#1Multi-Category strategy delivers growth in difficult times Interim Results 2020 Jack Bowles - Chief Executive | Tadeu Marroco - Finance Director BAT A BETTER TOMORROW#2BAT 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 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, made within the meaning of Section 21E of the United States Securities Exchange Act of 1934, 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 Group operates. In particular, these forward looking statements include statements regarding the BAT Group's future financial performance, future regulatory developments, planned product launches and the projected future financial and operating impacts of the COVID-19 pandemic. 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. 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. 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. 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; changes in domestic or international tax laws and rates and the impact of an unfavourable ruling by a tax authority in a disputed area; adverse litigation and dispute outcomes and the effect of such outcomes on the Group's financial condition; changes or differences in domestic or international economic or political conditions; the impact of the COVID-19 pandemic; adverse decisions by domestic or international regulatory bodies; the impact of market size reduction and consumer down-trading; translational and transactional foreign exchange rate exposure; the impact of serious injury, illness or death in the workplace; the ability to maintain credit ratings and to fund the business under the current capital structure; the inability to develop, commercialise and rollout New Categories; and changes in the market position, businesses, financial condition, results of operations or prospects of the Group. 2#3BAT A BETTER TOMORROW 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 filed on 26 March 2020 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. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. Readers are cautioned not to place undue reliance on such forward-looking statements. Additional Information All financial statements and financial information provided by or with respect to the US or Reynolds American Inc. ("RAI") are initially prepared on the basis of U.S. GAAP and constitute the primary financial statements or financial records of the US business/RAI. This financial information is then converted to International Financial Reporting Standards as issued by the IASB and as adopted by the European Union (IFRS) 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 RAI it is provided as an explanation of, or supplement to, RAI's primary U.S. GAAP based financial statements and information. Our vapour product Vuse (including Alto and Vibe), and certain oral products including Grizzly, Granit, Camel Snus, Kodiak and Velo, 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#42020 H1 RESULTS: BAT A BETTER TOMORROW Our Multi-Category strategy delivers growth in difficult times Delivering revenue, profit and earnings growth in exceptional circumstances Multi-Category consumer acquisition drives revenue and share growth** Excellent Combustibles value and volume share growth Navigating COVID supported by our diverse geographic footprint Committed to delivery and our 65% dividend pay-out ratio Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2 ** Tracked share metrics 4#5Building A Better Tomorrow A Defining Corporate Purpose A BETTER TOMORROW™ To reduce the health impact of our business by offering a greater choice of enjoyable and less risky products for our consumers * Growth over last 12 months. ** Marketing Investment Good Progress in 2020 BAT A BETTER TOMORROW ✓ Non-Combustibles now 10% of revenue ✓ Additional 2.7m* Non-Combustibles consumers Invested additional £250m** in New Categories Set ambitious 2025 environmental targets Set ambitious 2030 Carbon Neutrality target 5#6Delivering for Today & Investing in the Future Clear Commercial Priorities STEP-CHANGE IN NEW CATEGORIES COMBUSTIBLE VALUE GROWTH SIMPLIFY THE COMPANY Stronger, Simpler, Faster Commitment to Deliver Good Progress in 2020 BAT A BETTER TOMORROW ✓ Growing share in New Categories ✓ New Category revenue** +12.7% ✓ Cigarette price/mix*** +8.5% Group revenue** +2.4% Quantum savings c.£240m YTD Navigating COVID with agility Share growth versus FY19. Source: Company data * Volume share in THP, Value share in Vapour.. ** On an adjusted, constant rate basis. See Appendix A1 & A2. *** Price/mix defined in Appendix A4 Our people have gone above and beyond to deliver growth 6#7H1 2020 RESULTS: Delivering for Today Results demonstrate real resilience during COVID Revenue New Category Revenue Operating Margin Profit From Operations Diluted EPS * On an adjusted, constant rate basis. See Appendix A1 & A2. Prior period affected by charge in respect of the Quebec class action in Canada. REPORTED H1 2020 @ Current rates +0.8% +14.7% +550 bps** +16.4%** +22.7%** *** Current rate growth ADJUSTED H1 2020 Constant rates* +2.4% +12.7% +80 bps*** +3.3% +6.6% BAT A BETTER TOMORROW 7#8H1 2020 RESULTS: A strong performance in a challenging environment +50bps Corporate Volume Share all +12.7% New Category Revenue* Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2 +20pps Corporate Value Share +2.4% Group Revenue* مدا +40 bps Strategic Cig+THP Value Share all +3.3. % Adjusted Profit* from operations BAT A BETTER TOMORROW -6.3% -5.3% (excl GTR) BAT Volumes (FMC+THP) +6.6% Adjusted Diluted EPS* 8#9Successfully navigating a challenging environment COVID revenue* headwind c.4% H1; c.3% expected FY Developed Markets (c.75% of Group revenue) Consumption resilient; stable to slightly higher > Good pricing > Little evidence of accelerated downtrading Volume share +30bps Emerging Markets (c.25% of Group revenue) Volume impacted by lockdown severity & duration > > Deeper lockdown in some markets Reduced illicit trade in others South Africa sales ban Share growth versus FY19. Source: Company data *Adjusted Revenue on a constant rate basis. See Appendix A1 & A2 ** Volume share in THP, Value share in Vapour.. BAT Volume share +70bps Global Travel Retail (GTR) substantially impacted A BETTER TOMORROW New Categories Category growth slowed; now recovering > Face-to-face consumer activation restricted > Switch to Digital comms > E-commerce revenue up >2x Growing share** 9#10NEW CATEGORIES: Driving a Step-Change Vuse VII VELO glo Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2. ** Volume share in THP, Value share in Vapour.. BAT A BETTER TOMORROW Investing in Non-Combustible consumer acquisition in New Categories Leveraging our digital capabilities Growing our overall share** in New Categories 10#11New Categories: Consumer acquisition drives growth BAT A BETTER TOMORROW میرا +2.7m +12.7. +£250. (vs H1 2019) Non-Combustible product Consumers #1 Vapour Device Sales*** New Category Revenue* UP2x E-commerce Revenue* @ Additional Investment** UP2x X Speed of Innovation^ m vuse W VELO glo Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2. ** Marketing Investment. *** Volume share of devices: US and Canada, share of starter kits UK, France: and Germany Prototype to product 11#12New Categories: Successfully pivoting to digital during COVID Strong momentum in social media across New Categories V vuse 33% Share of Social Media Engagement in Vapour x1.5 H1 2020 vs SPLY Social Mentions Source: BAT Internal Estimates: Social Media Listening Analytics VELO 89% Share of Social Media Engagement in Mod. Oral Social Mentions x2.8 H1 2020 vs SPLY BAT A BETTER TOMORROW glo Hyper Highest interest THP launch x1.9 Social Mentions Post Hyper Launch (Q2'20 vs SPLY) 12#13VAPOUR: Delivering a Step-Change 6.1m vapour consumers V' vuse Vuse/Vype growing value share in all key markets Industry returning to growth in all key markets BAT A BETTER TOMORROW 13#14Vapour: Vuse/Vype driving strong growth میرا +2.1m (vs H1 2019) Vapour Consumers 26% Value Share in T5 Markets +39% Vapour Revenue* سا UP3x Strategic Brand Value Share in T5** +70% US Vapour Revenue* Up 3 UP Vuse Alto US Value Share** Number of consumers growth versus HY19. Number of consumers includes poly-users unless otherwise indicated. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2. ** growth over last 12 months BAT A BETTER TOMORROW Vuse 14#15Vapour: Vuse/Vype growing share* in all key markets BAT Industry returning to growth in all key markets A BETTER TOMORROW 4 Vapour Industry Value 12m change -17% +73% +24% +21% -11% 3m change +20% +38% +17% +25% +2% YTD Value share * Value share. Company data. Share growth YTD share v FY19. **Top 5 vapour markets offtake value accounting for 80% of vapour revenue. US industry based on volume. Growth over last 12 months (May '20 vs. Jun '19). 26.0% 35.0% 13.0% 26.6% 45.8% Vuse/Vype T5 Markets recovered to 76% of prior year peak value** YTD vs FY 19 +10.4pp +11.Opp +1.8pp +9.4pp +10.0pp Note: US(Vapour) - Jun Marlin Vapour Consumables Value Share; Canada - Jun Scan Data Vapour Value Share; UK - Jun Nielsen Vype Value Share; France - Jun Strator Vapour Value Share; Germany - Jun Nielsen Vapour Value Share; 15#16Vapour: Vuse/Vype is No.1 in device sales Leading indicator of future growth #1 47% #1 70% CD #1 36% O #1 70% Vype/Vuse Volume Share of Device / Starter Kits (Latest available month) Note: (1) USA & Canada : Volume Share of Device (Jun'20) (2) UK & France: Volume Share of Starter Kits (Jun'20) (3) Germany: Volume Share of Starter Kits (May'20) BAT A BETTER TOMORROW #1 44% 16#17Vapour: Vuse brand consolidation grows share Canada value share at 44%* post Vype to Vuse migration Value Share +9%pts 100% Within Vuse W Accelerating post migration Online Sales +54% VS. Q1'20 Retention Consumer 91% Awareness 66% 27% 3% -Vuse -JUUL -IQOS Vuse Migration * Latest weekly Value share. Note: Company data - Consumables $ Share of Value by brand. Retention and consumer data based on internal consumer data tracker. Vuse growing share of total nicotine post migration vuse BAT Dec'19 Jan'20 Feb'20 Mar'20 Apr¹20 May'20 A BETTER TOMORROW 56% Vuse 44% 3% Jun¹20 17#18THP: Delivering a Step-Change glo Growing volume share in Japan and ENA Strong early results from Hyper Delivering improved satisfaction Pivoting to digital activation Note: Company data - Improved satisfaction based on +30% tobacco stick with device delivery based on consumer testing data. BAT A BETTER TOMORROW 18#19THP: Growing volume share in Japan and ENA +70bps to 18.9% Japan Total Nicotine Volume Share حمد 0.7 glo Hyper Japan June Share % میرا 5.4% glo Japan June Share میرا 2.8 glo Moscow June Share % Moscow Jun YTD 5.3% 2.3% 0.2% YTD vs. FY 19* +0.1pp +0.5pp THP revenue down -12%* due to: > Japan excise harmonisation > glo Sens underperformance 0.7% +0.3pp +1.3pp BAT A BETTER TOMORROW glo THP Volume share growth v FY19. Japan - Jun CVS-BC Vol. Share of FMC+THP+Hybrid; Russia - Moscow Jun IMS est. Vol. Share of FMC+THP; Italy - Jun Nielsen Vol. Share of FMC+THP; Ukraine - May Nielsen RMS Vol. Share of FMC+THP; *On an adjusted, constant rate basis. See Appendix A1 & A2 19#20THP: glo Hyper delivers improved satisfaction Induction heating and larger stick format Tobacco Satisfaction ++ +30% More Tobacco + King Size Taste and Flavour Device Stick Conversion Rates ++ + ++ ++ New Flavours & Capsules Fast Ramp up with Boost Button Premium King Stick Format 50% Conversion neo designed for glo Fluorescent Ctrus U 喫煙は、あなたにとって肺がんの 原因の一つとなり、心筋梗塞 脳卒中の危険性や肺気腫を悪化 させる危険性を高めます。 については、ホーム www.mw.go.jp/topics/tobaccoman ECONCEBUS neo designed for glo Wotarmaton Split neo designed for go ●CONCERUL Mit Switch U neo 喫煙は、あなたにとって肺がん 喫煙は、あなたにとって肺が 原因の一つとなり､心筋梗 原因の一つとなり､心筋梗 脳卒中の危険性や肺気腫を悪 脳卒中の危険性や肺気腫を させる危険性を高めます。 させる危険性を高めます。 詳細については、厚生労働省のホームペ (詳細については、労働省のホーム・･ www.mhiw.go.jp/topice/tobacco/main.ht www.mht.go.jp/topics/tobaccomain ください。 Andacalendadadadi neo neo designed for glo Terracotto Tobacco をご参照ください BAT A BETTER TOMORROW glo neo designed for gio Blueberry Switch U 喫煙は、あなたにとって肺がんの 煙は、あなたにとって肺がんの 原因の一つとなり、心筋梗塞・原因の一つとなり、 心筋梗塞・ 脳卒中の危険性や肺気腫を悪化 卒中の危険性や肺気腫を悪化 させる危険性を高めます。 させる危険性を高めます。 詳細については、ホームページ www.mhiw.go.jp/topics/tobacco/main.html については、厚生労働省のホーム・ページ ww.mhiw.go.jp/topics/tobacco/main.html ご参ください。) glo neo designed for go Tropical Sur 9/0 煙は、あなたにとって肺がんの 因の一つとなり、心筋梗塞・ 卒中の危険性や肺気腫を悪化 せる危険性を高めます。 については、ホームページ ww.mhiw go jatopica/tobacco/main.html CONCESSIO Sources consumer data: company data based on brand launch monitor, CCC offtake data, social media listening, CVS share, ecommerce, glo stores and D2C consumer data. Conversion rates based on device penetration relative to share at latest weekly share. 20#21THP: Continued growth in Japan supported by glo Hyper +5.9% glo June Exit Share* 1.3% glo Hyper June Exit Share* میرا 37% glo Hyper New Consumer Acquisition میرا 50% UP 2X Conversion Rate 4.7% Hyper launch Dec'19 Jan'20 Feb'20 Mar'20 Apr¹20 May'20 -Total Glo -Hyper BAT A BETTER TOMORROW 5.4% 0.7% Jun'20 H1 Exit 5.9% H1 Exit 1.3% H1 Digital launches; H2 Full launches in Japan, Russia, Romania, Italy and Germany * Volume share. Chart source: CVS Offtake Sources consumer data: company data based on brand launch monitor, CCC offtake data, social media listening, CVS share, ecommerce, glo stores and D2C consumer data. Conversion rates based on device penetration relative to latest weekly share. 21#22MODERN ORAL: Delivering a Step-Change VII VELO Strong revenue* growth in a fast-growing category Strengthening leadership in Scandinavia** Volume share growth in US, but limited by portfolio gaps Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2. ** EPOK and LYFT brands BAT A BETTER TOMORROW 22#23Modern Oral: 71% growth in an exciting category #1 Scandinavia Volume Share +71. % Modern Oral Revenue* +3.6 ppts -300bps L3Mths US Modern Oral Share Portfolio gaps limiting share growth in US Encouraging pilots in APME & AMSSA › COVID impacting activations Volume share Jun YTD + + + 9.3% 3.9% 72.6% 53.4% 14.2% YTD vs. FY 19** +3.6pp +1.7pp +17.1pp +7.1pp +3.1pp BAT A BETTER TOMORROW VI VELO Constant currency revenue growth. Volume Share growth YTD share v FY19. See Appendix A1, A2. Scandinavian volume share relates to EPOK and LYFT brands. ** Volume share v FY19. US(MO) - Jun Marlin Vol. Share of Total Modern Oral; Sweden - Jun Nielsen Vol. Share of Total Oral; Denmark - Jun Nielsen Vol. Share of Total Oral; Switzerland - Jun Scan Data excl. Co-op Vol. Share of Total Oral (SPAR & Top CC data missing from Jun); Norway - Jun Nielsen Vol. Share of Total Oral; 23#24Modern Oral: Leadership in Scandinavia 1.4 Volume Share of Total Oral LYFT/EPOK 62% Share in Modern Oral Mar 19 Jun'19 Sep'19 Dec'19 Mar 20 Jun'20 Share of total oral in retail, % 4.5 Source: Nielsen retail RA June 2020, NCT R3M June 2020, NO Dunhumby 8.6 Volume Share of Total Oral EPOK 67% Share in Modern Oral Mar 19 Jun 19 Sep 19 Dec'19 Mar 20 Jun'20 Share of total oral in retail, % 14.7 BAT A BETTER TOMORROW Volume Share of Total Oral LYFT/EPOK 95% Share in Modern Oral Mar 19 Jun 19 Sep 19 Dec'19 Mar 20 Jun 20 Share of total oral in retail, % 74.3 24#25NEW CATEGORIES: Driving a Step-Change Vuse VII VELO glo Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2. ** Marketing Investment *** Volume share in THP, Value share in Vapour BAT A BETTER TOMORROW Adding 2.7m Non-Combustible product consumers Delivering 12.7% revenue growth in a challenging environment Investing an additional £250m** Successfully pivoting to digital during COVID Growing share*** in Vapour and THP, with strong revenue growth in Modern Oral 25#26COMBUSTIBLES: Value and volume share growth EST.Ot DUNHILL KENT Newport AMERICAN SPIRIT Markets LUCKY STRIKE CAMEL Rothmans OF LONDON 1890 BAT A BETTER TOMORROW Excellent global value and volume share growth, with strong pricing Driving revenue* and value share growth in the US Value and volume share growth in every region Growing value share in Developed Markets and volume share in Emerging Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2 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 PALL MALL 26#27Combustibles: Delivering excellent share growth حمد +50bps Corporate Volume Share +2.2% Combustibles Revenue* Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2 میرا +20bps Corporate Value Share +8.5% Cigarette Price/Mix +40bps Strategic Brand Value Share 66% Strategic Brand Share of Group Combustible volume EST (907 BAT A BETTER TOMORROW DUNHILL GRALLY D FANDUB FIE ΚΕΝΤ Newport AMERICAN SPIRIT LUCKY STRIKE CAMEL Rothmans OF LONDON 1890 PALL MALL 27#28Combustibles: Well balanced portfolio Driving value growth and strong pricing Premium 36% of Group CPTO* Mid 19% of Group CPTO* VFMA 45% of Group CPTO* DUNHILL TOBACCO OF LONDON LTD LUCKY STRIKE Rothmans OF LONDON 1890 ΚΕΝΤ CAMEL PALL MALL Newport BAT A BETTER TOMORROW NATURAL AMERICAN SPIRIT CIGARETTES Source: Company internal estimates at constant rates. 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 2019. 28#29Combustibles: a strong performance Winning in all market types and key segments Key Segments Driving growth Freshness and stimulation Slimmer Non full flavour +100bps +170 bps +30bps FMC share change YTD 2020 vs FY 2019 50 20 Corporate Share Volume share change DMS (c.75% revenue) Driving value growth 30 30 Share in Developed Markets Value share change BAT A BETTER TOMORROW EMS (c.25% revenue) Driving volume growth 70 Flat Share in Emerging Markets 29#30Driving revenue growth in the US US Corporate Volume Cigarette Share 35%, Newport Share 15% +10% US Revenue and Operating Profit Growth* +76% US New Category Revenue* Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2 +30 bps US Value Share +10%pts 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 Cigarette industry volume up +0.8%; FY outlook c.-2.5% YTD vapour value share up c.1.5x 30#31Multi-Category Strategy: Total Nicotine share in the US up 70bps US Nicotine Industry Value by Category THP Modern Oral 0.0% 1.0% Vapour 5.5% Traditional Oral 10.5% US Nicotine Industry Value by Category Share growth versus FY19. Source: Company data Cigarettes 83.0% BAT Growing Share of Total Nicotine 35.9% US Nicotine Value Share 33.6% US Nicotine Volume Share BAT A BETTER TOMORROW +70 bps US Nicotine Value Share Growth مدا +60bps US Nicotine Volume Share Growth 31#32H2: COVID uncertainty remains Navigating COVID with Agility Little evidence of accelerated downtrading to date in DMs Lockdown restrictions slowly easing All factories now fully reopened BCPS maintain supply continuity South Africa Sales Ban Maintained Court hearing delayed to August We have a strong case Planning for a positive outcome Share growth versus FY19. Source: Company data. BCP: Business Continuity planning ● BAT A BETTER TOMORROW GTR Substantially Impacted Planning for some recovery end Q4 COVID Uncertainty Remains Planning for sequential recovery through H2 Environment remains uncertain 32#33South Africa cigarette and alcohol ban A strong Q1 performance - Court hearing in August Strong Q1 Performance +10% Volume vs. SPLY Avg Daily Consumption →→ -38% Daily consumption Share growth versus FY19. Source: Company data *Industry-wide An Illicit Market 100% Total market is illicit Group Impact -£25m Adjusted profit from operations per month BAT A BETTER TOMORROW Illicit Price Spike +300% ➡ Government Revenue Lost -£340m Tobacco Excise and VAT* 33#342020 H1 RESULTS: BAT A BETTER TOMORROW Our Multi-Category strategy delivers growth in difficult times Delivering Revenue, Profit and Earnings Growth in exceptional circumstances Multi-Category consumer acquisition drives revenue and share growth** Excellent Combustibles value and volume share growth Navigating COVID supported by our diverse geographic footprint Committed to delivery and our 65% dividend pay-out ratio Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2 ** Tracked share metrics 34#35Delivering for today & investing in the future STEP-CHANGE IN NEW CATEGORIES COMBUSTIBLE VALUE GROWTH SIMPLIFY THE COMPANY BAT A BETTER TOMORROW Unique Multi-Category Strategy Investing in our Global Brands Strong brands and pricing Broad based share growth Agile organisation, resilient supply chain, embracing digital Focus on cost control and investing in the future 35#36Tadeu Marroco | Finance Director BAT A BETTER TOMORROW#37H1 2020 RESULTS: Delivering for today & investing in the future Delivering revenue* growth in a challenging environment Releasing funds to support the growth agenda Realising the benefits of Quantum Phase 1 Generating cash to de-lever the balance sheet Committed to dividend growth and our 65% pay-out ratio * On an adjusted, constant rate basis. See Appendix A1 & A2 BAT A BETTER TOMORROW 37#38REVENUE: Growth in a challenging environment Revenue* +2.4%, absorbing c.-4% H1 COVID headwind › Combustible revenue* +2.2% > New Category revenue* +12.7% Strong cigarette price/mix** +8.5% Volume and value share gains of +50bps; +20bps 5.6% Strategic brand combustible revenue* growth (66% of Group volume) Strong US performance with revenue* +9.7% > > > * On an adjusted, constant rate basis. See Appendix A1 & A2. **Price/mix defined in Appendix A4 12.1 Total Revenue* £bn HT'19 BAT +2.4% A BETTER TOMORROW 12.4 H1'20 38#39PRICING: Continued strong price/mix* +8.5% › Strong, balanced brand portfolio > Revenue growth management Elasticity & affordability remain robust >80% pricing achieved YTD > Little evidence of accelerated downtrading to date › Strong H1 pricing, benefitting from 2019 rollover › Lapping a strong price/mix comparator in H2 > > Price/mix defined in Appendix A4 Cigarettes Price / Mix 7.0% H119 9.2% BAT A BETTER TOMORROW FY19 8.5% H1'20 39#40REGIONS: Value share** growth in all regions Regional performance reflects contrasting EM/DM COVID impacts US ΕΝΑ APME AMSSA Group Adjusted Revenue* +9.7% +3.0% -10.5% -0.9% +2.4% *Adjusted and constant rate basis. See Appendix A1-A2. **Value share of cigarettes (APME: cigs+THP) v FY19 Source: Company data Value Share** +30bps +10bps +20bps +50bps +20bps Adjusted Profit from Operations* +9.6% +2.9% -6.9% -3.6% BAT A BETTER TOMORROW +3.3% 40#41MARKETS: Contrasting EM/DM COVID impacts Source: Company data DMs (c.75% revenue) H1 Industry Volume O GER USA JPN ITA +3.7% +0.8% -3.9% -4.0% BAT A BETTER TOMORROW EMS (c.25% revenue) H1 Industry Volume BRA +7.8% RUS -2.6% VNM -8.8% MEX -14.4% 41#42OPERATING MARGIN: Releasing funds to support the growth agenda New Categories investment +c.£250m; margin +80bps +0.8 42.9% 2019 Adjusted Operating Margin 4.0 * On an adjusted current rate basis. See Appendix A1. -2.7 +80bps + Pricing and Operational Incremental New Efficiencies Categories -0.5 €250m New Category Marketing Investment Transactional FX BAT A BETTER TOMORROW 43.7% 2020 Adjusted Operating Margin* 42#43QUANTUM: Realising the benefits of Phase 1 80% of Phase 1 savings realised; c.£300m expected savings for FY20 Phase 1 Completed: Ahead of schedule Organisational re-design ✓ Simplification and agility New ways of working Phase 2 Underway: Operational efficiency Route to market focus Supply chain productivity 80% Phase 1 savings realised £240m in H1 2020 Phase 2 £700m 2021-22 Expected savings BAT A BETTER TOMORROW QUANTUM £1bn On track to deliver Phase 1 savings of £300m 2020-2022 Expected savings Supporting investment and continued delivery 43#44H1 EPS* growth benefitting from: > Good contribution from associates Reduced H1 underlying tax rate 25.0% > EPS*: Strong growth up +6.6% FY EPS* considerations: H2 associate income reflecting COVID FY underlying tax rate slightly lower than previous guidance of 25.5% FX translation headwind of c.2.5% > > * Adjusted, diluted, EPS at constant rates. See Appendix A1 and A2. 149.3 2019 HY 5.5 0.6 1.9 +6.6% Adjusted Net Finance Associates Profit from Costs Operations 3.5 0.4 +6.6% Taxation Non- Controlling Interests -0.2 Diluted Number of Shares 159.1 BAT A BETTER TOMORROW +5.7% 1.3 157.8 2020 HY at FX Impact 2020 HY at Constant Current FX FX 44#45CASH AND DELEVERAGE: Strong liquidity position >90% operating cash conversion Strong H1 Operating Cash Strengthened Liquidity Flow Conversion in H1 £ in billions 70%* H118 66% H119 80% 73%* H120 Cash generation led by Combustibles 1.9 USD: April 2020 7, 10 & 30 year bonds £3.9bn £4.8bn £6.0bn 3.4 EUR: April 2020 4.5 & 8 year bonds * H1 2018 normalised for MSA impact in 2018. H1 2020 normalized for US excise deferral and COVID related inventories. 3.9 £ GBP: June 2020 8 year bonds Bond issuance 12-18 month Bi-laterals Renewed RCF: 1 & 5 year term 21 banks; No financial covenants Manageable Maturity 3.3 2.3* 1.0 Due H2'20 Profile BAT A BETTER TOMORROW £ in billions 7.2 3.0 Due'21 8.9yr 88:12 59:24:11:6 Repaid in July 2020 Due'22 2.6 Due'23 Average Maturity Fixed:Floating $:£:€:Other 45#46Committed to dividend growth & 65% pay-out ratio DISCIPLINE c.£650m Capex = Depreciation* Working Capital efficiencies CAPITAL £1bn Quantum savings expected 2020-2022 *Adjusted **Adjusted Net Debt to Adjusted EBITDA ALLOCATION PRIORITIES ● BAT A BETTER TOMORROW Deleverage (Adj Net debt/Adj EBITDA**) Around 3x expected by end 2021 1.5x-2.5x long term corridor Dividend 65% pay-out ratio growth in GBP BAT Ventures; partnerships/small scale M&A 46#47On track to deliver FY 2020 Guidance Demonstrating resilience through COVID challenges KI 1-3% Revenue * Adjusted Revenue on a constant rate basis. See Appendix A1 & A2 ^Adjusted Diluted EPS on a constant rate basis. See Appendix A1 & A2 Mid Single Figure EPS Growth^ BAT A BETTER TOMORROW 44 Continue to De-leverage 47#48Jack Bowles | Chief Executive BAT A BETTER TOMORROW#492020 H1 RESULTS: BAT A BETTER TOMORROW Our Multi-Category strategy delivers growth in difficult times Delivering revenue, profit and earnings growth in exceptional circumstances Multi-Category consumer acquisition drives revenue and share growth** Excellent Combustibles value and volume share growth Navigating COVID supported by our diverse geographic footprint Committed to delivery and our 65% dividend pay-out ratio Share growth versus FY19. Source: Company data * On an adjusted, constant rate basis. See Appendix A1 & A2 ** Tracked share metrics 49