#1'Accelerating Transformation' Growth in New Categories and Group earnings despite COVID-19 Preliminary results 2020 Jack Bowles - Chief Executive | Tadeu Marroco - Finance and Transformation Director BAT A BETTER TOMORROW#2Important 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. BAT A BETTER TOMORROW 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 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, including the projected future financial and operating impacts of the COVID-19 pandemic. 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 in the opening section (slide 4); (ii) certain statements in the performance section (slides 17 to 27); and (iii) certain statements in the outlook section (slides 31 to 38). 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 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. 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. Additional Information All financial statements and financial information provided by or with respect to the US 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 US 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 US 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, Camel Snus and Granit, 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. 3#4Committed to Building A Better Tomorrow™ A BETTER TOMORROWTM To reduce the health impact of our business^ £5bn New Category Revenue by 2025 Today, we have a significant CPTO* base of c.£90bn With a strong growing base of 10% Non-Combustibles** Revenue and already 13.5mn consumers BAT Carbon Neutral by 2030*** On track for our 2025 targets A BETTER TOMORROW 50mn Non-Combustible** Product Consumers by 2030 ^Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. * Estimated consumer price turnover (CPTO) FY20. ** See Appendix A6.*** ESG ambition. See Appendix A5. 4#5Transforming, Investing and Growing Accelerating New Category growth: ● ● ● Additional 3m Non-Combustibles consumers* to reach 13.5m ● BAT Accelerating volume growth in New Categories in H2 Continued growth and 20bps** value share gain in Combustibles 100bps Margin expansion and c.£430m increase in New Category investment £660m of savings driven by Quantum Free cash flow of £7.3bn generated, 103% operating cash conversion Strong results in a challenging environment *See Appendix A6. ** FMC value share. For share definitions, see Appendix A3. A BETTER TOMORROW 5#61 2 3 4 With Clear Points of Difference The largest and only truly global tobacco and nicotine company Present in over 180 markets Including the US - 40% of global industry value and creating trends across our multi-categories ● ● ● BAT The only global company present in all four New Categories From tobacco to nicotine and beyond The only truly consumer-centric, multi-category company With the global scale to leverage our insights on consumer satisfaction and taste preference ● A BETTER TOMORROW Building strong, unique and recognised brands of the future, specifically positioned in each category Underpinned by the quality and diversity of our people and strong corporate ethos 6#7Accelerating Non-Combustible consumer acquisition* Vapour BAT 13.5 6.7 4.0m +3.0m (29%) When including poly-usage: 15.2mn Non-Combustible** consumer numbers THP Modern Oral +1.5m (30%) 1.5m +1.4m (51%) +0.7m (79%) Includes consumer poly-usage***: 1.7m (+0.7m or 70%) Growth driven by true multi-category performance Growth versus FY19. Source: Company data. *Target market for acquisition is existing adult smokers/nicotine users. See Appendix A6. *** Poly-usage across non-combustible products BAT A BETTER TOMORROW Traditional Oral 3.0m +0.1m (5%) 7#8Accelerating consumer acquisition in H2 +0.6m Q1 +3m Non-Combustible* consumers over 2020 +0.5m Growth versus FY19. Source: Company data. *See Appendix A6 +0.8m Q2 (COVID impact) Non-Combustible* consumers 2020 growth Q3 +1.1m Q4 BAT A BETTER TOMORROW 13.5m FY20 Total Non-Combustible. consumers 8#9FY 2020: Building A Better Tomorrow™ glo BAT A BETTER TOMORROW 13.5m Non-Combustible product consumers* BAT A BETTER TOMORROW +3m Non-Combustible product consumers* V vuse 26% Value Share In Top 5 markets** Vuse +52% Vapour Pod/Liquid Volume growth 14 % Volume share In Top 9 markets** glo +29% THP Stick Volume growth (ex Sens) VII VELO BAT VELO A BETTER TOMORROW 40% Volume Share In Top 6 markets** +62% Pouch Volume growth Growth versus FY19. Source: Company data. * See Appendix A6 Top 5 vapour markets: US, Canada, UK, France, Germany. T5 represent c. 75% of Vapour industry revenue (closed-system). Top 6 Modern oral markets: US, Sweden, Denmark, Norway, Switzerland and Germany. Top 9 THP markets: Japan, South Korea, Russia, Italy, Germany, Romania, Ukraine, Poland and Czech Republic. T6 represent c. 95% Modern Oral industry revenue. T9 represent c. 90% of THP industry revenue. 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. ** Share definitions see Appendix A3. 9#10Strong consumable volume growth in H2 across all 3 categories +43% ■H1 +59% Vuse Pod/Liquid Volume H2 +9% glo Stick Volume (ex Sens) +45% +74% Velo Pouch Volume +56% BAT A BETTER TOMORROW Volume growth of Vapour consumables, THP sticks, and Modern Oral pouches. Vuse brand represents c. 80% of FY20 vapour revenue. Velo brand represents over 50% of FY20 Modern Oral markets. Continue to migrate remaining brands during 2021. 10#11FY 2020: Results Demonstrate Resilience Revenue New Category Revenue Operating Margin Profit From Operations Diluted EPS REPORTED FY 2020 @ Current rates *** *On an adjusted, constant rate basis. See Appendix A1 & A2. Prior period affected by charge in respect of the Quebec class action in Canada. Current rate growth -0.4% +14.9% +380 bps** +10.5%** +12.0%** ADJUSTED FY 2020 @ Constant rates* +3.3% +15.4% +100 bps*** +4.8% +5.5% BAT A BETTER TOMORROW 11#12FY 2020: Delivering Today +20bps Corporate Value Share^ +3.3% Group Revenue* Share growth versus FY19. Source: Company data ^See Appendix A3 M +15% New Category Revenue* +4.8 % Adjusted Profit* from operations +7.3% Price/Mix** (Combustibles) all +5.5% Adjusted Diluted EPS* BAT A BETTER TOMORROW -4.3% BAT Volumes (FMC+THP+Hybrid) £7.3bn Free Cash Flow*** * On an adjusted, constant rate basis. See Appendix A1 & A2. **Price/mix defined in Appendix A4 *** Free Cash flow before payment of dividends 12#13Our Ethos enabled the best of BAT through COVID BAT A BETTER TOMORROW ● Bold & Empowered Sales force adapted routes to market against disruption • COVID-secure workplace measures in all markets Implemented e-learning plan No employees made redundant or furloughed due to COVID crisis Delivering results in exceptional circumstances Source: Company data ● Operational Agility Dynamic response to supply chain disruptions & government mandated shutdowns ensured no combustibles out of stocks • glo Hyper launch switched to digital, most successful glo a launch to date Tripled e-com site visits and +65% e-com revenue in 2020 Quantum improved our response agility Stronger, Simpler, Faster < ESG Front & Centre Supporting communities with testing equipment, 3D printers, & medical & hygiene equipment • Partnering with leaf growing. communities to support water supply and sanitation • KBP: leveraging tobacco plant technology platform for potential COVID vaccine: in Phase 1 trials Supporting communities and developing solutions Commitment to Deliver 13#14Tadeu Marroco Finance and Transformation Director BAT A BETTER TOMORROW 14#15FY 2020: Further Transformation Fuels Growth BAT On an adjusted, constant rate basis. See Appendix A1 & A2 ** Adjusted net debt to adjusted EBITDA at current rates. See Appendix A1. A BETTER TOMORROW Delivering revenue, profit and earnings growth* in challenging circumstances Accelerating New Categories through H2 with good momentum into 2021 Combustibles and Quantum generating value and cashflow to invest in NCs £7.3bn FCF, driven by operating cash conversion of 103% ✔ Adjusted net debt/EBITDA** at 3.3x, on track for c.3x by end 2021 Mid-single digit EPS growth* guidance retained for 2021, given COVID uncertainty ✔ Committed to our financial algorithm post-COVID and our 65% pay-out ratio 15#16Resilient Combustible volumes Outperforming the industry (+30bps volume share*) Strong performance in DMs ● Robust pricing Robust pricing environment No accelerated downtrading +7.6% 3 year average price/mix ● ● REVENUE: Growth in a Challenging Environment BAT A BETTER TOMORROW ● Revenue growth*** +3.3% Absorbing c.-2.5% COVID headwind Combustible revenue*** +2.8% New Category revenue*** +15.4% ● Revenue 2019 +2.3% +1.0% Combustibles** Non-Combustibles c. 2.5% +3.3% Revenue growth Revenue 2020 constant rates COVID headwind -3.7% FX & Adjusting Revenue from PY Revenue 2020 Strong revenue and share momentum into 2021 *FMC+THP volume share. For definition see Appendix A3. ** Combustibles revenue contribution net of other revenue growth. ***On an adjusted, constant rate basis. See Appendix A1 & A2. 16#17Vuse: Establishing Vuse as a Global Leader x2 value share* in T5** Markets c.75% of Industry Revenue #1 12.0% Dec-19 20.0% ↓ #1 Dec-19 #2 17.9% Vype TTL Value Share Vuse TTL Value Share Dec-20 23.3% 29.1% Dec-19 Dec-20 28.0% O #1 Dec-19 40.0% Vype TTL Value Share 42.0% Dec-20 Dec-19 69.0% Vuse TTL Value Share 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 c. 80% of FY20 vapour revenue.. Continue to migrate remaining Vype brands during 2021. Dec-20 Strong performance from Alto, ePod and ePen3 BAT A BETTER TOMORROW #157.2% Vype TTL Value Share Dec-20 17#185.0% Dec-19 glo: Leveraging Improved Satisfaction to Drive Accelerated Japan 5.9% Dec-20 Japan: 6.3% Latest weekly share 0.3% Dec-19 Growth Record Volume Share Across Key Markets (c. 80% of Industry Revenue) Italy 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 +68% 1.2% Bucharest: 1.6% Dec'20 city share 4.4m Hyper devices sold in 2020 Record Device Sales: glo device volume growth* 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 w/e 7 Feb. Italy market test in Catania share of THP segment. See Appendix A3 for Volume share definition. Dec-20 18#19Velo: International Leadership Driven by Superior Product Leading in both established and new oral markets c.95% of Industry Revenue, including US SWE NOR + 67% DE 64% CH + 95% 50% DEN 91% CZE 87% With superior products** and mix Overall Product Appeal VELO Competitor 1 Competitor 2 Established oral market 4.7 4.5 4.6 4.7 BAT New to oral market + 4.9 4.2 A BETTER TOMORROW *Volume share. Includes EPOK/LYFT brands in ENA. Share of Modern oral category: Dec 2020. The US market accounts for c. 50% 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. 19#20Velo: Expanded US Product Range to Accelerate Growth Nicotine strength (mg) Flavours SKUS VI 07 Cinnamon WARNING: This product contains nicotine. Nicotine is an addictive chemical. *Expected Portfolio Strengthened by Dryft Acquisition Dragonfruit WARNING: This product contains nicotine. Nicotine is an addictive chemical. Initial portfolio 2 & 4 OTA 2 4 07 ******* 20 Nicotine Pouches Wintergreen WARNING: This product contains nicotine. Nicotine is an addictive chemical. 咖 Expanded portfolio 2, 4 & 7 07. ******* 20 Nicotine Pouches Spearmint WARNING: This product contains nicotine. Nicotine is an addictive chemical. 10 28 07. ******* Citrus Burst WARNING: This product contains nicotine. Nicotine is an addictive chemical. Nov'20 6K outlets Circle K Exclusivity 5.8% Jul-20 BAT Encouraging early results, with distribution building Mar¹21 c.80K outlets Nationwide* Velo US volume share A BETTER TOMORROW 8.5%. 11.1% Velo Phase 2 roll-out Dec-20 w/e 24 Jan 20#21COMBUSTIBLES: Delivering Value Growth +20 +40. Corporate Value ShareA bps سرا +2.8% Combustibles Revenue* Corporate Volume ShareA +7.3% Combustibles Price/Mix** +40m bps Strategic Brand Value Share 66% Strategic Brand Share of Group Combustible volume EST. 1907 BAT DUNHILL A BETTER TOMORROW TOBACCO OF LONDON LTD. AMERICAN SPIRIT KENT Newport LUCKY STRIKE CAMEL Rothmans OF LONDON 1890 PALL MALL Share growth versus FY19. FMC share. ^ See Appendix A3 for share definitions. Source: Company data. * On an adjusted, constant rate basis. See Appendix A1 & A2. **Price/mix defined in Appendix A4. The BAT Group does not own all brands featured in this presentation in all markets, e.g. BAT is the owner of Newport, Camel and Natural American Spirit in US only. 21#22Successfully Navigating Regulation 91% - EU Menthol Industry volume retained in FMC 70% - Vapour capture of EU menthol volume outflow EU & Turkey Menthol Ban BAT nicotine consumer retention 109% Total nicotine retention FMC consumers migrating to Vype 103% Total nicotine retention Accelerated glo growth driven by Hyper 105% Total nicotine retention Hyper growth off-setting FMC loss 113% Total nicotine retention Successfully transforming our multi-category portfolio +150k +176k ℗ Vuse FMC BAT A BETTER TOMORROW 91% Total nicotine retention Significant vapour gains close to offset FMC losses Source: Company data. % Retention figures reflect the number of consumers following the ban compared to the number of total nicotine consumers prior to the ban 113% Total nicotine retention Strong share growth; Kent outperforming the market 110% Total ENA nicotine retention 110% BAT total nicotine consumers retention post Menthol Bans +105k +25k glo VELO 22#23REGIONS: Resilient performance across the Group BAT A BETTER TOMORROW US ΕΝΑ APME AMSSA Group Adjusted Revenue* +11.2% +2.1% -9.9% +1.4% +3.3% *Adjusted and constant rate basis. See Appendix A1-A2. **Value share of cigarettes v FY19. See Appendix A3. Source: Company data Value Share** +45bps Flat +10bps +30bps +20bps Adjusted Profit from Operations* +15.5% -2.4% -7.3% -2.5% +4.8% 23#24H2 Emerging Market volume recovery BAT Volume H1 Developed GTR -3.5% -6.1% Emerging -6.4% Source: Company data. BAT volume % change versus same period last year BAT Volume H2 Developed GTR -3.5% -7.3% Emerging 0.0% Developed BAT BAT Volume Full Year Emerging -6.7% A BETTER TOMORROW -3.3% 24#25US: A Strong Performance +11.2% US Revenue Growth* سا all US Combustibles Value Share*** +83% US New Category Revenue Growth all +15.5% US Operating Profit Growth* +45bps +9.4% +8.3pts Combustibles Price/Mix** US Vapour Value Share growth... BAT A BETTER TOMORROW Strong Brands Driving Value Share Growth Higher Pricing Ahead of Peers enabled by Revenue Growth Management US Combustibles Volume Share 35%, Newport Value Share 17% YTD vapour value share up c.1.5x Share growth versus FY19. Combustible FMC share. ***See Appendix A3 for share definitions. Source: Company data. * On an adjusted, constant rate basis. See Appendix A1 & A2. **Price/mix defined in Appendix A4. 25#26OPERATING MARGIN: Releasing Funds to Support the Growth Agenda 43.1% 2019 Adjusted Operating Margin 2.2 On an adjusted current rate basis. See Appendix A1. +100bps Operating Margin Growth* Price/mix and Operational Efficiencies +1.0 -0.9 + -0.4 c.£430m New Category Marketing Investment Incremental New Categories Transactional FX BAT 44.1% A BETTER TOMORROW 2020 Adjusted Operating Margin* 26#27Quantum: Generating Significant Additional Investment 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 27#28EPS*: Growth up +5.5%, Against Significant COVID Headwind Strong FY EPS* delivery Resilient APFO** growth Reduction in underlying tax rate to 24.9% Resilient against headwinds COVID Higher Net Finance Costs Lower contribution from associates ● 323.8 2019 FY 17.1 -2.9 Adjusted Net Finance profit from costs operations * Adjusted, diluted, EPS at constant rates. See Appendix A1 & A2. ** Adjusted Profit from operations. -0.2 +5.5% 5.4 Associates +5.5% Adjusted diluted EPS* growth -1.2 Taxation Non- controlling interests -0.6 Diluted number of shares 341.4 2020 FY at Constant FX BAT A BETTER TOMORROW +2.4% -9.7 FX Impact 331.7 2020 FY at Current FX 28#29CASH: Strong Generation Driving Deleverage Adj. Net Debt / Adj. EBITDA 3.5x 41.7 OPENING NET DEBT 2.6 * On a constant rate basis. See Appendix A1. -0.3x FREE CASH FLOW AFTER DIVS 0.4 OTHER CASH & NON-CASH 3.2x 39.5 CLOSING NET DEBT @ CONSTANT RATES* +0.1x FX BAT 39.5 A BETTER TOMORROW 3.3x CLOSING NET DEBT 29#30CASH AND DELEVERAGE: Strong Liquidity Position >90% operating cash conversion Strong Operating Cash Flow Conversion !!! 100%* 103% 97% FY18 FY19 FY20 Cash generation led by Combustibles * normalised for MSA impact in 2018 Strengthened Liquidity in 2020 £ in billions 1.9 USD: Apr 7,10 & 30 yr bonds 3.4 € £8.9bn £3.4bn £5.8bn EUR: Apr 4.5 & 8 yr bonds 3.9 GBP: Jun 8 yr bonds 8.9 A USD: Sep 5.5, 7.5, 10.5, 20 & 30 yr bonds 2.8 Manageable Maturity Due¹21 Profile BAT A BETTER TOMORROW £ in billions 3.9 Bond issuance Bi-laterals Renewed RCF: 1 & 5 year term; No financial covenants Successful refinancing with enhanced liquidity and extended maturities 9.9yr 93:7 63:19:13:5 2.5 Due¹22 Due¹23 Average Maturity Fixed:Floating $:£:€:Other 30#31CAPITAL ALLOCATION: Our Priorities 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^^ BAT c.£40bn 5 Year Cumulative Free Cash Flow * Adjusted Depreciation, Amortisation & Impairment of Property, Plant and Equipment and Intangible assets ** Targeted annually. ^ Pre dividend payments. ^^Adjusted Net Debt to Adjusted EBITDA. A BETTER TOMORROW 31#32FY 2021 GUIDANCE: Resilience in an Uncertain Environment * Kil AA 3-5% Revenue Growth* Mid Single Figure EPS Growth** Continued Deleverage c.3X Adjusted Net Debt/Adjusted EBITDA by end 2021 On a constant rate basis. See Appendix A2 **Adjusted Diluted EPS on a constant rate basis. See Appendix A1 & A2 BAT A BETTER TOMORROW Performance within guidance range dependent on ● +/- External factors: • COVID impact US industry volume • Associate performance 32#33Jack Bowles Chief Executive BAT A BETTER TOMORROW 33#34Further Transformation Fuels Growth Clear Commercial Priorities STEP-CHANGE IN NEW CATEGORIES COMBUSTIBLE VALUE GROWTH SIMPLIFY THE COMPANY Share growth versus FY19. ***See Appendix A3 for share definitions. Source: Company data Good Progress in 2020 BAT See Appendix A6.. ** Price/mix defined in Appendix A4 A BETTER TOMORROW Non-combustible Consumers* +3.0m Accelerating New Category performance Combustibles price/mix** +7.3% Value share*** +20bps Savings of £660m driven by Quantum Leveraging our digital capabilities 34#35Consumer-Centric Multi-Category model Consumer Moments * Revenue Growth Management G MAPS Paration System Multi-Category Portfolio Digitally Embedded RGM* Consumer Centricity Consumer Digital Insights EI PRISM Sop Meth 153 Product Boundaries Beyond multi-category... we are consumer-centric multi-category BAT Product Satisfaction Index A BETTER TOMORROW 35#36A Clear Framework to Accelerate Transformation BAT A BETTER TOMORROW Guest Creating the Enterprise of the Future Quantum Delivery Unleash Innovation Empowered Organisation Shaping Sustainability Technology & Digital 36#37Confident in Medium-Term Guidance Post-COVID BAT A BETTER TOMORROW 3-5% Revenue* Growth High Single Figure EPS* growth Adjusted diluted (post COVID) £5bn New Categories Revenue by 2025 * On a constant rate basis. See Appendix A2. ** See Appendix A6. 50mn Non- Combustible Consumers** by 2030 Creating Shared Stakeholder and Shareholder Value 37#38Committed to Building A Better Tomorrow™ A BETTER TOMORROWTM To reduce the health impact of our business^ £5bn New Category Revenue by 2025 Today, we have a significant CPTO* base of c.90bn With a strong growing base of 10% Non-Combustibles** Revenue and already 13.5mn consumers 50mn Non-Combustible Consumers** by 2030 Carbon Neutral by 2030*** On track for our 2025 targets BAT ^Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. * Estimated consumer price turnover (CPTO) FY20. ** See Appendix A6.*** ESG ambition. See Appendix A5. A BETTER TOMORROW 38#39'Accelerating Transformation' Growth in New Categories and Group earnings despite COVID-19 Preliminary results 2020 Jack Bowles - Chief Executive | Tadeu Marroco - Finance and Transformation Director BAT A BETTER TOMORROW#40Appendix A1: Adjusting (Adj.) Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence. BAT 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. A BETTER TOMORROW 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. A5: Environmental Targets Targets cover: climate change, water and waste, sustainable agriculture. Full details are available from the ESG Report 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). 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. 40#41Top BAT Market Share Movements (1) Market Argentina Australia Bangladesh Belgium Brazil Bulgaria Canada Chile Colombia Czech Republic Denmark SOM FY20 Movement (ppt) 0.1 0.4 9.9 0.2 (0.8) 0.0 (0.5) (0.7) 2.3 (%) 23.4 41.9 78.3 25.0 74.9 37.8 48.1 96.7 54.6 20.0 69.5 (0.9) (2.0) Market France Germany Indonesia Italy Japan Kazakhstan KSA Malaysia Mexico Netherlands SOM FY20 (%) 16.0 20.1 4.0 17.7 18.8 15.9 31.7 51.7 37.1 21.4 BAT A BETTER TOMORROW Movement (ppt) (1.4) 0.1 (1.7) (0.3) 0.9 0.0 (5.2) 1.1 2.1 (1.1) 41#42Top BAT Market Share Movements (2) Market New Zealand Pakistan Poland Romania Russia South Africa South Korea SOM FY20 Movement (ppt) (1.3) 1.4 (0.8) (0.4) 0.8 (1.0) 0.1 (%) 70.8 76.3 27.8 58.5 24.5 76.2 12.2 Market Spain Switzerland Taiwan Turkey UK Ukraine Vietnam SOM FY20 (%) 10.4 33.4 10.8 25.8 8.6 27.8 29.5 BAT A BETTER TOMORROW Movement (ppt) (1.5) (1.6) 0.8 2.6 (0.8) (0.3) 1.1 42