British American Tobacco PLC

Latest Results (29.08.2026):

British American Tobacco PLC — Half‑Year (H1) 2026 results (six months to 30 June 2026, covering Q2 2026): H1 performance was reported as in line with expectations. Group revenue was £12,235m (reported +1.4%, +2.9% at constant currency). Management reported adjusted profit from operations broadly higher and adjusted diluted EPS up, while reported diluted EPS fell due to prior‑year credits and higher adjusting items. The company remains confident in its full‑year 2026 guidance and is continuing share buy‑backs and investment behind New Categories.

Headline numbers

Revenue £12,235m (reported +1.4%; +2.9% at constant FX). Reported profit from operations £4,266m (down 15.8%); adjusted profit from operations increased (management: +3.5% as adjusted for Canada, adjusted PFO at constant rates £5,530m). Reported diluted EPS 145.3p (down 28.6%); adjusted diluted EPS up (management: +7.9% as adjusted for Canada). Adjusted operating margin ~43.7% (up 30bps as adjusted for Canada).

New Categories driving growth

New Categories revenue grew strongly: +18.0% at constant rates (Modern Oral up ~66% and now the largest New Category). Modern Oral momentum led by the U.S. (Velo Plus/Velo Max rollout) with Modern Oral volume and revenue sharply higher; Vapour returned to growth (group Vapour +5.3% at constant rates) and New Category contribution margin improved materially.

Combustibles and portfolio mix

Combustibles revenue improved (+2.1% at constant rates) with robust U.S. and AME performances offsetting APMEA softness. Smokeless products now represent 19.8% of Group revenue (up 1.6 ppts vs FY25), supporting the strategic shift to multi‑category nicotine portfolio.

Regional performance highlights

U.S. was the main growth engine: revenue +8.5% at constant FX (combustibles price/mix +10.2% at times offset by volume decline, Modern Oral and Vapour strong). AME resilient (+0.9% at constant FX). APMEA faced headwinds (‑6.3% at constant FX) from regulatory issues, illicit trade in some markets and inventory timing.

Cash flow, balance sheet and returns

Net cash from operations £3,402m (+47%); free cash flow before dividends £2,285m (+85%). Management expects FY26 operating cash conversion to exceed 95%. Adjusted net debt ~£31.97bn (up vs prior year); share buy‑back programme on track for £1.3bn in 2026 and dividend policy remains progressive in sterling terms.

Adjusting items, one‑offs and margin context

Reported results were impacted by higher adjusting items (£1,160m in H1 2026 vs £325m prior year), including Fit2Win programme costs and a lower Canada litigation credit compared to the prior year. Management reported adjusted metrics to illustrate underlying operational progress (adjusted margin and EPS improvements).

Fit2Win transformation programme

BAT is implementing a Fit2Win operational review: one‑off costs now expected ~£950m (c.£370m recognised in H1 as adjusting items), targeting c.£700m annualised cost/cash savings by end‑2028 and reinvestment to support long‑term growth.

Guidance and outlook

Company confirms FY26 guidance and now expects adjusted diluted EPS growth towards the middle of its 5–8% medium‑term guidance range. Management flags a modest FX headwind and reiterates capital allocation priorities: investment in New Categories, capex ~£750m for 2026, deleveraging to a 2.0–2.5x adjusted net debt/EBITDA target, and continued shareholder returns.