BAT: FY25 Results

Posted February 12, 2026

Release date: February 12, 2026; before the LSE opening

Consensus ahead of the release: +1.9% revenue and 2.0% operating profit growth in FY25; Acceleration in financial delivery to +3.5% revenue and +4.0% operating profit growth in FY26

Latest guidance: c.2.0% revenue and c.2.0% operating profit growth in FY25; Lower end of the mid-term growth algorithm (+3-5% revenue, +4-6% operating profit and +5-8% adj. diluted EPS growth) expected in FY26

FY25 Results

– Revenue: £25.61 billion (vs. £25.6 billion expected)

– Reported Revenue: down -1.0%,(due to currency headwinds), up 2.1% at constant FX, driven by combustibles and Velo Plus in the U.S. and continued multi-category growth in AME, partly offset by APMEA

– Adj. New Categories Revenue: +7%, growth accelerated to double-digits in H2 2025

– Adj. Operating Profit: £11.28 billion (vs. £12.29 billion exp.), up +2.3%; Adj. Operating Margin: 44% (vs. 44.1% exp.), flat

– Contribution from New Categories: £427 million, up +77.1%. £1.4 billion profitability improvement since 2021. Number of markets with positive new category contribution increased from 4 in 2022 to 22 in 2025

– Adj. EPS: £3.405 (vs. £3.38 expected), up +3.4%

– Adjusted net debt / adjusted EBITDA down to 2.55x (down -0.20x)

– Dividend increase: +2.0% from 240.24p to 245.04p

Key Highlights – New Categories (NGP):

– Smokeless: Added 4.7 million consumers (to 34.1 million); smokeless products now represent 18.2% of revenue (up +70 bps vs. FY24)

– Vapour: revenue down -10.4% (down -8.6% at constant FX); with volume down -12.6%, impacted by illicit products mainly in the U.S. and Canada and regulatory and excise changes (in the UK, Poland and France). VUSE back to revenue growth in H2 2025 in the U.S. supported by increased enforcement against illicit single-use vapour products. Positive early performance of premium VUSE Ultra products in Canada, Germany and France

– Heated tobacco: Revenue down -0.7% (up +1.0% at constant FX), impacted by competitive pressure and resource allocation ahead of glo HILO launches. Volume share down 1.5 ppts, mostly impacted by competitive pressure and the phase-out of legacy super-slims in Japan. Momentum building with roll-out of glo HILO in largest profit pools: glo HILO reached 1.4% volume share in Japan, 1.0% in Italy and 3.9% in Poland, attracting premium segment consumers. Trial-to-conversion rate for glo HILO is around 50%. In the value-for-money segment, new glo HYPER launch and enhanced consumable range expected to strengthen glo’s competitiveness

– Modern oral nicotine: Revenue up +47.4% (up +48.0% at constant FX). Volume growth of 47.1%. Triple-digit volume and revenue growth in the U.S., following the national roll-out of VELO Plus. AME volume share leadership maintained, with strong revenue growth in Scandinavia, the UK and Switzerland. BAT now claims to be the global volume leader in the category (universe: top markets representing 90% of the global category volume)

Key Highlights – Combustibles:

– Cigarette volume down -7.9% to 465 billion sticks as volume growth in Turkey, Nigeria, Indonesia and Brazil was more than offset by lower volume in a number of markets, mainly driven by Bangladesh, the U.S. and Poland and market exits (including Mali)

– Revenue down -2.3% (up +1.0% at constant FX). Value share flat, volume share down 10 bps

– Return to growth in the U.S., with revenue up +4.6% at constant FX as price/mix (including excise duty drawback) more than offset volume decline. Resilient AME performance (up +2.3%), driven by Turkey, Brazil and Mexico. APMEA revenue decline (-8.3%) driven by Australia and Bangladesh with total volume down -11.7%

Regional Highlights – USA:

– Reported revenue up +2.3% (up +5.5% at constant FX); Smokeless now represents 19.6% of total revenue

– Combustibles revenue up +1.4% (up +4.6% at constant FX) as price/mix (including excise duty drawback) more than offset a 7.7% decline in volume. Volume share down 10 bps with value share up 30 bps. Implied pricing improvement is +13.3%, including the impact of duty drawback. Even independent of duty drawback, combustible revenue growth would be positive; BAT expects c.7% combustible market volume decline and 0%-1% combustible revenue growth in the U.S. in the long-term (vs. +4.6% in FY25). 90% of the market volume decline is from the non-discount category; BAT is test-marketing Doral (discount) brand in two states in the U.S.

– Modern Oral revenue up +297% (up +310% at constant FX) with category volume share up 11.6 ppts to 18.0%. Volume up +249% to 3.5 billion pouches (175 million cans). VELO achieved #2 volume and value share position in U.S.; volume share (based on number of pouches sold) up +17.9pp from 6.1% in November 2024 to 24.0% in December 2025, driven by VELO Plus launch. The trial-to-retention rate for Velo PLUS is 70%. VELO plus now available in c.150k store, which represents 93% of the category volume. In addition, Grizzly nicotine pouches reached c.2% national share – extending BAT’s overall FY25 exit share to 25.8%. Daily consumption remains low in the U.S. at 3.6 pouches per day (- up from 2.8 pouches, a year ago) vs. 6 pouches/day in Europe and 12 pouches/day in the Nordics. VELO Max (with higher moisture content) is currently under the expedited U.S. FDA review

– VUSE maintained value share leadership in the legal vape market despite a 6.4% decline in revenue (down -3.4% at constant FX), mainly driven by lower volume due to the continued impact of illicit single-use vapour products. VUSE is well-positioned to further benefit from stronger enforcement over time: VUSE monthly off-take volume up +10.6% from June 2025 to December 2025 (up +21.5% in states with effective enforcement) while the category volume is down -0.1%. Removal of NJOY ACE from the market also supports the volume trends (i.e. 63% of the NJOY ACE volume captured by VUSE). Stable VUSE volume expected in the U.S. in FY26

– Adjusted profit from operations: +5.9% to £6,766 million, with adjusted operating margin up 20 bps to 56.8%

Regional Highlights – Other Regions:

– AME (Americas and Europe): Reported revenue up +0.7% (+3.3% at constant FX); New Category revenue up +4.8% (up +4.3% at constant FX); Resilient combustibles revenue performance (+2.3% at constant FX), driven by price/mix; Smokeless now represents 19.9% of the total revenue; Adjusted profit from operations up +9.6% to £3,069 million, due to an improved financial performance in Brazil, Romania and Turkey as well as across New Categories. Operating margin up +1.8pp to 31.2%

– APMEA (Asia-Pacific, Middle East and Africa): Reported revenue down -10.9% (down -7.2% at constant FX); Headwinds to volume and financial performance due to regulatory and fiscal challenges in Australia and Bangladesh; New Category revenue down -10.6% (down -7.6% at constant FX), driven by HP in Japan and South Korea. Smokeless now represents 11.7% of total revenue. Adjusted profit from operations down -17.9% to £1,793 million, driven by Australia (continued increases in the illicit segment which now accounts for more than 65% of the combustibles industry volume, with the duty paid combustibles industry volume down more than 40% in 2025) and Bangladesh (driven by the increase in excise and minimum price in January 2025, necessitating an increase in consumer prices by 20-30%, which resulted in a reduction in the duty paid combustibles industry volume by more than 20%) – partly offset by an increase in Pakistan (led by the growth of Modern Oral and pricing in combustibles), Nigeria (driven by higher combustibles volume and improved combustibles pricing) and Indonesia (driven by higher combustibles volume and pricing). Operating margin down -4.7pp to 36.1%. In FY26, Bangladesh will no longer be a drag on the results while Australia will still be a pressure point with a diminishing weight on the overall financials. Avrerage price for legal cigarettes in Australia is c.£22 (for a pack of 20) versus c.£6 for illicit cigarettes. Overall, 85% of the nicotine consumption in Australia is illicit

FY26 Guidance

– Global cigarette industry volume: down c.2%.

– Lower end of the medium-term guidance range: 3-5% revenue growth, with low double-digit New Category revenue growth; 4-6% adjusted profit from operations growth (H2 2026 weighted); 5-8% adjusted diluted EPS growth

– FX Headwind: c.1% transactional, c.3% translational on adjusted diluted EPS growth

– Net finance costs: c.£1.8 billion, subject to interest rate volatility; Gross CAPEX: c.£750 million; Operating cash flow conversion: above 95%

– Leverage: within 2.0-2.5x adjusted net debt/adjusted EBITDA; Gross debt down by £8 billion from £43 billion in 2022 to £35billion in 2025; Commitment to dividend growth and £1.3 billion share buy-back