Preliminary announcement: year ended 31 December 2009

•  The reported Group revenue increased by 17 per cent to £14,208 million as a result of the favourable impact of exchange rate movements, continued good pricing momentum, volume from acquisitions made in the middle of 2008 (Skandinavisk Tobakskompagni (ST) and Tekel) and the acquisition of Bentoel Internasional Investama Tbk in June 2009. Revenue increased by 10 per cent at constant rates of exchange.  
•  The reported Group profit from operations was 15 per cent higher at £4,101 million. Adjusted profit from operations was 20 per cent higher and would have been up 10 per cent at constant rates of exchange, despite the adverse transactional impact of exchange rates on costs.  
•  Group volumes from subsidiaries were 724 billion, an increase of 1 per cent, as a result of the acquisitions of ST, Tekel and Bentoel. On an organic basis, volumes were down 3 per cent on last year, mainly driven by deteriorating economies.
  
•  The four Global Drive Brands achieved good overall volume growth of 4 per cent. Dunhill was up 9 per cent, Lucky Strike 4 per cent and Pall Mall grew by 10 per cent, while Kent volumes fell 4 per cent.  
•  Adjusted diluted earnings per share rose by 19 per cent, principally as a result of the strong growth in profit from operations and favourable exchange movements.  
•  The Board is recommending a final dividend of 71.6p, which will be paid on 6 May 2010. This, together with the interim dividend, will take dividends in respect of 2009 as a whole to 99.5p, an increase of 19 per cent.  
•  The Chairman, Richard Burrows, commented “There are signs that the global economy is beginning to improve, although unemployment, which is an important influence on our business, may continue to rise in developed markets. We have a very clear strategy and excellent management, with a well balanced portfolio of brands. Our unrivalled geographic spread mitigates risk for shareholders and will help us maintain sustainable growth and build shareholder value.”

Enquiries

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+44 (0) 20 7845 2888 (24 hours)

Investor Relations
Ralph Edmondson / Rachael Brierley
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