E-cigarettes Dropped By 13%, While Heated Products Only Increased By 3%... Why Has Oral Nicotine Become The Only Savior?

British American Tobacco (BAT) recently released its financial report for the first half of 2025, with performance slightly exceeding expectations. The company confirmed that its full-year performance guidance remains unchanged and announced an increase in the scale of stock repurchases, demonstrating confidence in future development.
Core performance: The impact of exchange rates was significant, while internal growth was steady.
Net income: £12.069 billion, a year-on-year decrease of 2.2% (mainly due to a 4.0% exchange rate fluctuation). Calculated at constant exchange rates, revenue increased by 1.8%. Net profit: Net profit attributable to the parent company was £4.512 billion, a year-on-year increase of 0.45%. Diluted earnings per share: £203.6 pence, a year-on-year increase of 1.6%. Constant exchange rate and adjusted earnings per share: £162.1 pence, a year-on-year increase of 1.7%.
New product categories as growth engines (at constant exchange rates):
New product category total revenue: £1.689 billion, a year-on-year increase of 2.4%, accounting for 18.2% of the group's total revenue.
Velo (modern oral products - nicotine pouches): Global revenue soared by 40.6%, and sales increased by 42.2%. The performance in the US market was particularly outstanding: revenue increased by 384%, sales increased by 206%, and market share rose from 6.9% in November 2024 to 15.6% in May 2025.

Glo (heating products): Revenue increased by 3.1%, and sales increased by 1.6%, with Japan and Kazakhstan being the main drivers. The promotion of the new generation product Glo Hilo in the second half of the year is expected to accelerate growth.
Vuse (electronic cigarettes): Revenue decreased by 13.0%, sales dropped by 12.9%, mainly due to the impact of illegal one-time products in North America and changes in the European market.

Regional performance differentiation (fixed exchange rate):
United States: Strong recovery, revenue growth of 3.7%, adjusted operating profit growth of 3.2%. Americas and Europe (AME): Strong performance, revenue growth of 3.5%, adjusted operating profit growth of 10.4%. Asia-Pacific, Middle East and Africa (APMEA): Revenue decline of 4.8%, affected by regulatory and fiscal challenges in Australia and Bangladesh.
Full-year outlook and shareholder returns:
The company expects the full-year revenue growth to be within the upper limit of the 1.0%-2.0% guidance range. It announced an additional £200 million share buyback program, with a total buyback amount reaching £1.1 billion by 2025.