British American Tobacco plc (LSE:BATS) delivered a 2.1% increase in constant-currency revenue to £25.6 billion in 2025, supported by resilient U.S. combustibles and strong momentum in its Velo Plus modern oral nicotine brand. Performance in the APMEA region remained constrained by fiscal and regulatory challenges, but growth in reduced-risk categories helped underpin overall progress.
Smokeless products accounted for 18.2% of group revenue during the year, while contributions from New Categories rose more than 77%. Profit from operations rose sharply, aided by a movement in Canadian provisions, strengthening cash generation and enabling enhanced shareholder returns. The board increased the dividend, announced a £1.3 billion share buyback and reiterated its medium-term growth ambitions. However, management cautioned that 2026 performance is likely to fall toward the lower end of guidance due to foreign exchange headwinds and continued investment in transformation initiatives.
From an outlook perspective, positive corporate developments—including capital returns and insider share purchases—support investor sentiment, alongside robust cash flow generation. That said, earnings volatility and a relatively elevated price-to-earnings ratio moderate the overall assessment. Technical indicators remain constructive, while the company’s strategic push into innovation, digital capabilities and reduced-risk products is expected to play a central role in long-term growth. Ongoing market-specific challenges, particularly in certain international regions, remain an area of focus.
More about British American Tobacco plc
British American Tobacco plc is a global tobacco and nicotine group whose traditional combustible cigarette business is increasingly complemented by a growing portfolio of smokeless and so-called New Category products. Its brands span vapour, heated tobacco and modern oral nicotine offerings, with a strategic emphasis on expanding reduced-risk revenues in the U.S. and across AME and APMEA regions.
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