British American Tobacco (BAT) expects to return to revenue and profit growth in the US, despite volumes in the global tobacco industry expected to be down about 2%.
Releasing a trading update on Tuesday, BAT CEO Tadeu Marroco said the group’s revenue performance in the first half was slightly ahead of its previous guidance, and it now expected to deliver full-year revenue growth of 1%-2% and 1.5% to 2.5% adjusted profit from operations growth.
Previously the group had expected 1% revenue growth.
“2025 is a deployment year and, as previously highlighted, we expect our performance to be second-half weighted, mainly driven by the roll-out of ‘new category’ innovations in key markets from the middle of the year,” he said.
He said that in the US market, BAT had stabilised its total industry volume and value share.
“Excluding the deep discount segment where we are not present, we are gaining share, driven by Natural American Spirit and Lucky Strike,” he said.
BAT’s brands include Lucky Strike, Rothmans, Dunhill and Kent.
In its Combustibles division — the traditional cigarette brands — BAT has reported a resilient financial performance led by Brazil, Turkey and Romania. However, there have been excise increases and regulatory headwinds in Bangladesh and Australia.
The group expects to report low-single digit first-half New Categories revenue growth, with the effects of illicit vapour products in the US and Canada partly offsetting excellent Velo nicotine pouches performance. The division includes tobacco heating products, vaping products and oral nicotine pouches.
“I am excited by the successful launch of [nicotine pouch] Velo Plus in the US driving excellent volume and revenue growth, with strong market share gains,” he said.
Globally, Velo continues to gain volume share in this fast-growing category, driven by the US, he added. “We are encouraged by the early performance of [heated tobacco product] glo Hilo in Serbia and continue to gain insights and critical learnings ahead of its phased roll-out in key markets from the second half onwards,” he added.
The Vapour category remains affected by the proliferation of illicit vapour products in the US and Canada, with US legal industry volume down in the mid-teens for the year to date.
“I am confident that the investments we have made and the actions we are taking will drive a return to our midterm algorithm in 2026,” he said.
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