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Building a Smokeless World

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Combined Performance and Sustainability Summary 2025
2025 Overview
2025 Overview
Quality Growth
Dynamic Business
Sustainable Future
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Building a Smokeless World

Combined Performance and Sustainability Summary 2024

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Chief Executive's Overview

In 2025, our transformation accelerated, with delivery at the top end of our guidance. The investments we have made in recent years are delivering tangible benefits, providing BAT with a stronger foundation for continued growth.

Tadeu Marroco
Chief Executive Officer

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Chief Executive’s Overview

Despite an evolving and unpredictable external environment, the strength of BAT was once again reflected in our 2025 performance.

As I look back, I’m proud of what we’ve achieved and the value we’ve been able to deliver consistently for shareholders.

When I became Chief Executive, it was clear that a relentless focus on execution and profitable transformation were needed for BAT to continue to grow sustainably. This is why we refined our strategy and revised our purpose, vision and mission, with the aim of becoming a predominantly smokeless business by 2035.

I’m pleased to say that in 2025, our transformation accelerated, with delivery at the top end of our guidance. The investments we have made in recent years are delivering tangible benefits, providing BAT with a stronger foundation for continued growth.

Full-Year 2025 Performance

Against a challenging backdrop, total Group revenue declined by 1.0%, negatively impacted by a translational foreign exchange headwind of 3.1%. At constant rates, revenue grew 2.1%.
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Our U.S. business returned to growth, driven by sustained momentum in combustibles underpinned by decisive commercial actions and sharper execution. Velo Plus achieved remarkable success with triple-digit revenue growth and reaching profitability (on a category contribution basis) within its first year, while also reaching the number 2 position in both volume and value share. I’m also proud that Velo has been established as the fastest growing brand within the Modern Oral category in the U.S.
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With progressive regulation for Modern Oral products now in 24 countries, the regulatory outlook for the category is encouraging. This is reflective of the recognition of the important role these products play in supporting adult smokers – who would otherwise continue to smoke – to switch to less risky*† alternatives.
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While the Vapour category faced challenges from illicit products, Vuse’s performance improved, and I am confident it is well positioned to benefit from enhanced enforcement at both state and federal levels in the U.S.

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.

Our New Categories business delivered another year of strong growth, with double-digit growth in revenue and category contribution in the second half of 2025, fuelled by Velo’s success in all regions. In 2025, New Category contribution was £427 million, with category contribution margin1 growing 4.7 ppts to 12.0%. Revenue from our Smokeless products accounted for 18.2% of Group revenue1.

While external headwinds may persist, BAT remains agile and resilient. We are guided by a clear strategy, anchored in our pillars of Quality Growth, Sustainable Future, and Dynamic Business, which positions us well for continued success.

Quality Growth

Our Quality Growth pillar defines how we innovate, shape the future, and deliver outstanding products for consumers. By maintaining a disciplined balance between top-line growth and bottom-line delivery, we are already seeing results across the Group.

New Category contribution has grown over 10x in the last two years1. The number of adult consumers choosing our Smokeless brands grew faster than ever before, with 4.7 million consumers added in 2025 (to 34.1 million).

We said 2025 would be a deployment year – and we have delivered. We launched new products across our Smokeless portfolio: Vuse Ultra – our premium Vapour product, glo Hilo and Hilo Plus – our premium Heated Products, and Velo Shift – our Modern Oral product in a new innovative pouch shape.

From device connectivity to new-to-world machinery and technologies developed specifically for BAT, you can read more about our new products on pages 29, 31 and 32 of the Annual Report 2025.
‍
I am confident that BAT is well-positioned for success, bolstered by a re-energised and growing U.S. business, strategic partnerships with industry-leading companies, strong R&D capabilities, and a growing intellectual property portfolio. This puts us on a strong footing to continue to deliver sustainable returns for our shareholders.

To maximise our growth potential, we remain focused on disciplined brand development, operational efficiency and margin enhancement. Alongside this, we will continue to build and maintain our competitive edge, while progressing our Beyond Nicotine portfolio and investments for sustained growth over the medium and long term.

Sustainable Future

Building a Sustainable Future remains a priority in everything we do. We seek to actively encourage adult smokers – who would otherwise continue to smoke – away from cigarettes and to smokeless alternatives in a responsible and sustainable manner.

We continue to invest in the quality of our Smokeless products, guided by robust science and evidence. This is complemented by our ongoing engagement with external stakeholders and regulators, as we work to turn our vision of a Smokeless World into reality.

Several highlights from 2025 stand out. Omni™, the dynamic international platform we have created for information and engagement, has won awards and achieved external recognition. The launch of our Vapers Deserve Better campaign further underscores our dedication to advocacy and education. Backed by decades of scientific evidence, our commitment to building a Smokeless World through meaningful stakeholder engagement is unwavering.

We are clear that the best choice for adult smokers is to quit. However, effective regulation is crucial to ensuring adult consumers can switch to smokeless alternatives if they choose. With a strong track record of navigating regulatory shifts, we are confident in our ability to manage this. Ultimately, a sustainable future only happens when the right regulations are landed and enforced, and we will continue with our efforts to move the needle.

I am confident that BAT is well-positioned for success, bolstered by a re-energised and growing U.S. business, strategic partnerships, strong R&D capabilities, and a growing intellectual property portfolio.

Dynamic Business

Ensuring that BAT is equipped with a future-ready, efficient, and effective operating model is at the core of our Dynamic Business pillar. This will be achieved by creating financial flexibility to invest in our business and enhance shareholder returns.

In July 2025, we took a significant step in our digital transformation by forming a strategic partnership with Accenture2. By transitioning our Global Shared Services to Accenture, we now benefit from their cutting-edge technology ecosystem, advanced AI solutions, and strategic collaborations with world-leading companies.

These capabilities are enabling us to simplify processes, accelerate speed to market, upskill our talent, and drive cost efficiencies over the medium to long term.

In addition, our collaborations in R&D with global leading companies, and the establishment of the first Consumer Packaged Goods AI lab with DIFC in Dubai, are clear examples of how we are proactively seeking expertise to innovate and strengthen our capabilities.

We remain committed to a disciplined approach to capital allocation and debt management1.

In 2025, our leverage ratio was 2.48x. However, both 2025 and 2024 have been impacted by the settlement payments in respect of Canada. In 2024, the Group had £2.5 billion of cash and cash equivalents on the balance sheet that reduced net debt at 31 December 2024. This was subsequently paid in 2025. Reflecting a consistent position in both years, and adjusting for Canada’s adjusted EBITDA1 (other than New Categories), our leverage ratio was 2.55x, a reduction of 0.20x from the equivalent in 2024 of 2.75x

We are focused on reducing our leverage ratio to be within the target range of 2.0-2.5x adjusted net debt to adjusted EBITDA1,3, which will provide the Group with increasing flexibility to deliver sustainable value, while remaining agile to respond to macroeconomic and regulatory developments.

As part of our active capital allocation, our share buy-back programme has been increased for 2026 to £1.3 billion. This, in addition to maintaining a growing dividend, reflects our commitment to enhancing shareholder returns.

Fit for the Future

To ensure that BAT is competitive and set up for even greater success in the future, we undertook a strategic review of our organisation.

As a result, we have proposed a three-year programme, called Fit2Win, which is designed to enhance our commerciality and increase our agility, while we make deliberate, focused choices about which opportunities we pursue. This will drive efficiency and profitability, while prioritising our investment in the areas that are thriving.

We expect the proposed changes to unlock annualised cost efficiencies and cash flow of c.£600 million by the end of 2028, enabling us to continue to fund our biggest growth opportunities.

Looking Ahead

Our heritage is rich, and our future promising. Embracing transformation is something we know how to do, and well.

The progress that we have made is a direct result of the passion and commitment of our employees around the world. Our people are empowered, engaged and excited about our business, and I thank them for all they have achieved in 2025, and the momentum they are bringing into 2026.

The next phase of our transformation will be realised through innovation, technology and excellence in deployment – doing so sustainably and with integrity throughout. This will enable us to deliver our mid-term financial algorithm, priorities and vision for the future.

All of this underscores our clear opportunity to Build a Smokeless World, and it gives me continued confidence that we will deliver on our commitments and create sustainable value for shareholders.

Tadeu Marroco
Chief Executive
Notes:
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.

  1. Please refer to page 377 of the Annual Report 2025 for the Non-GAAP measures definitions.
  2. Please refer to note 5 in the Notes on the Accounts on page 269 of the Annual Report 2025 for more details.
  3. As adjusted for Canada – adjusts for the performance of the Canadian business (excluding New Categories).
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Chair’s Introduction

With our refined strategy as our north star, our transformation accelerated in 2025, underpinned by disciplined execution and resilience.

Luc Jobin
Chair

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Chair’s Introduction

2025 was a year that challenged the global economy and tested the resilience of markets and businesses everywhere.

It was shaped by subdued growth, trade realignments and continued geopolitical and macro-economic shifts, alongside a changing labour market and the acceleration of AI.

Our industry, like many others, has not been immune to these external forces. Competitive and regulatory complexity, coupled with evolving consumer preferences, continue to shape the landscape.

BAT is no exception. We are not the same business we were ten or twenty years ago. As the world transforms, we recognise the opportunity we have not only to navigate change, but to help shape it.

Transforming with Confidence

With our refined strategy as our north star, our transformation accelerated in 2025, underpinned by disciplined execution and resilience. This enabled us to manage volatility, seize opportunities and innovate at pace.

We returned to growth in the U.S., continued developing new products and launched three innovations across our Smokeless portfolio. At the same time we’ve been thoughtfully extracting value from our combustibles business – all while staying closely attuned to adult consumer preferences and industry trends.

I’m encouraged that we have built a much stronger platform to deliver dependable performance, underpinned by the right talent and capabilities, our sales mix and our international presence.

Now more than ever, keeping pace with change while staying true to our strategy is essential – and I’m confident we are rising to that challenge.

Delivering for Shareholders

Our strategy continues to deliver for our shareholders.

The Board has declared a dividend of 245.04p per ordinary share, payable in four equal instalments of 61.26p per ordinary share, to shareholders registered on the UK main register or the South Africa branch register and to American Depository Shares (ADS)1 holders each on the applicable record dates.

Further information on dividends can be found on page 40 of the Combined Performance and Sustainability Summary 2025 and in the Annual Report 2025 on page 54.

Our disciplined approach to capital allocation remains crucial to fully realising our ambitions. As part of this framework, the share buy-back programme has been increased for 2026 to £1.3 billion.

As a Board, we’re confident in our capital allocation framework and continually review it to provide value for shareholders and support the growth of BAT.

We returned to growth in the U.S., continued developing new products, and launched three innovations across our Smokeless portfolio.

Enhancing our Capabilities

Success in a rapidly evolving environment demands agility, diversified supply chains, strong digital capabilities, partnerships and a culture that embraces change. Combined with strategic clarity and long-term vision, these attributes position us for sustainable success.

Our people have consistently demonstrated resilience and effectiveness, and the improvements seen across the Group are also testament to their hard work and commitment to BAT’s transformation.

Transformation has become second nature, but to capture future opportunities, we must nevertheless operate as a more dynamic business. Through our Fit2Win programme and progressive partnerships – outlined by Tadeu on page 7 of the Combined Performance and Sustainability Summary 2025 – we are building an organisation that is truly future-fit.

Tobacco Harm Reduction is the fastest route to achieving a Smokeless World, and we are determined to make it happen.

A Smokeless World

Over one billion adults2 still smoke cigarettes worldwide, but we believe that this number could reduce significantly with the right regulation and greater acceptance of Smokeless products.

Tobacco Harm Reduction (THR) – encouraging smokers who would otherwise continue to smoke to switch completely to less risky alternatives*† – is the fastest route to achieving a Smokeless World, and we’re determined to make it happen.

In 2025, we took Omni™ – our award-winning science and evidence-backed manifesto for change – to over 23 markets across the world, engaging with policymakers, public health officials and regulators. You can read more about this on page 33 of the  Combined Performance and Sustainability Summary 2025.

We also launched our new international campaign: Vapers Deserve Better, calling on key stakeholders for better standards and regulations for Vapour products, while demonstrating what we believe responsible leadership in THR looks like.

We are confident that growth in the Smokeless category will be driven by sustained investment and targeted innovation, while our international reach and active management of our multicategory portfolio stand us in good stead to deliver results.

Board Evolution

This year, we welcomed Uta Kemmerich-Keil and Matthew Wright as Non-Executive Directors. Uta brings deep experience in regulated industries, consumer markets, and digital transformation, while Matthew adds leadership advisory expertise and international perspective. Both will make valuable contributions.

We also said farewell to Murray S. Kessler and Soraya Benchikh, who stepped down from the Board. On behalf of the Board, I thank them for their service and wish them well. Javed Iqbal, Director of Digital and Information, is acting as interim Chief Financial Officer while we complete a global search to identify a successor for this role.

Looking Ahead

If the last 120+ years have shown us anything at BAT, it’s that resilience is embedded in the fabric of our business. Change is rarely simple, but progress demands it and we are embracing that reality.

With a solid foundation and momentum behind our strategy, we believe we are well positioned for the future. Our portfolio is diverse, our footprint international and our people engaged. Coupled with our ability to identify opportunities and create value, these strengths set us apart.

We expect 2026 to be a year of further strategic progress and delivery for investors, consumers and wider stakeholders, as we continue to Build a Smokeless World.

If the last 120+ years have shown us anything at BAT, it’s that resilience is embedded in the fabric of our business.
Luc Jobin
Chair
Notes:
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.

  1. The dividends receivable by ADS holders in US dollars will be calculated based on the exchange rate on the applicable payment dates.
  2. WHO global report on trends in prevalence of tobacco use 2000-2024 and projections 2025-2030. Geneva: World Health Organization; 2025. Available at: www.who.int/publications/i/ item/9789240116276
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Interim Chief Financial Officer's Overview

We are steadfast in our commitment to deliver sustainable shareholder value by growing our New Categories and delivering value from combustibles, ensuring we maximise cash generation to fund our progressive dividend and sustainable share buy-backs.

Javed Iqbal
Interim Chief Financial Officer

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Interim Chief Financial Officer’s Overview

Our strategy is designed to maximise sustainable shareholder returns.

We are in a strong position to continue to deliver sustainable returns as demonstrated by our financial performance in 2025, together with 2.0% dividend growth and a £1.3 billion share buyback programme in 2026.

Our key financial focus areas are:

  • — fuelling our transformation as we maximise value from combustibles, using our scale and efficiencies to release cash;
  • — deploying capital in a disciplined and targeted manner. This means investing in the largest New Category profit pools and maintaining a laser focus on return on investment;
  • — strengthening our financial position by reducing debt, providing us with greater financial resilience; and
  • — a balanced capital allocation approach – prioritising our transformation while continuing to deleverage, deliver a progressive dividend, maintain a sustainable share buy-back programme and explore bolt-on acquisitions.

Our strategy is expected to deliver shareholder value creation as:

  • — Combustibles fuel our transformation
  • — Targeted capital deployment focuses on return on investment
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Our priorities to deliver the algorithm are built around five key drivers:

1
Quality revenue growth

We aim to maximise the value from combustibles while driving growth in our New Categories through innovation and premiumisation. Excluding the impact of currency:

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- Our combustibles revenue was up 1.0% as pricing remained a driver of value, with Group price/mix (including excise duty drawback in the U.S.) of +9.1% in 2025 (compared to +7.4% in 2024). This more than offset lower combustibles volume (down 8.1% in 2025), negatively impacted by the continued decline in the U.S. where volume was 7.7% lower.

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-New Categories revenue was up 7.0% in 2025 as increases in Modern Oral and a stable performance in HP more than offset a decline in Vapour.

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2
Increase our adjusted gross profit*

We aim to continually increase our adjusted gross profit*. Total adjusted gross profit*, on a constant currency basis, grew by £576 million, an increase of 3.4% in 2025. Adjusted gross profit* from our combustibles portfolio, through pricing and efficiencies, has remained resilient, up 2.5% in 2025.

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New Categories revenue was up 7.0% in 2025 as increases in Modern Oral and a stable performance in HP more than offset a decline in Vapour.

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The main driver of growth has been New Categories with an increase of 11.0% in adjusted gross profit, driven by higher volume of Modern Oral, revenue growth management programmes and cost optimisation.

3
Accelerate New Category contribution

We will continue to invest in our transformation. We will focus on the right opportunities in the key growth areas – evaluating opportunities to maximise returns, freeing up resources for growth and incremental profit. In 2025, we have further increased New Category contribution by £193 million (at constant rates), with New Category contribution margin at 12.0%, up from 7.3% in 2024.

4
Driving Adjusted Profit from Operations* growth

Adjusted profit from operations*, on a constant currency basis, was up 2.3% in 2025. We committed to deliver cost savings of over £1.2 billion in the three years to 2025 and have delivered £1.2 billion, in line with expectations. We continue to target an additional £2 billion from 2026 to 2030.

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As discussed above, in 2025, we initiated our Fit2Win programme which we expect to deliver around £600 million of additional savings by the end of 2028. Fit2Win will simplify the way we work, with increased agility and embedding digital decision making.

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In 2025, we delivered savings of £327 million. This offset the impact of inflation on product costs of 5.8% (or £315 million), mainly due to higher tobacco leaf prices (impacted by adverse weather conditions) and manufacturing costs (labour and utilities).

5
Sustainable Adjusted Diluted EPS* growth 5-8%

We aim to grow our adjusted diluted EPS* in a sustainable manner, over the medium-term.

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This is driven by:

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- the continued operational* delivery of the Group;

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- reducing our net finance costs through lower borrowings as we continue to improve our leverage ratio towards our target range of 2.0-2.5x adjusted net debt to adjusted EBITDA* by end 2026; and

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- delivering against our tax strategy.

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The Group continues to be highly cash generative, with our operating cash conversion, ahead of our  90% target for a number of years. In 2025, we again delivered ahead of expectations at 100%.

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We aim to generate over £50 billion of free cash flow before dividends between 2024 and 2030, and have delivered £11.9 billion to date. 

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We have a long track record of rewarding our shareholders, with over 25 years of dividend growth in sterling terms. Since 2020, we have returned £33.9 billion to shareholders, including a cumulative £1.8 billion share buy-back programme 2024-2025, with a further £1.3 billion share buy-back  programme announced for 2026, itself an element of our growth in adjusted diluted EPS*, at constant rates.

2025 financial performance summary

In 2025, revenue was down 1.0% to £25,610 million, partly due to a translational foreign exchange headwind of 3.1%.

At constant rates of exchange, revenue was up 2.1% driven by the continued growth of New Categories, which grew revenue by 7.0%.

Profit from operations was £9,997 million, against £2,736 million in 2024, despite a translational foreign exchange headwind of 3.1%.

Our financial results have been impacted by a number of events that impacted profit from operations in the current and comparator period. In 2024, the Group recorded a provision (and associated charge) in respect of the Canadian litigation settlement (see page 319 of the Annual Report 2025) of £6.2 billion. In 2025, following a change to the forecasted Canadian combustibles performance, this provision was reduced, with a net credit of £708 million recognised in the year, partly offset by an impairment to goodwill in Canada of £184 million.

In 2025, we announced the Fit2Win programme, a structured time-bound review of processes and ways of working that will generate efficiencies of c.£600 million by 2028 and facilitate faster, more agile decision-making.

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.

Also in 2025, the Group incurred charges in respect of the Group’s operations in Cuba of £235 million (2024: £74 million) as those assets were classified as held-for-sale at 31 December 2025.

In 2024, a charge of £449 million was recognised in respect of an excise assessment in Romania which was partially reversed in 2025 (credit of £15 million). Finally, 2024 was also negatively impacted by an impairment charge of £646 million in respect of Camel Snus and a charge of £75 million related to the Group’s head office in London.

Excluding these items, on a constant currency basis, and adjusting for the performance of Canada, adjusted profit from operations* was up 2.3%, as New Categories further grew profitability by 77.1% (at the category contribution level) building on the momentum shown in 2024.

On a reported basis, basic EPS was 351.0p compared to 136.7p in 2024, with diluted EPS up 157% to 349.1p in 2025 (2024: 136.0p). This was mainly due to the impacts to profit from operations described earlier.

Furthermore, both years included a gain recognised as the Group monetised a portion of the investment in its Indian associate ITC (2025: £0.9 billion; 2024: £1.4 billion), while 2024 also included a credit of £0.6 billion related to debt refinancing. Excluding the adjusting items (discussed on pages 50 to 53 of the Annual Report 2025), Canada and the effect of translational foreign exchange, adjusted diluted earnings per share*, at constant rates, increased by 3.4% to 365.0p. We remain highly cash generative. This allows us to balance investment in the future while rewarding shareholders with a further increase in dividends (up 2.0% to 245.04p) and a £1.3 billion share buy-back in 2026, while targeting our leverage range of 2.0-2.5x adjusted net debt to adjusted EBITDA* – reaching 2.48x in 2025, or 2.55x (2024: 2.75x) when adjusted for Canada.

Partnering for Success and Facing the Future with Confidence

In 2025, we entered into a strategic partnership with Accenture – an example of our digital transformation in action.

This partnership gives us access to Accenture’s technology ecosystem, AI solutions and its strategic collaboration with technology companies.

These capabilities will help us to further simplify our processes, accelerate our speed to market, upskill talent and reduce costs over the medium to long-term, utilising Accenture’s global delivery network to complement our existing shared service centre hub locations. Please refer to note 5 of the Annual Report 2025 in the Notes on the Accounts.

Our track record of delivering robust financial performance and consistent cash generation demonstrates how we navigate the near-term macro-economic uncertainties, underpinned by geographic diversity and a portfolio of international brands.

Javed Iqbal
Interim Chief Financial Officer
Notes:
*

On a constant rate basis.

**

Adjusted gross profit, as adjusted for Canada as defined on page 380 of the BAT Annual Report 2025, on a constant rate basis.

†

New Category contribution as defined on page 380 of the BAT Annual Report 2025, on a constant rate basis.

‡

On an adjusted, constant rate basis as adjusted for Canada, as discussed on page 377 of the BAT Annual Report 2025.

^

Free cash flow before dividends as defined on page 389 of the BAT Annual Report 2025.

^^

Operating cash conversion, as defined on page 388 of the BAT Annual Report 2025.
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Our Year in Numbers

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Our Performance Metrics
Consumer
Volume
Financial
Number of Smokeless Product Consumers1
0
m
Hover over chart to reveal
2025,2024
false
34.1,29.4
#004f9f, #004f9f
20
35
0
false
m
true
24
400
#0e2b63
Target text
0
Cigarette and HP volume share growth (bps)2
-40 bps
2024: +10 bps
Cigarette and HP value share growth (bps)2
-10 bps
2024: -30 bps
Modern Oral (bn pouches)
0
+47%
Hover over chart to reveal
2025,2024
false
12.2,8.3
#004f9f, #004f9f
100
13
0
false
bn
true
24
400
#0e2b63
Target text
0
HP (bn sticks)
20
2024: 21
Cigarettes (bn sticks)
465
2024: 505
Profit from Operations (£m)
0
+265%
Hover over chart to reveal
2025,2024
false
9997,2736
#004f9f, #004f9f
1000
10000
0
false
m
£
true
24
400
#0e2b63
Target text
0
Revenue (£m)
25,610
2024: 25,867
Revenue from New Categories (£m)
3,621
2024: 3,432

A Better Tomorrow™ means Building a Smokeless World.
‍
A Smokeless World built on Smokeless products, where, ultimately cigarettes have become a thing of the past.
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A world where smokers, who would otherwise have continued to smoke, have migrated from cigarettes to smokeless alternatives.

A world where Tobacco Harm Reduction is both understood and accepted.
‍
A world where smokers make a Switch to Better.

A refined purpose:

The best choice any adult smoker can make will always be quitting cigarettes completely.‍

‍

Over the last few years, our aim has been to build A Better Tomorrow™. This means working to reduce the health impact of our business by offering adult consumers a greater choice of reduced-risk*† products compared to cigarettes.‍

‍

Other than certain products within the Modern Oral category, BAT’s Smokeless products are not smoking cessation devices and are not marketed for that purpose.

Notes:
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.

Vapers
Deserve
Better

Multiple blue cards with messages advocating for better vaping standards, safety, and marketing, emphasizing that vapers deserve better and promoting 'Let's Go Smokeless.'
Notes:
Other than certain products within the Modern Oral category, BAT’s New Category products are not smoking cessation devices and are not marketed for that purpose.
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.

BAT promotional materials about vaping regulations and standards emphasizing that vapers deserve better quality control and regulation.

We know that the best choice any adult smoker can make is to quit completely. However, for those adults who would otherwise continue to smoke cigarettes, we believe that they should have the choice to switch completely to less risky*† alternative products – vaping being one of them.

Yet the future of vaping is at a crossroads, with threats from those who ignore regulations, design products that target the underaged, and disregard quality and product stewardship.

Not only does this negatively impact those trying to transition; it also lets vapers down. Vaping needs responsible leadership.

‍

And that is why we launched our Vapers Deserve Better campaign in 2025.

‍

Aimed at key policymakers, regulators and public health stakeholders, the campaign calls out practices that undermine responsible progress, while showing what leadership in Tobacco Harm Reduction should look like. It highlights BAT’s strengths in this space, while encouraging stakeholders to drive change, address societal concerns and ultimately, make a Smokeless World a reality.

Our Strategic Navigator

To achieve our ambitions and accelerate our transformation, we’re committed to Building a Smokeless World by deploying our global multicategory portfolio.

A detailed look at the BAT strategy in a triangle diagram format.

A Multi-Category Portfolio

These are our key brands in both the combustibles and Smokeless*† categories. This ensures focus and investment in the brands and categories that will underpin the Group’s future performance.

Circular collage showing nicotine products including Velo Shift Hot Grape pouches, a brown vape device, Grizzly Wintergreen tobacco pouch with a warning label, a pack of cigarettes, and a blue Vuse vape device.

Our strategic portfolio

Smokeless:

All brands within New Categories (Vapour, Heated Products and Modern Oral) and the strategic Traditional Oral brands in moist and snus.

Combustibles:

Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport (U.S.), Natural American Spirit (U.S.) and Camel (U.S.).

Modern Oral

49 markets

Modern Oral products are pouches that contain high-purity nicotine, water, and other high-quality ingredients. They are typically manufactured to be tobacco-leaf free. Consumers place the disposable pouch within the mouth, between the lip and gum, where nicotine and flavours are then released and absorbed.

Heated Products

29 markets

Heated Products (HPs) have two main functional parts: a battery-powered device and a consumable, which contains a plant-based (tobacco leaf or non-tobacco leaf) substance that is heated, not burned. Once the consumable has reached a certain temperature, it forms an aerosol releasing nicotine and flavours.

Traditional Oral

3 markets

Traditional Oral products include snus and snuff. Snus is a moist form of oral tobacco originating from Sweden. It is available in loose form or as pouches.

With Traditional Oral products, consumers take a single portion or pouch and place it within the mouth, between the lip and gum. The nicotine and flavours are then absorbed through the inner lining of the cheek.

Vapour

57 markets

Vapour products contain an e-liquid, nicotine and flavours, and a battery-powered heating element. When activated, via puff or button, the heating element heats the liquid and forms an aerosol, commonly known as vapour.

Combustibles

>140 markets

The Group sold 465 billion cigarette sticks and 12 billion other tobacco products (stick equivalents) in 2025. With 36 fully integrated cigarette manufacturing facilities in 35 markets, the Group operates internationally.

Notes:
Other than certain products within the Modern Oral category, BAT’s New Category products are not smoking cessation devices and are not marketed for that purpose.
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.

Our Business at a Glance

Our Guiding Principles

Our purpose, vision and mission

We know A Better Tomorrow™ can be achieved by Building a Smokeless World. This is why we focus on offering adult consumers a choice of reduced-risk*† alternatives to cigarettes. This is complemented by our ambition to be a predominantly Smokeless business by 2035.

Where we operate

Our business is divided into three complementary regions, with a balanced presence in high-growth emerging markets and highly profitable developed markets. Each market is responsible for its own performance and driving growth.

Leading in Tobacco Harm Reduction

Through Omni™, our dynamic evidence-based manifesto and platform for change, BAT’s commitment to Tobacco Harm Reduction is not only clear, but founded in real-world evidence and supported by science. It presents a significant opportunity for stakeholders to join the conversation and drive change.

Working with key partners

We are collaborating with global leaders like BYD and Smoore to innovate and enhance our capabilities by leveraging expertise. We are also supporting world-class businesses through our venturing initiative, Btomorrow Ventures.

Three Complementary Regions

Note:
Map is accurate as at 31 December 2025 and is representative of general geographic regions and does not suggest that the Group operates in each country of every region.

Select a region to learn more

U.S.
United States

Regional revenue

£
0
m
Top markets:

The U.S. is a top market for Cigarettes, Vapour, Modern Oral and Traditional Oral products

Revenue by category as % of total Region
New Categories,Traditional Oral, Combustibles, Other
10.8,8.7,79.9,0.6
#00b1eb,#004f9f,#0e2b63,#f1f4f8
false
%
2025
2024
New Categories
10.8
9.6
Traditional Oral
8.7
9.4
Combustibles
79.9
80.6
Other
0.6
0.4

Exceptional performance from Velo and a return to growth in our combustibles portfolio which, combined with Vapour also back to revenue growth in H2 2025, demonstrates the success of our rebalanced approach

David Waterfield

President and CEO (Reynolds American Inc.)

+30bps

Cigarette value share change

19.6%

Smokeless revenue as % of total revenue

Man in a navy blue suit and tie standing with hands clasped and looking confidently at the camera.
AME
Americas and Europe

Regional revenue

£
0
m
Top markets:

Cigarettes: Brazil, Germany, Mexico, Romania
HP: Germany, Greece, Italy, Poland, Portugal, Romania, Spain, the Czech Republic
Vapour: Canada, France, Germany, Poland, Spain, the UK
Modern Oral: Denmark, Norway, Poland, Sweden,
Switzerland, the UK

Revenue by category as % of total Region
New Categories,Traditional Oral, Combustibles, Other
19.5,0.4,74.9,5.2
#00b1eb,#004f9f,#0e2b63,#f1f4f8
false
%
2025
2024
New Categories
19.5
18.7
Traditional Oral
0.4
0.4
Combustibles
74.9
76.2
Other
5.2
4.7

With nearly 20% of AME’s revenue from Smokeless products and growth in adjusted profit from operations (at constant rates of exchange) despite regulatory and legal challenges, AME has again demonstrated how our strategy is delivering value for all stakeholders

Fred Monteiro

Regional Director

-70 bps

Cigarette value share change

19.9%

Smokeless revenue as % of total revenue

Fred wearing a suit smiling for the camera
APMEA
Asia-Pacific, Middle East and Africa

Regional revenue

£
0
m
Top markets:

Cigarettes: Japan, Pakistan
HP: Japan, South Korea

Revenue by category as % of total Region
New Categories,Combustibles, Other
11.7,84.1,4.2
#00b1eb,#0e2b63,#f1f4f8
false
%
2025
2024
New Categories
11.7
11.7
Combustibles
84.1
85.1
Other
4.2
3.2

2025 was a challenging year, with regulatory, fiscal and illicit trade headwinds in a number of key markets, yet I am confident that, as those headwinds ease we are well placed for future growth.

Pascale Meulemeester

Regional Director

-40 bps

Cigarette value share change

11.7%

Smokeless revenue as % of total revenue

Smiling woman with short blonde hair wearing a black blazer and white blouse.
A map of the world split out into regions and coloured using the BAT brand colour palette.
£
25610
m
Total revenue
U.S.
£11,534m
AME
£9,309m
APMEA
£4,767m
Associates and Joint Ventures
N/A
0
major product categories
0
employee nationalities
+
0
employees globally

Top market by product

Combustibles

  • Brazil
  • Germany
  • Mexico
  • Romania
  • Japan
  • Pakistan
  • U.S.

Heated Products

  • Germany
  • Greece
  • Spain
  • Italy
  • Poland
  • Romania
  • Czech Republic
  • Portugal
  • Japan
  • South Korea

Vapour

  • Canada
  • France
  • Germany
  • Poland
  • Spain
  • UK
  • U.S.

Modern Oral

  • Denmark
  • Norway
  • Sweden
  • Switzerland
  • Poland
  • UK
  • U.S.

Note: The Group also sells Traditional Oral in the U.S. and in AME.

Our Business Model

Our business model begins and ends with the consumer.

The insights we gather from adult consumers, backed by robust science, unlock value by ensuring we offer the right product choices to meet their preferences. Our product portfolio is constantly enhanced through innovations designed to better serve adult consumers and build A Better Tomorrow™. We use our international footprint to  manufacture at speed and scale, and our global distribution capabilities to ensure our products are where they need to be, when needed, based on our market archetype model. Through our responsible marketing practices and powerful portfolio, we market and sell our products which, in turn, generate further insights.

‍

Our business model is intrinsically connected to our value chain.

The BAT business model graphic showing segments shaped like an orange.

Principal Risks

  • 1
    Competition from illicit trade
  • 2
    Geopolitical tensions
  • 3
    Tobacco, New Categories and other regulation interrupts growth strategy
  • 4
    Supply chain disruption
  • 5
    Litigation and external investigations
  • 6
    Significant increases or structural changes in tobacco, nicotine and New Categories related taxes
  • 7
    Inability to develop, commercialise and deliver the New Categories strategy
  • 8
    Disputed taxes, interest and penalties
  • 9
    Injury, illness or death in the workplace
  • 10
    Solvency and liquidity
  • 11
    Foreign exchange rates exposures
  • 12
    Climate Change
  • 13
    Circularity
  • 14
    Digital & Cyber
Aligning our business model to our value chain
U
Upstream
O
Own operations
D
Downstream
1
Insight

Seeing over the horizon

U
O
D

As one of the most established tobacco and nicotine businesses in the world, we truly understand adult consumers and their diverse preferences. This, combined with our data and analytics-led approach, helps us to gain insights and anticipate trends.

These insights enable the development and responsible marketing of our products, so that they are fit to satisfy consumer preferences.

Powered by our consumer insights platform, we focus on product categories and consumer segments across our global business that have the greatest potential for sustainable growth.

Link to Principal Risks
7
13
14
2
Science

Accelerating Tobacco Harm Reduction acceptance

U
O
D

We rely on world-class science to substantiate the product safety, quality and reduced-risk*† potential of our Smokeless products. It is crucial for building trust with consumers and regulators, and encouraging adult smokers – who would otherwise continue to smoke – to completely switch to less risky alternatives*†

Chemistry, molecular biology, and toxicology are just some of the fields that our extensive scientific research programme covers. We are transparent about our science and have published a compendium of information in the Omni™, which explores over a decade’s worth of Tobacco Harm Reduction evidence, alongside science and research.

Link to Principal Risks
1
3
5
7
10
14
3
Innovate

Staying ahead of the curve

U
O
D

As consumer preferences and technology rapidly evolve, our international network of digital hubs, innovation hubs, world-class research and development (R&D) laboratories and external partnerships help us to stay at the forefront of innovation with our products, alongside our corporate venturing initiative, Btomorrow Ventures.

Innovation is core to us driving sustainable growth, and we invest significantly in R&D to create great products that satisfy changing consumer preferences. Led by data and consumer insights, each innovation takes us a step further towards building A Better Tomorrow™ by reducing the health impact of our business.

Link to Principal Risks
3
5
7
10
13
14
4
Source

Sourcing materials responsibly

U
O
D

The majority of our tobacco is sourced by our Group-owned vertically integrated Leaf Operations through direct contracts with c.91,000 farmers. The remaining tobacco is sourced from third-party suppliers that, in turn, contract with an estimated 134,000 farmers. The vast majority of tobacco farms in our supply chain are smallholder family farms.

Beyond tobacco, we source product materials like paper and filters for cigarettes and, for our New Category products, we have a growing supply chain in consumer electronics and e-liquids. We also have a vast network of suppliers of indirect goods and services that support our business beyond our products, such as for IT services and facilities management.

Link to Principal Risks
2
4
7
9
10
11
12
13
14
5
Manufacture

Utilising our global manufacturing footprint

U
O
D

We manufacture high-quality products in our international facilities. These products, and the tobacco leaf we source, are then optimised for distribution and sale.

Our tobacco leaf may be processed upstream via our contracted farmers, and processing can also occur in our own Leaf Operation sites. Our Smokeless products are manufactured in a mix of our own and third-party factories. We work to keep our costs globally competitive and endeavour to use our resources as effectively as possible.

Link to Principal Risks
2
4
7
8
9
10
11
12
14
6
Move
Moving our products seamlessly everywhere
U
O
D

Technologies including AI and machine learning help us to get our products to the right place at the right time.

Our products are sold across the world and distributed efficiently using distribution models tailored to suit local circumstances and conditions. These include retailers, supplied through our direct distribution capability or exclusive distributors, and our Direct-to-Consumer business – which has been accelerated through the deployment of owned e-commerce sites.

Link to Principal Risks
2
3
4
7
10
11
12
14
7
Market
Marketing our products responsibly
U
O
D

We use a globally responsible approach to marketing, seeking to raise standards and prevent underage access, while growing our market share by encouraging adult consumers to choose our products over those of our competitors.

Our marketing across all our tobacco, nicotine and nicotine-free products and brands is governed by our Responsible Marketing Principles (RMP) and Responsible Marketing Code (RMC). They include strict requirements to be accurate, responsible, and targeted at adult consumers only. Our RMP are applied even when they are stricter than local laws.

Link to Principal Risks
3
5
7
10
13
14
8
Sell
Offering the consumer choice
U
O
D

Our powerful portfolio of brands is something we’re proud of – including our combustibles portfolio and our Smokeless product brands, which we believe will drive us towards our strategic aim. Our strong product pipeline is supported by our quality insights, science and innovation, and international positioning. We offer adult consumers all over the world a range of high-quality products – from value-for-money to premium, including combustible products, Vapour, Modern Oral, Traditional Oral and Heated Products.

Link to Principal Risks
1
2
3
4
5
6
7
8
10
11
12
13
14
8
Offering the consumer choice

We are proud of our powerful portfolio of brands. This includes our combustibles portfolio and our Smokeless product brands which we believe will accelerate us towards our strategic aim. Our product pipeline is strong, aided by our quality insights, science and innovation, and being well-positioned globally. We offer adult consumers all over the world a range of high-quality products – from value-for-money to premium, including combustible products, Vapour, Modern Oral and Heated Products.

Link to Principal Risks
Competition from illicit trade; Geopolitical tensions; Tobacco, New Categories and other regulation interrupts growth strategy; Supply Chain disruption; Litigation; Significant increases or structural changes in tobacco, nicotine and New Categories related taxes; Inability to develop, commercialise and deliver the New Categories strategy; Disputed taxes, interest and penalties; Foreign exchange rate exposures; Circular economy

Notes:
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.

A Better Tomorrow™ for:

Consumers
Four colleagues sitting in a discussion, one man holding and showing a small round object labeled VETO.

Adult consumers are at the core of everything we do and our success is underpinned by addressing their preferences, offering them a choice of enjoyable, innovative and less risky products*† .

57
Countries where Vapour products are available
49
Countries where Modern Oral products are available
29
Countries where Heated Products are available
Notes:
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.

Our People
Two people sitting on a light blue couch, smiling and talking with a colorful circular design and the text 'WE ARE BAT.' on the wall behind them.

We employ 47,000+ people worldwide. Attracting and retaining an increasingly diverse workforce and providing a welcoming, inclusive working environment are key drivers in BAT’s transformation journey to build A Better Tomorrow™. Our focus is on providing a dynamic, inspiring and purposeful place to work.

85%
Engagement Index score in our Your Voice employee survey
44.4%
Proportion of women in Management‡ roles
0.12
Lost Time Incident Rate (LTIR) vs 0.12 in 2024

Accredited as Global Top Employer by the Top Employers Institute

Note:
‡

As at 31 December 2025. Refer to the BAT 'Reporting Criteria' for a full description of key terms and definitions bat.com/reporting

Suppliers
Worker wearing a yellow hard hat operating an orange forklift in a warehouse with large cardboard boxes on the floor.

We work with a range of suppliers worldwide. Our suppliers across the Group are valued business partners and we believe, by working together, we can raise standards, drive sustainable practices, create shared value and build A Better Tomorrow™.

Customers
Hand holding a Vuse Go Reload electronic cigarette kit with a nicotine warning in German, another hand reaching to take it.

Our customers include retailers, distributors and wholesalers who are essential for driving growth and embedding responsible marketing practices.

Investors
Hand holding smartphone displaying a share price chart for British American Tobacco on the London Stock Exchange.

We are committed to delivering sustainable and superior returns to our shareholders and investors. It is essential that we maintain the support of our shareholders and investors to enable access to capital. This allows us to implement our strategy and achieve our business objectives.

3-5%
Revenue growth over the medium-term
5-8%
Adjusted diluted EPS* growth (on a constant currency basis) over the medium-term
2.0-2.5x
Deleveraging the balance sheet into our 2.0-2.5x adjusted net debt to adjusted EBITDA* target range
65%
A progressive dividend being a 65% dividend payout ratio over the long-term
Note:
*

As adjusted for Canada.

Society
Three women sitting in a row, one in the foreground wearing a colorful headscarf and looking thoughtfully to the side.

We believe the greatest contribution we can make to society is Building a Smokeless World and reducing the health impact of our business*†. We will do this by encouraging those who would otherwise continue to smoke cigarettes to switch completely to Smokeless alternatives*†. Achieving this, while working to reduce our impact on the environment, is central to delivering A Better Tomorrow™.

34.1m
Consumers of Smokeless products
30.4%
Reduction of waste generated (versus our 2017 baseline)
46.6%
Reduction in Scope 1 and 2 GHG emissions versus our 2020 baseline
Notes:
*

Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

†

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.