Financial Data and Key Metrics Changes - Group revenue increased by 2.1%, adjusted profit rose by 3.4%, adjusted profit from operations grew by 2.3%, and adjusted diluted EPS was up by 3.4% [8][17] - The company delivered results at the top end of guidance, supported by accelerated momentum through the second half of the year [6][8] - Adjusted operating profit grew by nearly 10%, driven by operating leverage and efficiency gains in combustibles [12] Business Line Data and Key Metrics Changes - New categories revenue grew by 7%, driven by outstanding growth in Modern Oral, which was up strongly by 48%, while Heated Products increased by 1% [8][10] - Combustibles revenue grew by 1%, with volume decline more than offset by a robust price mix across markets [9][10] - Vapor revenue declined by nearly 9%, mainly due to continued illicit pressures in the U.S. and Canada [8][10] Market Data and Key Metrics Changes - In the U.S., combustibles revenue increased by 4.6%, with a value share increase of 30 basis points [10][11] - New category revenue in the U.S. grew nearly 20%, driven by the success of VELO+, which delivered over 300% growth [10][11] - In AME, revenue grew over 3%, with combustibles up more than 2%, supported by strong delivery in Brazil, Turkey, and Mexico [11][12] Company Strategy and Development Direction - The company aims to become a predominantly smokeless business by 2035, focusing on premium innovation and quality growth [20][21] - The Fit to Win program is expected to deliver GBP 600 million of annualized incremental savings by 2028, with a focus on optimizing processes and improving execution [15][16] - The company is committed to reinvesting savings to support further sustainable growth initiatives [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to the Midterm Algorithm in 2026, with expectations of 3%-5% revenue growth and 4%-6% adjusted profit from operations growth [18][19] - The company is optimistic about the growth potential in Modern Oral and the performance of VELO+ in the U.S. market [22][23] - Management acknowledged challenges in the APMEA region but expects stabilization in performance as regulatory headwinds lessen [13][14] Other Important Information - The company announced an increase in share buyback to GBP 1.3 billion for 2026 and a 2% increase in dividends [3][17] - The company has delivered GBP 1.2 billion in productivity savings since 2023, helping to offset inflationary pressures [15][14] - The company remains on track to generate more than GBP 50 billion in free cash flow by the end of 2030 [18][33] Q&A Session Questions and Answers Question: Expectations for Modern Oral performance in the U.S. for fiscal 2026 - Management believes that the strong retention rate of VELO+ and increasing average daily consumption indicate continued growth potential in the U.S. market [39][40] Question: Factors that could improve performance guidance for 2026 - Management highlighted the potential for improved enforcement in the vapor category and the expected growth in new categories as key factors for better performance [46][49] Question: Insights on heated tobacco share progression in 2026 - Management acknowledged the competitive landscape but expressed confidence in the revamped product offerings, including glo HYLO, to strengthen market position [47][48]