British American Tobacco P.l.c Stock Earnings Reports

Key investor takeaways from the FY2025 call: BAT delivered results at the top end of guidance with clear progress on its smokeless transformation. The company added 4.7m smokeless consumers (total 34.1m), grew group revenue +2.1% and adjusted diluted EPS +3.4% (constant currency, adjusted). New categories continue to scale: new category revenue +7% with modern oral up ~48% (Velo/Velo Plus driving the growth) while vapor declined ~9% due to illicit competition in the U.S. and Canada. The U.S. returned to revenue and profit growth (overall U.S. revenue +5.5%, adjusted profit +5.9%), gaining 30 bps combustible value share. Velo Plus achieved >300% revenue growth in the U.S. and reached positive category contribution within its first year. Management reaffirmed the midterm algorithm (3–5% revenue, 4–6% adj. op. profit, 5–8% adj. diluted EPS growth) and said BAT expects to return to that algorithm in 2026, but guided to the lower end of the ranges for 2026 with profit second-half weighted. Cash and returns: dividend up 2% and share buyback increased to GBP 1.3bn for 2026; adjusted net debt ended 2025 at 2.55x adjusted EBITDA (target 2–2.5x by year-end); free cash flow target remains >GBP 50bn by 2030. Cost & transformation: GBP 1.2bn productivity savings delivered since 2023; targeting a further GBP 2bn by 2030 and Fit to Win to deliver ~GBP 600m annualized savings by 2028 (GBP 500m of associated costs to be treated as adjusting). Key risks and headwinds: illicit vapor channels (notably U.S./Canada), regulatory and fiscal headwinds (Bangladesh, Australia), competitive pressure in heated products in some markets, and transactional FX exposure (Turkey, Japan, Nigeria). Management highlighted continuing investment behind premium innovation (Velo Shift, Velo Max, Vuse Ultra, glo Hilo) and a disciplined, quality-growth approach to improve returns.