British American Tobacco said Wednesday that sales sank in the first nine months of the year and blamed adverse currency moves and Western Europe's slow recovery.
Revenues dived 9.6 percent in the nine months to September 30 at current rates of exchange, the maker of Lucky Strike, Dunhill and Kent cigarettes said in a statement.
Sales, however, grew 2.4 percent at constant rates of exchange, BAT said, without giving any specific figures.
"Although currency movements impacted our reported results, the group continues to perform well and we are on track to deliver another year of good earnings growth," said chief executive Nicandro Durante.
But investors sent BAT's share price to the bottom of London's FTSE 100 losers board.
Shares fell 3.63 percent to 3,340.5 pence in mid-afternoon deals on the FTSE 100, which was up 0.25 percent at 6388.39 points.
"The trading environment remains challenging due to continuing pressure on consumer disposable income worldwide and the slow economic recovery in Western Europe," BAT added in the statement.
"Industry volume has declined at a lower rate than last year, but is being impacted by large excise-driven (tax-driven) price increases."
Cigarette companies have struggled to maintain their profits as smoking rates have declined, even in once fast-growing emerging markets which have started to bring in more stringent anti-tobacco laws.
This month the World Health Organization adopted guidelines recommending countries bring in higher taxes on cigarettes to help cut smoking rates, a move fiercely opposed by the tobacco industry.   
Overall volumes declined one percent to 515 billion cigarettes during the reporting period, compared with a fall of 3.2 percent in the same part of the previous financial year.
Volumes grew in Bangladesh, Indonesia, the Middle East, Pakistan, Turkey, Ukraine and Venezuela. However, demand fell in Brazil, Russia and Vietnam.
BAT is the world's second-largest quoted tobacco group by market share, with brands sold in more than 200 markets. Its brands also include Pall Mall and Rothmans cigarettes.