**Summary**
British American Tobacco (BAT) released its half-year report for the six months ending June 30, 2025, highlighting progress towards full-year guidance despite challenges. Key points include
**Revenue and Profit** Revenue decreased by 2.2% to £12,069 million due to currency headwinds but grew 1.8% at constant FX, driven by U.S. and AME growth. Reported profit from operations rose 19.1% to £5,069 million, partly due to a Canadian settlement provision update. Adjusted profit from operations increased 1.9% at constant FX.
**New Categories** New Categories revenue remained stable at £1,651 million, with a 2.4% increase at constant FX. Smokeless products now account for 18.2% of Group revenue, up 70 bps. The contribution margin for New Categories improved to 10.6%.
**Regional Performance** The U.S. saw revenue and profit growth for the first time since 2022, driven by combustibles and Velo Plus. AME continued strong performance, while APMEA faced challenges in Bangladesh and Australia.
**Financial Metrics** Reported diluted EPS increased 1.6% to 203.6p. The 2025 share buy-back program was increased by £200 million to £1.1 billion. Net debt decreased by 9.9% to £30,342 million.
**Strategic Focus** BAT added 1.4 million smokeless consumers, reaching 30.5 million. The company is on track to deliver mid-term goals by 2026, focusing on sustainable value creation and shareholder returns.
**Outlook** BAT expects global tobacco volume to decline by 2%, with revenue growth at the top end of the 1.0-2.0% guidance range. Adjusted profit from operations is projected to grow 1.5-2.5%, with a focus on deleveraging and dividend growth.
**Key Takeaways**
BAT is navigating currency challenges and regional disparities but remains on track for full-year guidance.
New Categories, particularly smokeless products, are driving growth and margin improvement.
The U.S. market is a key growth driver, while APMEA faces regulatory and fiscal headwinds.
Financial discipline and strategic investments are expected to support mid-term goals and shareholder value.
| Metric | 2025 (£m) | 2024 (£m) | Change |
|---|---|---|---|
| Revenue | 12,069 | 12,340 | -2.2% |
| Revenue (constant FX) | 12,567 | 12,340 | +1.8% |
| Profit from Operations | 5,069 | 4,258 | +19.1% |
| Adjusted Profit from Operations | 5,394 | 5,564 | -3.0% |
| Adjusted Profit from Operations (constant FX) | 5,599 | 5,564 | +0.6% |
| Net Debt | 30,342 | 33,658 | -9.9% |
| Adjusted Net Debt | 29,749 | 32,973 | -9.8% |
| Borrowings (including lease liabilities) | 35,208 | 40,158 | -12.3% |