British American Tobacco: Stoking the Fire

“Our confidence is underpinned by continued growth in the U.S., accelerating New Category revenue growth led by Velo globally, and the rollout of our premium innovations in the largest profit pools, continued robust delivery in AME, lapping Bangladesh combustibles headwinds, further improvement in New Category contribution, and stepping up efficiencies delivered by our new Fit to Win program in addition to the GBP 2 billion cost of goods sold savings targets announced at our Capital Markets Day. Moving forward, we expect all going to drive 5% to 8% adjusted diluted EPS growth.” - Tadeu Marroco, CEO, BAT, 2025 Pre-Close Trading Update

Last year’s pre-close note highlighted the period of indigestion, during which British American Tobacco was coming to terms with its position and addressing numerous challenges at hand. 2025 has been another year that has proven the company’s story to be far from spotless. Sustained elevated investment has not fully offset all pressures, and there remain pain points unlikely to be resolved quickly. Both have suppressed earnings growth and the rate at which capital has been returned to shareholders. However, the company’s pre-close statement provides confidence in operations. Far from miserly with its coal scuttle, the group has been stoking the fire, and now, the bright spots, once only gently shining through, are beaming fiercely.

Coal Fire, Henrique Vincente, 2007