Preliminary Results

About this update from British American Tobacco P.l.c.

[{"type":"text","content":"\n \n \n \n \n \n 12 February 2026 - Press Release/Preliminary Results \n \n \n \n \n \n \n \n British American Tobacco p.l.c. \n \n \n \n \n Preliminary results for the year ended 31 December 2025 \n \n \n \n \n Momentum Drives Further Confidence in 2026 Delivery \n \n \n \n \n Summary \n - Added 4.7 million consumers (to 34.1 million) of our Smokeless brands \n - Smokeless products now 18.2% of Group revenue, up 70 bps vs FY24 \n - Reported revenue down 1.0% (due to currency headwinds), up 2.1% at constant FX, driven by combustibles and Velo Plus in the U.S. and continued multi-category growth in AME, partly offset by APMEA \n - New Categories revenue growth accelerated to double-digits in H2, with FY growth of 7.0% 2 \n - New Categories contribution 2 increased by 77.1% to £442 million, driven by our Quality Growth approach \n - Improved combustibles revenue and category contribution 2,3 driven by the U.S. and AME \n - Reported profit from operations up 265% (with reported operating margin up 28.4 ppts to 39.0%), largely due to the movement in the Canadian settlement provision \n -  Adjusted profit from operations 1,2,3 up 2.3%, adjusted operating margin 1,2,3 at 44.0% (flat vs FY24) \n -  Reported diluted EPS up 157% to 349.1p, with adjusted diluted EPS 1, 2,3 up 3.4% \n - Confident in sustainably delivering mid-term growth algorithm, 2026 performance expected at the lower end of the range \n - On track to reduce leverage 3 to within 2.0-2.5x by end 2026, supported by continued strong cash conversion \n - Dividend growth of 2.0% to 245.04p and a £1.3 billion share buy-back in 2026 \n Tadeu Marroco, Chief Executive \n \"I am pleased with our accelerating momentum through 2025, enabling full-year delivery at the top end of our guidance. This reinforces our confidence in sustainably delivering our mid-term algorithm from 2026. \n Our U.S. business has delivered strong growth, mainly driven by sustained momentum in combustibles, resulting from our commercial actions and enhanced execution. Velo Plus has delivered excellent results with triple-digit revenue growth, with Velo reaching the number 2 position in volume and value share and achieving category contribution profitability within one year of launch. The recent improvement in Vuse performance is encouraging, although the Vapour category continues to be impacted by illicit proliferation. Over time, we believe Vuse is well positioned to benefit from stronger enforcement at the Federal and State level. \n In AME, our multi-category portfolio continued to perform strongly, while our performance in APMEA was impacted by fiscal and regulatory challenges in Bangladesh and Australia. \n Our New Categories revenue is accelerating, returning to double-digit growth in H2, driven by strong Velo growth in all regions. We continue to prioritise accelerating growth in category contribution through investment in our most profitable markets. \n Our enhanced R&D capabilities have enabled three premium innovation launches - Vuse Ultra, glo Hilo and Velo Shift, with encouraging early results and further targeted roll-outs planned in 2026. With this momentum, together with resilient combustibles delivery and further productivity initiatives, we are confident in sustainably delivering on our financial algorithm of +3-5% revenue 2 , +4-6% APFO 1,2,3 and +5-8% adjusted diluted EPS 1,2,3 , with 2026 expected to be at the lower end of the range, as we continue to invest in our transformation. \n Our strong cash flow is driving increased financial flexibility and we expect to be within our 2.0-2.5x target leverage range by end 2026. \n I remain committed to delivering sustainable shareholder value through robust cash returns, with progressive dividends and sustainable share buy-backs, including £1.3 billion programme for 2026.\" \n \n   \n Summary Information \n \n \n \n \n Performance highlights \n \n \n Reported \n \n \n   \n \n \n Adjusted 3 \n \n \n   \n \n \n Adjusted 3 for Canada 4 \n \n \n \n \n For year ended 31 December 2025 \n \n \n Current \n \n \n vs 2024 \n \n \n   \n \n \n Current \n \n \n vs 2024 \n \n \n   \n \n \n Current \n \n \n vs 2024 \n \n \n \n \n   \n \n \n rates \n \n \n (current) \n \n \n   \n \n \n rates \n \n \n (constant) \n \n \n   \n \n \n rates \n \n \n  (constant) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cigarette and HP volume share 1 \n \n \n   \n \n \n -40 bps \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cigarette and HP value share 1 \n \n \n   \n \n \n -10 bps \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Consumers of Smokeless products 2 \n \n \n 34.1m \n \n \n +4.7m \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Revenue (£m) \n \n \n £25,610m \n \n \n -1.0% \n \n \n   \n \n \n £25,610m \n \n \n +2.1% \n \n \n   \n \n \n £25,610m \n \n \n +2.1% \n \n \n \n \n Revenue from New Categories (£m) \n \n \n £3,621m \n \n \n +5.5% \n \n \n   \n \n \n £3,621m \n \n \n +7.0% \n \n \n   \n \n \n £3,621m \n \n \n +7.0% \n \n \n \n \n Smokeless revenue as a % of total revenue (%) \n \n \n 18.2% \n \n \n +70 bps \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Profit from operations (£m) \n \n \n £9,997m \n \n \n +265% \n \n \n   \n \n \n £11,572m \n \n \n +0.4% \n \n \n   \n \n \n £11,279m \n \n \n +2.3% \n \n \n \n \n Adjusted gross profit growth (%) \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n +2.1% \n \n \n   \n \n \n   \n \n \n +3.4% \n \n \n \n \n Category contribution - New Categories (£m) \n \n \n   \n \n \n   \n \n \n   \n \n \n £427m \n \n \n +77.1% \n \n \n   \n \n \n £427m \n \n \n +77.1% \n \n \n \n \n Category contribution margin - New Categories (%) \n \n \n   \n \n \n   \n \n \n   \n \n \n 11.8% \n \n \n 4.7 ppts \n \n \n   \n \n \n 11.8% \n \n \n 4.7 ppts \n \n \n \n \n Operating margin (%) \n \n \n 39.0% \n \n \n +28.4 ppts \n \n \n   \n \n \n 45.2% \n \n \n -80 bps \n \n \n   \n \n \n 44.0% \n \n \n flat \n \n \n \n \n Diluted earnings per share (pence) \n \n \n 349.1p \n \n \n +157% \n \n \n   \n \n \n 352.1p \n \n \n +0.7% \n \n \n   \n \n \n 340.5p \n \n \n +3.4% \n \n \n \n \n Net cash generated from operating activities (£m) \n \n \n £6,342m \n \n \n -37.4% \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Free cash (before payment of dividend) (£m) \n \n \n   \n \n \n   \n \n \n   \n \n \n £4,048m \n \n \n -48.8% \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Adjusted cash generated from operations (£m) 5 \n \n \n   \n \n \n   \n \n \n   \n \n \n £6,882m \n \n \n -5.5% \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash conversion (%) \n \n \n +63% \n \n \n -307 ppts \n \n \n   \n \n \n +100% \n \n \n -50 bps \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Borrowings including lease liabilities (£m) \n \n \n £35,070m \n \n \n -5.1% \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Adjusted net debt to adjusted EBITDA ratio \n \n \n   \n \n \n   \n \n \n   \n \n \n 2.48x \n \n \n +0.05x \n \n \n   \n \n \n 2.55x \n \n \n -0.20x \n \n \n \n \n Dividend per share (pence) \n \n \n 245.04 \n \n \n +2.0% \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n The use of non-GAAP measures, including adjusting items and constant currencies, are further discussed from page 49 , with reconciliations from the most comparable IFRS measure provided. \n Notes: \n 1. To better reflect the evolving performance of each category, from 1 January 2026 the Group will decouple the value share and volume share metrics from a combined Cigarettes and HP view to disclose Cigarettes and HP performance separately. 2. Internal estimate. See page 43 . 3. See page 26 for a discussion on adjusting items. 4. As adjusted for Canada excludes the performance of the Canadian business (excluding New Categories) given the requirement to use the profits earned to settle the litigation liability - see page 17 . There is no adjustment to revenue. 5. 2025 was negatively impacted by deferral of tax in the U.S. from 2024 of £678 million, the benefit of which was excluded in the 2024 comparator. Excluding the deferral from 2025, adjusted cash generated from operations would have been £7,560 million , or £7,840 million at constant rates of exchange in 2025 compared to £7,554 million in 2024 . \n 2026 Outlook \n - Global cigarette industry volume expected to be down c.2%. \n - Lower end of our medium-term guidance ranges: \n - 3-5% revenue 1 growth, with low double-digit New Category revenue growth 1 . \n - 4-6% adjusted profit from operations growth 1,2 - H2 weighted. \n - Expected c.1% transactional FX headwind. \n - 5-8% adjusted diluted EPS growth 1,2 growth. \n - We expect a translational FX headwind of c.3% on adjusted diluted EPS growth 2 . \n - Net finance costs 1,2 expected to be c.£1.8 billion, subject to interest rate volatility. \n - Gross capital expenditure in 2026 of approximately £750 million. \n - Operating cash flow conversion that exceeds 95%. \n - Leverage within our 2.0-2.5x adjusted net debt/adjusted EBITDA 2 corridor by year end. \n - Commitment to dividend growth in sterling terms and £1.3 billion share buy-back. \n 1.  At constant rates of exchange.  2. As adjusted for Canada. \n Enquiries \n \n \n \n \n For more information, please contact \n Investor Relations: \n Victoria Buxton +44 (0)20 7845 2012 \n Amy Chamberlain +44 (0)20 7845 1124 \n John Harney+44 (0)20 7845 1263 \n BAT IR Team [email protected] \n \n \n   \n Press Office: \n +44 (0)20 7845 2888 | @BATplc \n [email protected] \n \n \n \n \n Webcast and Q&A session: \n BAT will hold a live webcast for investors and analysts at 9.30am (GMT) on 12 February 2026, hosted by Tadeu Marroco, Chief Executive, and Javed Iqbal, Interim Chief Financial Officer. The presentation will be followed by a Q&A session. \n The webcast and presentation slides will be available to view on our website at www.bat.com/latestresults . \n If you prefer to listen via conference call, please use the following dial-in details (participant passcode: BAT - FY25). \n \n \n \n \n Standard International: +44 (0) 33 0551 0200 \n \n \n SA (toll free): 0 800 980 512 \n \n \n \n \n UK (toll free): 0808 109 0700 \n \n \n U.S. (toll free): 866 580 3963 \n \n \n \n \n Video: Chief Executive's take on Full-Year 2025 Results: To watch highlights of this year's results, please visit: www.bat.com/highlights-video-fy25 \n Group Operating Review \n Analysis of revenue, profit from operations (by segment) and diluted earnings per share \n Prior year data is provided in the table on page 61 . \n \n \n \n \n For year ended 31 December 2025 \n \n \n Reported \n \n \n vs \n 2024 \n \n \n Adj Items 1 \n \n \n Adjusted \n \n \n vs \n 2024 \n \n \n Exch. \n \n \n Adjusted at CC 2 \n \n \n vs \n 2024 \n \n \n   \n \n \n Adj for Canada 3 at CC 2 \n \n \n vs \n 2024 \n \n \n \n \n £m \n \n \n % \n \n \n £m \n \n \n £m \n \n \n % \n \n \n £m \n \n \n £m \n \n \n  % \n \n \n   \n \n \n £m \n \n \n % \n \n \n \n \n Revenue \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n U.S. \n \n \n 11,534 \n \n \n +2.3% \n \n \n   \n \n \n   \n \n \n   \n \n \n 369 \n \n \n 11,903 \n \n \n +5.5% \n \n \n   \n \n \n 11,903 \n \n \n +5.5% \n \n \n \n \n AME \n \n \n 9,309 \n \n \n +0.7% \n \n \n   \n \n \n   \n \n \n   \n \n \n 239 \n \n \n 9,548 \n \n \n +3.3% \n \n \n   \n \n \n 9,548 \n \n \n +3.3% \n \n \n \n \n APMEA \n \n \n 4,767 \n \n \n -10.9% \n \n \n   \n \n \n   \n \n \n   \n \n \n 196 \n \n \n 4,963 \n \n \n -7.2% \n \n \n   \n \n \n 4,963 \n \n \n -7.2% \n \n \n \n \n Total Group \n \n \n 25,610 \n \n \n -1.0% \n \n \n   \n \n \n   \n \n \n   \n \n \n 804 \n \n \n 26,414 \n \n \n +2.1% \n \n \n   \n \n \n 26,414 \n \n \n +2.1% \n \n \n \n \n Profit from Operations \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n U.S. \n \n \n 4,942 \n \n \n +21% \n \n \n 1,601 \n \n \n 6,543 \n \n \n +2.4% \n \n \n 223 \n \n \n 6,766 \n \n \n +5.9% \n \n \n   \n \n \n 6,766 \n \n \n +5.9% \n \n \n \n \n AME \n \n \n 3,433 \n \n \n -199% \n \n \n (128) \n \n \n 3,305 \n \n \n -0.5% \n \n \n 72 \n \n \n 3,377 \n \n \n +1.7% \n \n \n   \n \n \n 3,069 \n \n \n +9.6% \n \n \n \n \n APMEA \n \n \n 1,622 \n \n \n -23.3% \n \n \n 102 \n \n \n 1,724 \n \n \n -21.1% \n \n \n 69 \n \n \n 1,793 \n \n \n -17.9% \n \n \n   \n \n \n 1,793 \n \n \n -17.9% \n \n \n \n \n Total Group \n \n \n 9,997 \n \n \n +265% \n \n \n 1,575 \n \n \n 11,572 \n \n \n -2.7% \n \n \n 364 \n \n \n 11,936 \n \n \n +0.4% \n \n \n   \n \n \n 11,628 \n \n \n +2.3% \n \n \n \n \n Net finance costs \n \n \n (1,819) \n \n \n +65.7% \n \n \n 170 \n \n \n (1,649) \n \n \n +3.8% \n \n \n (27) \n \n \n (1,676) \n \n \n +5.5% \n \n \n   \n \n \n (1,733) \n \n \n +1.0% \n \n \n \n \n Associates and joint ventures \n \n \n 1,681 \n \n \n -11.5% \n \n \n (1,239) \n \n \n 442 \n \n \n -15.0% \n \n \n 33 \n \n \n 475 \n \n \n -8.6% \n \n \n   \n \n \n 475 \n \n \n -8.6% \n \n \n \n \n Profit before tax \n \n \n 9,859 \n \n \n +179% \n \n \n 506 \n \n \n 10,365 \n \n \n -4.2% \n \n \n 370 \n \n \n 10,735 \n \n \n -0.8% \n \n \n   \n \n \n 10,370 \n \n \n +1.9% \n \n \n \n \n Taxation \n \n \n (2,094) \n \n \n +487% \n \n \n (344) \n \n \n (2,438) \n \n \n -4.9% \n \n \n (84) \n \n \n (2,522) \n \n \n -1.6% \n \n \n   \n \n \n (2,425) \n \n \n +1.3% \n \n \n \n \n Non-controlling interests \n \n \n (1) \n \n \n -98.7% \n \n \n (125) \n \n \n (126) \n \n \n -16.3% \n \n \n (3) \n \n \n (129) \n \n \n -14.1% \n \n \n   \n \n \n (129) \n \n \n -14.1% \n \n \n \n \n Coupons relating to hybrid bonds net of tax \n \n \n (87) \n \n \n +105.4% \n \n \n 29 \n \n \n (58) \n \n \n +36.9% \n \n \n - \n \n \n (58) \n \n \n +36.9% \n \n \n   \n \n \n (58) \n \n \n +36.9% \n \n \n \n \n Profit attributable to shareholders \n \n \n 7,677 \n \n \n +154% \n \n \n 37 \n \n \n 7,743 \n \n \n -4.0% \n \n \n 283 \n \n \n 8,026 \n \n \n -0.5% \n \n \n   \n \n \n 7,758 \n \n \n +2.2% \n \n \n \n \n Diluted number of shares (m) \n \n \n 2,199 \n \n \n -1.2% \n \n \n   \n \n \n 2,199 \n \n \n -1.2% \n \n \n   \n \n \n 2,199 \n \n \n -1.2% \n \n \n   \n \n \n 2,199 \n \n \n -1.2% \n \n \n \n \n Diluted earnings per share (pence) \n \n \n 349.1 \n \n \n +157% \n \n \n   \n \n \n 352.1 \n \n \n -2.9% \n \n \n   \n \n \n 365.0 \n \n \n +0.7% \n \n \n   \n \n \n 352.8 \n \n \n +3.4% \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 1.   Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence - see pages 26 to 33 . \n 2.   CC: constant currency - measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments . \n 3.   As adjusted for Canada excludes the performance of the Canadian business (excluding New Categories). \n   \n   \n Total Group revenue \n Movement in Revenue \n \n Reported revenue decreased 1.0% to £25,610 million, negatively impacted by a translational foreign exchange headwind of 3.1%. \n On a constant currency basis, revenue grew by 2.1%, with: \n - The U.S. up 5.5% driven by combustibles, which benefitted from both strong price/mix (including excise duty drawback) contributing +12.3% and the success of the Velo Plus launch (with Modern Oral up 310% to £327 million). These more than offset lower combustibles volume (down 7.7%) and lower revenue in Vapour (down 3.4%); \n - AME up 3.3% led by combustibles price/mix (+7.2%) and the growth of Modern Oral (up 17.3%), which drove New Categories up 4.3% despite a decline in Vapour of 11.4%; and \n - APMEA down 7.2% due to regulatory and fiscal challenges in Australia and Bangladesh, partially offset by higher revenue in Pakistan, Nigeria and Indonesia. \n New Categories continued to grow, with revenue up 7.0% at constant rates of exchange driven by Modern Oral (up 48.0%) and HP (up 1.0%). However, Vapour declined 8.6% due to the continued impact of illicit products mainly in the U.S. and Canada and regulatory and excise changes in the UK, Poland and France and market exits. \n Group cigarette volume share declined 10 bps, with value share flat.  Volume share in the U.S. was down 10 bps and value share up 30 bps. \n Refer to pages 7 to 9 for a discussion on regional performance and pages 10 to 12 for a further discussion on performance by category. \n Group Operating Review \n Continued \n Profit from operations, operating margin and category contribution \n Profit from operations on a reported basis was up 265%, with reported operating margin up 28.4 ppts to 39.0%. \n This was driven by lower adjusting items of £1,575 million (compared to £9,154 million in 2024), largely due to: \n - movements in respect of the Canadian litigation settlement. While 2024 included a charge of £6.2 billion, 2025 benefited from a net credit of £524 million following a change to the forecasted Canadian combustibles industry performance. This reduced the provision by £708 million (credit) but was partly offset by a goodwill impairment charge of £184 million, described on page 17 ; \n - the classification in 2025 of the Group's business in Cuba as held-for-sale, recognising a charge of £235 million (2024: £74 million) as discussed on page 18 ; and \n - the partial release of the provision recognised in respect of an excise assessment in Romania (2025: £15 million credit; 2024: £449 million charge). \n Translational foreign exchange was a headwind of 3.1% or £364 million. \n Expenditure on research and development was £358 million in 2025 (2024: £380 million), with a focus on products that could potentially reduce the risk associated with smoking conventional cigarettes. \n On an adjusted, constant currency basis and also as adjusted for Canada, profit from operations was up 2.3% to £11,628 million, despite inflation on our product costs estimated to be 5.8% (or £315 million). This increase was largely due to: \n - the U.S., which was up 5.9%, due to the revenue growth discussed earlier; and  \n - AME, up 9.6%, due to an improved financial performance in Brazil (due to combustibles with higher volume and pricing), Romania (driven by pricing in combustibles) and Türkiye (led by the revenue performance in combustibles). \n However, APMEA was down 17.9%, with the regional delivery largely driven by the respective revenue performance discussed above. \n The regional performance includes a total increase in New Categories contribution of £193 million to £442 million at constant rates. \n Adjusted operating margin declined 80 bps to 45.2% at constant rates of exchange, but was flat at 44.0% when adjusted for Canada. For a full discussion on the performance by region, please see pages 7 to 9 . \n Earnings per share \n \n Basic earnings per share (EPS) were up 157% to 351.0p (31 December 2024: 136.7p), with diluted EPS up 157% to 349.1p (31 December 2024: 136.0p). The increases in both basic and diluted EPS were largely driven by: \n - Higher profit from operations due to the lower adjusting items described on page 6 ; and \n -  A gain of £333 million in respect of the demerger of the hotels division of the Group's Indian associate ITC (see page 32 ). \n These were partly offset by: \n -  A lower gain arising on the partial sale of the Group's investment in ITC in 2025 (£898 million) compared to £1,361 million in 2024 mainly due to a lower number of shares disposed of (2025: 313.0 million shares; 2024: 436.9 million shares), discussed on page 32 ; and \n - A credit in 2024, which did not repeat in 2025, of £590 million related to the debt liability management exercise (see page 32 ). \n Basic and diluted EPS were also positively impacted by the reduction in the number of shares due to the cumulative effect of the 2024 and 2025 share buy-back programmes, with 30,460,763 ordinary shares repurchased and cancelled in the year ended 31 December 2025. \n Before adjusting items and the impact of translational foreign exchange and also including the dilutive effect of employee share schemes, adjusted diluted earnings per share, at constant rates, increased 0.7% to 365.0p (31 December 2024: 362.5p). \n Adjusting for the profit 1 performance of Canada, adjusted diluted earnings per share was 340.5p, a decline of 0.2% (31 December 2024: 341.1p), being an increase of 3.4% to 352.8p at constant rates of exchange. \n For a full reconciliation of diluted earnings per share to adjusted diluted earnings per share and adjusted diluted earnings per share as adjusted for Canada, both at constant rates, see page 57 . Please also refer to page 61 for further reconciliations of profit from operations and diluted EPS to adjusted profit from operations 1 and adjusted diluted EPS 1 at both current (actual) and constant rates of exchange. \n 1.   The adjustment in respect of Canada is discussed on page 17 , with the adjustment based upon the profit after interest and tax from all sources, excluding New Categories, in Canada. \n   \n Regional Review \n The performances of the regions are discussed below. The following discussion is based upon the Group's internal reporting structure. \n All references to volume share or value share movement in the following discussion are compared to FY 2024. See page 42 for a discussion on the use of these measures. \n Products sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. \n United States (U.S.): \n - Reported revenue up 2.3%, being an increase of 5.5% at constant rates. \n - Modern Oral revenue up 297% (or 310% at constant rates) with category volume share up 11.6 ppts to 18.0% , driven by Velo Plus. \n - Vuse maintained value share leadership* despite a 6.4% decline in revenue (down 3.4% at constant rates of exchange), mainly driven by lower volume due to the continued impact of illicit single-use vapour products. \n - Combustibles revenue up 1.4% (up 4.6% at constant rates) as price/mix (including excise duty drawback) more than offset a 7.7% decline in volume. Volume share down 10 bps with value share up 30 bps. \n - Smokeless now represents 19.6% of total revenue. \n Volume/Revenue \n Please see page 51 for a full reconciliation to constant currency metrics, including prior year data. \n \n \n \n \n For year ended 31 December 2025 \n \n \n Volume \n \n \n   \n \n \n Revenue \n \n \n \n \n Reported \n \n \n   \n \n \n Reported \n \n \n \n \n   \n \n \n   \n \n \n Current \n \n \n Exchange \n \n \n Constant \n \n \n \n \n Unit \n \n \n vs 2024 \n \n \n   \n \n \n £m \n \n \n vs 2024 \n \n \n £m \n \n \n £m \n \n \n vs 2024 \n \n \n \n \n New Categories \n \n \n   \n \n \n   \n \n \n   \n \n \n 1,251 \n \n \n +16.1% \n \n \n 39 \n \n \n 1,290 \n \n \n +19.8% \n \n \n \n \n Vapour (units mn) \n \n \n 262 \n \n \n -8.8% \n \n \n   \n \n \n 934 \n \n \n -6.4% \n \n \n 29 \n \n \n 963 \n \n \n -3.4% \n \n \n \n \n HP (sticks bn) \n \n \n - \n \n \n -% \n \n \n   \n \n \n - \n \n \n -% \n \n \n - \n \n \n - \n \n \n -% \n \n \n \n \n Modern Oral (pouches bn) \n \n \n 3.5 \n \n \n +249% \n \n \n   \n \n \n 317 \n \n \n +297% \n \n \n 10 \n \n \n 327 \n \n \n +310% \n \n \n \n \n Traditional Oral (stick eq bn) \n \n \n 4.8 \n \n \n -8.9% \n \n \n   \n \n \n 1,006 \n \n \n -5.0% \n \n \n 31 \n \n \n 1,037 \n \n \n -2.0% \n \n \n \n \n Total Smokeless \n \n \n   \n \n \n   \n \n \n   \n \n \n 2,257 \n \n \n +5.6% \n \n \n 70 \n \n \n 2,327 \n \n \n +9.0% \n \n \n \n \n Total Combustibles (bn sticks) \n \n \n 44 \n \n \n -7.7% \n \n \n   \n \n \n 9,218 \n \n \n +1.4% \n \n \n 295 \n \n \n 9,513 \n \n \n +4.6% \n \n \n \n \n Other \n \n \n   \n \n \n   \n \n \n   \n \n \n 59 \n \n \n +23.2% \n \n \n 4 \n \n \n 63 \n \n \n +27.5% \n \n \n \n \n Total \n \n \n   \n \n \n   \n \n \n   \n \n \n 11,534 \n \n \n +2.3% \n \n \n 369 \n \n \n 11,903 \n \n \n +5.5% \n \n \n \n \n Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments. \n See page 48 for a discussion on the preparation of the U.S. financial information, initially based on U.S. GAAP as the primary financial record and converted to IFRS for the purpose of consolidation within the results of the Group. \n Reported revenue increased 2.3%, despite a translational foreign exchange headwind, negatively impacting revenue by 3.2%. \n On a constant currency basis, which we believe reflects the operational performance, revenue increased 5.5%. This was driven by the performance in: \n - Combustibles , where revenue increased 4.6%, as the positive impact of price/mix (including excise duty drawback) of +12.3% more than offset a 7.7% reduction in volume, compared to the industry volume decline of 7.4%. Our volume share was down 10 bps while value share was up 30 bps following the commercial actions taken in 2024 to deliver sustainable value; and \n - Modern Oral, where revenue increased by 310%, driven by higher volume (up 249%), following the successful national roll-out of Velo Plus. Accordingly, our category volume share 1 was up 11.6 ppts to 18.0% with value share growth of 9.1 ppts to 13.1%. \n These were partly offset by: \n - Vapour , where the U.S. is the world's largest market. Revenue was down 3.4%, as price/mix (+5.4%) was offset by an 8.8% decline in consumables volume driven by an industry decline of c. 9% mainly due to the continued impact of illicit single-use vapour products. There are encouraging signs for Vuse with the brand back to revenue growth in the second half of 2025 driven by increased enforcement at a Federal and State level. We remain optimistic that Vuse will benefit as the authorities continue with enforcement initiatives in 2026. We maintained leadership in value share with an increase in value share of 2.0 ppts to 51.7%*; and \n - Traditional Oral, where revenue declined 2.0%, as price/mix (+6.9%) was more than offset by lower volume (down 8.9%) due to the continued Poly-use of Modern Oral by Traditional Oral consumers. \n *         Based on estimated value share for Vapour in tracked channels (i.e., value share of rechargeable closed systems consumables and disposables sales in retail) in the Top Vapour markets. \n Profit from operations and operating margin \n Please see page 61 for a full reconciliation to constant currency, including prior year data. \n \n \n \n \n For year ended 31 December 2025 \n \n \n Reported \n \n \n   \n \n \n Adj. \n \n \n Exchange \n \n \n Adjusted \n \n \n \n \n Current \n \n \n   \n \n \n   \n \n \n   \n \n \n Constant \n \n \n \n \n £m \n \n \n vs 2024 \n \n \n   \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n vs 2024 \n \n \n \n \n Profit from Operations \n \n \n 4,942 \n \n \n +20.9% \n \n \n   \n \n \n 1,601 \n \n \n 223 \n \n \n 6,766 \n \n \n +5.9% \n \n \n \n \n Operating Margin \n \n \n 42.8% \n \n \n +7 ppts \n \n \n   \n \n \n   \n \n \n   \n \n \n 56.8% \n \n \n +20 bps \n \n \n \n \n Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments. \n Reported profit from operations increased by 20.9%, as both an impairment charge of £646 million in respect of Camel Snus (see page 28 ) and income (£132 million) related to Fox River recognised in 2024 did not repeat. Accordingly, reported operating margin was up 6.6 ppts to 42.8%. \n Excluding adjusting items (largely in respect of amortisation, impairment charges and income related to Fox River recognised in 2024) and a translational foreign exchange headwind of £223 million, our performance was positively impacted by the growth in revenue (described above). \n At constant rates of exchange, adjusted profit from operations was up 5.9% to £6,766 million, with adjusted operating margin up 20 bps. \n   \n Regional Review \n Continued \n Americas and Europe (AME): \n - Reported revenue up 0.7%, an increase of 3.3% at constant rates of exchange. \n - New Category revenue up 4.8%, up 4.3% at constant rates of exchange. \n - Resilient combustibles revenue performance - down 0.9%, an increase of 2.3% at constant rates of exchange driven by price/mix. \n - Combustibles volume share up 10 bps and value share down 70 bps. \n - Multi-category region with Smokeless now representing 19.9% of revenue. \n Volume/Revenue \n Please see page 51 for a full reconciliation to constant currency, including prior year data. \n \n \n \n \n For year ended 31 December 2025 \n \n \n Volume \n \n \n   \n \n \n Revenue \n \n \n \n \n Reported \n \n \n   \n \n \n Reported \n \n \n \n \n   \n \n \n   \n \n \n Current \n \n \n Exchange \n \n \n Constant \n \n \n \n \n Unit \n \n \n vs 2024 \n \n \n   \n \n \n £m \n \n \n vs 2024 \n \n \n £m \n \n \n £m \n \n \n vs 2024 \n \n \n \n \n New Categories \n \n \n   \n \n \n   \n \n \n   \n \n \n 1,813 \n \n \n +4.8% \n \n \n (6) \n \n \n 1,807 \n \n \n +4.3% \n \n \n \n \n Vapour (units mn) \n \n \n 244 \n \n \n -11.6% \n \n \n   \n \n \n 543 \n \n \n -11.2% \n \n \n (1) \n \n \n 542 \n \n \n -11.4% \n \n \n \n \n HP (sticks bn) \n \n \n 8 \n \n \n -3.4% \n \n \n   \n \n \n 470 \n \n \n +6.2% \n \n \n 1 \n \n \n 471 \n \n \n +6.2% \n \n \n \n \n Modern Oral (pouches bn) \n \n \n 7.5 \n \n \n +19.0% \n \n \n   \n \n \n 800 \n \n \n +18.3% \n \n \n (6) \n \n \n 794 \n \n \n +17.3% \n \n \n \n \n Traditional Oral (stick eq bn) \n \n \n 0.7 \n \n \n -10.3% \n \n \n   \n \n \n 37 \n \n \n +9.9% \n \n \n (1) \n \n \n 36 \n \n \n +5.1% \n \n \n \n \n Total Smokeless \n \n \n   \n \n \n   \n \n \n   \n \n \n 1,850 \n \n \n +4.9% \n \n \n (7) \n \n \n 1,843 \n \n \n +4.4% \n \n \n \n \n Total Combustibles \n \n \n 237 \n \n \n -4.9% \n \n \n   \n \n \n 6,974 \n \n \n -0.9% \n \n \n 226 \n \n \n 7,200 \n \n \n +2.3% \n \n \n \n \n Other 1 \n \n \n   \n \n \n   \n \n \n   \n \n \n 485 \n \n \n +10.8% \n \n \n 20 \n \n \n 505 \n \n \n +15.7% \n \n \n \n \n Total \n \n \n   \n \n \n   \n \n \n   \n \n \n 9,309 \n \n \n +0.7% \n \n \n 239 \n \n \n 9,548 \n \n \n +3.3% \n \n \n \n \n Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments. \n 1.   Other revenue in AME largely relates to sales of leaf to external parties and revenue from warehousing and distribution of other fast moving consumer goods. \n Reported revenue was up 0.7%, negatively impacted by a translational foreign exchange headwind of 2.6%. \n On a constant currency basis, which we believe reflects the operational performance, revenue increased by 3.3% to £9,548 million, driven by: \n - Combustibles , with revenue 2.3% higher, largely driven by higher volume and pricing in Türkiye, Brazil and Mexico. These factors combined with robust pricing in Romania to more than offset a reduction in revenue in Canada (due to lower price/mix and volume) and Germany (driven by lower volume). Cigarette value share was down 70 bps with volume share up 10 bps ; \n -  Modern Oral , where we are category leaders, with volume up 19.0%. Revenue grew 17.3%, while volume share of the Modern Oral category was down 20 bps. The volume and revenue growth reflects the strength of our portfolio in both established oral markets across Scandinavia, and markets that are more recent adopters of Modern Oral such as the UK, Switzerland and Austria ; and \n - HP (revenue up 6.2%) as higher revenue in Italy and Germany was partly offset by lower revenue in Romania largely due to the prioritisation of resource allocation ahead of the wider roll-out of glo Hilo in the region. \n These more than offset: \n - Lower revenue from Vapour (down 11.4% ), largely driven by a decline in revenue in Canada (due to the continued lack of enforcement against illegal flavoured vapour products) and regulatory and excise changes in the UK, Poland and France. Our value share leadership was down 60 bps with gains in Germany more than offset by a value share decline in Canada. \n Profit from operations and operating margin \n Please see page 61 for a full reconciliation to constant currency and as adjusted for Canada metrics, including prior year data. \n \n \n \n \n For year ended 31 December 2025 \n \n \n Reported \n \n \n   \n \n \n Adj. \n \n \n Exchange \n \n \n Adjusted \n \n \n   \n \n \n Adjusted for Canada \n \n \n \n \n Current \n \n \n   \n \n \n   \n \n \n   \n \n \n Constant \n \n \n   \n \n \n Constant \n \n \n \n \n £m \n \n \n vs 2024 2 \n \n \n   \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n vs 2024 \n \n \n   \n \n \n £m \n \n \n vs 2024 \n \n \n \n \n Profit from Operations \n \n \n 3,433 \n \n \n n/m \n \n \n   \n \n \n (128) \n \n \n 72 \n \n \n 3,377 \n \n \n +1.7% \n \n \n   \n \n \n 3,069 \n \n \n +9.6% \n \n \n \n \n Operating Margin \n \n \n 36.9% \n \n \n n/m \n \n \n   \n \n \n   \n \n \n   \n \n \n 35.4% \n \n \n -50 bps \n \n \n   \n \n \n 32.1% \n \n \n +1.8 ppts \n \n \n \n \n Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments. \n 1.   Adjusted for Canada excludes the performance of the Canadian business (excluding New Categories). 2. n/m - not meaningful as 2024 was a loss of £3,464 million / operating margin -37%. \n Reported profit from operations increased to a profit of £3,433 million (from a loss of £3,464 million in 2024), largely due to movements in respect of the Canadian litigation settlement. While 2024 included a charge of £6.2 billion, 2025 benefited from a net credit of £524 million following a change to the forecasted Canadian combustibles industry performance. This reduced the provision by £708 million (credit) but was partly offset by a goodwill impairment charge of £184 million, described on page 17 . 2025 was also negatively impacted by the classification of the Group's business in Cuba as held-for-sale, recognising a charge of £235 million ( 2024 : £74 million ) as discussed on page 18 , and a charge of £39 million which related to the loss of a distribution facility in Ukraine following a missile attack in the second half of 2025. A goodwill impairment charge in Peru (£72 million) was also recognised due to the ongoing difficult trading conditions. These were partially offset by a credit of £15 million in respect of an excise audit in Romania (2024: £449 million charge). Other fixed asset charges of £75 million in 2024 did not repeat. \n Our performance was also negatively impacted by a translational foreign exchange headwind of £72 million or 2.2%. \n Excluding the impact of foreign exchange, adjusting items (described above and on page 29 ) and also adjusting for the performance of Canada, adjusted profit from operations was up 9.6% to £3,069 million, due to an improved financial performance in Brazil (due to combustibles with higher volume and pricing), Romania (driven by pricing in combustibles), and Türkiye (led by the revenue performance in combustibles). The increase was also due an improved financial performance across our New Categories; notably in Modern Oral (driven by Sweden, Switzerland and Italy), Vapour (which became profitable on a category contribution basis) and a reduction in losses in HP driven by resource allocation. \n Regional Review \n Continued \n Asia-Pacific, Middle East and Africa (APMEA): \n - Reported revenue declined 10.9%, a decrease of 7.2% at constant rates. \n - Headwinds to volume and financial performance due to regulatory and fiscal challenges in Australia and Bangladesh. \n - Combustibles value share down 40 bps with volume share down 40 bps. \n - New Category revenue down 10.6%, or 7.6% at constant rates of exchange, driven by HP in Japan and South Korea. \n - Smokeless now represents 11.7% of total revenue. \n   \n Volume/Revenue \n Please see page 51 for a full reconciliation to constant currency, including prior year data. \n \n \n \n \n For year ended 31 December 2025 \n \n \n Volume \n \n \n   \n \n \n Revenue \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Reported \n \n \n   \n \n \n Reported \n \n \n \n \n   \n \n \n   \n \n \n Current \n \n \n Exchange \n \n \n Constant \n \n \n \n \n Unit \n \n \n vs 2024 \n \n \n   \n \n \n £m \n \n \n vs 2024 \n \n \n £m \n \n \n £m \n \n \n vs 2024 \n \n \n \n \n New Categories \n \n \n   \n \n \n   \n \n \n   \n \n \n 557 \n \n \n -10.6% \n \n \n 19 \n \n \n 576 \n \n \n -7.6% \n \n \n \n \n Vapour (units mn) \n \n \n 32 \n \n \n -38.2% \n \n \n   \n \n \n 65 \n \n \n -41.2% \n \n \n 3 \n \n \n 68 \n \n \n -39.4% \n \n \n \n \n HP (sticks bn) \n \n \n 12 \n \n \n -3.9% \n \n \n   \n \n \n 444 \n \n \n -7.0% \n \n \n 15 \n \n \n 459 \n \n \n -3.8% \n \n \n \n \n Modern Oral (pouches bn) \n \n \n 1.2 \n \n \n +24.7% \n \n \n   \n \n \n 48 \n \n \n +39.8% \n \n \n 1 \n \n \n 49 \n \n \n +44.2% \n \n \n \n \n Traditional Oral (stick eq bn) \n \n \n - \n \n \n -% \n \n \n   \n \n \n - \n \n \n -% \n \n \n - \n \n \n - \n \n \n -% \n \n \n \n \n Total Smokeless \n \n \n   \n \n \n   \n \n \n   \n \n \n 557 \n \n \n -10.6% \n \n \n 19 \n \n \n 576 \n \n \n -7.6% \n \n \n \n \n Total Combustibles \n \n \n 196 \n \n \n -11.7% \n \n \n   \n \n \n 4,009 \n \n \n -11.9% \n \n \n 165 \n \n \n 4,174 \n \n \n -8.3% \n \n \n \n \n Other \n \n \n   \n \n \n   \n \n \n   \n \n \n 201 \n \n \n +16.3% \n \n \n 12 \n \n \n 213 \n \n \n +23.7% \n \n \n \n \n Total \n \n \n   \n \n \n   \n \n \n   \n \n \n 4,767 \n \n \n -10.9% \n \n \n 196 \n \n \n 4,963 \n \n \n -7.2% \n \n \n \n \n Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments. \n Reported revenue declined 10.9%, largely due to the regulatory and fiscal challenges impacting combustibles in Australia and Bangladesh, partly offset by higher combustibles revenue in Nigeria, Indonesia and Pakistan. Translational foreign exchange was a headwind of 3.7%. \n On a constant currency basis, which we believe reflects the operational performance, revenue was down 7.2%. \n Combustibles revenue, was down 8.3% due to the factors described above. Our combustibles value share declined 40 bps with volume share down 40 bps as volume share gains in Pakistan were more than offset by reductions in Japan. \n In total, New Categories revenue was down 7.6%. \n Revenue grew in Modern Oral (up 44.2%) with strong revenue growth in Global Travel Retail (GTR), Pakistan, Japan and South Africa. \n However, this was more than offset by a reduction in: \n - HP , with revenue down 3.8%, largely driven by Japan (which remains highly competitive alongside the continued phase-out of our legacy super-slims platform) and South Korea, partially offset by a strong performance in Kazakhstan; and \n - Vapour , as volume was down 38.2%, leading to a 39.4% reduction in revenue largely driven by lower volume in South Africa and New Zealand and by the Group exiting the category in a number of markets (including Malaysia and Saudi Arabia). \n   \n Profit from operations and operating margin \n Please see page 61 for a full reconciliation to constant currency metrics, including prior year data \n \n \n \n \n For year ended 31 December 2025 \n \n \n Reported \n \n \n   \n \n \n Adj. \n \n \n Exchange \n \n \n Adjusted \n \n \n \n \n Current \n \n \n   \n \n \n   \n \n \n   \n \n \n Constant \n \n \n \n \n £m \n \n \n vs 2024 \n \n \n   \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n vs 2024 \n \n \n \n \n Profit from Operations \n \n \n 1,622 \n \n \n -23.3% \n \n \n   \n \n \n 102 \n \n \n 69 \n \n \n 1,793 \n \n \n -17.9% \n \n \n \n \n Operating Margin \n \n \n 34.0% \n \n \n -5.5 ppts \n \n \n   \n \n \n   \n \n \n   \n \n \n 36.1% \n \n \n -4.7 ppts \n \n \n \n \n Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments. \n Profit from operations was down 23.3%, including a translational foreign exchange headwind of £69 million or 3.2%. The lower profit from operations was mainly driven by the revenue movements above. \n In 2025, the Group recognised a further impairment charge of £21 million (2024: £39 million) in respect of Malaysia in response to the ongoing difficult trading conditions. \n Excluding adjusting items and translational foreign exchange, adjusted profit from operations at constant rates was down 17.9% to £1,793 million driven by: \n - Australia, due to continued increases in the illicit segment which we estimate now accounts for more than 65% of the combustibles industry volume, with the duty paid combustibles industry volume down more than 40% in 2025; and \n - Bangladesh, driven by the increase in excise and minimum price in January 2025, necessitating an increase in consumer prices by 20-30%, which resulted in a reduction in the duty paid combustibles industry volume by more than 20%. \n However, these were partly offset by an increase in Pakistan (led by the growth of Modern Oral and pricing in combustibles), Nigeria (driven by higher combustibles volume and improved combustibles pricing) and Indonesia (driven by higher combustibles volume and pricing). \n   \n Category Performance Review \n Vapour - Vuse \n - Vapour revenue down 10.4% or 8.6% (at constant rates), with volume down 12.6%, impacted by illicit products mainly in the U.S. and Canada and regulatory and excise changes (in the UK, Poland and France). \n - Continued value share* leadership with a 60 bps increase driven by the U.S. \n - In Europe, Vapour value share down 10 bps* with industry rechargeable closed systems back in growth . \n - Positive early performance of our premium innovation, Vuse Ultra, in Canada, Germany and France. \n Group Vapour performance was negatively impacted by: \n - The U.S., the world's largest Vapour market, where Group volume was down 8.8% mainly due to the continued proliferation of illicit single-use vapour products. Accordingly, revenue was down 6.4% (or 3.4% on a constant currency basis). However, we are encouraged by recent signs of Vuse returning to revenue growth in the second half of 2025 in the U.S. supported by increased enforcement against illicit single-use vapour products.  We maintained leadership in value share with an increase in value share of 2.0 ppts to 51.7%*; \n - AME, where revenue was 11.2% lower (a decline of 11.4% on a constant currency basis), largely driven by a decline in revenue in Canada (due to the continued lack of enforcement against illegal flavoured vapour products) and regulatory and excise changes in the UK, Poland and France. Our value share* leadership was down 60 bps with gains in Germany more than offset by a value share decline in Canada; and \n - APMEA, where volume declined 38.2%, leading to a 41.2% reduction in revenue (being down 39.4% at constant rates), largely driven by lower volume in South Africa and New Zealand and by the Group exiting the category in a number of markets (including Malaysia and Saudi Arabia). \n Our new premium innovation, Vuse Ultra, offers consumers a highly differentiated, connected and customisable experience. We are encouraged by the early performance in Canada, Germany and France. \n * Based on estimated value share for Vapour in tracked channels (i.e., value share of rechargeable closed systems consumables and disposables sales in retail) in the Top Vapour markets. Top Vapour markets are defined as the Top markets by industry revenue, being the U.S., Canada, the UK, France, Germany, Poland and Spain. These Top markets account for c.80% of total industry vapour revenue (rechargeable closed systems consumables and disposables in tracked channels) in 2024. \n   \n   \n Heated Products (HP) - glo \n - Revenue down 0.7%, up 1.0% at constant rates, impacted by competitive pressure and resource allocation ahead of glo Hilo launches. \n -  Volume share * down 1.5 ppts, mostly impacted by competitive pressure and the phase-out of legacy super-slims in Japan. \n -  AME volume share down 80 bps with growth in Spain, Portugal and the Czech Republic more than offset by Romania, Germany, Italy and Poland. \n - Momentum building with roll-out of glo Hilo in largest profit pools. \n In AME, volume was down 3.4%, with revenue up 6.2% (being an increase of 6.2% at constant rates), as higher revenue in Italy and Germany was partly offset by lower revenue in Romania largely due to the prioritisation of resource allocation ahead of the wider roll-out of glo Hilo in the region. \n In APMEA, volume was down 3.9%, with revenue down 7.0%, or 3.8% at constant rates, largely driven by Japan (which remains highly competitive alongside the continued phase-out of our legacy super-slims platform) and South Korea, partially offset by a strong performance in Kazakhstan. \n Our new premium connected device, glo Hilo, offers faster heating technology and an integrated display combined with a new consumables range, Virto and tobacco-free Rivo. We have continued the roll-out through H2 2025, focused on the largest profit pools with launches in Japan, Poland and Italy. \n *Volume share is based upon the Top HP markets, which are defined as the Top markets by industry revenue. Top markets are Japan, South Korea, Italy, Germany, Greece, Poland, Romania, the Czech Republic, Spain and Portugal. These Top markets account for c.80% of total industry HP revenue in 2024. \n Modern Oral - Velo \n - Revenue up 47.4%, up 48.0% at constant rates, with volume growth of 47.1%. \n - Growth in volume share* up 5.8 ppts in Total Oral and up 7.5 ppts in Modern Oral. \n - AME volume share leadership maintained, with strong revenue growth in Scandinavia, the UK and Switzerland. \n - Triple-digit volume and revenue growth in the U.S., following the national roll-out of Velo Plus. \n In AME, where we are category leaders, our volume was up 19.0%, with revenue up 18.3% (up 17.3% at constant rates) while volume share of the Modern Oral category was down 20 bps. \n The volume and revenue growth reflects the strength of our portfolio in both established oral markets across Scandinavia, and markets that are more recent adopters of Modern Oral such as the UK, Switzerland and Austria. \n In the U.S., revenue increased by 297% (or 310% at constant rates), driven by higher volume (up 249%), following the successful national roll-out of Velo Plus. Accordingly, our category volume share was up 11.6 ppts to 18.0% with value share growth of 9.1 ppts to 13.1% . This performance has positioned Velo as the fastest growing brand in the category, reaching the number 2 position in both volume and value share. \n While we await the outcome of our PMTA submission for new Velo variants, we have invested in higher capacity to support our sustainable growth agenda. In addition, in August 2025, we expanded distribution of Grizzly nicotine pouches, reaching 1.8% national share by December 2025 - successfully capturing Grizzly Traditional Oral consumers interacting with the Modern Oral category. \n In APMEA, our volume grew 24.7% and our revenue grew 39.8% (up 44.2% at constant rates), with strong revenue growth in Global Travel Retail (GTR), Pakistan, Japan and South Africa. \n *Volume share is based upon the Top Modern Oral markets which are defined as the Top markets by industry revenue, being the U.S., Sweden, Denmark, Norway, Switzerland, the UK and Poland, account ing for c.90% of total industry Modern Oral revenue in 2024. \n   \n Category Performance Review \n Continued \n Combustibles \n - Revenue down 2.3%, up 1.0% at constant rates with momentum accelerating through the year. \n - Value share* flat; volume share* down 10 bps , as growth in AME was more than offset by the U.S. and APMEA. \n - Return to growth in the U.S., with revenue up 1.4% (or 4.6% at constant rates) as price/mix (including excise duty drawback) more than offset volume decline . \n - Resilient AME performance with revenue down 0.9%, or up 2.3% at constant rates, driven by Türkiye, Brazil and Mexico. \n - APMEA revenue declined 11.9%, or 8.3% at constant rates, impacted by Australia and Bangladesh with total volume down 11.7%. \n Group cigarette volume was down 7.9% to 465 billion sticks as volume growth in Türkiye, Nigeria, Indonesia and Brazil was more than offset by lower volume in a number of markets, mainly driven by Bangladesh, the U.S. and Poland and market exits (including Mali). \n Revenue from combustibles declined 2.3% to £20,201 million, up 1.0% at constant rates of exchange as the Group benefitted from a robust price/mix (including U.S. excise duty drawback) of +9.1%. This was partly offset by the lower volume (down 8.1%). \n Excluding the impact of translational foreign exchange: \n - In the U.S., revenue increased 4.6%, as the positive impact of price/mix (including excise duty drawback) of +12.3% more than offset a 7.7% reduction in volume, compared to the industry volume decline of 7.4%. Our volume share was down 10 bps while value share was up 30 bps following the commercial actions taken in 2024 to deliver sustainable value; \n - In AME, revenue was 2.3% higher, largely driven by higher volume and pricing in Türkiye, Brazil and Mexico. These factors combined with robust pricing in Romania to more than offset a reduction in revenue in Canada (due to lower price/mix and volume) and Germany (driven by lower volume); and \n - In APMEA, revenue declined 8.3% due to regulatory and fiscal challenges impacting combustibles in Australia and Bangladesh, partly offset by higher combustibles revenue in Nigeria, Indonesia and Pakistan. \n *Volume and value share are based upon the Top cigarette markets which are defined as the Top markets by industry revenue, being the U.S., Japan, Brazil, Germany, Pakistan, Mexico and Romania, accounting for c.60% of total industry cigarettes revenue in 2024. \n Traditional Oral \n Group volume declined 9.1% to 5.5 billion stick equivalents. Total revenue was £1,043 million (2024: £1,092 million), down 4.5% or 1.7% at constant rates. \n In the U.S. (which accounts for 96% of Group revenue from the category), revenue declined 5.0% or 2.0% at constant rates of exchange, as price/mix was insufficient to offset the volume decline of 8.9%, due to the continued Poly-use with Modern Oral. \n Value share in the U.S. decreased 40 bps, with volume share down 40 bps, negatively impacted by consumer migration predominantly in the aspirational premium segment, where Grizzly is positioned. \n Outside the U.S., revenue grew 9.9% or 5.1% at constant rates of exchange as pricing more than offset a 10.3% decline in volume in 2025. \n   \n Beyond Nicotine \n Btomorrow Ventures (BTV), the corporate venture capital arm of BAT, has completed 30+ investments since its launch in 2020. \n BTV provides strategic value to the next generation of innovative companies, to support the Group's purpose of creating A Better Tomorrow™. \n In 2025, BTV's Fund II, an additional £200 million second fund commitment from BAT announced in 2024, was repositioned. \n Fund II now has a broader mandate, focusing on investments in: \n - Smokeless nicotine products, \n - business transformation and capability enablers, \n - sustainability, and \n - a continued focus on Wellbeing and Stimulation. \n In 2025, BTV made five new investments, including Bloom Biorenewables and China Materialia Evergreen Fund. \n In November 2023, the Group announced the signing of an agreement for a further proposed investment in Organigram of CAD$125 million (£74 million), payable across three tranches, with approvals received from the shareholders of Organigram on 18 January 2024. \n In February 2025, we paid the last of the three tranches of the Group's follow-on investment. \n The Group's equity position at 31 December 2025 was 36.8% (restricted to 30% voting rights). \n Please see page 18 for more information on our investment in Organigram. \n Following a series of pilot launches of our own functional wellness shot brand, Ryde, we are continuing commercial expansion. Our scientifically formulated range of Energy, Focus and Relax are available in three markets - Australia, Canada and the U.S. Our recent innovations of Sleep and Exercise shots are in selected distribution across the U.S. and Australia. \n While immaterial to the Group's results, Ryde is not sold in Canada by ITCAN but by another Group subsidiary. Accordingly, the performance does not form part of the future settlement payments due as part of the Approved Plans and have also been excluded from the adjustment referred to on page 17 . \n   \n Other Financial Information \n Cash flow \n We continue to make progress on de-leveraging our balance sheet and we expect to be within our leverage target range of 2.0-2.5x adjusted net debt/adjusted EBITDA as adjusted for Canada by the end of 2026, driven by continued strong cash generation. \n We continue to expect the Group to generate c.£50 billion of free cash flow before dividends between 2024 and 2030 (inclusive). To date we have generated £11.9 billion. \n Our active capital allocation framework considers the continued investment in our transformation, the macro-environment, and potential future litigation and regulatory outcomes. \n We understand the importance of cash returns to shareholders, and remain committed to our progressive dividend based upon 65% of long-term sustainable earnings. \n \n \n \n \n   \n \n \n For years ended 31 December \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n Change \n \n \n \n \n £m \n \n \n £m \n \n \n % \n \n \n \n \n Net cash generated from operating activities \n \n \n 6,342 \n \n \n 10,125 \n \n \n -37.4% \n \n \n \n \n Operating cash flow conversion \n \n \n 100% \n \n \n 101% \n \n \n   \n \n \n \n \n Free cash flow - before payment of dividends \n \n \n 4,048 \n \n \n 7,901 \n \n \n -48.8% \n \n \n \n \n Free cash flow - after payment of dividends \n \n \n (1,190) \n \n \n 2,688 \n \n \n -144% \n \n \n \n \n Note: \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 2025 was negatively impacted by the payment made in respect of the Approved Plans in Canada of £2,560 million. Excluding this, net cash generated from operations would have been £8,902 million, free cash flow before dividends would have been £6,608 million and free cash flow after dividends would have been an inflow of £1,370 million . \n \n \n \n \n   \n \n \n As at 31 December \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n Change \n \n \n \n \n £m \n \n \n £m \n \n \n % \n \n \n \n \n Borrowings (including lease liabilities) \n \n \n 35,070 \n \n \n 36,950 \n \n \n -5.1% \n \n \n \n \n Adjusted net debt \n \n \n 30,416 \n \n \n 30,583 \n \n \n -0.5% \n \n \n \n \n In the Group's cash flow, prepared in accordance with IFRS and presented on page 26 , net cash generated from operating activities declined by 37.4% to £6,342 million (2024: £10,125 million). This was driven by: \n - payment of cash, cash equivalents and investments held at fair value totalling £2,560 million, in the second half of 2025, as part of the Approved Plans (as discussed on page 17 ) in Canada; \n - deferral of US$895 million of tax payments in the U.S. from 2024 to 2025, negatively impacting 2025 by £678 million; and \n - payment related to the Franked Investment Income Group Litigation Order (FII GLO) of £479 million (2024: £50 million). The Group will make further payments of £222 million in 2026 and £41 million in 2027 (see page 40 ). \n These were partly offset by payments in 2024 in respect of the DOJ and OFAC (£267 million) and an excise assessment in Romania (£390 million), both of which did not repeat. \n Operating cash conversion and free cash flow (before and after dividends paid to shareholders) \n The Group's operating cash conversion rate (based upon adjusted profit from operations and defined on page 57 ) was largely in line with the prior period, at 100% (2024: 101%). \n Free cash flow (before the payment of dividends), as defined on page 58 , was £4,048 million for 2025 (2024: £7,901 million), a decrease of 48.8%. This was driven by the reduction in net cash generated from operating activities (driven by the initial payment of £2.6 billion as part of the Approved Plans in Canada, the deferral from 2024 of U.S. tax of £678 million and payments in respect of FII GLO (£479 million)) and higher net capital expenditure (2025: £612 million; 2024: £434 million), partly offset by lower net interest paid (2025: £1,582 million; 2024: £1,669 million). \n The Group expects its gross capital expenditure in 2026 to be approximately £750 million mainly related to the ongoing investment in the Group's operational infrastructure, including the expansion of our New Categories portfolio and enhancements to our Modern Oral capacity. \n After paying dividends of £5,238 million (2024: £5,213 million), free cash flow (after dividends paid to shareholders), as defined on page 58 , was an outflow of £1,190 million for 2025 (2024: £2,688 million inflow). \n For a full reconciliation of net cash generated from operating activities to free cash flow before and after dividends, see page 58 . \n   \n Other Financial Information \n Continued \n Borrowings and net debt \n Borrowings (which includes lease liabilities) were £35,070 million at 31 December 2025, a decrease of 5.1% compared to £36,950 million at 31 December 2024 mainly due to foreign exchange movements related to the US dollar and sterling, which were a tailwind in 2025. \n The Group remains confident of its ability to access the debt capital markets successfully and reviews its options on a continuing basis. \n The Group's average centrally managed debt maturity was 9.5 years at 31 December 2025 (31 December 2024: 9.5 years), and the highest proportion of centrally managed debt maturing in a single rolling 12-month period was 15.1% (31 December 2024: 14.8%). \n The Group defines net debt as borrowings (including related derivatives and lease liabilities), less cash and cash equivalents (including restricted cash) and current investments held at fair value. Closing net debt was £31,215 million at 31 December 2025 (31 December 2024: £31,253 million). \n A reconciliation of borrowings to net debt is provided below. \n \n \n \n \n   \n \n \n As at 31 December \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n Change \n \n \n \n \n £m \n \n \n £m \n \n \n % \n \n \n \n \n Borrowings (including lease liabilities) \n \n \n (35,070) \n \n \n (36,950) \n \n \n -5.1% \n \n \n \n \n Derivatives in respect of net debt \n \n \n 12 \n \n \n (113) \n \n \n -111% \n \n \n \n \n Cash and cash equivalents \n \n \n 3,827 \n \n \n 5,297 \n \n \n -27.8% \n \n \n \n \n Current investments held at fair value \n \n \n 16 \n \n \n 513 \n \n \n -96.9% \n \n \n \n \n Net debt \n \n \n (31,215) \n \n \n (31,253) \n \n \n -0.1% \n \n \n \n \n Maturity profile of net debt: \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Net debt due within one year \n \n \n 492 \n \n \n 1,545 \n \n \n -68.2% \n \n \n \n \n Net debt due beyond one year \n \n \n (31,707) \n \n \n (32,798) \n \n \n -3.3% \n \n \n \n \n Net debt \n \n \n (31,215) \n \n \n (31,253) \n \n \n -0.1% \n \n \n \n \n The movement in net debt includes the free cash outflow, after payment of dividends to shareholders, of £1,190 million \n(2024: £2,688 million inflow), as described on page 58 . Also impacting the carrying value of net debt at the balance sheet date are: \n - Cash inflow related to share schemes and investing activities of £167 million (2024: £74 million outflow), which, in 2025, included net proceeds of £318 million from the sale of around 59% of the Group's investment in ITC Hotels; \n - the liquidation of investments (£437 million) that were then included in the upfront payment in respect of Canada as part of the Approved Plans; \n - Net proceeds from the partial monetisation of our investment in ITC of £1,052 million (2024: £1,577 million); \n - The purchase of £1.1 billion of own shares under the Group's 2025 share buy-back programme (2024: £0.7 billion); \n - Other non-cash movements of £41 million inflow (2024: £568 million outflow) including the net inflow from the redemption and issuance of perpetual hybrid bonds in 2025. 2024 was negatively impacted by the repurchase of a series of bonds in May 2024 as part of the Group's debt liability management exercise; and \n - Foreign exchange impacts related to the revaluation of foreign currency denominated net debt balances being a net tailwind of £1,121 million (2024: £674 million headwind). \n Investments held at fair value through profit and loss included restricted amounts at 31 December 2024 of £437 million were subsequently paid as part of the settlement of historical litigation in Canada as described on page 17 . At 31 December 2025 nil (31 December 2024: £60 million) was restricted due to potential exchange control restrictions. \n Cash and cash equivalents include restricted amounts of £268 million (31 December 2024: £2,072 million) in Canada which will be paid as part of the ongoing settlement payments and £67 million (31 December 2024: £339 million) principally due to exchange control restrictions. \n   \n Other Financial Information \n Continued \n Borrowings and net debt (continued) \n Adjusted net debt and adjusted net debt to adjusted EBITDA, including as adjusted for Canada \n For the purposes of assessing the Group's ability to service and repay borrowings, the Group uses the ratio of adjusted net debt to adjusted EBITDA, including as adjusted for Canada. Adjusted EBITDA is defined as profit for the year (earnings) before net finance costs, taxation on ordinary activities, share of post-tax results of associates and joint ventures, depreciation, amortisation, impairment costs and adjusting items. Adjusted EBITDA as adjusted for Canada is further adjusted to exclude the impact of the Canadian business (other than New Categories) as described on page 17 . Please refer to page 60 for a reconciliation of profit for year to adjusted EBITDA, including as adjusted for Canada. \n The Group also adjusts net debt for the purchase price allocation adjustment to the debt, included within borrowings, acquired as part of the acquisition of Reynolds American Inc. This is an accounting adjustment and does not reflect the enduring repayment of the instrument. The Group Management Board believes that this additional measure, which is used internally to assess the Group's financial capacity, is useful to the users of the financial statements in helping them to see how the Group's financial capacity has changed over the year. The adjusted net debt position is provided below: \n \n \n \n \n   \n \n \n As at 31 December \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n Change \n \n \n \n \n £m \n \n \n £m \n \n \n % \n \n \n \n \n Net debt \n \n \n (31,215) \n \n \n (31,253) \n \n \n -0.1% \n \n \n \n \n Net debt items included within assets held-for-sale \n \n \n 208 \n \n \n - \n \n \n 0% \n \n \n \n \n Purchase price allocation (PPA) adjustment to acquired debt \n \n \n 591 \n \n \n 670 \n \n \n -11.7% \n \n \n \n \n Adjusted net debt \n \n \n (30,416) \n \n \n (30,583) \n \n \n -0.5% \n \n \n \n \n Exchange \n \n \n (1,018) \n \n \n   \n \n \n   \n \n \n \n \n Adjusted net debt translated at 2024 exchange rates \n \n \n (31,434) \n \n \n (30,583) \n \n \n +2.8% \n \n \n \n \n Provision recognised in respect of cash and cash equivalents and investments held at fair value in Canada, paid in August 2025. \n \n \n - \n \n \n (2,456) \n \n \n   \n \n \n \n \n Adjusted net debt excluding the Canada provision, translated at 2024 exchange rates \n \n \n (31,434) \n \n \n (33,039) \n \n \n -4.9% \n \n \n \n \n The Group's ratio of adjusted net debt to adjusted EBITDA as at 31 December 2025 was 2.48x (2024: 2.44x). \n Adjusting for Canada's adjusted EBITDA in both 2025 and 2024, and the cash held at 31 December 2024 which reduced adjusted net debt in the comparator period and was paid as part of the settlement obligation discussed on page 17 , our leverage ratio at \n31 December 2025 was 2.55x, a reduction of 0.20x (2024: 2.75x). \n The calculation of adjusted net debt to adjusted EBITDA (including adjustments in respect of Canada) is provided on page 60 . \n   \n Foreign currencies \n The principal exchange rates used to convert the results of the Group's foreign operations to pounds sterling for the purposes of inclusion and consolidation within the Group's financial statements are indicated in the table below. Where the Group has provided results \"at constant rates of exchange\" this refers to the translation of the results from the foreign operations at rates of exchange prevailing in the prior period - thereby eliminating the potentially distorting impact of the movement in foreign exchange on the reported results. \n The principal exchange rates used were as follows: \n \n \n \n \n \n \n \n Average for the period ended \n \n \n   \n \n \n As at \n \n \n \n \n 31 December \n \n \n   \n \n \n 31 December \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n Australian dollar \n \n \n 2.045 \n \n \n 1.937 \n \n \n   \n \n \n 2.017 \n \n \n 2.023 \n \n \n \n \n Bangladeshi taka \n \n \n 160.886 \n \n \n 147.803 \n \n \n   \n \n \n 164.432 \n \n \n 149.662 \n \n \n \n \n Brazilian real \n \n \n 7.363 \n \n \n 6.893 \n \n \n   \n \n \n 7.371 \n \n \n 7.737 \n \n \n \n \n Canadian dollar \n \n \n 1.842 \n \n \n 1.751 \n \n \n   \n \n \n 1.844 \n \n \n 1.801 \n \n \n \n \n Chilean peso \n \n \n 1,253.837 \n \n \n 1,206.394 \n \n \n   \n \n \n 1,212.663 \n \n \n 1,245.543 \n \n \n \n \n Euro \n \n \n 1.167 \n \n \n 1.181 \n \n \n   \n \n \n 1.145 \n \n \n 1.209 \n \n \n \n \n Indian rupee \n \n \n 114.989 \n \n \n 106.952 \n \n \n   \n \n \n 120.892 \n \n \n 107.223 \n \n \n \n \n Japanese yen \n \n \n 197.243 \n \n \n 193.583 \n \n \n   \n \n \n 210.830 \n \n \n 196.827 \n \n \n \n \n Romanian leu \n \n \n 5.885 \n \n \n 5.877 \n \n \n   \n \n \n 5.834 \n \n \n 6.018 \n \n \n \n \n South African rand \n \n \n 23.562 \n \n \n 23.423 \n \n \n   \n \n \n 22.287 \n \n \n 23.633 \n \n \n \n \n Swiss franc \n \n \n 1.094 \n \n \n 1.125 \n \n \n   \n \n \n 1.066 \n \n \n 1.135 \n \n \n \n \n US dollar \n \n \n 1.319 \n \n \n 1.278 \n \n \n   \n \n \n 1.345 \n \n \n 1.252 \n \n \n \n \n   \n Sustainability Performance Update \n We continue to embed sustainability across our business as a strategic lever, driving performance, enhancing resilience, and enabling long-term growth. Our sustainability strategy is anchored in four interconnected impact areas beyond Tobacco Harm Reduction: Climate, Nature, Circularity, and Communities. By focusing on these areas, we aim to mitigate risks, strengthen resilience, and amplify positive contributions throughout our value chain. \n Over the past few years, we have made significant progress. For the second year in a row, BAT has received a Triple-A rating * from CDP for our 2025 disclosures on Climate Change, Water Security and Forest, one of 23 companies globally, reflecting our commitment to environmental transparency and action. Highlights include a 21% reduction in annual emissions between 2020 and 2024 (equivalent to 1,323 ktCO₂e), achieving 100% Alliance for Water Stewardship certification across all manufacturing sites in 2025, and a 50.8% reduction in water withdrawn. We also achieved a 30.4% reduction in absolute waste generated in our operations (vs 2017 baseline), and 93.5% of farmers in our Thrive Supply Chain 1 have diversified crops. For our non-tobacco supply chain, we have achieved our 2025 target to complete an independent labour audit assessment across all product materials and higher-risk indirect suppliers. \n As our 2025 targets reach maturity, we recognise both our achievements and the work still ahead. Guided by our Double Materiality Assessment ^ , we are setting new 2030 targets under each strategic pillar, reinforcing our commitment to responsible growth and long-term value creation. These targets will enable us to proactively manage broad impacts, regulatory shifts, and evolving stakeholder expectations. \n In September 2025, we outlined our sustainability strategy and new 2030 targets to investors, receiving positive feedback on our digital data-driven approach, robust governance, value chain collaboration and alignment of commercial success with sustainable practices. Details of our new 2030 targets will be available in our Combined Annual and Sustainability Report 2025 which will be published on 13 February 2026. \n Notes: \n Our ambitions and targets cover all tobacco we purchase for our products ('tobacco supply chain'), which is used in our combustibles, Traditional Oral and Heated Products. Our metrics, however, derive data from our annual Thrive assessment, which includes our directly contracted farmers and those of our third-party suppliers, which represented over 94% of the tobacco we purchased by volume in 2025 ('Thrive Supply Chain'). \n *    A to F (A as the best possible score). A rating is not a recommendation to buy, sell or hold securities. A rating may be subject to withdrawal or revision at any time. Each rating should be evaluated separately from any other rating. In addition, the criteria used in ratings may differ among ESG rating organisations. Companies may also supply different information to such organisations (or none at all) and this lack of consistency may impact ratings. \n ^    Although financial materiality has been considered in the development of our Double Materiality Assessment (DMA), our DMA and any conclusions in this document as to the materiality or significance of sustainability matters do not imply that all topics discussed therein are financially material to our business taken as a whole, and such topics may not significantly alter the total mix of information available about our securities. \n   \n Other Information \n Risks and uncertainties \n The Board carried out a robust assessment of the Principal Risks and uncertainties facing the Group for the period, including those that would threaten its business model, future performance, solvency, liquidity and viability. The Board also maintained close oversight of the Group's response to critical external uncertainties, recognising current macro-economic and geopolitical challenges. \n All Group risks are reviewed biannually by the Audit Committee and annually by the Board. During the period, the risk related to \"Litigation\" was renamed \"Litigation and external investigations\", the risk related to \"Circular economy\" was renamed \"Circularity\" and the risk related to \"Cybersecurity\" was renamed \"Digital & Cyber\", reflecting the nature of the risk. There were no changes to the underlying risks. \n Leading in Sustainability is a core component and key building block of our corporate strategy and sustainability risk factors are embedded across the Group's risks in accordance with the management of these risks within the Group. \n The Principal Risks facing the Group are summarised under the headings of: \n - Competition from illicit trade; \n - Geopolitical tensions; \n - Tobacco, New Categories and other regulation interrupts the growth strategy; \n - Supply chain disruption; \n - Litigation and external investigations; \n - Significant increases or structural changes in tobacco, nicotine and New Categories related taxes; \n - Inability to develop, commercialise and deliver the New Categories strategy; \n - Disputed taxes, interest and penalties; \n - Injury, illness or death in the workplace; \n - Solvency and liquidity; \n - Foreign exchange rate exposures; \n - Climate change; \n - Circularity; and \n - Digital & Cyber. \n A summary of the Principal Risks which are monitored by the Board through the Group's risk register will be included in the Group's Annual Report for the year ended 31 December 2025. \n   \n Other Information \n Continued \n Update on Quebec class action, CCAA and the Approved Plans in Canada \n As previously announced, on 29 August 2025, we implemented a court-sanctioned plan of compromise and arrangement to resolve all Canadian tobacco litigation and provide a full and comprehensive release to Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited (together ITCAN), BAT p.l.c. and all related companies for all past, present and future tobacco claims in Canada. Substantially similar plans were also implemented by Rothmans, Benson & Hedges Inc. (RBH, a subsidiary of Philip Morris International Inc.) and JTI-Macdonald Corp. (JTIM, a subsidiary of Japan Tobacco International) (collectively, the Approved Plans). \n Under the Approved Plans, ITCAN, RBH and JTIM (collectively, the Companies) are required to pay an aggregate settlement amount of CAD$32.5 billion (approximately £17.6 billion). This amount is to be funded by: \n - an upfront payment equal to all the Companies' cash and cash equivalents that was on hand as of 31 July 2025 (including investments held at fair value) plus certain court deposits (subject to an aggregate industry holdback of CAD$750 million (£407 million) allocated in March 2025 to RBH) plus 85% of any cash tax refunds that may be received by the Companies on account of the upfront payments; and \n - annual payments based on a percentage (initially 85%, reducing over time) of each of the Companies' net income after taxes, based on amounts generated from all sources, excluding New Categories, until the aggregate settlement amount is paid. \n By the end of 2025, ITCAN had paid CAD$5.5 billion (£3.0 billion) in respect of its upfront payment obligation, which included an escrow payment made between December 2015 and June 2017 of CAD$758 million (£411 million) and payments during the second half of 2025 of CAD$4.8 billion (£2.6 billion). In addition, ITCAN's payment obligation based on the period from 1 August 2025 to 31 December 2025 is currently estimated to amount to CAD$156 million (approximately £85 million) and will be due on 30 July 2026. \n In line with IFRS 10 Consolidated Financial Statements, ITCAN is consolidated in the Group's results. \n Update on provision \n Under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, when there is an expected future economic outflow, arising from a past event, the value of which can be reasonably estimated, a provision should be recognised. A provision of £6.2 billion was recognised in 2024. \n For the 2025 financial year, the Group's estimated share of the undiscounted future liability has not materially changed. However, the Group has recognised a net credit of £708 million as the provision recognised in relation to the Canadian litigation settlement was updated in line with the latest forecast of the Canadian combustibles industry performance, impacting the present value of the future liability described on page 31 . \n The update was, in particular, in respect of pricing and volume decline assumptions. However, it was partly offset by the allocation of the industry holdback to RBH referred to above. \n The net credit has been treated as an adjusting item. \n Update on goodwill \n Further to the latest financial forecasts in respect of Canada, and as discussed on page 30 , the Group has reassessed the carrying value of goodwill. An adjusting charge of £184 million has been recognised in 2025. Goodwill recognised on the balance sheet in respect of Canada is £1,994 million at 31 December 2025. \n Update on restricted cash \n At 31 December 2025, restricted cash in respect of ITCAN was £268 million. \n For a summary of the case, please see the Contingent Liabilities section on page 39 . Full details of the case and the assessment of goodwill will be included in the Group's Annual Report for the year ended 31 December 2025 (note 12 Intangible Assets and note 31 Contingent Liabilities and Financial Commitments). \n Adjusted performance \n As discussed in note 2 on page 27 , Group's management (from 1 January 2025) assesses the performance of the Group by reviewing adjusted profit from operations as adjusted for Canada using the prior year's translational exchange rates (constant rate) to evaluate segment performance and allocate resources on a regional basis. \n Due to the initial uncertain nature of the timing of the implementation of the settlement on the Group's 2025 results, for the purposes of 2025 versus 2024 this charge is 100% of the profit after interest and tax from all sources in Canada, excluding New Categories. \n From 2026, this charge will (following the underlying terms of the Approved Plans) be 85% of the profit after interest and tax from all sources in Canada, excluding New Categories, reducing in future periods in line with the Approved Plans. \n Also from 1 January 2025, as part of the adjustment for Canada, the Group has adjusted out the interest earned (in both the current year and comparator year's performance) on restricted cash held in Canada that was subsequently paid in line with the Approved Plans. The interest income earned on such balances is not representative of the ongoing business. \n   \n Other Information \n Continued \n Update on investigations into misconduct allegations \n The Group investigates, and becomes aware of governmental authorities' investigations into, allegations of misconduct, including alleged breaches of sanctions and allegations of corruption, at Group companies. Some of these allegations are currently being investigated. The Group cooperates with the authorities, where appropriate. \n In addition, the Group is, and may in the future be, subject to investigations or legal proceedings in relation to, among other things, its marketing, promotion or distribution activities in respect of its products. As such, the Group or Group companies, could be subject to liability and costs associated with any damages, fines, or penalties brought in connection with these allegations. \n There are instances where the Group investigates or where Group companies are cooperating with relevant national competition authorities in relation to competition law investigations and/or engaged in legal proceedings at the appellate level. \n   \n Operational and process review \n To further support our transformation and underpin investment initiatives to drive long-term sustainable profit and cash flow growth, we have started a structured time-bound programme (referred to as Fit2Win) to review processes and ways of working which will generate efficiencies and facilitate faster, more agile and effective decision-making. \n This programme includes a comprehensive review of our overhead optimisation opportunities, route to market and digitalisation, in order to deliver more effective, data-driven digital ways of working. \n It is expected to generate annualised cost efficiencies and cash flow of c.£600 million by the end of 2028 which will be re-invested to support further sustainable growth initiatives. These expected savings are in addition to the £2 billion of targeted savings between 2026 and 2030 announced at our Capital Markets Day in 2024. \n We expect associated one-off costs of around £600 million (including non-cash items of £100 million). As a one-off time bound programme and to aid comparison of performance, c.£500 million will be treated as adjusting items within adjusted profit from operations. Having commenced in 2025, the programme is expected to complete in 2027. \n Changes in the Group \n Cuba \n On 19 December 2025, the Group entered into an agreement to sell its 50% shareholding in Brascuba Cigarrillos S.A. (Brascuba), its operating entity in the Republic of Cuba (Cuba), to Tabagest S.A. (Tabagest), a company incorporated in Cuba and an existing investor in Brascuba. \n Completion of the business disposal and assignment of trading balances is conditional on receipt of formal government approval and there being no regulatory, compliance or other impediments to completion. \n Upon completion, the Group will no longer have a presence in Cuba. Consequently, management have classified the entirety of the assets and liabilities of the Cuban business, excluding intercompany balances, as a disposal group as at 31 December 2025 in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations . \n Impairment charges of £231 million and associated costs of £4 million have been recognised in the Income Statement as adjusting items. \n ITC Ltd (ITC) \n On 1 January 2025, ITC completed the demerger of its hotels business through a scheme of arrangement. Under this scheme, 60% of the equity in the newly incorporated entity, ITC Hotels Limited (ITC Hotels), was directly allocated to ITC's shareholders in proportion to their existing shareholding in ITC as of that date. \n As part of the demerger accounting, ITC recognised the excess of the fair value over the carrying value of the hotels business as an adjusting item. The Group's share of this adjusted gain amounted to £333 million (net of tax). \n The Group's initial direct stake was approximately 15% and recognised as a non-current investment on the balance sheet held at fair value through Other Comprehensive Income. However, in December 2025, the Group sold 9% of ITC Hotels in a block trade, retaining a direct stake of 6.3%. Net proceeds from the sale were £318 million. \n On 28 May 2025, the Group disposed of 313.0 million shares in ITC resulting in a gain of £898 million in 2025. The sale represented 2.5% of ITC's ordinary shares. This compares to 2024 when the Group sold 436.9 million ordinary shares held in ITC, representing 3.5% of ITC's ordinary shares, and recognised a gain of £1,361 million in that year. \n The gain in both years has been treated as an adjusting item. \n Following the sale in 2025, the Group's shareholding in ITC decreased from 25.45% (31 December 2024) to 22.91% at 31 December 2025. \n Net proceeds from the sale of ITC shares was £1,052 million in 2025 and £1,577 million in 2024. \n Organigram Global Inc. (Organigram) \n As previously announced, the Group signed an agreement for a further investment in Organigram, with a value of CAD$125 million (£74 million) in three tranches. \n On 28 February 2025, the Group made the third and final tranche investment in Organigram for CAD$42 million (£23 million), subscribing for 7,562,447 common shares and 5,330,728 preferred shares at a price of CAD$3.22 per share. \n At 31 December 2025, the Group's ownership in Organigram was 36.77% (2024: 35.09%). Under the terms of the agreement, the Group's voting rights are restricted to 30%. \n   \n Other Information \n Continued \n Changes to the Main Board and Management Board \n Main Board \n As previously announced: \n - Soraya Benchikh stepped down from her role as Chief Financial Officer and from the Board of Directors of the Company with effect from 26 August 2025. A recruitment process to identify a permanent successor to the role of Chief Financial Officer is underway. Javed Iqbal, Director, Digital and Information, was appointed to the role of Interim Chief Financial Officer; \n - Matthew Wright joined the Board as an independent Non-Executive Director and a member of the Remuneration and Nominations Committees, with effect from 1 November 2025; \n - Holly Keller Koeppel, stepped down from the Audit Committee, with effect from 31 December 2025; \n - Holly Keller Koeppel will step down from the Board at the conclusion of the 2026 Annual General Meeting (AGM); and \n - Karen Guerra will be appointed as Senior Independent Director with effect from the conclusion of the 2026 AGM (subject to re-election), when Holly Keller Koeppel steps down from the Board. \n Management Board \n As previously announced: \n - Jerome Abelman stepped down from his role as Director, Legal and General Counsel and left BAT on 31 December 2025. He has been succeeded by Paul McCrory, previously Director, Corporate and Regulatory Affairs, with effect from 1 January 2026. \n - Michael Dijanosic stepped down from his role as Regional Director, Asia-Pacific, Middle East and Africa on 31 December 2025. He has been succeeded by Pascale Meulemeester, with effect from 1 January 2026. \n The responsibilities of the role of Director, Corporate and Regulatory Affairs transferred (with effect from 1 October 2025) to Kingsley Wheaton, Chief Corporate Officer. \n   \n Going concern \n A description of the Group's business activities, its financial position, cash flows, liquidity position, facilities and borrowings position, together with the factors likely to affect its future development, performance and position, are set out in this announcement. Further information will be provided in the Strategic Report and in the Notes on the Accounts, all of which will be included in the Group's 2025 Annual Report. \n The Group has sufficient existing financing available for its estimated requirements for at least 12 months from the date of approval of this preliminary announcement. This, together with the ability to generate cash from trading activities, the performance of the Group's Strategic Portfolio, its leading market positions in a number of countries and its broad geographical spread, as well as numerous contracts with established customers and suppliers across different geographical areas and industries, provides the Directors with the confidence that the Group is well placed to manage its business risks successfully through the ongoing uncertainty, the current macro-economic financial conditions and the general outlook in the global economy. \n After reviewing the Group's forecast financial performance and financing arrangements, the Directors consider that the Group has adequate resources to continue operating for at least 12 months from the date of approval of this preliminary announcement and that it is therefore appropriate to continue to adopt the going concern basis in preparing the Group's 2025 Annual Report. \n   \n Additional information \n In addition to this preliminary announcement, the Group wishes to inform the reader that additional information will be available in documents filed with or furnished to the LSE and U.S. Securities and Exchange Commission (SEC) on 13 February 2026 and which should be referred to in addition to this preliminary announcement. Additional information includes: \n - The Group's audited Financial Statements; \n - Reconciliations of all non-GAAP measures from the most relevant IFRS equivalent; \n - Information regarding contingent liabilities and financial commitments; \n - Information for shareholders on dividends; \n - Information with regard to the Group's Principal Risks; and \n - Glossary and definition of key terms. \n This information will be included in the Group's: \n - 2025 Annual Report; and \n - Annual Report on Form 20-F for the 12 months ended 31 December 2025. \n These are expected to be published on 13 February 2026. \n   \n Financial Statements \n Contents \n   \n \n \n \n \n   \n \n \n Page \n \n \n \n \n Financial Statements: \n \n \n   \n \n \n \n \n Group Income Statement \n \n \n 21 \n \n \n \n \n Group Statement of Comprehensive Income \n \n \n 22 \n \n \n \n \n Group Statement of Changes in Equity \n \n \n 23 \n \n \n \n \n Group Balance Sheet \n \n \n 25 \n \n \n \n \n Group Cash Flow Statement \n \n \n 26 \n \n \n \n \n Notes to the Financial Statements \n \n \n 27 \n \n \n \n \n Other Information \n \n \n 42 \n \n \n \n \n Data Lake and Reconciliations \n \n \n 49 \n \n \n \n \n   \n   \n Financial Statements \n Group Income Statement \n \n \n \n \n   \n \n \n For years ended 31 December \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n £m  \n \n \n £m \n \n \n \n \n Revenue 1 \n \n \n 25,610 \n \n \n 25,867 \n \n \n \n \n Raw materials and consumables used \n \n \n (4,465) \n \n \n (4,565) \n \n \n \n \n Changes in inventories of finished goods and work in progress \n \n \n 239 \n \n \n 129 \n \n \n \n \n Employee benefit costs \n \n \n (3,125) \n \n \n (2,831) \n \n \n \n \n Depreciation, amortisation and impairment costs \n \n \n (2,547) \n \n \n (3,101) \n \n \n \n \n Other operating income \n \n \n 192 \n \n \n 340 \n \n \n \n \n Loss on reclassification from amortised cost to fair value \n \n \n (12) \n \n \n (10) \n \n \n \n \n Other operating expenses \n \n \n (5,895) \n \n \n (13,093) \n \n \n \n \n Profit from operations \n \n \n 9,997 \n \n \n 2,736 \n \n \n \n \n Net finance costs \n \n \n (1,819) \n \n \n (1,098) \n \n \n \n \n Share of post-tax results of associates and joint ventures \n \n \n 1,681 \n \n \n 1,900 \n \n \n \n \n Profit before taxation \n \n \n 9,859 \n \n \n 3,538 \n \n \n \n \n Taxation on ordinary activities \n \n \n (2,094) \n \n \n (357) \n \n \n \n \n Profit for the year \n \n \n 7,765 \n \n \n 3,181 \n \n \n \n \n Attributable to: \n \n \n   \n \n \n   \n \n \n \n \n Owners of the parent \n \n \n 7,764 \n \n \n 3,068 \n \n \n \n \n Non-controlling interests \n \n \n 1 \n \n \n 113 \n \n \n \n \n   \n \n \n 7,765 \n \n \n 3,181 \n \n \n \n \n Earnings per share \n \n \n   \n \n \n   \n \n \n \n \n Basic \n \n \n 351.0p \n \n \n 136.7p \n \n \n \n \n Diluted \n \n \n 349.1p \n \n \n 136.0p \n \n \n \n \n All of the activities during both years are in respect of continuing operations. \n The accompanying notes on pages 27 to 41 form an integral part of this condensed consolidated financial information. \n 1.   Revenue is net of duty, excise and other taxes of £32,160 million and £33,818 million for the years ended 31 December 2025 and 31 December 2024, respectively. \n   \n Financial Statements \n Continued \n Group Statement of Comprehensive Income \n \n \n \n \n   \n \n \n For years ended 31 December \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n £m  \n \n \n £m  \n \n \n \n \n Profit for the year (page 21 ) \n \n \n 7,765 \n \n \n 3,181 \n \n \n \n \n Other comprehensive (expense)/income \n \n \n   \n \n \n   \n \n \n \n \n Items that may be reclassified subsequently to profit or loss: \n \n \n (3,278) \n \n \n (50) \n \n \n \n \n Foreign currency translation and hedges of net investments in foreign operations \n \n \n   \n \n \n   \n \n \n \n \n - differences on exchange from translation of foreign operations \n \n \n (3,330) \n \n \n (195) \n \n \n \n \n - reclassified and reported in profit for the year \n \n \n 2 \n \n \n - \n \n \n \n \n - net investment hedges - net fair value gains on derivatives \n \n \n 151 \n \n \n 20 \n \n \n \n \n - net investment hedges - differences on exchange on borrowings \n \n \n (20) \n \n \n 17 \n \n \n \n \n Cash flow hedges \n \n \n   \n \n \n   \n \n \n \n \n - net fair value gains \n \n \n 2 \n \n \n 65 \n \n \n \n \n - reclassified and reported in profit for the year \n \n \n 16 \n \n \n 36 \n \n \n \n \n - tax on net fair value gains in respect of cash flow hedges \n \n \n (13) \n \n \n (23) \n \n \n \n \n Associates \n \n \n   \n \n \n   \n \n \n \n \n - share of other comprehensive income, net of tax \n \n \n (133) \n \n \n (13) \n \n \n \n \n - differences on exchange reclassified to profit or loss \n \n \n 47 \n \n \n 43 \n \n \n \n \n Items that will not be reclassified subsequently to profit or loss: \n \n \n (83) \n \n \n (7) \n \n \n \n \n Retirement benefit schemes \n \n \n   \n \n \n   \n \n \n \n \n - net actuarial losses \n \n \n (10) \n \n \n (19) \n \n \n \n \n - movements in surplus recognition \n \n \n (67) \n \n \n (14) \n \n \n \n \n - tax on actuarial losses in respect of subsidiaries \n \n \n - \n \n \n (1) \n \n \n \n \n Investments held at fair value \n \n \n   \n \n \n   \n \n \n \n \n - net fair value losses \n \n \n (2) \n \n \n (6) \n \n \n \n \n Associates - share of other comprehensive (loss)/income, net of tax \n \n \n (4) \n \n \n 33 \n \n \n \n \n Total other comprehensive expense for the year, net of tax \n \n \n (3,361) \n \n \n (57) \n \n \n \n \n Total comprehensive income for the year, net of tax \n \n \n 4,404 \n \n \n 3,124 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Attributable to: \n \n \n   \n \n \n   \n \n \n \n \n Owners of the parent \n \n \n 4,425 \n \n \n 3,013 \n \n \n \n \n Non-controlling interests \n \n \n (21) \n \n \n 111 \n \n \n \n \n   \n \n \n 4,404 \n \n \n 3,124 \n \n \n \n \n The accompanying notes on pages 27 to 41 form an integral part of this condensed consolidated financial information. \n   \n Financial Statements \n Continued \n Group Statement of Changes in Equity \n \n \n \n \n   \n \n \n Attributable to owners of the parent \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Share \n capital \n \n \n Share premium, capital redemption and merger reserves \n \n \n Other \n reserves \n \n \n Retained \n earnings \n \n \n Total attributable \n to owners \n of parent \n \n \n Perpetual hybrid bonds \n \n \n Non-controlling interests \n \n \n   \n Total equity \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Balance at 1 January 2025 \n \n \n 585 \n \n \n 26,665 \n \n \n (902) \n \n \n 21,610 \n \n \n 47,958 \n \n \n 1,685 \n \n \n 352 \n \n \n 49,995 \n \n \n \n \n Total comprehensive (expense)/income for the year comprising: (page 22 ) \n \n \n - \n \n \n - \n \n \n (3,267) \n \n \n 7,692 \n \n \n 4,425 \n \n \n - \n \n \n (21) \n \n \n 4,404 \n \n \n \n \n Profit for the year (page 21 ) \n \n \n - \n \n \n - \n \n \n - \n \n \n 7,764 \n \n \n 7,764 \n \n \n - \n \n \n 1 \n \n \n 7,765 \n \n \n \n \n Other comprehensive expense for the year (page 22 ) \n \n \n - \n \n \n - \n \n \n (3,267) \n \n \n (72) \n \n \n (3,339) \n \n \n - \n \n \n (22) \n \n \n (3,361) \n \n \n \n \n Other changes in equity \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash flow hedges reclassified and reported in total assets \n \n \n - \n \n \n - \n \n \n 21 \n \n \n - \n \n \n 21 \n \n \n - \n \n \n - \n \n \n 21 \n \n \n \n \n Employee share options \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n -  value of employee services \n \n \n - \n \n \n - \n \n \n - \n \n \n 83 \n \n \n 83 \n \n \n - \n \n \n - \n \n \n 83 \n \n \n \n \n -  proceeds from new shares issued \n \n \n - \n \n \n 2 \n \n \n - \n \n \n - \n \n \n 2 \n \n \n - \n \n \n - \n \n \n 2 \n \n \n \n \n Dividends and other appropriations \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n -  ordinary shares \n \n \n - \n \n \n - \n \n \n - \n \n \n (5,240) \n \n \n (5,240) \n \n \n - \n \n \n - \n \n \n (5,240) \n \n \n \n \n -  to non-controlling interests \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (108) \n \n \n (108) \n \n \n \n \n Purchase of own shares \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n -  held in employee share ownership trusts \n \n \n - \n \n \n - \n \n \n - \n \n \n (61) \n \n \n (61) \n \n \n - \n \n \n - \n \n \n (61) \n \n \n \n \n -  share buy-back programme, shares bought back and cancelled \n \n \n (8) \n \n \n 8 \n \n \n - \n \n \n (1,114) \n \n \n (1,114) \n \n \n - \n \n \n - \n \n \n (1,114) \n \n \n \n \n Perpetual hybrid bonds \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n - proceeds, net of issuance fees \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,050 \n \n \n - \n \n \n 1,050 \n \n \n \n \n - redemption of perpetual hybrid bonds, net of costs \n \n \n - \n \n \n - \n \n \n - \n \n \n (39) \n \n \n (39) \n \n \n (844) \n \n \n - \n \n \n (883) \n \n \n \n \n - tax on issuance fees \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 2 \n \n \n - \n \n \n 2 \n \n \n \n \n -  coupons paid \n \n \n - \n \n \n - \n \n \n - \n \n \n (55) \n \n \n (55) \n \n \n - \n \n \n - \n \n \n (55) \n \n \n \n \n -  tax on coupons paid \n \n \n - \n \n \n - \n \n \n - \n \n \n 14 \n \n \n 14 \n \n \n - \n \n \n - \n \n \n 14 \n \n \n \n \n Non-controlling interests - acquisitions \n \n \n - \n \n \n - \n \n \n - \n \n \n (15) \n \n \n (15) \n \n \n - \n \n \n (4) \n \n \n (19) \n \n \n \n \n Other movements \n \n \n - \n \n \n - \n \n \n - \n \n...

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