Half Year 2025 British American Tobacco plc Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Simon Hales - Citibank Cameroon SA - Analyst : Thank you. Good morning Tadeu, and Soraya and VB. Two or three for me if possible please. Today, can we just talk a little bit more about the early performance that you're seeing the glo Hilo launch in Japan, obviously you reference in your presentation in terms of the recent share gain you're seeing. Qualitatively, what is the feedback you're getting on the ground from those Japanese consumers? How does it vary at all from what you saw in the test market in Serbia? And how should we think about the scale of the rollout in of the key markets through the rest of the year? What percentage of your key tobacco markets do you expect to be in by the end of the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2025 / 8:30AM, BATS.L - Half Year 2025 British American Tobacco plc Earnings Call And then secondly, on Modern Oral, clearly a very strong performance coming through from Velo Plus in the US and you referenced, the further share gain that you've seen coming through into July as well. Have you seen any change in momentum for the brand as you exited the quarter came into July, given that you know the biggest competitor on the ground is now back on the shelf and perhaps being a little bit more aggressive in its point of sale promotional activity? And then finally, just really a clarification for Soraya around the Fit2Win, program, I think you said that there won't be any upfront costs until 2026 for that program. There's nothing in the second half of the year. Am I right on that? And I've seen the GBP500 million target over three years is a gross savings target, and we should expect a chunk of that to be reinvested back into the business?

Question: Simon Hales - Citibank Cameroon SA - Analyst : Thanks very much.

Question: Damian McNeela - Deutsche Numis - Analyst : Yeah, hi. Morning, everybody. Thank you for taking the questions. The first question really is on whether you could provide us a little bit more color on the performance of the vapor business in the AME region. I think you sort of flagged some challenges in Canada, and also the transition that's happening in some of the bigger markets like the UK. I was just wondering if you could provide some thoughts on what's happening on the ground and your expectations, for vape in those markets, over the medium term. And then just on the US vape, and just some clarification on the 40% reduction in shipments that you've seen, I guess it's very difficult to have any accurate number. But could you provide us with a sense of what that means in terms of when we might expect to see a change on the ground in terms of illicit availability please?

Question: Damian McNeela - Deutsche Numis - Analyst : That's great. Thank you very much, Tadeu.

Question: Rey Wium - Anchor Securities Stockbrokers Pty Ltd - Analyst : Hi, good morning, Tadeu, Soraya, and Victoria. Yeah, if I can just start off with the US. On the combustible side, yeah, it's quite -- I think to see that the volume decline has sort of now used to seeing 7.6%. I just want to know whether, I mean, what is your indication for the remainder of the year? Is there a chances of this rate of decline to ease further or is that pretty much where we are going to stabilize? The other question that I have is just on -- I mean, a very strong performance from Velo is in the US. Now I just want to know, obviously, you are still writing approval for, I guess, Velo 2, if you can give us any update on that. And, given that Velo Plus is already doing so well, I mean, what are you thinking around Velo 2 when that becomes available? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2025 / 8:30AM, BATS.L - Half Year 2025 British American Tobacco plc Earnings Call And my last question is just a clarification because I'm -- honestly, I'm a bit confused in terms of your adjusted EPS number. You show it as GBP162, but I also see a number that I can't find anywhere in the present in the release, which is the GBP155.5, which exclude or make the adjustment for Canada, including currency. So I mean, maybe if you could just help us understand what is the real number that you are looking at and what you want us to focus on because I mean, the adjusted EPS on that basis actually down 2.4% and not up. So that will be very helpful just to get some understanding of how we need to think of this one.

Question: Simon Hales - Citibank Cameroon SA - Analyst : Okay. Thank you.

Question: Gaurav Jain - Barclays Services Corp - Analyst : Hi, good morning, Tadeu. Good morning, Soraya. Three questions from me. So first on US cigarette pricing, which was almost 12% ahead of your big competitor. And there was, clearly a lot of discussion around double drawback in the US market and in the press releases or all these newspaper articles and all was mentioned a lot. So could you talk about how double drawback is impacting the US business, how much it has changed on a YoY basis in terms of contribution to your portfolio? So that's my question number one. And question number two is on your overall e-cigarette strategy, it seems you have exited a few markets, especially Latvia, like Malaysia, etc. called out. So is it like something bigger happening in your overall global e-cigarette portfolio, the way you think about it? And then the last question I have is on your Velo Plus. So amazing growth in the US, 1.1 billion pouches in one edge, and if we just extrapolate these market share trends what you're highlighting and what we see in the standard data, you could be doing like 6x volume next year assuming you know market keeps growing and you get your fair share. So do you have that kind of capacity or will you run into capacity shortages at some point in time? Thank you.

Question: Gaurav Jain - Barclays Services Corp - Analyst : Thank you so much.

Question: Faham Baig - UBS AG - Analyst : Good morning, team. Thank you for the thorough presentation as well as the Q&A. A couple from me, if I may. Firstly, you have now raised topline guidance twice in the past two months, but the EBITDA outlook continues to be reiterated. Can you dive a bit deeper in where the incremental investments are being spent, which you did not budget for at the start of the year, and how you expect these investments to pay back in 2026? And the second question, just can you remind us where we are on ITC hotels? I know, you've given your view on this asset previously, but where are we in the process of divesting that stake, please? Thank you.

Question: Faham Baig - UBS AG - Analyst : Thank you, guys.