British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — British American Tobacco Industries, p.l.c. — H1 2025 Earnings Presentation
45 slides from British American Tobacco P.l.c's earnings presentation, Jul 31, 2025
Slide 1: Building a smokeless world
Building a smokeless world Interim Results 2025 Tadeu Marroco – Chief Executive | Soraya Benchikh – Chief Financial Officer
Slide 2: Important Information
Important Information The information contained in this presentation in relation to British American Tobacco p.l.c. (“BAT”) and its subsidiaries has been prepared solely for use at this presentation. The presentation is not directed to, or intended for distribution to or use by, any person or entity
Slide 3: Important Information
Important Information Additional Information All financial statements and financial information provided by or with respect to the U.S. or Reynolds American Inc. (“Reynolds”) are initially prepared on the basis of U.S. GAAP and constitute the primary financial statements or financial records of the
Slide 4: On track for FY guidance, led by the U.S. and Velo's global growth
On track for FY guidance, led by the U.S. and Velo’s global growth Interim Results 2025 Tadeu Marroco – Chief Executive
Slide 5: Driving a sustainable transformation in HY25
Driving a sustainable transformation in HY25 • Results delivered slightly ahead of expectations • Return to U.S. growth and robust AME delivery • Excellent Velo performance globally A Better Tomorrow • Progress towards a smokeless world • Consumers of smokeless* products +1.4m to 30.5m Building a •
Slide 6: Delivering on key 2025 Deployment Year priorities
Delivering on key 2025 Deployment Year priorities What we said What we delivered in H1 ▪ Targeted roll-out of NC innovations ▪ Velo Plus, glo Hilo and Vuse Ultra launches ▪ Increasing NC returns ▪ NC contribution margin + 280bps ▪ Drive value from combustibles ▪ Combustibles revenue, GM* and profit
Slide 7: HY25 results slightly ahead of expectations
HY25 results slightly ahead of expectations Interim Results 2025 Soraya Benchikh – Chief Financial Officer
Slide 8: H1 performance slightly ahead of expectations
H1 performance slightly ahead of expectations Reported Adjusted at constant rates H1’25 at current rates Absolutes Growth vs. HY24 Total Revenue £ 12,069m £ 12,567m +1.8% New Category Revenue £ 1,651m £ 1,689m +2.4% Profit from Operations £ 5,069m £ 5,435m* +1.9%* Operating Margin 42.0% 43.2%* Flat*
Slide 9: H1 performance slightly ahead of expectations
H1 performance slightly ahead of expectations Revenue Adjusted gross profit/margin* Adjusted profit from Adjusted diluted EPS* (£bn) (£bn) operations/margin (APFO)* (pence) (£bn) +1.8% +3.0% +1.9% +1.7% vs. HY24 vs. HY24 vs. HY24 vs. HY24 65.9% 43.2% 43.2% 65.2% 12.6 8.3 162.1 12.3 8.0 5.3 5.4 159.4
Slide 10: Delivering Quality Growth in New Categories
Delivering Quality Growth in New Categories Revenue Adjusted gross profit/margin Category contribution/margin Return on investment (£m) (£m) (£m) (%) +2.4% +6.8% +39% +5.7pp vs. HY24 vs. HY24 vs. HY24 vs. HY24 59.6% 10.6% 57.1% 7.8% 1,689 1,006 21.6% 179 1,651 942 129 15.9% HY24 HY25 HY24 HY25 HY24
Slide 11: Quality Growth in action: Modern Oral in AME
Quality Growth in action: Modern Oral in AME Topline drivers tripling Already our largest New Higher gross margin than Category combustibles H1’25 vs. H1’21 H1’25 revenue H1’25 gross margin 26% Heated +10pp 3x Products 42% Modern Oral Vapour 32% Number of consumers* Combustibles Modern Oral Volume M
Slide 12: Delivering Quality Growth in combustibles
Delivering Quality Growth in combustibles Revenue Adjusted gross profit/margin* Category contribution/margin* (£m) (£m) (£m) +0.8% +2.4% +2.2% vs. HY24 vs. HY24 vs. HY24 67.3% 57.4% 66.2% 56.6% 9,933 9,856 6,684 5,697 6,525 5,573 HY24 HY25 HY24 HY25 HY24 HY25 U.S. and AME growth more than offset Ban
Slide 13: U.S. back to revenue and profit growth
U.S. back to revenue and profit growth Key drivers Combustibles • Strengthened combustibles portfolio & sharper execution Revenue 3.8% • Return to revenue and profit growth for first time since 2022 • Value share +20bps • Volume share +10bps (+60bps excl. deep discount) New Category Revenue 3.9% • V
Slide 14: AME continued strong performance
AME continued strong performance Key drivers Combustibles • Continued robust combustibles performance Revenue 2.8% • Driven by Brazil and Türkiye • Strong Velo volume, revenue and profitability growth New Category • 62.7% volume share leadership Revenue 1.3% • Vapour impacted by illicit in Canada; e
Slide 15: APMEA impacted by combustibles fiscal and regulatory headwinds
APMEA impacted by combustibles fiscal and regulatory headwinds Key drivers Combustibles Revenue -7.9% • Combustibles impacted by fiscal and regulatory headwinds • Significant volume declines in Australia and Bangladesh • Good revenue performances in Pakistan and Nigeria New Category Revenue +2.5% •
Slide 16: Group operating margin: Performance gains offset inflation and transactional FX
Group operating margin*: Performance gains offset inflation and transactional FX +20bps Flat 0.5% -0.1% 0.3% 0.2% 43.4% 43.2% -0.4% 43.2% -0.3% HY24 New Category Traditional Category Transactional Overheads & HY25 Translational FX HY25 Contribution Category Mix FX Other Expenses (constant FX) Contri
Slide 17: Increasing agility and productivity savings
Increasing agility and productivity savings On track to deliver 2023-2025 *Previously announced* commitment of Further commitment Productivity >£1.2bn c.£2.0bn from 2026-2030 savings (c.£870m delivered through FY24) Focused on Cost of Sales 2023 2024 2025 2026 2027 2028 2029 2030 New *New* Fit2Win O
Slide 18: Fit2Win: Reinvesting c.£500m annualised savings to drive sustainable Quality Growth
Fit2Win: Reinvesting c.£500m annualised savings to drive sustainable Quality Growth Overhead optimisation Route to market Digitalisation Driving cost efficiency through: Modernising our route to market by: Simplifying key processes through: ▪ Indirect cost optimisation ▪ Leveraging a more sustainabl
Slide 19: Adjusted diluted EPS +1.7%
Adjusted diluted EPS +1.7%* -2.4% +1.7% 4.6 2.4 162.1 159.4 -1.9 -0.8 -1.6 155.5 -6.6 HY24 Adj. Profit Net Finance Tax Associates Others (incl. HY25 Translational HY25 from Cost incl. # of shares) (constant) FX Operations Hybrid . Definitions of non-GAAP financial measures can be found in the Append
Slide 20: Strong cash flow generation driving enhanced financial flexibility
Strong cash flow generation driving enhanced financial flexibility Cash generation Generate >£50bn* Free Cash Flow by end 2030 Deliver business transformation Targeted investment in business transformation Optimise portfolio Continuously review our footprint and drive cash flows Progressive Dividend
Slide 21: Building momentum in 2025
Building momentum in 2025 FY25 Guidance Key drivers Top end of • Continued U.S. momentum driven by strengthening 1-2% combustibles and Velo Plus • No meaningful impact assumed from enforcement Revenue Growth actions in U.S. illicit Vapour • Strong Velo revenue and contribution growth momentum • Prem
Slide 22: Supports delivery of our mid-term algorithm in 2026
Supports delivery of our mid-term algorithm in 2026 d capital allocat alance ion B nsformation & d tra Fun reholder returns sha 1 CO S n rev Qu 0b flow op 5 en a u li >£ ash 30 ti * 3- e on mi De ings c 20 ty ow sa 5 rsi sat gr by live by 20 v e fre % nve r c.£ ion 5 al th apit >90% cash co 2bn work
Slide 23: Confident in our sustainable transformation
Confident in our sustainable transformation Interim Results 2025 Tadeu Marroco – Chief Executive
Slide 24: Strengthened, Consumer-led, Multi-Category Portfolio
Strengthened, Consumer-led, Multi-Category Portfolio Modern Oral Heated Products Vapour Combustibles Strong global growth driven by Breakthrough premium device Premium, connected and reimagined consumables Well-balanced portfolio of product satisfaction, brand customizable Vapour delivering enhanced
Slide 25: The Modern Oral Category is scaling fast
The Modern Oral Category is scaling fast Significant opportunity with Growing across all regions global reach % Industry volume growth HY25 vs. HY24 % Industry volume growth HY25 vs. HY24 >40% c.36% U.S. UK UA ZA CL MX FI CZ 20-40% CH PL AT Growth contribution led by U.S. <20% c.70% c.30% SE NO DK P
Slide 26: Velo: Fastest growing brand in fastest growing New Category
Velo: Fastest growing brand in fastest growing New Category We are clear AME category Leading brand equity** Fastest growing in the U.S. leaders 62.7% Capturing c. 60 %* #1 Higher brand equity score Index vs. #2 brand From To x5.5 of category growth SE 124 UK 104 6.9% 15.6% DK 178 CH 155 Nov’24 May’
Slide 27: Excellent Velo Plus performance since launch
Excellent Velo Plus performance since launch Building Strong volume Heading for momentum in the U.S. share gains #2 U.S. Modern Oral brand** Total Modern Oral Velo Plus +8.7pp Texas New York New Jersey May’25 vs. Nov’24 22.4% 23.5% 21.1% 15.6% Maryland Arkansas Maine 24.1% 29.4% 24.3% 12.7% 6.9% New
Slide 28: glo Hilo – Breakthrough glo innovation
glo Hilo – Breakthrough glo innovation EasyView TouchScreen | EasyView Screen EasySwitch Heating Pen TurboStartTM Quartz Dual-Heating for TrueTaste Fastest* Ramp up to first puff Less than 10" on Hilo Plus | 5" on Hilo Mobile App first ever connected glo device New taste intensity. Cigarette-like ex
Slide 29: glo Hilo – Positive early consumer reaction in Japan
glo Hilo – Positive early consumer reaction in Japan Promising initial progress in Sendai Hilo lifts consumer perception** of glo +1.5pp 58 → 64 Sendai city launch 57% → 66% volume share* 58% → 69% 66% → 71% Targeted roll-out through H2’25 * Source: Sales to date: wk5. ** Pre-testing Total Offer Tes
Slide 30: Differentiated and Premium Vuse Portfolio – Vuse Ultra
Differentiated and Premium Vuse Portfolio – Vuse Ultra On Device Through the App Flavour AutoTuneTM Ultra Pod tracker Recognises your flavour selection and adjusts Get insights into your flavour usage and see device automatically for best experience your flavour preferences with Ultra Pod Tracker Cl
Slide 31: Vuse Ultra – Encouraging early results in Canada
Vuse Ultra – Encouraging early results in Canada Canada national launch – June 2025 Value Share* 2.4pp Vuse Ultra Ultra App Users vs. among all Consumer quotes** “Vuse Ultra’s premium design and the MYVUSE Premium +13pp Improved Perception** app made it an easy choice.” Innovative +16pp “It’s worth
Slide 32: Strengthened portfolio and capabilities drive U.S. recovery
Strengthened portfolio and capabilities drive U.S. recovery Stronger portfolio Sharpening execution Newport laddering with soft-pack 1 Re-addressed price gaps and indexation Rolled out to 19 targeted states 2 Expanded contract coverage to 88% Lucky Strike & Pall Mall Select driving 3 Increased sales
Slide 33: Driving U.S. Combustibles back to growth
Driving U.S. Combustibles back to growth BAT volume share BAT value share HY25 vs. FY24 HY25 vs. FY24 Total combustibles Excl. deep discount Total combustibles Excl. deep discount +10bps +60bps +20bps +30bps AWAP* Menthol Natural American Spirit +60bps +10bps Flat +40bps +20bps Fastest growing Soft
Slide 34: More States enacting Vapour directories and enforcement legislation
Sustainable Future More States enacting Vapour directories and enforcement legislation 18 states have enacted directory/enforcement legislation Vuse volume* HY25 vs. HY24 State Change Alabama +5.4% Kentucky +9.1% Louisiana +4.8% Rhode Island +13.4% 3 Effective prior to 2024 Representing Utah +5.4% 2
Slide 35: Early evidence of a more proactive Federal approach to illicit Vapour
Sustainable Future Early evidence of a more proactive Federal approach to illicit Vapour FDA actions to address illicit Vapour… “Trump administration taking action on ’port shopping’ to combat Chinese vape ‘attack’.” Washington Examiner headline May 2025 • Updated product classes and codes down to c
Slide 36: Accelerating transformation through our digital ecosystem
Dynamic Business Accelerating transformation through our digital ecosystem “Cloud First” strategy Data-driven enterprise Investments in AI & TECH Partner strategy BAT is a global leader in BAT in partnership with Pioneered GenAI Lab in cloud adoption. Microsoft on MS Fabric, DIFC* to foster 40% redu
Slide 37: A global, strategic partnership to become future-ready
A global, strategic partnership to become future-ready Partnering for Success An evolved operating model An industry-leading Exciting career opportunities powered by data, AI and tech supply chain capability, at scale through digital upskilling A more agile, resilient and World class business servic
Slide 38: Confident in delivering our mid-term sustainable growth algorithm in 2026
Confident in delivering our mid-term sustainable growth algorithm in 2026 2025 Deployment Year 2026 Sustainable mid-term growth Top end of 1 - 2% 3 - 5% Revenue growth Revenue growth 1.5 - 2.5% 4 - 6% Adjusted Profit from Operations Growth* Adjusted Profit from Operations Growth* ▪ Sustained U.S. re
Slide 39: Delivering on priorities to drive sustainable shareholder value
Delivering on priorities to drive sustainable shareholder value • Return to revenue and profit* growth in the U.S. A Better Tomorrow • Velo fastest growing brand in fastest growing New Category • Increasing New Category profitability** Building a Switch smokeless World to Better • R&D ecosystem sign
Slide 40: Q&A
Q&A Interim Results 2025 Tadeu Marroco – Chief Executive | Soraya Benchikh – Chief Financial Officer Have you downloaded the new BAT Investor Relations App? Available now to download for free to access live share prices, presentations, news, webcasts, create your own watchlist and download content f
Slide 41: Appendix
Appendix Interim Results 2025 Have you downloaded the new BAT Investor Relations App? Available now to download for free to access live share prices, presentations, news, webcasts, create your own watchlist and download content for offline use. https://myirapp.com/bat/
Slide 42: Appendix: Our volume shares in Top markets
Appendix: Our volume shares in Top markets* Cigarettes Volume share of Vuse Value share glo Volume share Velo Volume share Volume share Cigarettes of Total Vapour of HP of Total Oral of Modern Oral HY25 Change HY25 Change HY25 Change HY25 Change HY25 Change volume HY25 vs. value HY25 vs. volume HY25
Slide 43: Appendix: Non-GAAP Measures Reconciliation
Appendix: Non-GAAP Measures Reconciliation Adjusted Profit from Operations HY25 HY24 Six months to 30 June £m £m Profit from operations 5,069 4,258 Add: Restructuring and integration costs 13 - Amortisation and impairment of trademarks and similar intangibles 804 1,295 Impairment of goodwill 72 - Ro
Slide 44: Appendix: HY25 Adjusted for Canada
Appendix: HY25 Adjusted for Canada Adjusted for Six months to 30 June 2025 (£m) Adjusting Adjusted Canada Canada at constant at constant at constant Reported items Adjusted Exchange currency currency currency Profit from Operations U.S. 2,255 808 3,063 87 3,150 - 3,150 AME 1,969 (495) 1,474 76 1,550
Slide 45: Appendix
Appendix Unless otherwise stated, absolute financials are presented at constant rates of exchange, growth in financial metrics is presented versus the same period in prior year at constant rates of exchange and share data is presented versus full prior year. A1: Non-GAAP financial measures Adjusting
British American Tobacco Industries, p.l.c. — H1 2025 Earnings Presentation on 6ix