British American Tobacco Reaffirms Guidance, Announces £1.3bn Buyback

British American Tobacco (LON: BATS) is on track to meet its full-year 2025 targets, reaffirming its 2026 guidance and unveiling a substantial £1.3 billion share buy-back program. This announcement signals confidence in the company's future performance and commitment to shareholder returns.

The company now anticipates approximately 2% revenue and adjusted profit from operations growth for the fiscal year 2025. This growth is underpinned by an accelerating New Category revenue growth, expected to reach double-digits in the second half of the year, driving mid-single-digit growth for the full year.

Strong momentum in the U.S. market is a key driver, fueled by consistent performance in combustibles and the success of Velo Plus, which is on track for full-year profitability. Early indications of increased enforcement against illicit vapor products in the U.S. are also supporting recent volume and revenue improvements for Vuse.

Velo is contributing significantly to global growth in the Modern Oral category, the fastest-growing segment within New Categories. While the AME region continues to deliver strong results, the APMEA region is facing headwinds due to fiscal and regulatory challenges in Bangladesh and Australia.

BATS is confident in its ability to sustainably deliver its mid-term growth algorithm from 2026, projecting revenue growth of +3-5%, adjusted profit from operations growth of +4-6%, and adjusted diluted EPS growth of +5-8%. The company expects its 2026 performance to be at the lower end of this range.

The company's strong cash generation enables a balanced capital allocation strategy. BATS remains on track to reduce leverage to within its target range of 2.0-2.5x by the end of 2026, alongside progressive dividends and sustainable share buy-backs. The buyback program is set at £1.3 billion for FY26.

CEO Tadeu Marroco stated, “Full-year delivery remains on track. I am particularly pleased with our momentum in the U.S., the world's largest nicotine value pool. Strengthened combustibles performance and enhanced commercial execution reinforce our future confidence.”