British American Tobacco (NYSE:BTI) outlined its Horizon 2030 strategy at its 2026 Capital Markets Day, targeting growth in smokeless nicotine products while maintaining combustibles as a cash-generating business that funds investment, dividends and share buybacks.
Chief Executive Tadeu Marroco said the company’s strategy remains centered on “quality growth, a dynamic business, and a sustainable future,” with modern oral nicotine products serving as its primary growth engine. BAT reiterated targets for 3%-5% revenue growth, 4%-6% adjusted profit growth and 5%-8% adjusted diluted earnings-per-share growth through 2030.
Modern Oral at the Center of Smokeless Growth
Marroco said BAT expects legal nicotine industry revenue in its addressable markets to grow at about a 4% compound annual rate between 2025 and 2030. The company expects double-digit growth in new categories, led by modern oral products, while combustibles retain low-single-digit revenue growth.
BAT forecasts that modern oral industry revenue will nearly triple to about £11 billion by 2030. The company said Velo, its oral nicotine pouch brand, is the global volume-share leader and has achieved substantial gains in the U.S. market.
In the U.S., Marroco said Velo’s volume share has surpassed 30%, while Velo+ has captured about 80% of industry growth. Reynolds American President David Waterfield said Velo+ volume rose 158% year-to-date, with the brand’s adult consumer base nearly doubling to 6.2 million. Reynolds has launched Velo Max, an expanded product line with larger pouch formats, higher moisture levels, flavors and nicotine strengths.
BAT’s new-category targets include mid-teens revenue growth through 2030, a new-category contribution margin of at least 30% by 2030 and 50 million smokeless consumers. Anniek Kindts, global head of new categories, said BAT expects Velo to generate approximately £4.3 billion in revenue by 2030.
U.S. Business Seen as Growth Cornerstone
BAT described the U.S. as the cornerstone of its strategy, citing an estimated £42 billion nicotine revenue pool and projected annual growth of 4.3% from 2025 through 2030. Marroco said U.S. revenue increased more than 8% in the first half of 2026, adjusted profit rose 10%, and new-category revenue advanced 60%.
Waterfield said Reynolds plans to invest £2.5 billion through 2030 to expand capabilities and capacity in the U.S. The company has invested more than $200 million in U.S. manufacturing over the past two years, including capacity for Velo+.
BAT expects enforcement against unauthorized vapor products to support its Vuse business. The company estimates the illicit U.S. vapor value pool at about £7 billion and assumes that 30% of that value could return to the legal market by 2030, representing a potential £2 billion opportunity.
Waterfield said Vuse holds more than 56% share of the U.S. closed-system vapor market nationally. The company has expanded Vuse into four flavor variants under revised FDA guidance, using selected retailers and requirements related to age verification, purchase limits and adult-only messaging.
Combustibles Continue to Fund Transformation
While BAT is pursuing a predominantly smokeless future by 2035, executives emphasized that cigarettes remain a significant source of revenue and cash flow. The company expects combustibles to deliver average revenue growth of 1%-2% through 2030 and category contribution growth above 2%.
Emma Dean, global head of combustibles, said BAT remains the global revenue leader in the category and holds No. 1 or No. 2 positions in 25 of its 40 largest markets. The company plans to focus on 20 markets that account for approximately 80% of industry revenue, using portfolio laddering, pricing, digital revenue management and distribution capabilities.
Dean said BAT has exited 12 markets and simplified its formats, leaf grades and blends as part of an effort that contributed to £1.2 billion in group savings between 2023 and 2025. She said around 90% of products tested met their competitiveness objectives.
Technology, Innovation and Regulation
BAT executives highlighted artificial intelligence as a tool for product development, marketing, supply-chain management and internal productivity. Javed Iqbal, BAT’s director of digital and information, said the company has about 1,000 AI agents in daily active use and has made AI tools available to employees with computers.
According to Iqbal, AI-supported sensory science can reduce certain product-development processes from as much as three months to about 30 minutes. BAT said its digital tools have also helped lower consumer research costs by 20%, while AI-enabled content work for a McLaren social-media activation reduced agency hours by 90%.
Group Operations Director Zafar Khan said BAT and its strategic partners invested about £1 billion in innovation during 2025, representing approximately 3.9% of group revenue. The company said it has more than 80 technologies ready for deployment and more than 100 under development.
On regulation, Chief Corporate Officer Kingsley Wheaton and Group Head of Scientific Affairs Danni Tower argued that tobacco-harm-reduction policies should distinguish between combustible cigarettes and smokeless nicotine products. Tower said BAT has published more than 280 peer-reviewed scientific papers and concluded that completely switching from cigarettes to any of its three smokeless categories presents a lower-risk profile than continued smoking.
BAT said 70 of its 80 focus markets permit at least one new category, while modern oral regulation has expanded from four markets in 2023 to more than 30 markets currently.
Marroco said BAT’s near-term focus is on executing its existing strategy rather than pursuing higher financial targets. “We are here for the long run, not for the short term,” he said, pointing to investment opportunities in U.S. new categories, global modern oral expansion and selected combustible markets.
About British American Tobacco (NYSE:BTI)
British American Tobacco p.l.c. (NYSE:BTI) is a multinational consumer goods company focused on nicotine and tobacco products. Its portfolio includes traditional cigarettes, heated tobacco products, vapor products and modern oral nicotine products, including nicotine pouches. The company markets products under brands such as Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans and Vuse, with additional brands varying by market.
Founded in 1902 through the combination of the Imperial Tobacco Company and the American Tobacco Company, British American Tobacco has developed into an international business serving markets across the Americas, Europe, Africa, the Middle East and Asia-Pacific.
