British American Tobacco (LSE:BATS) reported first-half revenue up 1.4% to the six months to 30 June, or 2.9% at constant currency, with growth led by an 8.5% rise in the United States and 0.9% growth in the Americas, Middle East and Africa region.
That offset a 6.3% decline in the Asia-Pacific, Middle East and Africa (APMEA) region, where the tobacco group said recovery has been slower than expected.
Adjusted profit from operations rose 3.5%, with adjusted operating margin up 30 basis points to 43.7%, while adjusted diluted earnings per share (EPS) climbed 7.9% to reflect underlying trading. Reported profit from operations fell 15.8% and reported diluted EPS dropped 28.6% to 145.3p, partly due to a credit booked in the prior year tied to the Canadian settlement provision.
New Categories revenue, covering vapour, heated products and modern oral, rose 18.0%, with contribution margin up 3.3 percentage points to 13.8%. Modern Oral, now BAT's largest New Category by revenue, grew 65.9%, lifting volume share in top markets to 39.2%, up 8.4 points versus the 2025 financial year. Combustibles revenue rose 2.1%, driven by pricing and mix including a U.S. excise duty drawback.
"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," said chief executive Tadeu Marroco.
BAT now expects full-year adjusted diluted EPS growth toward the middle of its 5-8% medium-term range, with New Categories revenue growth expected in the mid-teens. The share buyback remains on track for £1.3 billion in 2026.
News Intelligence what this means for the company
BAT's H1 results landed in line with guidance, with adjusted EPS up 7.9% and New Categories revenue jumping 18%, but the company is guiding toward the middle of its 5–8% full-year EPS growth range—a narrowing that reflects slower-than-expected recovery in Asia-Pacific offsetting strength in the US. Modern Oral, now BAT's largest New Category by revenue, surged 65.9%, signalling the portfolio shift is gaining traction, yet the midpoint guidance suggests management sees headwinds ahead.
The H1 beat on New Categories and margin expansion (43.7%, up 30bp) reinforces BAT's transformation narrative, but guidance to the middle of the range—not the upper end—signals caution on near-term momentum. The £1.3bn buyback remains on track, supporting the 5.4% dividend yield, but investors should watch whether H2 can accelerate from the slower APMEA recovery to justify the upper half of the 5–8% range.
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