British American Tobacco (BAT) has reaffirmed its full-year guidance after delivering first-half results in line with expectations, with continued growth in its smokeless portfolio helping offset challenges in some international markets.
The tobacco giant reported group revenue of £12.24 billion for the six months to 30 June, up 1.4 per cent on a reported basis and 2.9 per cent at constant exchange rates. New Categories revenue rose 18 per cent at constant currency to £1.93bn, while smokeless products accounted for 19.8 per cent of total group revenue, up 1.6 percentage points from last year.
Adjusted diluted earnings per share rose 7.9 per cent at constant currency, while reported profit from operations fell 15.8 per cent, largely due to one-off items including the prior year's Canadian litigation settlement credit. BAT said it now expects adjusted diluted EPS growth for the full year to be towards the middle of its 5-8 per cent guidance range.
Chief executive Tadeu Marroco said the business was continuing to build momentum as it transformed towards reduced-risk products.
“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,” he said.
Nicotine pouches remained BAT's fastest-growing category, with revenue increasing 65.9 per cent at constant currency, driven by strong demand for Velo Plus in the US and sustained double-digit growth across the Americas, Europe, Asia-Pacific and other international markets. BAT said the category has now become its largest New Category by revenue and that it increased its global volume share in key markets to 39.2 per cent.
The group also reported a return to growth in vape, with category revenue rising 5.3 per cent at constant currency after a challenging 2025, when the category was hit by illicit products in key markets and regulatory and excise changes across several countries, including the UK. The recovery was driven by the US, where Vuse revenue increased 19.8 per cent and the business returned to double-digit growth.
Combustibles revenue increased 2.1 per cent at constant currency, supported by pricing and mix improvements, although cigarette volume and value share both declined globally. BAT said it had increased investment in key markets to respond to heightened competition, with US cigarette volume share beginning to stabilise during the first half.
However, performance in Asia-Pacific, the Middle East and Africa remained under pressure, with revenue falling 6.3 per cent at constant currency. BAT cited the challenging regulatory environment and the growth of illicit tobacco in markets including Bangladesh and Australia, where it estimates illicit cigarettes now account for around 80 per cent of total market volume.
Looking ahead, BAT said it expects mid-teens growth in New Categories revenue for the full year, driven by continued momentum in Modern Oral and innovation roll-outs, while maintaining its commitment to dividend growth and a £1.3bn share buyback programme.