**Summary of British American Tobacco PLCs 2025 H2 Pre-Close Trading Update (December 9, 2025):**
British American Tobacco (BAT) reaffirmed its full-year 2025 (FY25) financial targets and 2026 guidance, highlighting progress across its core business and new categories. Key points include
1. **Financial Performance**
Expects ~2% growth in revenue and adjusted profit from operations for FY25.
New Category revenue (e.g., Modern Oral, Vapour, Heated Products) is accelerating, with double-digit growth in H2 2025, driving mid-single-digit growth for the full year.
Strong U.S. performance, driven by combustibles and Velo Plus, which is on track for full-year profitability.
2. **New Categories Momentum**
Velo is leading global growth in Modern Oral, with strong performance in all regions.
Vuse (Vapour) saw improved volume and revenue in the U.S., supported by enforcement against illicit products.
Glo Hilo (Heated Products) is being established as a premium offering in key markets, with further roll-outs planned for 2026.
3. **Regional Performance**
AME (Africa, Middle East) remains strong, while APMEA (Asia Pacific, Middle East, and Africa) faces headwinds in Bangladesh and Australia due to fiscal and regulatory challenges.
4. **Financial Outlook**
Confident in delivering mid-term growth algorithm from 2026: +3-5% revenue, +4-6% adjusted profit from operations, and +5-8% adjusted diluted EPS.
2026 performance expected at the lower end of the range.
5. **Capital Allocation**
Announced a £1.3bn share buy-back program for 2026, reflecting strong cash generation and balanced capital allocation.
On track to reduce leverage to 2.0-2.5x by end 2026, alongside progressive dividends.
6. **CEO Commentary**
Tadeu Marroco emphasized U.S. momentum, Velo Plus profitability, and progress in New Categories, aligned with the Quality Growth approach.
Highlighted early signs of enforcement tackling illicit Vapour products in the U.S., benefiting Vuse.
7. **Technical Guidance for FY25**
Global tobacco industry volume expected to decline ~2%.
Operating cash flow conversion >95%, with gross capital expenditure of ~£650 million.
BAT remains focused on sustainable growth, innovation in New Categories, and delivering shareholder value through robust cash returns and disciplined capital allocation.
