British American Tobacco (BAT) has on Tuesday reported robust growth in its nicotine pouch segment, with its Velo Plus brand delivering standout performance in the US and globally.
In its 2025 first half pre-close trading update, the company highlighted that Velo, its flagship modern oral product, remains the fastest-growing category within its New Categories portfolio. Velo Plus, launched in the US, recorded triple-digit revenue growth and drove a 550 basis point (bps) increase in modern oral market share to 11.9 per cent in the region.
Globally, Velo’s volume share rose by 270bps to 14.3 per cent of total oral and by 350bps to 29.7 per cent of the modern oral category in BAT’s top seven markets, including the UK, Sweden, and Poland. The company credited strong consumer trial and retention rates and maintained leadership in the AME region (Africa, Middle East, and Europe), with notable financial performances in Scandinavia, the UK, and Poland.
“I am excited by the successful launch of Velo Plus in the US driving excellent volume and revenue growth, with strong market share gains. Globally, Velo continues to gain volume share in this fast-growing category,” BAT chief executive Tadeu Marroco said.
BAT’s glo heated tobacco products faced mixed results in early 2025. Volume share in top markets fell by 90bps, mainly due to a highly competitive landscape in Japan and the ongoing phase-out of BAT’s older super-slims platform. However, the company expressed optimism about the recently launched glo Hilo device in Serbia, which has delivered double the previous trial-to-conversion rates.
A broader roll-out of glo Hilo is planned for the second half of the year, and BAT expects this to drive a rebound in revenue growth across key heated tobacco markets.
Despite macroeconomic pressures and regulatory challenges, and ongoing issues from illicit vapour product sales in North America, BAT’s New Categories revenue still saw low single-digit growth in H1, with acceleration expected in the second half of 2025.
The update reaffirmed BAT’s guidance for 2025 with expected full-year revenue growth of 1–2 per cent and adjusted profit from operations growth of 1.5–2.5 per cent, with a continued focus on innovation-led, H2-weighted performance across its New Categories.
“Excluding the impact of the US and Canada Vapour markets, we expect double-digit New Category revenue growth for FY,” Marroco said.
BAT’s broader performance saw a return to revenue and profit growth in the US, led by gains in its combustibles portfolio and the success of Velo Plus. Operating cash flow remains strong, with BAT on track to achieve its target of reducing leverage to 2–2.5x by end-2026.
