London · Delayed Price · Currency is GBP · Price in GBX British American Tobacco p.l.c. Earnings Call Transcripts
Fiscal Year 2026
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BAT is accelerating its transformation toward a smokeless future, driven by innovation in nicotine pouches, vapor, and heated products, with strong financial growth and regulatory progress. Reynolds American anchors U.S. strategy, delivering robust results and leading in new category adoption.
Fiscal Year 2025
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2025 results reached the top end of guidance, with strong growth in Modern Oral and new categories, robust U.S. and AME performance, and continued productivity savings. Outlook for 2026 is positive, with double-digit new category growth expected and ongoing investment in innovation.
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Full-year revenue and profit growth are on track, driven by strong U.S. performance and accelerating new category growth, especially in Modern Oral and vapor. Regulatory enforcement is aiding legal market recovery, while continued investment in innovation and efficiency supports future growth.
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H1 2025 results were ahead of expectations, with revenue up 1.8% and strong growth in modern oral and U.S. combustibles. Full-year revenue is now expected at the top end of guidance, supported by innovation, cost savings, and robust shareholder returns.
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A refreshed strategy and innovation pipeline have driven early profitability in new categories and U.S. growth, with strong international performance from Vuse and Velo. Regulatory engagement and financial flexibility support midterm growth targets, while nicotine pouches are expected to play a key role in the future.
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Revenue and profit growth are expected in 2025, led by a strong U.S. recovery and robust modern oral performance. Regulatory headwinds in APAC and illicit trade impact growth, but new category innovations and increased financial flexibility support a positive outlook.
Fiscal Year 2024
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2024 results met expectations, with strong growth in new categories and improved margins, despite headwinds from illicit trade and regulatory changes in key markets. Guidance for 2025 is cautious due to challenges in Australia and Bangladesh, but medium-term growth targets remain intact.
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Performance is on track with full-year guidance, driven by innovation and strong regional results. New category growth, especially in modern oral, and robust pricing in key markets support financials, while regulatory and cash flow management remain priorities.
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A refreshed strategy targets a predominantly smokeless business by 2035, leveraging a multi-category approach, innovation, and regulatory engagement. Financial guidance aims for 3%-5% revenue and 4%-6% profit growth from 2026, underpinned by strong cash flow, disciplined investment, and a robust cultural transformation.
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First half 2024 results met expectations, with New Category revenue up over 7% and strong Modern Oral growth. U.S. performance was impacted by macro headwinds and illicit vapor, but investments and innovation are expected to drive a stronger second half. Share buybacks and disciplined capital allocation continue.
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Aiming for over 50% smokeless revenue by 2035, the group is accelerating innovation, stabilizing U.S. market share, and targeting quality growth. Strong cash generation supports share buybacks and a revised leverage target, with double-digit new category growth expected in H2 2024.
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Performance is on track with guidance, with H1 impacted by U.S. investments and macro headwinds, but a stronger H2 expected. New categories are driving growth, regulatory actions are underway, and cash flow remains robust, supporting share buybacks and improved leverage.