Half Year 2026 British American Tobacco P.l.c Earnings Call Transcript
Key Points
- New category revenue grew 18%, driven by a 66% surge in Modern Oral, with Velo capturing ~90% of category value growth in the US.
- Group revenue increased 2.9% and adjusted diluted EPS rose 7.9%, with EPS guidance upgraded to the middle of the 5%-8% range.
- US multi-category delivery was strong, with Vuse returning to double-digit growth and Velo+ growing over 200%, driving total US revenue up 8.5%.
- New category contribution improved 55% to £269 million, reflecting disciplined investment and increasing scale benefits.
- Strong cash generation supports a £1.3 billion share buyback in 2026, with leverage expected within the 2-2.5x target range by year-end.
- Heated product revenue declined nearly 12%, impacted by inventory movements and competitive intensity in the value segment.
- APMEA region revenue fell 6.3%, with slower-than-expected recovery due to regulatory pressures and illicit volume in Bangladesh and Australia.
- US combustible volume share declined 80 basis points, reflecting growth in the discount segment and heightened competitive activity.
- Vapor revenue in AME declined 14% due to regulatory changes in Poland, and APMEA vapor revenue fell 28% from strategic market exits.
- Full-year revenue and operating profit guidance is at the lower end of the mid-term algorithm, absorbing ~1% transactional FX headwind and active investment choices.
Welcome you to our 2026 interim results presentation. With me this morning is Javed Iqbal, Interim CFO and Victoria Buxton, Group Head of Investor Relations.
I will begin with our transformation highlights.
Javed will then take you through our financial results in more detail.
Finally, I will return to talk more about our performance outlook and why we are confident in the pathway ahead given the clear momentum we are building.
We will then take your questions.
With that, I'd like to draw your attention to the disclaimers on slide 2 and 3.
Let's begin by looking at our transformation momentum.
Starting with some highlights from H1.
Smokers now represents 19.8% of group revenue, up 160 basis points versus last year.
We added 4.1 million smokers consumers over the last 12 months, taking the total to 35 million.
This progress is mainly driven by modern opera industry growth. Where the strength of the Vilo brand continues
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