According to the Belfast Telegraph, British American Tobacco (BAT) has raised its growth expectations for the e-cigarette business, indicating that global consumers are increasingly shifting from traditional cigarettes to alternative products such as e-cigarettes and nicotine pouches.
BAT stated that the sales of the new category (New Category) of products, including e-cigarettes, nicotine pouches and other new types of tobacco products, are expected to achieve a “mid-teens” growth rate, which is higher than the previously projected “low double-digit growth”.
Meanwhile, the company predicts that global cigarette sales will decline by approximately 2.5%, which is higher than the previously forecast 2% drop, indicating that the traditional tobacco market is still under continuous pressure.
BAT has maintained its expectation for full-year revenue growth unchanged, expecting the full-year revenue increase to be at the lower end of the 3% to 5% target range; the growth in basic operating profit is expected to be at the lower end of the 4% to 6% medium- to long-term target range.
The company stated that the profit contribution is expected to be more concentrated in the second half of the year. The reasons include the stabilization of performance in the Asia-Pacific, Middle East and Africa markets, as well as the gradual realization of benefits from the cost reduction plan.
BAT also stated that it is closely monitoring the developments in the Middle East region. The company said that currently, the relevant situation has not had a significant impact on the group’s business, but there is still uncertainty in the macroeconomic and geopolitical environment, which may affect consumer confidence.
In the area of smoke-free products, BAT stated that the growth was mainly attributed to its Vuse e-cigarette brand and Velo nicotine pouch brand.
Among them, the Velo brand continued to achieve “excellent” revenue growth performance in the global market.
The CEO of BAT, Tadeu Marroco, stated:
“The group’s overall performance throughout the year has continued to steadily move towards the set goals.”
In recent years, BAT has been continuously shifting its business focus from traditional cigarettes to new categories such as e-cigarettes, nicotine pouches, and heated tobacco products, in order to adapt to changes in the market structure.
The company previously stated that it aims to become a “company predominantly focused on smokeless products” by 2035.
However, from the perspective of the revenue structure, the traditional cigarette business still holds a dominant position at present.
According to the data disclosed by BAT, the revenue from the traditional cigarette business of the group reached 20.2 billion pounds (approximately 27.4 billion US dollars) in 2025, mainly coming from brands such as Lucky Strike, Pall Mall and Dunhill; during the same period, the revenue from new product categories was 3.6 billion pounds (approximately 4.9 billion US dollars), accounting for approximately 18% of the group’s total revenue.
After the announcement was made, the share prices of BAT dropped by approximately 4% in the morning trading on June 2nd.
AJ Bell’s investment director Russ Mould said that this update from BAT indicates that the demand for new product categories such as e-cigarettes and heated tobacco products is accelerating.
However, he pointed out that some investors previously expected the traditional cigarette business to maintain strong profitability for a longer period of time. Therefore, the market’s response to this performance guidance was relatively cautious.