BTIBritish American Tobacco p.l.c.
Is the business good?
The checks split: mostly cash-backed earnings (0.8×) and margins steady.
Operating profit is mostly backed by cash. Conversion is worsening vs a year ago.
Margins have held roughly steady, a stable cost structure.
Margin-driven, fat margins on slower asset turns. ROE 17% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is BTI?
British American Tobacco p.l.c. earns 10% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 1.2 points above what the capital costs: growth creates value
- Operating margin
- 39%
Operating margin · Consumer Defensive median 8.1% · fiscal year to FY2025
- Cash conversion
- 0.81×
Cash conversion · 4.12× a year ago · most of the operating profit arrived as cash, working capital took the rest
- Share count, year on year
- −1.2%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | 39% |
| FY2021 | 40% |
| FY2022 | 38% |
| FY2023 | −58% |
| FY2024 | 11% |
| FY2025 | 39% |
Details›
- Gross marginfiscal year to FY2025
- 83%
- Operating marginfiscal year to FY2025
- 39%
- Net marginfiscal year to FY2025
- 30%
- Free cash flow margin
- 23%
- R&D as % of revenue
- 1.4%
- Revenue, trailing twelve months
- $25.6B
- Free cash flow, trailing twelve months
- $5.79B
- Net income, trailing twelve months
- $7.76B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 10%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Consumer Defensive
Ranks #100 of 131 by RyuScore