B.A.T (Tobacco)

History and Structure

British American Tobacco was incorporated in September 1902 when the Imperial Tobacco Company of the UK and the American Tobacco Company of the US formed a joint venture to handle their export businesses and overseas subsidiaries. The first chairman was James Buchanan Duke. American Tobacco divested its stake in 1912 following a US Supreme Court ruling, and BAT was listed on the London Stock Exchange. Over the decades, BAT expanded through acquisitions (e.g., Maspero Freres in Egypt, Henri Wintermans in cigars, and later the 2017 full acquisition of Reynolds American). Today, BAT plc has a primary listing on the London Stock Exchange (FTSE 100) and secondary listings on the Johannesburg Stock Exchange and the New York Stock Exchange (American Depositary Shares).

Business Model and Categories

BAT describes itself as a “multi‑category consumer goods” company. Its portfolio is split into: - Combustibles: Traditional cigarettes and fine‑cut tobacco, with global brands such as Dunhill, Kent, Lucky Strike, Pall Mall, and Rothmans. - Vapour: Vuse (e‑cigarettes), a category that includes open and closed systems; Vuse Ultra launched in 2025. - Heated Tobacco: glo (tobacco‑heating devices) and the newer glo Hilo. - Modern Oral: Velo (nicotine pouches), including the recently launched Velo Shift. The company’s “Quality Growth” approach aims to drive category‑contribution profitability, especially in smokeless products. In 2025, smokeless products accounted for 18.2% of group revenue and the company added 4.7 million smokeless consumers, bringing the total to 34.1 million.

Financials and Restructuring

In the year ended 31 December 2025, BAT reported revenue of £25.6 billion (‑1% nominal due to currency headwinds, +2.1% at constant FX) and adjusted profit from operations of £10.0 billion. Adjusted diluted EPS rose 3.4% to 349.1p. The company announced a £1.3 billion share buy‑back for 2026 and a 2% dividend increase to 245.04p.

In early 2026, BAT launched the “Fit2Win” restructuring programme, eliminating 5,500 roles directly and outsourcing another 3,500 positions (a total of 9,000 jobs, or ~19% of its workforce) to partners such as Accenture. The programme is intended to generate £600 million in annual savings by 2028, primarily through AI‑driven automation and simplification.

Regulatory and Sustainability Context

BAT is a member of the FTSE4Good Index and publishes extensive science and research (the Omni™ platform) to support its tobacco harm reduction claims. However, the vapour category in the US continues to face headwinds from illicit products, and regulatory challenges persist in markets like Bangladesh and Australia. The company is investing in R&D and premium innovations (Vuse Ultra, glo Hilo, Velo Shift) to strengthen its smokeless portfolio.

Leadership and Governance

BAT’s Management Board is chaired by the CEO and oversees day‑to‑day operations. The Board of Directors is chaired by Luc Jobin. Key executives as of mid‑2026 include Tadeu Marroco (CEO), Johan Vandermeulen (COO), Javed Iqbal (Interim CFO and Director of Digital & Information), Luciano Comin (Chief Marketing Officer), Zafar Khan (Director of Operations), and James Barrett (Director of Business Development).