WEBVTT

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I'm pleased that we have delivered

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a first half performance in line

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with expectations, and we are on track

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to deliver our full-year guidance.

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As we transform our business,

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and Build a Smokeless World,

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we have been working hard
to encourage adult smokers,

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who would otherwise continue
to smoke, to make the switch

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to our smokeless products.

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Smokeless now accounts
for 18% of group revenue,

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up 1.4 percentage points
versus full year 2023,

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and represents more than
30% of total revenue in 25 markets.

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Let's take a look at how

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our regions have performed
over the last six months.

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In the U.S., H1 revenue
was down 6.7%,

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due to the lower volumes,

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mainly driven by
macroeconomic headwinds

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and the continued
lack of enforcement

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against illicit vapour products.

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We expect an acceleration in our U.S.
performance in the second half,

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driven by previously
planned investments

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we have made in
our commercial plans,

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New Category launches,

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together with the unwind
of inventory movements.

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Excluding these inventory movements,

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our first-half U.S. revenue
was down 4.8%.

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AME is a true multi-category region,

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driving continued
strong H1 delivery,

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with revenue
up 5.4%,

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driven by growth
in every category.

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And we expect this
positive momentum

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to continue in
the second half.

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APMEA also delivered
a resilient performance in H1,

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with revenue up 1.8%
as we lapped

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a tougher prior
year comparator.

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We expect a stronger
performance in H2

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driven by continued
resilience in combustibles

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and an acceleration
of New Category growth.

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Through our Quality Growth lens,

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focused on balancing
top and bottom-line delivery

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New Category revenue
was up by 7.4%

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and New Category contribution
up by £165 million.

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Looking forwards, we expect
New Category revenue growth

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to accelerate in all regions,
driven by the phasing

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of the new product launches
in all three categories.

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And we are encouraged
by the early positive

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consumer response
to our latest innovations,

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including glo Hyper Pro,
with its upgraded consumables.

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In May we launched Vuse Go 2.0

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our new Vapour innovation
across 12 markets.

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An upgraded device with superior
heating technology,

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removable battery and device lock.

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And we launched Vuse Go Re-Load,

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which boasts a rechargeable modi format,

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device lock and upgraded consumables.

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These innovations
directly address key sustainability

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and safety concerns.

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In Modern Oral, Velo
delivered strong

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volume-led revenue growth
across every region.

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In AME, Velo maintained
its leadership position

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with 65% share,
growing revenue at 47%

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and capturing 75%
of industry growth.

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I am excited about our future
opportunity in Modern Oral

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with new markets outside
the Nordics already

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representing 40% of regional
growth, and highly profitable.

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In the U.S., we launched
Grizzly Modern Oral last month

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to capitalise on the trend
of Traditional Oral consumers

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trialling Modern Oral.

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We are also encouraged
by the progress of the refreshed

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Velo brand expression,
with continued inroads

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in the U.S. national market share.

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Our focus on Quality Growth is
driving strong returns

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on more targeted investments,
and I am confident that these will

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deliver long-term growth and value
creation moving forward.

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We continue to call for more appropriate
regulation and enforcement

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of New Categories,
to tackle illicit products,

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particularly in the
U.S. Vapour market.

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However, we are clear
that more enforcement action

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is still needed at both state
and federal levels.

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Last week, we welcomed
FDA's decision to award

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marketing authorisation
for our Vuse Alto device

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and tobacco flavour consumables,

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demonstrating that these products

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are appropriate for the
protection of public health.

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BAT is a highly cash
generative business,

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and we are committed

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to continue to
reward shareholders

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with strong cash returns.

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We have made good progress
in enhancing our capital effectiveness,

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including the partial sale
of our ITC stake,

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which enabled the initiation
of a sustainable share buyback.

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And, we continue to de-leverage
our balance sheet and expect

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to be within our
narrowed target range of

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2.0-2.5x adjusted net debt/
adjusted EBITDA by the end of 2024.

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Working together with our new CFO,
Soraya Benchikh,

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we will ensure we create the right balance
between growth and cash returns.

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In summary, we are on
track to deliver our full-year guidance.

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Guided by our multi-category strategy,

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I am confident that
we will progressively

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improve our performance
to deliver 3-5% revenue growth,

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and mid-single digit adjusted
profit from operations growth

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by 2026, on an organic
constant currency basis.

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I look forward to updating you
on our progress.

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And I hope to see many of you
at our Capital Markets Day

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at our new Innovation Centre
in Southampton on 16th October.

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Thank you.