British American Tobacco p l c : Presentation slides (0.5 mb)

Building a Smokeless World

UBS Global Consumer and Retail Conference 13 March 2024

Tadeu Marroco - Chief Executive

Important Information

The information contained in this presentation in relation to British American Tobacco p.l.c. ("BAT") and its subsidiaries has been prepared solely for use at this presentation. The presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

References in this presentation to 'British American Tobacco', 'BAT', 'Group', 'we', 'us' and 'our' when denoting opinion refer to British American Tobacco p.l.c. and when denoting business activity refer to British American Tobacco Group operating companies, collectively or individually as the case may be.

The information contained in this presentation does not purport to be comprehensive and has not been independently verified. Certain industry and market data contained in this presentation has come from third party sources. Third party publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of accuracy or completeness of such data.

Forward-looking Statements

This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any BAT shares or other securities. This presentation contains certain forward-looking statements, including "forward-looking" statements made within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "believe," "anticipate," "could," "may," "would," "should," "intend," "plan," "potential," "predict," "will," "expect," "estimate," "project," "positioned," "strategy," "outlook", "target" and similar expressions. These include statements regarding our intentions, beliefs or current expectations concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the economic and business circumstances occurring from time to time in the countries and markets in which the British American Tobacco Group (the "Group") operates.

All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors. It is believed that the expectations reflected in this presentation are reasonable but they may be affected by a wide range of variables that could cause actual results to differ materially from those currently anticipated.

In particular, among other statements: (i) certain statements on slides 4-9.

Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are uncertainties related to the following: the impact of competition from illicit trade; the impact of adverse domestic or international legislation and regulation; the inability to develop, commercialise and deliver the Group's New Categories strategy; the impact of supply chain disruptions; adverse litigation and dispute outcomes and the effect of such outcomes on the Group's financial condition; the impact of significant increases or structural changes in tobacco, nicotine and New Categories related taxes; translational and transactional foreign exchange rate exposure; changes or differences in domestic or international economic or political conditions; the ability to maintain credit ratings and to fund the business under the current capital structure; the impact of serious injury, illness or death in the workplace; adverse decisions by domestic or international regulatory bodies; changes in the market position, businesses, financial condition, results of operations or prospects of the Group; direct or indirect adverse impacts associated with Climate Change and the move towards a Circular Economy; and Cyber Security risks caused by the heightened cyber-threat landscape, and increased digital interactions with consumers and changes to regulation.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. The forward-looking statements reflect knowledge and information available at the date of preparation of this presentation and BAT undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on such forward-looking statements.

No statement in this presentation is intended to be a profit forecast and no statement in this presentation should be interpreted to mean that earnings per share of BAT for the current or future financial years would necessarily match or exceed the historical published earnings per share of BAT.

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Important Information

Forward-looking Statements (continued)

Additional information concerning these and other factors can be found in BAT's filings with the U.S. Securities and Exchange Commission ("SEC"), including the Annual Report on Form 20-F and Current Reports on Form 6-K, which may be obtained free of charge at the SEC's website, http://www.sec.gov, and BAT's Annual Reports, which may be obtained free of charge from the British American Tobacco website www.bat.com.

Additional Information

All financial statements and financial information provided by or with respect to the U.S. or Reynolds American Inc. ("Reynolds") are initially prepared on the basis of U.S. GAAP and constitute the primary financial statements or financial records of the U.S. business/Reynolds. This financial information is then converted to International Financial Reporting Standards as issued by the IASB for the purpose of consolidation within the results of the BAT Group. To the extent any such financial information provided in this presentation relates to the U.S. or Reynolds it is provided as an explanation of, or supplement to, Reynolds' primary U.S. GAAP based financial statements and information.

Our Vapour product Vuse (including Alto, Solo, Ciro and Vibe), and certain oral products including Velo, Grizzly, Kodiak, and Camel Snus, which are sold in the US, are subject to the Food and Drug Administration ("FDA") regulation and no reduced-risk claims will be made to these products without agency clearance.

No Profit or Earnings Per Share Forecasts

No statement in this presentation is intended to be a profit forecast and no statement in this presentation should be interpreted to mean that earnings per share of BAT for the current or future financial years would necessarily match or exceed the historical published earnings per share of BAT.

Audience

The material in this presentation is provided for the purpose of giving information about BAT and its subsidiaries to investors only and is not intended for general consumers. BAT, its directors, officers, employees, agents or advisers do not accept or assume responsibility to any other person to whom this material is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. The material in this presentation is not provided for product advertising, promotional or marketing purposes. This material does not constitute and should not be construed as constituting an offer to sell, or a solicitation of an offer to buy, any of our products. Our products are sold only in compliance with the laws of the particular jurisdictions in which they are sold.

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Our transformation to A Better TomorrowTM

• 2023 results delivered in-line with our guidance - reflecting the benefit of our global multi-categorystrategy.
• New Categories are now profitable - 2 years ahead of target.
• Good progress across six key focus areas - deliver the right balance between growth and sustainable returns.
• Strong cash flows - committed to rewarding shareholders through enhanced financial flexibility.

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Resilient FY23 performance, in line with guidance

Organic Group

Revenue*

(£ bn)

+3.1%

26.7	27.5
FY22	FY23

+4.2%

Avg. 2019 - 2023*

Adjusted

Operating Profit**

(£ bn)

+3.1%

12.4	12.8
FY22	FY23

+4.8%

Avg. 2019 - 2023**

Adjusted Diluted

EPS**

	(pence)
	+4.0%
371.4	386.4
FY22	FY23

+6.1%

Avg. 2019 - 2023**

Key performance drivers

• Organic New Category revenue* +21.0%
• Organic Combustibles revenue* +0.6%
• • Volume -5.5%
  • Price/mix^ +6.1%
• Organic APFO^^ +3.9%
• Organic EPS^^ +5.2%

Financial growth versus FY22. Source: Company data. * On a constant rate, organic basis. See Appendices A2 &. A7. ** On an adjusted, constant rate basis. See Appendices A1 & A2. *** On a constant rate basis. See Appendix A2. ^ See Appendix	5
A4. ^^ On an adjusted, organic, constant rate basis. See Appendices A1 , A2 & A7.

We are transforming our business rapidly

>30%

Smokeless*

revenue in 24

markets

10

3

16

24

New Category contribution (£bn)

Dec'20 Dec'21 Dec'22 Dec'23

Number of markets***

16.5% Smokeless revenue in FY23 as a % of Group (+170bps vs. FY22)^

* Profitability at category contribution level: Profit from operations before the impact of adjusting items and translational foreign exchange, having allocated costs that are directly attributable to New Categories. See Appendices A1 & A2. **On a constant rate	6
basis. See Appendix A2. ^ Smokeless - refers to non-combustibles, including Vapour products, Heated Products, Modern Oral pouches and Traditional Oral. *** Number of markets with over 30% Smokeless revenue as a percentage of total market revenue in

FY19 - FY23, respectively.

Driving sharper execution in six areas of focus

Sharpen execution

1

Drive

profitability in

New Categories

NC profitability

ahead of plan

>£1.1bn

improvement

since 2020

Vuse and Velo

profitable

2

Consistent U.S. combustibles value growth

Volume and value share growth since Jan 2023

Encouraging results from commercial plans

Strengthening

route-to-market

3

Significantly

strengthen HP

Enhanced

innovation with

patent settlement

Upgrade to glo

device and

consumables

First mover with tobacco-free veo

4

Lead

responsible

New Category development

Proactive

external affairs

approach

Launching

Responsible

Marketing Code

Campaign for a

smoke-free Britain

5

Enhance financial flexibility

Continued strong cash generation

Operational excellence & self-help

Asset

divestments

6

Collaborative and inclusive culture

New corporate values and Management/Board appointments

7

Allocation of free cash flow*

Strong cash generation - c.£40bn FCF expected over the next 5 years

• 100% cash conversion (4th consecutive year)
• £8.4bn FCF pre-dividend
• £26bn returned to shareholders (2019-2023)
• Leverage reduced to 2.6x
• Committed to rewarding shareholders through enhanced financial flexibility

	Guidance
2024	Low-single figure organic revenue** and adjusted profit from operations growth^
2025	Progressive improvement
2026 & Beyond	3-5% organic revenue growth**, and mid-single figure organic adjusted profit from operations growth^

* Free cash flow at current rates. See Appendices A1 & A5. ** On a constant rate, organic basis. See Appendices A2 &. A7. ^ Adjusted on an organic, constant rate basis. See Appendices A1, A2 & A7.

Refining our strategy with new Strategic Pillars

1. Better Tomorrow™

Building a	Switch
Smokeless
to Better
World

	Quality	Sustainable	Dynamic
	Growth	Future	Business
	Inspiring New Category	Tobacco Harm Reduction	Exciting, Winning
	Innovation & Brands		Acceptance	Company
	Managed Combustible	Shaping the	Operational Excellence
	Transition		Landscape
	Beyond Nicotine	Leading in Sustainability	Capital Effectiveness
	Foundations	and Integrity
Truly	Empowered	Stronger	Love Our	Passion	Do the
Through	Right
Inclusive	Together	Consumer	To Win
Trust	Thing

Committed to 50% Smokeless^ revenue ambition by 2035

^ Smokeless - refers to non-combustibles, including Vapour products, Heated Products, Modern Oral pouches and Traditional Oral.

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Appendix

A1: Adjusting (Adj.)

Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence.

A2: Constant currency

Constant currency - measures are calculated based on the prior year's exchange rate, removing the potentially distorting effect of translational foreign exchange on the Group's results. The Group does not adjust for normal transactional gains or losses in profit from operations which are generated by exchange rate movements.

A3: Share metrics

Year to date basis through December 2023.

Volume share: The number of units bought by consumers of a specific brand or combination of brands, as a proportion of the total units bought by consumers in the industry, category or other sub-categorisation.Sub-categories include, but are not limited to, the total nicotine category, modern oral, vapour, traditional oral or cigarette. Corporate volume share is the share held by BAT Group. Except when referencing particular markets, volume share is based on our key markets (representing over 80% of the Group's cigarette volume).

Value share: The retail value of units bought by consumers of a particular brand or combination of brands, as a proportion of the total retail value of units bought by consumers in the industry, category or other sub-categorisation in discussion.

A4: Price/Mix

Price mix is a term used by management and investors to explain the movement in revenue between periods. Revenue is affected by the volume (how many units are sold) and the value (how much is each unit sold for). Price mix is used to explain the value component of the sales as the Group sells each unit for a value (price) but may also achieve a movement in revenue due to the relative proportions of higher value volume sold compared to lower value volume sold (mix).

A5: Free Cash Flow

Net cash generated from operating activities before the impact of trading loans provided to a third party and after dividends paid to non-controlling interests, net interest paid and net capital expenditure.

A6: Operating Cash Conversion

Net cash generated from operating activities before the impact of adjusting items and dividends from associates and excluding trading loans to third parties, pension short fall funding, taxes paid and net capital expenditure, as a proportion of adjusted profit from operations.

A7: Organic

To supplement the Group's results presented in accordance with International Financial Reporting Standards (IFRS), the Group's Management Board, as the chief operating decision maker, reviews certain of its results, including revenue and adjusted profit from operations, at constant rates of exchange, prior to the impact of businesses sold or held-for-sale. Although the Group does not believe that these measures are a substitute for IFRS measures, the Group does believe that such results excluding the impact of businesses sold or to be held-for-sale provide additional useful information to investors regarding the underlying performance of the business on a comparable basis and in the case of the divestment of the Group's businesses in Russia and Belarus, the impact these businesses have on revenue and profit from operations. Accordingly, the organic financial measures appearing in this document should be read in conjunction with the Group's results as reported under IFRS.

A8: Poly-usage

Refers to a transitional period for smokers towards complete switching to potentially risk reduced nicotine products during which period such smokers reduce cigarette consumption and choose to consume one or more New Category products.

A9: Adjusted net debt to adjusted EBITDA

Net debt, excluding the impact of the revaluation of Reynolds American Inc. acquired debt arising as part of the purchase price allocation process, as a proportion of profit for the year (earnings) before net finance costs (interest), tax, depreciation, amortisation, impairment, associates and adjusting items

A10: Consumers of Smokeless Products

The number of consumers of Smokeless products is defined as the estimated number of Legal Age (minimum 18 years) consumers of the Group's Smokeless products. In markets where regular consumer tracking is in place, this estimate is obtained from adult consumer tracking studies conducted by third parties (including Kantar). In markets where regular consumer tracking is not in place, the number of consumers of Smokeless products is derived from volume sales of consumables, pouches and devices in such markets, using consumption patterns obtained from other similar markets with adult consumer tracking (utilising studies conducted by third parties including Kantar). The number of consumers is adjusted for those identified (as part of the consumer tracking studies undertaken) as using more than one BAT Brand.

The number of consumers of Smokeless products is used by management to assess the number of consumers using the Group's Smokeless products as the increase in Smokeless products is a key pillar of the Group's sustainability ambition and is integral to the sustainability of our business.

A11: Smokeless Products

Refers to Non-Combustibles, including Vapour products, Heated Products, Modern Oral pouches, and Traditional Oral.

A12: New Categories

Refers to Vapour products, Heated Products and Modern Oral pouches.

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