British American Tobacco (LSE:BATS) told investors it remains firmly on track to deliver full‑year guidance for 2026, driven by continued US delivery and accelerating New Category momentum.
The pre‑close trading update, covering the first half and full year 2026, on Tuesday said New Category revenue growth is now expected to be in the mid‑teens for H1 and FY26 and that group profit delivery will be weighted to H2.
"Our full‑year delivery remains firmly on track," Chief Executive Tadeu Marroco commented.
Management points to Modern Oral and Vapour as the main accelerants for New Categories, with Velo driving strong double‑digit revenue growth and volume share gains of +5.7pts in Total Oral and +7.4pts in Modern Oral in top markets, and Velo Plus delivering a +10.4pts uplift in U.S. Modern Oral volume share.
Vuse extends global value‑share leadership (top markets +1.3pts and U.S. value share +4.2pts) and is expected to deliver mid‑single digit revenue growth led by the U.S., while glo faces low double‑digit revenue declines in H1 and FY driven by material inventory movements in Japan and competitive intensity in the value segment with improvement expected in H2.
Combustibles show resilient delivery with strong U.S. revenue and profit growth skewed to H1, AME performance led by Brazil and Türkiye and APMEA stabilising sequentially versus H2 2025.
BAT expects operating cash conversion in excess of 95% in FY26, gross capex of c.£750m, net finance costs of c.£1.75bn, and to be within a 2.0-2.5x adjusted net debt/adjusted EBITDA range by year‑end while maintaining a progressive dividend and sustainable share buy‑backs of £1.3bn in 2026.
The group reiterated its mid‑term algorithm of 3-5% revenue growth, 4-6% adjusted profit from operations growth (H2‑weighted) and 5-8% adjusted diluted EPS growth, noting 2026 is expected at the lower end of these ranges and flagging a c.1% transactional FX headwind and a 2-3% translational FX headwind on EPS.
BAT also now expects global cigarette industry volume down c.2.5% (previously c.2%).
