British American Tobacco (BATS) CMD 2026 summary

Horizon 2030 strategy

• Strategic direction is unchanged from CMD 2024, with execution sharpened around quality growth, a dynamic business and a sustainable future.

• Legal nicotine industry revenue is expected to grow ~4% CAGR from 2025 to 2030, driven by double-digit New Category growth and resilient low-single-digit combustibles growth.

• Ambition is a predominantly smokeless business by 2035, with New Categories targeting 50m smokeless consumers by 2030.

• Seven growth levers prioritize the U.S., Modern Oral, combustibles, selective Vapour and Heated investment, Beyond Nicotine, harm-reduction policy and core capabilities.

Financial guidance and capital allocation

• 2030 algorithm: 3%-5% revenue growth, 4%-6% adjusted profit growth and 5%-8% adjusted diluted EPS growth; 2026 adjusted profit growth is expected at the lower end of its range.

• Free cash flow target exceeds £50bn cumulatively from 2024 to 2030, with ~£8bn annual generation expected through 2030; 2025 and 2026 include significant one-off cash outflows.

• Productivity plans target £2bn savings in 2026-30 and £700m annualized Fit2Win benefits by 2028; £1.2bn savings were delivered in 2023-25.

• Capital returns include progressive dividends and sustainable buybacks; £3.1bn of repurchases are expected since 2024 by year-end, including a £1.3bn 2026 buyback.

• Leverage target is 2.0x-2.5x by end-2026; senior management incentives track EPS, cash flow, smokeless revenue and return on capital.

Category plans

• New Categories target mid-teens revenue growth and >30% contribution margin by 2030; Velo revenue is projected at £4.3bn by 2030.

• Modern Oral industry revenue is forecast to reach £11bn by 2030, ~3x today’s level; Velo aims to outperform category growth and holds 40% global volume share.

• Combustibles guidance is 1%-2% revenue growth and >2% category contribution growth, focused on 20 markets representing ~80% of industry revenue.

• Vapour investment focuses on 10 priority markets and Heated investment on the top 10 value markets; Heated products reach peak investment in 2026, with losses reducing from 2027.

• Vapour and Modern Oral are profitable at scale; Heated returns are expected to improve after 2026. New Category contribution reached 14% at H1 2026, up from zero in 2023.