry, in 2023 we will take an accounting non-cash adjusting impairment charge of around GBP 25B. This accounting adjustment mainly relates to some of our acquired U.S. combustibles brands, as we now assess their carrying value and useful economic lives over an estimated period of 30 years. Accordingly, we will commence amortization of the remaining value of our U.S. combustibles brands from January 2024. Building on our broad-based performance in 2023, I am clear that now is the right time to further invest to accelerate our transformation. We are making active investment choices to strengthen our U.S. business, accelerate innovation momentum in Heated Products globally, and enhance capabilities that support our strategic delivery. These investments will impact in 2024, and alongside continued macro-economic pressures in the U.S., we now expect growth in revenue and adjusted profit from operations of low-single digit on an organic1 basis at constant rates. We expect a progressive improvement to 3-5% revenue growth, and mid-single digit adjusted profit from operations growth on an organic1 basis at constant rates by 2026. We will continue to reward shareholders through our strong cash returns, including our progressive dividend, and, once the middle of our leverage range is reached, we will evaluate all opportunities to return excess cash to our shareholders. I am confident that the choices we are making today will drive our long-term success and deliver sustainable value for all of our stakeholders.” Other publicly traded companies in the tobacco products space include Altria Group (MO), Imperial Brands (IMBBY) and Philip Morris (PM).