BAT on track; expects revenue slightly ahead of guidance

British American Tobacco (BTI) anticipates delivering FY revenue growth of 1-2% after a promising first half, supporting a 1.5 to 2.5% increase in adjusted profit from operations. This positive trajectory is partly fueled by a resurgence in the U.S. market, driven by robust combustibles performance and the successful Velo Plus launch. The company expects a low-single digit revenue growth in New Categories for H1, accelerating to mid-single digits for the full year, while strong global growth from Velo continues in the Modern Oral segment. BAT confirms its confidence in achieving its mid-term algorithm of 3-5% revenue growth and 4-6% APFO growth in 2026, supported by further improvements in New Category contribution margins. The company also announced an increase in share buy-backs to GBX 1.1bn. The tobacco industry volume is expected to decline by 2% globally.