BAT's Combustibles Generate Robust Free Cash Flow to Fund Growing Reduced-Risk Business

British American Tobacco is the world’s third-largest tobacco company by volume, with sales in around 180 countries. But with global cigarette consumption declining a mid-single-digit percentage each year, BAT has invested in several next-generation products that can deliver nicotine with reduced risk. This strategy makes sense, and we think it has a decent portfolio that should allow it to drive low-single-digit top-line growth in the long term.