BAT Investor Conference Presentation Deck

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#1BAT X Enterprise of the Future Transformation and Growth BAT A BETTER TOMORROW Jack Bowles | Chief Executive Tadeu Marroco| Finance and Transformation Director Y#2BAT ЗАТ) A BETTER TOMORROW 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 tobacco 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 These materials do not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any British American Tobacco p.l.c. ("BAT") shares or other securities. These materials contain 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 these materials 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 in the first/second section (slides 10 to 17); (ii) certain statements in the fourth section (slide 37); and (iii) certain statements in the fifth section (slides 43 to 49) 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 market size reduction and consumer down-trading; 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; and changes in the market position, businesses, financial condition, results of operations or prospects of the Group. 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 these materials 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. 2#3Important information BAT A BETTER TOMORROW 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. 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. 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. / Reynolds. This financial information is then converted to International Financial Reporting Standards as issued by the IASB and for the purpose of consolidation within the results of the 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 and Vibe), and certain products including Grizzly, Granit, Camel Snus, Velo and Kodiak, which are sold in the U.S., are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. 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, 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. 3#4Building A Better Tomorrow™ We are committed to transforming BAT to reduce our health impact 2 We are uniquely positioned with our consumer- centric multi- category portfolio 3 We have the strengths, new capabilities, brands and resources to succeed 4 We are on a journey: transformation is happening. The opportunity is huge BAT A BETTER TOMORROW 5 We are confident in delivering our targets and building A Better Tomorrow ™ 4#51 We are committed to transforming BAT to reduce our health impact BAT A BETTER TOMORROW M 77 FF 77#6Committed to Building A Better Tomorrow™ Our Purpose To reduce the health impact. of our business G A BETTER TOMORROW * Assuming a complete switch from cigarette smoking. These products have the potential to be less risky and if they contain nicotine are addictive. TM BAT A BETTER TOMORROW Our Commitment To provide adult consumers with a wide range of enjoyable and less risky products* To encourage smokers to switch completely to scientifically-substantiated reduced-risk alternatives* 6#7Creating the Enterprise of the Future is Key From Cigarettes And Declining Volume Growing Value Quest *Beyond refers to Wellbeing & Stimulation Beyond Nicotine. Target market for consumer acquisition is existing adult smokers/nicotine/beyond nicotine users. To Building A Better Tomorrow™ Multi-category CPG Nicotine & Beyond* BAT A BETTER TOMORROW And Growing Volume & Value 7#8Delivering Value for all Our Stakeholders H E CONSUMER CHOICE Excellence in ENVIRONMENTAL management • Climate change • Water and waste Reducing the HEALTH impact of our business • Sustainable agriculture • Circular economy 50 million consumers of non-combustible* products by 2030 S 4 WORLD-CLASS SCIENCE Delivering a positive SOCIAL impact • Human rights • Farmer livelihoods • Health and safety People and culture £5bn New Category Revenue in 2025 G ...with stretching targets * Non-combustible consumer definition. See Appendix A6 ** Environmental targets. See Appendix A5 ^ Reusable, recyclable or compostable ● Business ethics Responsible marketing • Regulation and policy engagement Carbon CO₂ neutral by 2030** STANDARDS & REGULATION Robust corporate GOVERNANCE BAT A BETTER TOMORROW Eliminate unnecessary single- use plastic & all plastic packaging recyclable by 2025** 8#9Delivering for all Stakeholders in 2020 2020 REVENUE GROWTH* +3.3% CONSUMERS of Non-Combustibles 13.5m +3.0m OPERATING CASH CONVERSION 103% 2020 PROFIT GROWTH* FROM OPERATIONS +4.8% ESG INDICES MSCI: BBB Sustainalytics: 27.8% LEVERAGE REDUCTION -0.3x 2020 EPS GROWTH** +5.5% Growth versus FY19. * On an adjusted, constant rate basis. See Appendix A1 & A2. ** Adjusted, diluted EPS on a constant rate basis. See Appendix A1 & A2. *** Ratio DIVERSITY FT Index & Global Top Employer FT LEADER IN stus 2020 DIVERSITY top EMPLOYERS INSTITUTE DIVIDEND PAY-OUT*** 65% BAT A BETTER TOMORROW A £26bn revenue, consumer-centric multi-category CPG with ESG at the centre 9#10Shared Stakeholder & Shareholder Value 3-5% Revenue Growth* High Single Figure EPS growth. Adjusted diluted (post COVID) Our Targets: £5bn New Categories Revenue by 2025 Growth and Transformation enabling A Better Tomorrow™ * Medium-term growth targets. On a constant rate basis. See Appendix A2. ** Non-Combustible consumer definition: see Appendix A6. BAT A BETTER TOMORROW 50mn Non- Combustible Consumers** by 2030 10#112 We are uniquely positioned with our consumer-centric multi-category portfolio BAT A BETTER TOMORROW#12Consumer-Centric Multi-Category model Consumer Moments * Revenue Growth Management MAPS 9 Digitally Embedded RGM* Multi-Category Portfolio Consumer Centricity 153 Product Boundaries Consumer Digital Insights EI A PRISM Product Satisfaction Index BAT A BETTER TOMORROW Beyond multi-category... we are Consumer-Centric Multi-Category 12#13Our well-established Multi-Category Brand Portfolio BAT A BETTER TOMORROW # VAPOUR V vuse #2 #2 THP glo ODD DO #1 MODERN ORAL VII VELO ++ ++ #3 Share positions based on value share of vapour and volume share of THP and Modern oral. Vuse brand represents c. 80% of FY20 vapour revenue. Continue to migrate remaining Vype brands during 2021. Velo brand represents over 50% of FY20 Modern Oral markets. Continue to migrate remaining EPOK, LYFT brands during 2021. 13#14Deep Consumer Insights to Target Distinct Consumer Spaces BALANCE P vuse EXPLORATION Stigma ACU30 Income FLOW Stigma ACU30 Income TOGETHER I I I VII VELO glo PROGRESSIVE Stigma ACU30 Income ENERGISING Stigma ACU30 Income ALONE CLASSIC Stigma ACU30 Income One size does not fit all... BAT A BETTER TOMORROW PLEASURE 14#15PRODUCT SATISFACTION INDEX (PSI) Unique Multi-Category Consumer Insights Driven Portfolio ULTRA-LIGHTS MARKETS (C. 20% of Industry FMC* volumes) Predominantly THP 100% FMC 80% THP 30% VAPOUR 50% (C. 30% of Industry FMC* volumes) Both THP & Vapour Modern Oral: Potential across All Market Types MODERN ORAL 100% LIGHTS MARKETS FMC 60% THP 70% VAPOUR 65% MODERN ORAL FULL FLAVOUR MARKETS (C. 50% of Industry FMC* volumes) Predominantly Vapour 100% FMC BAT A BETTER TOMORROW 25% THP 75% VAPOUR *FMC: Factory Made Cigarette. Source: Volumes split based on BAT internal estimates of industry (Top 40 markets,. excluding China, India) Index based on external consumer track data For purpose of this slide, the terms "Full-flavour", "ultra-light" and "light" refer to global consumer taste and sensorial preferences. "Ultra-light" or "light" should not be interpreted as a representation of product's risk profile. 70% MODERN ORAL 15#16Targeting: Globally Capable, Locally Relevant P vuse 1 2 3 I MAPS MArket Pation System Consumer & Commercial Opportunity Product Satisfaction Index (PSI) Regulatory & Tax/Excise Environment 4 Distribution & Channel Landscape * Across non-combustible products. Source: Kantar & Internal Forecasts N. America & W. Europe Predominantly Vapour VELO Northern Europe Oral Modern Oral Emerging Potential BAT A BETTER TOMORROW glo Central & Eastern Europe Mixed Usage* Japan & SK Predominantly THP 16#17A Large, Growing New Category Opportunity BAT A BETTER TOMORROW Non- Combustibles*** 13.5mn Consumers*** 17% Revenue & Consumers Share^ MODERN ORAL THP 2020 TRAD ORAL VAPOUR -79mn Net Consumers** ~£16bn revenue THP MODERN ORAL 2025* BAT A BETTER TOMORROW TRAD ORAL VAPOUR ~123mn Net Consumers** ~£29bn revenue 2025 estimate based on company data. Industry Incidence Study & BAT internal estimates, excluding India and China **Total Non-Combustibles Net Consumers excludes-Poly users. Poly-usage across non-combustible products. *** Non-Combustible consumer definition. See Appendix A6. ^ BAT share of revenue and consumers as a % of 2020 industry estimates 17#18MI We have the strengths, new capabilities, brands & resources to succeed BAT A BETTER TOMORROW#19Unrivalled Outlet Reach in Our Top 40* Markets Double the retail reach of large-cap CPGs Outlet Reach Channel Split 11m 5% 15% 80% BAT Distribution power: 4-5m 5% 55% 40% CPG >180 Markets 7m 10% 50% 40% On-premise Beverages >11m Retail Outlets Modern 1.5m 60% 25% 15% Alcohol BAT A BETTER TOMORROW Convenience/Traditional >150m daily consumer touchpoints Note: Company share of retail sales estimated based on category channel breakdown; for 2020 where available, otherwise 2019; numbers rounded for simplicity Channel classification: On-premise includes Bars, Restaurants, Hotels. Modern includes Super/Hypermarkets, Other Grocers, Discounters, Drug, Mixed Retailers (e.g. (department stores); Convenience includes Convenience (traditional/convenience.), Forecourt, Food/Drink/Tobacco Specialists, Independent Grocers; Source: Euromonitor; company financials; desk research; BCG analysis *T40 Top 40 markets representing c. 90% group revenue 19#20World-Class Capability in Science and R&D 2x R&D spend since 2017 1,500 R&D specialists £4.1bn New Category revenue since 2017* * Representative 2017 basis with a full 12 months of US acquisition, Reynolds. ** First amongst leading tobacco and nicotine global companies 1st Launch of e-cig, nicotine salts, CBD vaping" BAT A BETTER TOMORROW Phase I COVID & Flu vaccine studies 20#21Developing a New World of Digital Insights Digital Hubs Customers & Consumers 1:1 engagement with New Category consumers c.10m NC consumers in database +40% 2.4x strategic brands in own e-commerce revenue Digital expertise & external partnerships Agile Design Thinking Innovation Storytelling Data Sciences Disruptive Technology Supply chain BAT A BETTER TOMORROW Zero-touch Factories Virtual Experts in >50% factories End-to-end automation >5,000 SKUs Faster, Forward Looking, New Capabilities Finance, HR, Legal Bot Enabled Workforce +100% work hours saved 21#22Our People Delivering the Enterprise of the Future New Capabilities D2C e-commerce Design & Product Revenue Growth Consumer Analytics Accelerating transformation ➤ 400+ management hires bringing new capabilities Our Ethos: Learning and development at speed and scale via 100% virtual delivery Bold Bold & Empowered FT LEADER IN ANCIAL Fast DIVERSITY statista 2021 top GLOBAL EMPLOYER 2020 CERTIFIED EXCELLENCE IN EMPLOYEE CONDITIONS HUMAN RIGHTS ➤ 80+ awards and certifications 0000 BEST PLACES TO WORK for LGBTQ Equality 100% CORPORATE EQUALITY INDEX Purpose driven organisation ➤ With new Ethos and leadership capability disability confident COMMITTED Empowered Stronger, Simpler, Faster BAT A BETTER TOMORROW Digitally enabled workforce ➤ Simpler, faster organisation ➤ Connected and empowered workforce Diverse Responsible 22#23160/0.17 10/0.25 4 We are on a journey: Transformation is happening. The opportunity is huge BAT A BETTER TOMORROW $40/065 160/0.17#24We Have Made a Strong Start Non-Combustible Consumers. Strong growth in New Categories Powered by combustibles and simplification Continued strong financial delivery +29% 13.5m CAGR 2020 Combustible Volume Reduction -4.5% -4.5% CAGR 2020 EPS Growth*** +8.5% +5.5% CAGR 2020 CAGR over last three years ending FY20. * Non-Combustible consumer definition: See Appendix A6. ** Total New Category Investment, *** Adjusted EPS @ Constant rates of exchange New Category Revenue +43% £1.4bn CAGR 2020 Combustible Revenue Growth +3.1% +2.8% CAGR 2020 Free Cash Flow Generated +14% £7.3bn CAGR 2020 BAT A BETTER TOMORROW New Category Incremental Investment** +c.£430m 2020 Quantum Savings +£660m 2020 Dividend Paid £4.7bn 2020 24#25Delivered by Our 3 Operational Priorities Step-Change In New Categories Delivering accelerated growth in New Categories Combustible Value Growth Generating the investment resources and cash flow Simplify the Company Building the capabilities to succeed BAT A BETTER TOMORROW 25#26Our Transformation Journey is Accelerating Non-Combustible products revenue % 63% 42% 28% 27% c.15% of our developed market* revenue Note: % Revenue by market FY2020 *OECD excluding Australia and Turkey where Non-Combustible products are unavailable BAT A BETTER TOMORROW 13% 26#27Accelerating New Category Growth and Profitability BAT A BETTER TOMORROW Vapour "' vuse Establishing Vuse as the global leader* in Vapour, with a clear pathway to profitability THP glo Leveraging improved consumer satisfaction & innovation pipeline to be the fastest growing** THP brand Modern Oral VELO Leveraging superior international products & accelerate US growth for global leadership** in Modern Oral *Value share basis. ** Volume share basis. Vuse brand represents c. 80% of FY20 vapour revenue. Continue to migrate remaining Vype brands during 2021. Velo brand represents over 50% of FY20 Modern Oral markets. Continue to migrate remaining EPOK, LYFT brands during 2021. 27#28vuse 12.0% Dec-19 Establishing Vuse as a Global Leader x2 value share* in T5** Markets c.75% of Industry Revenue 29.1% #1 20.0% 13.1% #1 Dec-19 #2 BAT TTL Value Share 17.9% BAT TTL Value Share Dec-20 23.3% Dec-19 Dec-20 28.0% #1 # Dec-19 40.0% Vype TTL Value Share 42.0% Dec-20 Dec-19 BAT TTL Value Share Strong performance from Alto, ePod and ePen3 Source: BAT value share of total Vapour - US Dec Marlin, Canada Dec Scan, UK Dec Nielsen, France Dec stator & Germany Dec Nielsen. * See Appendix A3 for Value share definition. ** T5 represent c. 75% of Vapour industry revenue (closed-system) Vuse brand represents 80% of FY20 vapour revenue. Continue to migrate remaining Vype brands during 2021. Dec-20 BAT A BETTER TOMORROW 69.0% #1 57.2% Vype TTL Value Share Dec-20 28#29vuse With a Clear Pathway to Profitability Improved Trade Margin Reduced Cost of Goods Marketing Spend Effectiveness ■ ■ ■ E-Commerce expansion Subscription sales Channel shift away from high cost vape stores Front margin* already reduced significantly in France and Canada BAT Global deployment of MSE Model (Marketing Spend Effectiveness) A BETTER TOMORROW c. £100m productivity savings delivered in 2020 Design for automation ▪ Further scale benefits * Front margin refers to recommended trade margins based on recommended resale prices, not contingent on performance. ** Across New Categories Vuse migration and global brand benefits ▪ Scale benefits 29#30glo Leveraging Improved Satisfaction to Record Volume Share Across Key Markets (c.80% of Industry Revenue) Italy 5.0% Dec-19 Japan 5.9% Dec-20 Japan: 6.3% Latest weekly share 0.3% Dec-19 Russia 1.4% Dec-20 Moscow: 4.6% Dec '20 city share 0.1% Dec-19 0.9% Dec-20 Market test: 14% Dec '20 segment share 0.5% Dec-19 Ukraine 1.9% Dec-20 Kiev: 3.9% Dec '20 city share 0.5% BAT A BETTER TOMORROW Dec-19 Romania Driven by Hyper: Our most successful THP launch to date Record Device Sales: +68% glo device volume growth* 4.4m Hyper devices sold in 2020 THP Volume share growth v FY19. * Device growth excluding Sens. Japan - Dec CVS-BC Vol. Share of FMC+THP+Hybrid; Russia -Dec IMS est. Vol. Share of FMC+THP; Italy and Ukraine - Dec Nielsen Vol. Share of FMC+THP.; Romania - Dec Nielsen KA Vol. share of FMC+THP. City shares based on discrete Dec 20. Latest weekly share in Japan is week ending 7th Feb. Italy market test in Catania share of THP segment. See Appendix A3 for Volume share definition. 1.2% Bucharest: 1.6% Dec '20 city share 30 Dec-20#31glo Insight Driven Innovation to be the Fastest Growing THP Brand Satisfaction Taste & Flavour Device Stick Glo 1.0 2017 Kent Slims format Sources: Company data consumer product tests | | | | Glo Pro & Nano 2019 Glo Hyper 2020 |||| Neo Slims format upgrades Neo Premium King Size BAT A BETTER TOMORROW Further Improvement in Device Appeal & Sensorials Device miniaturisation Enhanced Boost Function Personalisation Stick Format Flavour Pipeline 31#32VELO Leverage Superior International Product and Leadership+ Position Leading* in both established and new oral markets c.95% of Industry Revenue, including US DEN SWE + 64% CH + 95% NOR 67% DE 50% + 91% CZE 87% Overall Product Appeal** With superior products and mix VELO Competitor 1 Competitor 2 Established oral market + 4.7 4.5 4.6 BAT *Volume share. Includes EPOK/LYFT brands in ENA. Share of Modern oral category: Dec 2020. The US accounts for c.50% of Modern Oral industry revenue. ** Product appeal based on 2020 Consumer Quantitative Product Research, Sweden & Switzerland. Velo brand represents over 50% of FY20 Modern Oral markets. Continue to migrate remaining EPOK, LYFT brands during 2021. A BETTER TOMORROW New to oral market 4.9 4.7 4.2 32#33VI VELO Expanded US Range to Accelerate Growth SKUS Expected Nicotine strength (mg) Flavours VIL Cinnamon WARNING: Portfolio strengthened by Dryft acquisition 07 This product contains nicotine. Nicotine is an addictive chemical 咖 Dragonfruit WARNING: This product contains nicotine. Nicotine is an addictive chemical. Initial portfolio 2 & 4 OMA 2 4 07 20 Nicote Wintergreen WARNING: This product contains nicotine. Nicotine is an addictive chemical. Expanded portfolio 2, 4 & 7 07- ******* 20 Nea Spearmint WARNING: This product contains nicotine. Nicotine is an addictive chemical 10 28 07 ANAY Citrus Burst WARNING: This product contains nicotine. Nicotine is an addictive chemical Nov'20 6K outlets Circle K Exclusivity 5.8% BAT Jul-20 A BETTER TOMORROW Encouraging early results, with distribution building Velo US volume share Mar'21 c.80K outlets Nationwide* 8.5%. 11.1% Velo Phase 2 roll-out Dec-20 w/e 24 Jan 33#34Exciting Product Innovation Pipelines V vuse ZERO " vuse CREATIONS 1 Vuse ePod / Alto superiority* CBD & Zero** City tests Dau neo 10 YOOTPERNEHME BPEDIT BAWIEMY 30OPOBLO glo Hyper+ upgrade Superior neo sensorials H Will VELO BAT A BETTER TOMORROW Patented nicotine delivery system New strengths, flavours and formats OWAN * Superiority through new device upgrades including Bluetooth enabled age verification. **Zero nicotine Vuse brand represents 80% of FY20 vapour revenue. Continue to migrate remaining Vype brands during 2021. Velo brand represents over 50% of FY20 Modern Oral markets. Continue to migrate remaining EPOK, LYFT brands during 2021. 34#35Beyond Nicotine: Exploring New Opportunities Social Acceptability Beyond "On the Go Wellbeing Nicotine: & Stimulation" New Nicotine Categories Tobacco Less Usage Regain * Indicative assessment - assessment of Social Acceptance will be product specific Additional BAT Global Marketing Reach Clear portfolio expansion boundaries Reduced Health Impact Compared to Cigarettes Leveraging Delivery Platforms NEW CATEGORY GROWTH OPPORTUNITIES Strategic and Financial Attractiveness BAT A BETTER TOMORROW Positive Environmental Contribution Science and Regulatory Expertise 35#36Beyond Nicotine: Leveraging our Strengths to Explore "On The Go Wellbeing & Stimulation" Reclaiming consumer moments مسا High growth & margin categories BAT strengths & capabilities Target Area On the Go Wellbeing & Stimulation Boost & Energy Clarity & Focus Calm & Relax BAT Active Distribution A BETTER TOMORROW BAT Strengths & Capabilities Product Global Reach Insights Stewardship Science Navigating M&A & R&D Regulation Expertise Portfolio & Brands 9 new Better Tomorrow Ventures investments closed to date 36#37£5bn Revenue: Clear Pathway to Profitability Marketing Investment New Category Revenue £1.4bn FY20 BAT NC revenue 1/3 Category growth 2/3 £5bn BAT share FY25 BAT growth* NC revenue 2020 c.80% 2025 c.40% Marketing investment as % of revenue Marketing investment expected to grow But reduce as % of revenue BAT A BETTER TOMORROW New Category Profitability * Volume share in THP, Modern Oral and Value share in Vapour. **Market contribution: Profit from the sales of brands after deduction of directly attributable costs (including marketing) and before allocation of overheads New Categories to be profitable** by 2025 37#385 We are confident in delivering our targets and building A Better Tomorrow™ BAT A BETTER TOMORROW#39Combustibles Value Growth: Sustainable Investment Resources and Cashflows Well positioned Strategic brands Premium 36%^ Mid priced 19% Value For Money 45% DUNHILL TO OF O STRIKE Rollmars KENT CAMEL Newport 29.8% NATURAL AMERICAN SPIRIT CIGARETTE Global Leader with #1 Position Global Market Share* Value Share** Driving value growth Volume Share** +20 bps -15% Brand & SKU rationalisation BAT A BETTER TOMORROW ΑΛΛ +40 bps SKU Reduction Over Last 2 years^^ Targeted pricing with RGMAM The BAT Group does not own all brands featured in this presentation in all markets, e.g. BAT is the owner of Camel and Natural American Spirit in US only. ^ Estimated consumer price turnover (CPTO) Combustible Strategic Brands FY 19. *Value share in Top-40 39 markets **For FMC share definitions, See Appendix A3. ^^ Target for end of 1021 from 2019 baseline ^^^ Revenue Growth Management#40RGM* driving sustainable value creation RGM* powered by a data science-led approach Price Strategy & Settings Trade Investments Optimisation Assortment Optimisation Promotion Optimisation Lead Markets New Markets * Revenue Growth Management. ** On a constant currency basis. See Appendix A2. Key driver of our 2-3% Combustible revenue growth** BAT A BETTER TOMORROW 80% of revenue to be covered by RGM* by end of 2021 40#41US Combustibles: a Source of Value Growth Strong Results +10 bps Volume Share* 11.8 Japan +45bps Value Premium Share. Share* 10.1 +70bps ↑ USA 8.8 Low cigarette prices relative to income** Russia 8.4 8.1 Germany Vietnam Share growth versus FY19. *For share definitions, See Appendix A3. ** Income defined as GDP per capita ('000) / average pack price (£) Source: Euromonitor, Oxford economics, Company internal data 6.1 Strong Brands Newport Highest share* & value share* growth in market (+50bps vs FY'19) China 5.6 Turkey 3.0 2.8 NATURAL AMERICAN SPIRIT Fastest growing. brand in the market (+5% volumes vs FY'19) Indonesia Egypt BAT A BETTER TOMORROW 0.6 India 41#42Quantum: Significant Additional Resources QUANTUM * 2020-2022 target Quantum 1 Supply chain optimisation Organisational design Quantum 2 Simplification Operating model Route to market Marketing Spend Effectiveness Revenue Growth Management BAT A BETTER TOMORROW KEY BENEFITS Generate resources Fund investments and capabilities On track for £1bn* benefit by 2022 Stronger, simpler, faster organisation Agility to operate, increased efficiency, new capabilities 42#43✓ FY20: Strong Results in a Challenging Year 2020 Results Non-Combustibles 10% of revenue Accelerating New Category: Consumer acquisition* - Revenue and share** growth Good New Category revenue and share* growth momentum entering 2021 2021 outlook 3-5% revenue growth^ BAT A BETTER TOMORROW Retaining mid-single digit EPS growth^^ guidance given COVID uncertainties Well positioned for continued strong delivery in 2021 *Target market for acquisition is existing adult smokers/nicotine users. **Volume share of THP, Modern oral and Value share of Vapour. ^ Constant currency basis. See Appendix A2. ^^ On an adjusted, diluted, constant rate basis. See Appendix A1 & A2. 43#44Continued Financial Delivery: confident in our medium-term financial algorithm post-COVID +3% to +5% Revenue Growth* High Single Figure EPS growth** BAT A BETTER TOMORROW ✓ +2% to +3% Combustibles Revenue Growth* ✓-3% to -4% Duty Paid Industry Cigarette Volume ✓Continued robust price mix*** (7.6% 3 year average) ✓New Category Revenue Growth towards £5bn 2025 target ✓Progressive operating margin ✓ Improving profitability from New Categories ✓ Reducing Net Finance Charge as Leverage reduces ✓Contribution from Associates * On a constant rate basis. See Appendix A2. ** On an adjusted, diluted, constant rate basis. See Appendix A1 & A2. *** Price/Mix definition. See Appendix A4. 44#45Continued Financial Delivery: confident in our medium-term financial algorithm post-COVID Drivers of cash generation Capital Allocation priorities ✓ Combustible value growth ✓ Working capital efficiencies ✓ Capex = Depreciation* ✓ £1bn Quantum savings 2020-2022 ✓ >90% operating cash flow conversion** ✓ 65% Dividend pay-out ✓ Continued investment in New Categories ✓ Deleverage to between 2-3x Adj net debt / Adj EBITDA^^ Adjusted Depreciation, Amortisation & Impairment of Property, Plant and Equipment and Intangible assets. ** Targeted annually. ^ Pre dividend payments. ^^Adjusted Net Debt to Adjusted EBITDA. BAT A BETTER TOMORROW c.£40bn 5 Year Cumulative Free Cash Flow 45#462 3 4 Our Responsibility to Transform The largest and only truly global tobacco and nicotine company Present in > 180 markets ● BAT Including the US - 40% of global industry value and creating trends across our multi- categories The only global company present in all four New Categories* From tobacco to nicotine and beyond A BETTER TOMORROW The only truly consumer-centric, multi-category company Global scale to leverage our insights on consumer satisfaction and taste preference Building strong, unique and recognised brands of the future, specifically positioned in each category * Includes Beyond Nicotine exploration with existing Vapour, THP and Modern Oral presence. Underpinned by the quality and diversity of our people and strong corporate ethos 46#47A Clear Framework to Accelerate Transformation BAT A BETTER TOMORROW Quest Creating the Enterprise of the Future Quantum Delivery Empowered Shaping Unleash Innovation Organisation Sustainability Technology & Digital Five 'accelerators' to enable The Enterprise of the Future 47#48Our Strategic Journey Building the Foundations 2019-2020 Strategy • 3 Clear Priorities ● · Capability Building • Science and R&D Digital Agenda Financial Delivery * By 2025 QUANTUM • Operational Delivery ● Innovation Pipeline ● Accelerating our Transformation 2020-2021 • 2030 Ambitions New Ways of Working Financial Delivery ● ● ● ● ● • Enterprise of the Future ● Nicotine & Beyond Societal Contribution ● BAT A BETTER TOMORROW Enterprise of the QUEST Future 2021 - 2025 On Track for a Pivotal Year in 2021 ● • £5 Billion NC Revenue* Financial Delivery 48#49Confident in delivering A Better Tomorrow™ 3-5% Revenue Growth* High Single Figure EPS growth* Adjusted diluted (post COVID) £5bn New Categories Revenue by 2025 Creating shared Stakeholder and Shareholder value * Medium-term growth targets. On a constant rate basis. See Appendix A2. ** Non-Combustible consumer definition: see Appendix A6. BAT A BETTER TOMORROW 50mn Non- Combustible Consumers** by 2030 49#50BAT X Enterprise of the Future Transformation & Growth BAT A BETTER TOMORROW Jack Bowles | Chief Executive Tadeu Marrocol Finance Director Y#51Appendix A1: Adjusting (Adj.) Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence. BAT A BETTER TOMORROW A2: Constant currency Constant currency-measures are calculated based on a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments. A3: Share metrics 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/Reynolds (US region). Value share: The retail sales value of the product sold as a proportion of total retail sales value in that category. Premium share: The retail sales volume of the premium product sold as a proportion of total retail sales volume of premium products in that category. Nicotine share: The retail sales volume of the nicotine product sold as a proportion of total nicotine product volume in that category. Exit share: The retail sales volume of the product sold as a proportion of total retail sales volume in that category at a specific period point in time. 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: Environmental Targets Targets cover: climate change, water and waste, sustainable agriculture. Full details are available from the ESG Report https://www.bat.com/group/sites/UK 9D9KCY.nsf/vwPagesWebLive/DOAWWEKR/$file/BAT ESG Report 2019.pdf. A6: Non-Combustible consumers The number of consumers of Non-Combustible products is defined as the estimated number of Legal Age (minimum 18 years, US: 21 years) consumers of the Group's Non- Combustible 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 Non-Combustible products is derived from volume sales of consumables and devices in such markets, using consumption patterns obtained from other similar markets with consumer tracking (utilising studies conducted by third parties including Kantar). The number of Non-Combustible products consumers is used by management to assess the number of consumers regularly using the Group's New Category products as the increase in Non-Combustible products is a key pillar of the Group's ESG Ambition and is integral to the sustainability of our business. The Group's management believes that this measure is useful to investors given the Group's ESG ambition and alignment to the sustainability of the business with respect to the Non-Combustibles portfolio. 51

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