H1 in line with expectations; Confident in Full-Year 26 guidance
- Building strong momentum as transformation continues with consumers of Smokeless products reaching 35 million.
- Accelerating New Category revenue growth to 18.0%2, driven by Modern Oral and a return to double-digit growth2 in U.S. Vapour.
- Extended global category leadership in Modern Oral, now our largest New Category, achieving 39.2% volume share4 in our top markets.
- Continue to drive value from combustibles to fund our transformation with revenue up 2.1%2, driven by the U.S. and AME.
- In the U.S., revenue from New Categories grew 58.1%2 and we expect our performance to be further enhanced by the planned roll-out of Velo Max in Modern Oral and a select range of adult-focused Vuse flavours in Vapour which are expected to commence in the second half of 2026.
- Full-Year 2026 adjusted diluted EPS1,2,3 now expected to be towards the middle of our 5–8% guidance range.
- Firmly on track to deliver our Full-Year 2026 guidance.
Half-Year Summary
- Smokeless products now 19.8% of Group revenue, up 1.6 ppts vs Full-Year 2025.
- Revenue up 1.4%, up 2.9% at constant FX, driven by the U.S. (up 8.5% led by strong multi-category delivery), and resilience in AME (up 0.9%), partly offset by a slower than expected recovery in APMEA (down 6.3%).
- New Categories revenue up 18.0%2 and New Categories contribution margin up 3.3 ppts to 13.8%2.
- Improved combustibles revenue, up 2.1%2, driven by price/mix (including excise duty drawback in the U.S.).
- Reported profit from operations down 15.8% (with reported operating margin down 7.1 ppts to 34.9%), partly due to a credit in the prior year related to the Canadian settlement provision.
- Adjusted profit from operations1,2,3 up 3.5%, adjusted operating margin1,2,3 up 30 bps at 43.7%.
- Reported diluted EPS down 28.6% to 145.3p, with adjusted diluted EPS1,2,3 up 7.9%.
- Full-Year 2026 adjusted diluted EPS1,2,3 now expected to be towards the middle of our 5–8% guidance range.
- Commitment to dividend growth in sterling terms and share buy-back programme on-track for £1.3 billion in 2026.
Tadeu Marroco, Chief Executive said:
“Our H1 performance is in line with expectations. We are building momentum as we transform and I am confident that we are firmly on track to deliver our full-year 2026 guidance.
“New Category revenue growth has accelerated to 18.0%2, driven by another strong performance from Modern Oral globally (up 65.9%2), and a return to double-digit growth2 in U.S. Vapour. This improving portfolio mix, together with our continued focus on quality growth and disciplined resource allocation in Heated Products and Vapour, drove an increase in New Category contribution of 54.7%.
“We further extended our global category leadership in Modern Oral, now our largest New Category (by revenue), achieving 39.2% volume share in our top markets4, up 8.4 ppts versus FY2025. Revenue grew 65.9%2, driven by the continued excellent performance of Velo Plus in the U.S. and sustained double-digit growth2 in AME and APMEA.
“We delivered a robust performance in combustibles with revenue up 2.1%2, driven by the U.S. and AME, more than offsetting a slower than expected recovery in APMEA. We continue to drive value from combustibles to fund our transformation, while remaining focused on volume share globally. In H1 2026, we have actively increased investment in key markets in response to heightened competitive activity, including in the U.S., where our combustibles volume share has started to stabilise.
“In the U.S., the recently published FDA prioritisation guidance for Vapour and Modern Oral, together with other Federal and State enforcement actions, mean that BAT is well positioned to benefit from our multi-category nicotine portfolio, leveraging Reynolds’ strong execution and extensive distribution capabilities. In the second half of 2026 we plan to roll out Velo Max nationally, together with a disciplined roll-out of a select range of adult-focused Vuse flavours.
“We expect mid-teens New Categories revenue growth for the full-year 2026, driven by continued global momentum in Modern Oral and further traction from innovation roll-outs, partly offset by lapping a higher second half comparator in the U.S.
“We continue to make good progress towards our year-end target leverage range of 2.0–2.5x while rewarding shareholders through strong cash returns. I remain committed to delivering sustainable value for our shareholders.”
Change in Group Revenue:
| Reported | +1.4% |
| At CC2 | +2.9% |
Change in Profit from Operations:
| Reported | +15.8% |
| APFO1,3 at CC2 | +3.5% |
Change in Group diluted EPS:
| Reported | -28.6% |
| Adj1 at CC2 | +5.9% |
| As adj for Canada1,3 | +5.5% |
| As adj for Canada1,3 at CC2 | +7.9% |
Notes
1 Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence
2 Presented on a constant currency (CC) basis.
3 As adjusted for Canada. The adjustment in respect of Canada is discussed on pages 50 and 51 of the Half-Year Report, with the adjustment based upon percentage (2026: 85%; 2025: 100%) of the net income after taxes earned from all sources, excluding New Categories, in Canada.
4 See page 46 of the full Half-Year Report annoucement for a list of the Top markets.
Summary Information
Performance highlights
For six months to 30 June 2026
| Cigarette volume share1 | |
|---|---|
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | -30 bps |
| Non-GAAP Adjusted3 Current rates | |
| Non-GAAP Adjusted3 vs 2025 (constant) | |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Cigarette value share1 | |
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | -40 bps |
| Non-GAAP Adjusted3 Current rates | |
| Non-GAAP Adjusted3 vs 2025 (constant) | |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Consumers of Smokeless products2 | |
| IFRS Reported Current rates | 35.0m |
| IFRS Reported vs 2025 (current) | +0.9m |
| Non-GAAP Adjusted3 Current rates | |
| Non-GAAP Adjusted3 vs 2025 (constant) | |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Revenue (£m) | |
| IFRS Reported Current rates | £12,235m |
| IFRS Reported vs 2025 (current) | +1.4% |
| Non-GAAP Adjusted3 Current rates | £12,235m |
| Non-GAAP Adjusted3 vs 2025 (constant) | +2.9% |
| Non-GAAP Adjusted for Canada5 Current rates | £12,235m |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +2.9% |
| Revenue from New Categories (£m) | |
| IFRS Reported Current rates | £1,928m |
| IFRS Reported vs 2025 (current) | +16.8% |
| Non-GAAP Adjusted3 Current rates | £1,928m |
| Non-GAAP Adjusted3 vs 2025 (constant) | +18.0% |
| Non-GAAP Adjusted for Canada5 Current rates | £1,928m |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +18.0% |
| Smokeless revenue as % of total revenue (%)4 | |
| IFRS Reported Current rates | 19.8% |
| IFRS Reported vs 2025 (current) | +1.6ppts |
| Non-GAAP Adjusted3 Current rates | |
| Non-GAAP Adjusted3 vs 2025 (constant) | |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Profit from operations (£m) | |
| IFRS Reported Current rates | £4,266m |
| IFRS Reported vs 2025 (current) | -15.8% |
| Non-GAAP Adjusted3 Current rates | £5,426m |
| Non-GAAP Adjusted3 vs 2025 (constant) | +2.5% |
| Non-GAAP Adjusted for Canada5 Current rates | £5,319m |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +3.5% |
| Adjusted gross profit growth (%) | |
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | |
| Non-GAAP Adjusted3 Current rates | +1.8% |
| Non-GAAP Adjusted3 vs 2025 (constant) | +3.2% |
| Non-GAAP Adjusted for Canada5 Current rates | +2.5% |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +3.8% |
| Category contribution – New Categories (£m) | |
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | |
| Non-GAAP Adjusted3 Current rates | £257m |
| Non-GAAP Adjusted3 vs 2025 (constant) | +54.7% |
| Non-GAAP Adjusted for Canada5 Current rates | £257m |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +54.7% |
| Category contribution margin – New Categories (%) | |
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | |
| Non-GAAP Adjusted3 Current rates | 13.3% |
| Non-GAAP Adjusted3 vs 2025 (constant) | +3.3 ppts |
| Non-GAAP Adjusted for Canada5 Current rates | 13.3% |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +3.3 ppts |
| Operating margin (%) | |
| IFRS Reported Current rates | 34.9% |
| IFRS Reported vs 2025 (current) | -7.1 ppts |
| Non-GAAP Adjusted3 Current rates | 44.4% |
| Non-GAAP Adjusted3 vs 2025 (constant) | -20 bps |
| Non-GAAP Adjusted for Canada5 Current rates | 43.5% |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +30 bps |
| Diluted EPS (pence) | |
| IFRS Reported Current rates | 145.3p |
| IFRS Reported vs 2025 (current) | -28.6% |
| Non-GAAP Adjusted3 Current rates | 167.7p |
| Non-GAAP Adjusted3 vs 2025 (constant) | +5.9% |
| Non-GAAP Adjusted for Canada5 Current rates | 164.0p |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | +7.9% |
| Net cash generated from operating activities (£m) | |
| IFRS Reported Current rates | £3,402m |
| IFRS Reported vs 2025 (current) | +47.3% |
| Non-GAAP Adjusted3 Current rates | |
| Non-GAAP Adjusted3 vs 2025 (constant) | |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Free cash pre-dividend (£m) | |
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | |
| Non-GAAP Adjusted3 Current rates | £2,285m |
| Non-GAAP Adjusted3 vs 2025 (constant) | +85.2% |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Adjusted cash generation from operations (£m) | |
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | |
| Non-GAAP Adjusted3 Current rates | £2,102m |
| Non-GAAP Adjusted3 vs 2025 (constant) | +45.4% |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Cash conversion (%) | |
| IFRS Reported Current rates | 79.7% |
| IFRS Reported vs 2025 (current) | +34.1 ppts |
| Non-GAAP Adjusted3 Current rates | 79.7% |
| Non-GAAP Adjusted3 vs 2025 (constant) | +5.6 ppts |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Borrowings including lease liabilities (£m) | |
| IFRS Reported Current rates | £35,063m |
| IFRS Reported vs 2025 (current) | -0.4% |
| Non-GAAP Adjusted3 Current rates | |
| Non-GAAP Adjusted3 vs 2025 (constant) | |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) | |
| Adjusted Net Debt (£m) | |
| IFRS Reported Current rates | |
| IFRS Reported vs 2025 (current) | |
| Non-GAAP Adjusted3 Current rates | £31,969m |
| Non-GAAP Adjusted3 vs 2025 (constant) | +6.1% |
| Non-GAAP Adjusted for Canada5 Current rates | |
| Non-GAAP Adjusted for Canada5 vs 2025 (constant) |
The use of non-GAAP measures, including adjusting items and constant currencies, are further discussed from page 50 of the full annoucement, with reconciliation from the most comparable IFRS measure provided.
Notes:
1. To better reflect the evolving performance of each category, from 1 January 2026, the Group has decoupled the value share and volume share metrics from a combined Cigarettes and HP view to disclose the performance of Cigarettes as a distinct category.
2. Internal estimate.
3. See page 28 of the Half-Year Report for discussion on adjusting items.
4. Movement in Smokeless revenue as a percentage of total revenue compared to full-year 2025.
5. As adjusted for Canada. The adjustment in respect of Canada is discussed on pages 50 and 51 of the full Half-Year Report annoucement, with the adjustment based upon a percentage (2026: 85%; 2025: 100%) of the net income after taxes earned from all sources, excluding New Categories, in Canada. There is no adjustment to revenue.
Confirmation of Full-Year 2026 Guidance
- Global cigarette industry volume expected to be down c.3%.
- Lower end of our medium-term guidance ranges:
- 3–5% revenue1 growth, with mid-teens New Category revenue growth1.
- 4–6% adjusted profit from operations growth1,2 – H2 weighted.
- Expected c.1% transactional FX headwind.
- We expect a translational FX headwind of c.2–3% on adjusted diluted EPS growth2.
- Adjusted net finance costs1,2 expected to be c.£1.65 billion (prev. £1.75 billion), subject to interest rate volatility.
- Adjusted diluted EPS growth1,2 now expected to be towards the middle of 5–8% medium-term guidance range.
- Gross capital expenditure in 2026 of approximately £750 million.
- Operating cash flow conversion that exceeds 95%.
- Leverage within our 2.0–2.5x adjusted net debt/adjusted EBITDA2 corridor by year end.
- Commitment to dividend growth in sterling terms and £1.3 billion share buy-back.
Notes
1. At constant rates of exchange.
2. As adjusted for Canada. The adjustment in respect of Canada is discussed on pages 50 and 51 of the Half-Year Report, with the adjustment based upon percentage (2026: 85%; 2025: 100%) of the net income after taxes earned from all sources, excluding New Categories, in Canada.
To watch the highlights of our Half-Year 2026 Results update, please visit – Video: Our Chief Executive Tadeu Marroco shares his views on BAT’s Half-Year Results 2026.
Half-Year Results for the six months to 30 June 2026
Forward-looking statements
This release contains certain forward-looking statements, including “forward-looking” statements made within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as “believe,” “anticipate,” “could,” “may,” “would,” “should,” “intend,” “plan,” “potential,” “predict,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “outlook”, “target”, “being confident” and similar expressions. These include statements regarding our intentions, beliefs or current expectations concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the economic and business circumstances occurring from time to time in the countries and markets in which the Group operates. In particular, these forward-looking statements include, among other statements, statements regarding (i) our confidence to deliver on our full-year 2026 guidance, including our expectation of mid-teens New Categories revenue growth for the full-year 2026 driven by further traction from innovation roll-outs and being within our target leverage range of 2.0–2.5x while rewarding shareholders through strong cash returns and our commitment to delivering sustainable value to our shareholders, (ii) the planned roll-outs of products, innovations and consumable flavours of Velo Max in the second half of 2026, (iii) our expectation that our full-year adjusted diluted EPS will be towards the middle of our 5–8% guidance range, (iv) our commitment to dividend growth in sterling terms and £1.3 billion share buy-back, (v) our expectations of being well-positioned to benefit from recent regulatory developments in the U.S., (vi) our customer target ambitions for Smokeless products by 2030, and our revenue targets for Smokeless products by 2035 and (vii) our continued commitment to Tobacco Harm Reduction and our sustainability targets.
All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors. It is believed that the expectations reflected in this release are reasonable but they may be affected by a wide range of variables that could cause actual results to differ materially from those currently anticipated. A review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found by referring to the information contained under the headings “Cautionary Statement” and “Group Principal Risks” in the 2025 Annual Report and Accounts of BAT and under the heading “Forward Looking Statements” and Item 3.D – Risk Factors in the 2025 Annual Report on Form 20-F of BAT.
Additional information concerning these and other factors can be found in BAT’s filings with the U.S. Securities and Exchange Commission (“SEC”), including the 2025 Annual Report on Form 20-F and current reports on Form 6-K, which may be obtained free of charge at the SEC’s website, https://www.sec.gov and BAT’s Annual Reports, which may be obtained free of charge from the BAT website https://www.bat.com.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. The forward-looking statements reflect knowledge and information available at the date of preparation of this release and BAT undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on such forward-looking statements.
Note on Non-GAAP Measures
This announcement contains several forward-looking non-GAAP measures used by management to monitor the Group’s performance. For definitions and reconciliations of non-GAAP measures, please see the Non-GAAP Measures sections under “Non-GAAP Measures” on pages 41–47 and under “Non-GAAP measures used with the Group’s remuneration schemes” on pages 70–74 in our 2025 Annual Report on Form 20-F.