The British American Tobacco (BAT) expects an overall drop in cigarette production amid a reported loss in the first half of the 2026 financial year.
The giant international company that makes cigarettes, vapes, and nicotine pouches has reported a 15.8% loss amounting to £4-billion (approximately R94-billion) compared with
£5-billion recorded in the same period last year.
Revenue increased 1.4% to £12-billion supported by the increased demand for smokeless products, which contributed 19.8% to revenue.
The company makes Vuse vape products, VELO modern oral nicotine pouches and the traditional cigarettes, including, among others, Dunhill, Peter Stuyvesant and Rothmans.
Company ‘in transformation process’
Tadeu Marroco, BAT chief executive, said the company is in the process of transformation and the results remain in line with their strategy for the year.
“New Category revenue growth has accelerated to 18.0%2, driven by another strong performance from Modern Oral globally (up 65.9%2), and a return to double-digit growth2 in US Vapour. This improving portfolio mix, together with our continued focus on quality growth and disciplined resource allocation in Heated Products and Vapour, drove an increase in New Category contribution of 54.7%.
“We further extended our global category leadership in Modern Oral, now our largest new category (by revenue), achieving 39.2% volume share in our top markets, up 8.4 ppts versus FY25. Revenue grew 65.9%, driven by the continued excellent performance of Velo Plus in the US and sustained double-digit growth in AME and APMEA,” said Marroco.
Focus on global volume share
He said the 2.1% increase in combustibles revenue is planned to be used to fund the transformation, as the company also remains focused on global volume share.
“We expect mid-teens New Categories revenue growth for the full-year 2026, driven by continued global momentum in Modern Oral and further traction from innovation roll-outs, partly offset by lapping a higher second-half comparator in the US.
“We continue to make good progress towards our year-end target leverage range of 2.0–2.5x while rewarding shareholders through strong cash returns. I remain committed to delivering sustainable value for our shareholders,” said Marocco.
- British American Tobacco (BAT) reported a 15.8% loss (£4 billion) in the first half of the 2026 financial year, with an expected overall drop in cigarette production.
- Revenue rose 1.4% to £12 billion, driven by increased demand for smokeless products which now contribute 19.8% of revenue.
- The company’s new categories, including Modern Oral products and US Vapour, grew significantly, with Modern Oral revenue up 65.9%.
- BAT aims to fund its transformation through a 2.1% increase in combustibles revenue while maintaining focus on global volume share.
- The company expects mid-teens growth in New Categories revenue for 2026 and is progressing toward its target leverage range while delivering shareholder returns.
£5-billion recorded in the same period last year.
Revenue increased 1.4% to £12-billion supported by the increased demand for smokeless products, which contributed 19.8% to revenue.
Tadeu Marroco, BAT chief executive, said the company is in the process of transformation and the results remain in line with their strategy for the year.
“New Category revenue growth has accelerated to 18.0%2, driven by another strong performance from Modern Oral globally (up 65.9%2), and a return to double-digit growth2 in US Vapour.
“We further extended our global category leadership in Modern Oral, now our largest new category (by revenue), achieving 39.2% volume share in our top markets, up 8.4 ppts versus FY25. Revenue grew 65.9%, driven by the continued excellent performance of Velo Plus in the US and sustained double-digit growth in AME and APMEA,” said Marroco.
He said the 2.1% increase in combustibles revenue is planned to be used to fund the transformation, as the company also remains focused on global volume share.
“We expect mid-teens New Categories revenue growth for the full-year 2026, driven by continued global momentum in Modern Oral and further traction from innovation roll-outs, partly offset by lapping a higher second-half comparator in the US.
“We continue to make good progress towards our year-end target leverage range of 2.0–2.5x while rewarding shareholders through strong cash returns. I remain committed to delivering sustainable value for our shareholders,” said Marocco.
