British American Tobacco Regulatory News (BATS)

Summary

- Revenue down 1.3%, up 3.1% on an organic basis (at constant rates), driven by New Categories organic revenue up 21.0% (at constant rates) and resilient pricing

- Strong volume led New Category revenue growth - driven by Vuse and Velo, with revenue from Non-Combustibles now 16.5% of Group revenue, up 170 bps vs FY22

- New Categories achieved profitability in 2023 (at a category contribution level), two years ahead of original target and contributing a £398 million increase to Group profit, at constant rates of exchange

- Global settlement with Philip Morris International Inc. (PMI) that resolves all ongoing patent infringement litigation between the parties related to our Heated Products (HP) and Vapour products

- Total Combustibles organic revenue up 0.6% (at constant rates), with organic price/mix of +6.1% offset by lower volume and geographic mix mainly due to macro-economic pressures in the U.S. impacting the premium segment

- Strong performances from AME and APMEA, demonstrating the benefit our global footprint and multi-category strategy

- Reported loss from operations of £15,751m (with reported operating margin down 95.8 ppts to -57.7%) - impacted by a £27.6 billion non-cash impairment charge mainly related to our U.S. business (£27.3 billion)

- Adjusted organic profit from operations up 3.9% at constant rates, adjusted organic operating margin up 40 bps to 45.6%

- Reported diluted EPS at -646.6p; adjusted organic diluted EPS up 5.2% at constant rates

- Operating cash flow conversion 100% - organic adjusted net debt / adjusted EBITDA down to 2.6x

- Dividend growth of 2.0% to 235.52p, in line with our progressive dividend increase approach

- Continued ESG progress - 2023 MSCI rating upgraded to A (2022: BBB), achieved targets for water withdrawn and waste generated two years early

Tadeu Marroco, Chief Executive

"2023 was another year of resilient financial performance and delivery in line with our guidance, underpinned by our global footprint and multi-category strategy, despite a challenging macro-environment.

New Categories delivered continued volume-led revenue growth and increased profitability, driven by Vuse and Velo. As a result, our New Categories portfolio has turned profitable two years ahead of our original target.

In combustibles, our commercial plans in the U.S. are enabling early signs of portfolio recovery. AME and APMEA performed well, with a strong revenue and profit performance, led by our well-balanced portfolio.

Our refined strategy commits us to 'Building a Smokeless World', a predominantly smokeless business, with 50% of our revenue from Non-Combustibles by 2035. Consistent with this vision, and taking into account the current macro-economic pressures impacting the U.S. combustibles industry, the growth of illicit single-use vapour products and uncertainty around a potential menthol ban in the U.S., we have taken a non-cash impairment charge of £27.3 billion, mainly relating to our acquired U.S. combustibles brands.

We are investing to strengthen our U.S. business, accelerate innovation momentum, and enhance capabilities that support our strategic delivery. We expect these investments, together with the U.S. macro-economic pressures, will impact 2024. Thereafter, we will progressively build to deliver 3-5% organic revenue, and mid-single digit adjusted organic profit from operations growth by 2026 on a constant currency basis. We are committed to continuing to reward shareholders with strong cash returns throughout this period.

I am confident that the choices we have made will drive our long-term success and create sustainable value for all our stakeholders."

The use of non-GAAP measures, including adjusting items and constant currencies, are further discussed from page 51, with reconciliation from the most comparable IFRS measure provided.

Notes: 1. See page 31 for discussion on adjusting items. 2. Organic measures exclude the performance of businesses sold (including the Group's Russian and Belarusian businesses) or acquired, or that have an enduring structural change impacting performance that may significantly affect the users' understanding of the Group's performance in the current and comparator periods to ensure like-for-like assessment across all periods. 3. Internal estimate, excluding Russia and Belarus, see page 45. 4. New Categories contribution is positive in 2023 at £17 million (at current rates of exchange), turning from a loss of £366 million in 2022. Accordingly, the movement is deemed not meaningful (or n/m) in % terms. 5. Includes lease liabilities.

Sharpening our Vision and Strategic Execution

Tadeu Marroco, Chief Executive

When appointed as Chief Executive, I was clear that the fundamentals of our strategy remain correct. However, we need to clarify our vision and strengthen our execution.

We are therefore refining our A Better TomorrowTM purpose, with a vision to 'Build A Smokeless World'.

Our vision is clear and focused on migrating cigarette consumers to reduced-risk*? alternatives.

At the same time, we will manage our cigarette business responsibly, enabling the returns to continue to invest in growing smokeless alternatives.

Leading in adult consumer choice is the cornerstone of our vision. Consumers are not choosing a single alternative to smoking, and BAT is very well positioned in all three of the main alternatives to smoking:

- Vuse is the global market leader in Vapour, a category that is the fastest growing alternative to smoking;

- glo, our HP brand, is the global #2 brand in a category that is a strong substitutional offer; and

- Velo is a leading Modern Oral brand in a rapidly growing category with the lowest toxicant profile of all New Categories.

We have refined our strategy, enabling sharper execution with a clear organisational line of sight across three strategic pillars:

- Quality Growth: Focused on more balanced top-line and bottom-line delivery, built on the strength of our global brands and innovation;

- Sustainable Future: Our first-class science, more active external engagement and regulatory focus driving our future sustainability; and

- Dynamic Business: A modern and progressive organisation, that is both efficient and effective in its operations, is data driven and creates the greatest financial flexibility possible to invest and generate cash returns.

I am pleased with the progress made across each of our key focus areas in 2023, each aligning with our strategic pillars:

- Drive profitability in New Categories: Reaching profitability (on a category contribution basis) two years ahead of our original target;

- U.S. combustibles value growth: Delivering sequential volume and value share growth since January 2023;

- Significantly strengthening Heated Products: Launching our first-to-market tobacco-free offer, veo, and the launch of glo Hyper pro in Italy and Poland, combined with the recently announced global settlement with PMI that resolves all ongoing patent infringement litigation between the parties related to our HP and Vapour products.

- Lead responsible New Category stewardship: Taking a pro-active, science-driven approach to external affairs, as demonstrated by our campaign in support of the ambition for a smoke-free Britain, through appropriate and responsible Vapour regulation; and

- Enhance financial flexibility: Delivering our fourth consecutive year of 100% operating cash conversion, enabling us to return a total of £26.2 billion to shareholders since 2019.

A key part of our Dynamic Business pillar is financial flexibility, disciplined capital allocation and strong shareholder distributions. We remain committed to our 25-year track record of consistent dividend growth, rewarding our shareholders through all economic cycles.

Over the next five years, we expect to generate around £40 billion of free cash flow before dividends.

In addition, we continue to pursue all opportunities to enhance balance sheet flexibility and, as part of this, we regularly review our stake in ITC. We recognise that we have a significant shareholding which offers us the opportunity to release and reallocate some capital.

Our shareholding in ITC has existed in one way or another since the early 1900s and is subject to numerous share capital changes and regulatory restrictions. We have been actively working for some time on completing the regulatory process required to give us the flexibility to monetise some of our shareholding and will update you at the earliest opportunity.

It is an exciting time to be part of BAT and I look forward to working with my colleagues around the globe to Build a Smokeless World and drive A Better Tomorrow?.

 *  Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

?Our Vapour product Vuse (including Alto, Solo, Ciro and Vibe), and certain products including Velo, Grizzly, Kodiak, and Camel Snus, 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.

2024 Outlook

- Global tobacco industry volume expected to be down c.3% mainly due to the U.S. and Indonesia.

- Low-single figure organic revenue* growth and continued progress towards our 2025 £5 billion New Category revenue ambition.

- Low-single figure organic adjusted profit from operations growth*, including an expected c.2% transactional FX headwind.

- Performance expected to be second half weighted given planned investment phasing and expected slow recovery in U.S. macros.

- Expected translational foreign exchange headwind of 3% on full year adjusted profit from operations growth.

- Operating cash flow conversion in excess of 90%.

- Progress towards the middle of our 2-3x adjusted net debt/adjusted EBITDA corridor*.

- Commitment to dividend growth in sterling terms*.

* at constant rates of exchange.

Group Operating Review

Total Group volume and revenue

Prior year data is provided in the tables on pages 49 and 52

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

Movement in Revenue

Reported revenue decreased by 1.3% to £27,283 million, largely due to the sale of our businesses in Russia and Belarus partway through the year, as well as the impact of lower cigarette volume (mainly in the U.S.) and a translational foreign exchange headwind of 2.9% (due to the relative strength of sterling, particularly against the US dollar, Pakistani rupee, Bangladeshi taka and Japanese yen). These more than offset:

- New Categories revenue growth, up 17.8% (at constant rates of exchange), up 21.0% organically, with volume growth in all three categories; and

- Robust delivery in AME (despite the negative impact of the sale of the businesses in Russia and Belarus midway through the year) and APMEA.

Cigarette volume declined c.8.2%, a decline of 5.3% on an organic basis. This was mainly driven by the U.S. cigarette volume decline of 11.4%. The U.S. cigarette industry was down 7.5%, driven by continued macro-economic pressures and proliferation of illicit single-use vapour products impacting industry volumes into the second half of 2023, with the premium segment remaining under pressure. Despite this, our commercial plans are delivering early signs of portfolio stabilisation with our volume share up 40 bps since January 2023. This was driven by Newport and the continued strength of Natural American Spirit and Lucky Strike. However, there is still more to do to mitigate the impact from challenging macro-economic cycles, the rise of illicit single-use vapour products and regulatory uncertainty.

Global duty paid industry cigarette volume was estimated to be down by c.3.5%.

Group cigarette volume share was flat, with value share 40 bps lower vs. 2022.

The following analysis is on a constant currency basis, which we believe reflects the operational performance of the Group:

- In the U.S., revenue was down 4.5% as combustibles pricing and the growth of New Categories (up 12.0%, underpinned by pricing, which more than offset a decrease in volume of 11.4%) were more than offset by lower cigarette volume. Vuse extended leadership in value share (of total Vapour in tracked channels) by 470 bps to 45.6%. While we welcome the recent step-up in enforcement actions from the FDA and other federal and state government agencies, those regulatory bodies have an obligation to do far more to prevent the proliferation of illicit flavoured single-use vapour products in the U.S.

- In AME, revenue grew 7.6%, driven by combustibles (up 2.9%, underpinned by a robust pricing delivery) and New Categories (up 29.6%) where the Group continued to grow revenue in all three categories. On an organic basis, excluding the results of Russia and Belarus, revenue increased by 13.0% to £9,439 million, with New Categories up 39% to £1,585 million.

- In APMEA, revenue was up 5.5%, driven by higher combustibles volume in Bangladesh and combustibles pricing in Pakistan. New Categories revenue grew 2.6%, as higher volume in all categories was partly offset by lower revenue in Heated Products (down 7.3%) driven by the price repositioning in the highly competitive Japanese market, including the impact of the final step in the five-year excise harmonisation programme.

Please refer to pages 8 to 10 for a further discussion on the performance by category and pages 11 to 13 for discussion on regional performance.

Group Operating Review

Continued

Profit from operations, operating margin and category contribution

Reconciliation of Profit from Operations and Operating Margin, to adjusted profit from operations at constant rates of exchange

Further details and prior year data are provided in the table on page 54

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

^ New Categories contribution is positive in 2023 at £17 million (at current rates of exchange), turning from a loss of £366 million in 2022. Accordingly, the movement is deemed not meaningful (or n/m) in % terms.

Movement in Profit/(loss) from Operations

Profit from operations and operating margin

Profit from operations on a reported basis was a loss of £15.8 billion compared to a profit in 2022 of £10.5 billion, driven by:

- The recognition of non-cash impairment charges of £22,992 million in respect of certain of the acquired U.S. brands, £4,299 million in respect of U.S. goodwill, £291 million related to South African goodwill and £24 million in respect of goodwill related to Peru;

- A translational foreign exchange headwind of 2.6% due to the relative strength of sterling against the Group's operating currencies, particularly in APMEA; and

- While absorbing a 2.5% (or £293 million) transactional foreign exchange headwind.

These more than offset:

- A significant reduction in other one-off charges (£610 million in 2023 compared to £1,885 million in 2022). The movement was largely due to charges relating to the agreement with the U.S. Department of Justice (DOJ) and the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) to resolve investigations into historical breaches of sanctions (£75 million in 2023, compared to £450 million in 2022) and the Group's restructuring programme Quantum, which did not repeat; and

- The recognition in 2023 of a further charge of £353 million (2022: £612 million) relating to the completed sale of the Group's Russian and Belarusian businesses (see page 21).

Our Group operating margin was -57.7% in 2023, compared to 38.1% in 2022, due to the impairment charges referred to above.

For a full discussion on the performance by region, please see pages 11 to 13.

However, excluding the impact of adjusting items and the impact of translational foreign exchange (as we believe this provides an understanding of the operational performance on a comparable basis):

- In the U.S., adjusted profit from operations was marginally higher than 2022 (up 0.4% to £6,863 million), as the continued improved performance in Vapour (where pricing more than offset lower volume) offset the lower volume in combustibles (described earlier) and associated decline in revenue (despite an increase in pricing);

- In AME, adjusted profit from operations increased 5.9%, driven by improved New Category profitability (on a category contribution basis) and pricing in combustibles (with price/mix of 8.6%) enabling further New Categories expansion. This more than offset the headwind from the sale of the Group's businesses in Russia and Belarus midway through the year. On an organic basis, adjusted profit from operations increased 9.7% at constant rates of exchange; and

- In APMEA, adjusted profit from operations increased 6.9%, driven by the performance of Pakistan, Sri Lanka and Uzbekistan and asset sales in West Africa related to various market exits, which more than offset the decline in Japan.

In aggregate, adjusted profit from operations at constant rates of exchange was up 3.1%, or 3.9% on an organic basis, with adjusted operating margin up 80 bps at current rates and 60 bps at constant rates of exchange.

Group Operating Review

Continued

Earnings per share

Note: NFC and Hybrid referred to above relates to Net Finance Costs (NFC) and Hybrid bonds. Please refer to page 14.

 * In 2023, the Group reported a loss for the year. Following the requirements of IAS 33, the impact of share options would be antidilutive and are therefore excluded from the calculation of diluted earnings per share, calculated in accordance with IFRS, for that year. For remuneration purposes, and reflective of the Group's positive earnings on an adjusted basis, management have included the dilutive effect of share options in calculating adjusted diluted earnings per share.

Basic earnings per share were down 320% to -646.6p (2022: 293.3p) due to the non-cash impairment charges in respect of goodwill and trademarks discussed earlier, partly offset by lower other one-off charges compared to 2022 (mainly related to the sale of the Group's businesses in Russia and Belarus, the resolutions of the DOJ and OFAC investigations into historical sanctions breaches and the Quantum restructuring).

Before adjusting items and including the dilutive effect of employee share schemes, adjusted diluted earnings per share increased 1.1% to 375.6p (2022: 371.4p). On a constant translational foreign exchange basis, adjusted diluted earnings per share were 4.0% higher at 386.4p, being an increase of 5.2% on an adjusted, organic basis. For a full reconciliation of diluted earnings per share to adjusted diluted earnings per share, at constant rates, and adjusted diluted organic earnings per share, at constant rates, please see page 57.

Cash/Capital allocation

The Group continues to be highly cash generative, delivering another year of operating cash conversion at c.100%, in excess of our 90% guidance. We continued to make good progress towards reaching the middle of our 2-3x adjusted net debt to adjusted EBITDA range reaching 2.6x in 2023.

Liquidity remains strong with average debt maturity close to 10 years, and a fixed debt profile of c.95% and close currency matching. Our medium-term rating target remains Baa1/BBB+/BBB+, with a current rating of Baa2 (positive outlook), BBB+ (negative outlook), BBB (positive outlook), from Moody's, S&P and Fitch, respectively. The Group expects gross capital expenditure in 2024 of approximately £550 million, mainly related to the ongoing investments in the Group's operational infrastructure, including the expansion of our New Categories portfolio.

Our active capital allocation framework considers the continued investment in our transformation, the macro environment, and potential future litigation and regulatory outcomes. In April 2023, we reached agreements with the DOJ and OFAC to resolve previously disclosed investigations into suspicions of sanctions breaches. The total amount payable to the U.S. authorities is US$635 million plus interest.

In Canada, the confidential CCAA mediation process is still ongoing and the outcome remains uncertain. At 31 December 2023, Canada had a balance of £1,904 million related to restricted cash and cash equivalents and £446 million related to restricted investments held at fair value.

Given the above issues, and a more challenging and dynamic macro environment, in 2023 the Board took a pragmatic approach to prioritise strengthening our balance sheet.

Moving forward, capital effectiveness will continue to play a pivotal role in our transformation strategy. We will continue to pursue all opportunities to enhance balance sheet flexibility, including disposals and non-strategic market exits. In line with our tobacco sector and broader FMCG peer group, and taking into consideration the global interest rate environment, we aim to further deleverage towards the middle of our 2-3x adjusted net debt to adjusted EBITDA corridor over the medium term.

We continue to expect to deliver c.£40 billion of cumulative free cash flow over the next five years, and remain committed to a progressive dividend. Once our leverage target is reached, we will evaluate further opportunities to return excess cash to our shareholders.

ESG Performance update

Notes:  Environmental and Health & Safety data is reported for the period 1 December 2022 to 30 November 2023. * See 'Key Terms' on page 49. For more definitions, see 'Reporting Criteria' on www.bat.com/sustainabilityreport. 1. Compared to a 2020 baseline. Our near-term 2030 science-based targets comprise 50% reduction in Scope 1 and 2 and 50% reduction in Scope 3 GHG emissions. Scope 3 emissions target includes purchased goods and services, upstream transportation and distribution, use of sold products and end-of-life treatment of sold products, which collectively comprised >90% of Scope 3 emissions in 2020. 2. Due to the complexity of consolidating and assuring Scope 3 data from our suppliers and value chain, this is reported one year later. In 2022 we further enhanced our Scope 3 calculation methodology leading to the reporting periods 2020 and 2021 being restated accordingly. 3. Our ambitions cover all tobacco we purchase for our products ('tobacco supply chain'), which is used in our combustibles, Traditional Oral and Tobacco Heated Products. Our metrics, however, derive data from our annual Thrive assessment, which includes our directly contracted farmers and those of our third-party suppliers, which represented over 94% of the tobacco we purchased by volume in 2023 ('Thrive Supply Chain'). 4. In line with a reclassification of 'ongoing incidents' (which, from 2023 reporting will be included as an 'incident' when the final decision is issued), the 2022 number has been restated (three previously reported for 2022). 5. Consistent with previous years' reporting, cases are not included if investigations were not resolved at year-end.

ESG Performance update

As we transition from cigarettes to smokeless products, our transformation must address not only our products' public health impact, but all our material1 sustainability topics. In 2023, we continued on our journey to embed sustainability in our business and across our value chain guided by this clear focus on materiality.

In 2023, we established a cross-functional programme to comply with the EU Corporate Sustainability Reporting Directive (CSRD) for 2025. We also refreshed our Double Materiality Assessment, building on last year's findings and working towards alignment with the available guidance. One outcome was the addition of 'Supplier engagement' as a distinct material topic, reflecting the importance of engaging with our suppliers to drive progress on climate, circularity, human rights and beyond.

Tobacco Harm Reduction: Science and regulation key to Building a Smokeless World

- Non-Combustible product consumer acquisition of 3.2 million to 23.9 million (excluding Russia and Belarus) and now representing 16.5% of Group revenue

-  Published two cross-sectional studies which demonstrated a significant reduction in biomarkers associated with negative health impacts for those who switch from cigarettes to Velo or Vuse, as compared to continuing to smoke

- New Management Board role created - Director, Corporate and Regulatory Affairs (CORA) with accountabilities for shaping regulatory strategy and leading regulatory engagement

In response to the UK government's Tobacco and Vapes Bill announced in November 2023, our UK business ran a proactive campaign to demonstrate its support for the UK government's '2030 smoke-free' ambition. The campaign called for a number of critical steps, including more effective vaping regulation enforcement, a ban on flavours that appeal to those underage, harsher penalties for illegal imports, restricting where and how vaping products are sold in the UK and making devices more environmentally responsible.

Environment: Further environmental progress across our operations; step-change in biodiversity disclosure and actions

- Continued emissions reduction across own operations with Scope 1 and 2 GHG emissions, now down 33.1% vs our 2020 baseline(down 13.9% vs 2022), partly driven by continued capital expenditure (2023: £24 million) in emissions and energy reduction activities

- Water withdrawn and waste generated reduction targets achieved two years ahead of 2025 goals

- Science-Based Targets set by 15% of suppliers of purchased goods and services by spend; more than halfway to 2025 goal of 20% of suppliers

We recognise the importance of protecting biodiversity - our approach starts within our own operations and extends across our supply chain. Our approach to identifying biodiversity risks and opportunities includes on-the-ground farmer monitoring, geospatial risk assessment and third-party assessments. In 2023, we launched a new Biodiversity Operating Standard outlining our requirements to protect forest and biodiversity in agriculture, trained more than 1,300 employees and suppliers, set out our approach to Taskforce on Nature-related Financial Disclosures (TNFD) and initiated work towards setting nature targets aligned to the Science-Based Targets Network (SBTN).

Social: Holistic approach to human rights in our supply chain

- 0.15% of farms2 with child labour incidents reported, down from 0.38% in 2022; with 100% reported as resolved by end of the growing season

- Over 415,000 farmers and community members reported as engaged in human rights training and awareness programmes while building community resilience, including by increasing coverage of our Women's Empowerment Programme

- Joined the Responsible Business Alliance, a global industry initiative for sustainable supply chains related to manufacturing and sourcing of minerals, metal and plastics, with a particular focus on the electronics industry

Our Supplier Code of Conduct outlines our expectation that all suppliers conduct their operations in a way that respects the fundamental human rights of others. Our non-leaf suppliers undergo independent due diligence audits, which cover assessments of workplace conditions, and we continue to educate our supply partners on sustainability issues. In 2023, we hosted supplier engagement events in Bangladesh and Pakistan to develop local suppliers' understanding of sustainability topics, such as human rights and climate change.

Governance: Continuously strengthening our SoBC and Business Integrity and Compliance (BIC) programmes

- Further strengthened our Group compliance programme with ongoing focus on automation, centralisation, and deployment consistency; included improved sanctions screening, automation and training initiatives in 2023

- Seventh continuous year of 100% Group-wide completion of Standards of Business Conduct (SoBC) employee training and certification

- The 2023 annual SoBC e-learning programme included modules on Underage Access Prevention and International Marketing Principles for the first time, to deepen employee awareness and understanding of these key areas for the Group

We continue to drive a culture of integrity, aligned with our values, and with clear commitment that our business standards should never be compromised for the sake of results.The Group continues to embrace the 'Delivery with Integrity' programme, and we actively benchmark to keep up with global regulations and expectations.

  1. See Key Terms on page 49. 2. We derive data from our annual Thrive assessment, which represented over 94% of tobacco sourced in 2023 ('Thrive Supply Chain').

Enquiries

Webcast and Q&A session:

BAT will hold a live webcast for investors and analysts at 9.30am (GMT) on 8 February 2024, hosted by Tadeu Marroco, Chief Executive, and Javed Iqbal, Interim Finance Director and Director, Digital & Transformation. The presentation will be followed by a Q&A session. The webcast and presentation slides will be available to view on our website at www.bat.com/latestresults.

If you prefer to listen via conference call, please use the following dial-in details (participant passcode: 550353).

Category Performance Review

Please see page 52 for a full reconciliation to constant currency and organic metrics, including prior year data.

All references to volume share or value share movement in the following discussion are compared to 2022. See page 44 for a discussion on the use of these measures.

Our products as sold in the US, including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance.

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

*New Categories contribution is presented above on adjusted and adjusted organic bases, in each case at constant rates of exchange. New Categories contribution is positive in 2023 at £17 million (at current rates of exchange), turning from a loss of £366 million in 2022. Accordingly, the movement is deemed not meaningful (or n/m) in % terms.

Vuse - Vapour

Driving strongest consumer conversion to New Categories

- Vapour is the largest contributor to New Category usage, reaching 11.5 million consumers1, adding 1.5 million in 2023, driven by continued closed system growth and single-use vapour products.

- Vuse value share* up 30 bps, reaching 36.1% in key Vapour markets**, with the single-use Vapour products continuing to accelerate total category growth. Vuse Go now in 59 markets.

- Vuse extended leadership in value share (of total Vapour in tracked channels) by 470 bps to 45.6% in the U.S.

- Vapour revenue up 26.9% (at constant rates), delivered by volume growth of 7.0% and pricing.

- Accelerating positive contribution with four of the five key Vapour markets profitable2, driven by pricing, increased scale and marketing spend effectiveness.

Vuse volume grew 7.0% vs 2022, with revenue up 26.2% to £1,812 million, or 26.9% at constant rates of exchange. Vuse increased value share by 30 bps, reaching 36.1%, with continued strong performance across all three regions.

Single-use products continue to accelerate category growth with their convenient format, driving consumer trial and conversion. Vuse Go is now in 59 countries, with positive regulatory developments enabling our entrance into a number of emerging markets (Colombia, Paraguay, Peru). We continue to approach the growing single-use product category in a responsible way (including through Underage Access Prevention programmes and flavours targeted to adult consumers).

In the U.S., the world's largest Vapour market, Vuse extended leadership in value share (of total Vapour in tracked channels) by 470 bps to 45.6%, with revenue up 13.1%, or 13.8% on a constant currency basis. This was despite a decrease in consumables volume (down 6.6%), due to the growth of illicit single-use products which we estimate to be more than 60% of the total Vapour market. We believe that public health officials, legislators, and regulators -especially the FDA- should be concerned about the continued influx of illegalsingle-use vapour products into the U.S. market. It is unacceptable that these products, marketed in youth-appealing flavours such as Bubble Gum and Cotton Candy, continue to be sold. We call on the FDA, in conjunction with state and local authorities, to enforce against these products.

We are disappointed by the FDA's Marketing Denial Orders (MDOs) for Vuse Alto's Menthol and Mixed Berry products. We are challenging these denials and have obtained a permanent stay of enforcement allowing Vuse Alto Menthol to remain on the market until a final decision is made. Furthermore, we remain confident in our Premarket Tobacco Product Authorisation (PMTA) submission for Vuse Alto tobacco variants, which further builds on the foundational science of our successful applications for Solo, Ciro and Vibe tobacco flavour.

In AME, our Vapour business continued to grow volume (up 19.4%) and revenue (up 47.6%, or 46.9% on a constant currency basis) with broad based growth across key European markets.

In APMEA, total Vapour consumables volume grew 43.1%, with revenue up 60.5%, or 74.6% on a constant currency basis, driven by South Africa, New Zealand, Malaysia and Indonesia.

*Based on Vuse estimated value share from RRP in measured retail for Vapour (i.e., total Vapour category value in retail sales) in the U.S., Canada, France, the UK and Germany.

**Key Vapour markets are defined as the Top 5 markets by industry revenue in tracked channels, being the U.S., the UK, France, Germanyand Canada. The Top 5 account for c.75% (2022: 88%) of global industry vapour revenue (rechargeable closed systems and single-use products).

1. Excluding Russia and Belarus.

2. On a market contribution basis.

Category Performance Review

Continued

glo - Heated Products (HP), including Tobacco Heated Products (THP)

Global category growth slowing driven by increasing use of single-use Vapour products and heightened competitive activity

- glo volume declined 1.3%, with revenue down 6.0% negatively impacted by the disposal of the Russian and Belarusian businesses and translational foreign exchange. On an organic basis, volume grew 11.6% with revenue up 4.1% at constant rates of exchange.

- Global industry HP category volume growth of 13%, slowed from 20% in 2022, due to the growth of single-use vapour despite elevated competitive activity.

- glo volume share of total HP and combustibles up 20 bps to reach 4.0%; glo HP category volume share in key HP markets declined 110 bps to 18.2%.

- Continued HP category volume share gains in key AME markets (Poland and the Czech Republic) offset by heightened competitive activity in Japan, South Korea, and Italy.

- Enhancing our innovation pipeline, glo Hyper Air now launched in 23 markets; veo?, our first brand to launch in the tobacco-free segment, now in 11 markets. Hyper pro launched in Italy and Poland with further geographic rollouts planned for 2024.

- Global settlement with Philip Morris International (PMI) resolving all ongoing patent infringement litigation related to HP and Vapour products.

glo volume declined by 1.3% (up 11.6% on an organic basis). Reported revenue declined by 6.0%, or 2.5% at constant rates of exchange, due to the sale of the Russian and Belarusian businesses during the year. On an organic, constant rate basis, revenue grew 4.1%. Continued category volume share momentum in key HP markets, including Poland and the Czech Republic, was offset by the highly competitive markets in Japan, South Korea and Italy, leading to glo's HP category volume share in key HP markets being down 110 bps to 18.2%. glo's volume share of total HP and combustibles was up 20 bps to reach 4.0%.

In AME, volume was down 7.5%, as growth in Poland, Italy, Lithuania, Bulgaria and Romania was more than offset by the sale of the Group's businesses in Russia and Belarus. Reported revenue was up 2.3%, or 3.0% at constant currency. On an organic basis, continued strong volume growth of 23.4% drove revenue up 23.1% at constant rates of exchange, due to our successful portfolio laddering strategy and volume share gains in key markets.

In APMEA, volume grew 4.9%, with revenue down 13.2%, or 7.3% at constant currency, driven by the price repositioning in the highly competitive Japanese market, including the impact of the final step in the five-year excise harmonisation programme. glo's volume share in Japan started to stabilise in the second half of 2023, driven by the activation of our commercial plans.

Our recently announced global IP settlement agreement with PMI is an important step forward for glo, allowing us to further develop enhanced product iterations and innovations in the Heated Products category over the medium term.

veo? is our latest innovation, offering an alternative to adult smokers in 11 markets and is the first brand to launch in the tobacco-free segment. glo Hyper Air (our lightest device to date) is now in 23 markets, delivering positive results. We continue to expand our geographic footprint with glo now available in 31 markets.

*Key HP markets are defined as the Top 12 markets (excl Russia) by industry volume. They were adjusted in 2023, with more established HP markets Kazakhstan, Romania, Switzerland and Malaysia introduced and Russia removed. Accordingly, glo's category volume share for 2022 was rebased on the new definition from 19.4% to 19.2%. Top 12 markets are Japan, South Korea, Italy, Greece, Hungary, Kazakhstan, Ukraine, Poland, Switzerland, Romania, Malaysia and the Czech Republic. The Top 12 account for c. 85% of global industry HP volume in 2023.

Velo - Modern Oral

Continued strong volume and revenue growth driving accelerating returns

- Continued strong volume growth of 33.6% driving revenue up 39.0% (at constant rates).

- Growth driven by consumer acquisition, up 26.1%, reaching 3.3m users1 and increasing average daily consumption in both established and expansion markets.

- Continued volume share leadership in 14 European markets, with aggregate volume share at 67.0% in our four key AME markets*.

- Strong volume growth in Pakistan and Kenya, supporting future Emerging Market ambitions.

Modern Oral volume was up 33.6% and revenue up 35.3%, or 39.0% at constant rates, driving volume share of the total oral category up 120 bps to 8.6%. While our category volume share of Modern Oral in key markets was 28.0%, down 240 bps, this was mainly driven by the reduction in volume share in the large U.S. market (down 200 bps) where we continue to await the outcome of our PMTA submission for our successful European product, Velo 2.0.

We are encouraged by the strong results from our recent Velo pilot in New York, with a national roll-out to commence in 2024.

In our key markets outside the U.S., we maintained clear Modern Oral category volume share leadership, despite a decline of 170 bps to 67.0%. We have maintained our momentum by driving further geographic expansion and through continued innovation, including the launch of our fusion and sensations ranges, tailored to meet the needs of local consumer tastes and preferences.

In AME, we maintained volume share leadership in 14 markets, with volume growth of 36.5% and revenue growth of 41.5% (or 44.6% at constant rates), mainly driven by continued consumer acquisition.

We have been engaging with governments and other regulatory agencies and are encouraged by the recently announced government regulatory proposals in Hungary, Finland, Lithuania, Iceland and Serbia joining a growing group of countries issuing bespoke regulation for the Modern Oral category that is aligned to our Tobacco Harm Reduction strategy.

In APMEA, our volume grew 36.2% and our revenue grew 50.3% (or 70.8% at constant rates), mainly driven by strong volume performances in Pakistan and Kenya. In Pakistan, through stronger consumer acquisition, we have achieved our highest active consumer base (as a % of population) in Modern Oral globally. In Kenya, our accelerated national roll-out in January 2023 has driven a near fourfold increase in adult consumer numbers. Together, our learnings from these two markets give us confidence in our ability to unlock the Emerging Market opportunity for Modern Oral going forward.

* Key Oral and Modern Oral markets are defined as the Top 5 markets by industry revenue, being the U.S., Sweden, Norway, Denmark and Switzerland and accounting for c.85% (2022: c.80%) of total industry Modern Oral revenue.

** Source: Kantar New Category Tracker.

1. Excluding Russia and Belarus

Category Performance Review

Continued

Combustibles

- Group value share down 40 bps, with AME flat, while APMEA was down 60 bps and the U.S. was down 60 bps.

- Group volume share flat, with an increase in AME (up 10 bps) offset by APMEA (down 20 bps) and the U.S. (down 10 bps).

- U.S. commercial plans delivered sequential volume share growth in 2023.

- Sharpening execution with reinvigorated portfolios and refreshed brands are driving strong performance outside the U.S., demonstrating benefit of our well-balanced portfolio and global footprint.

Group cigarette volume was down 8.2% to 555 billion sticks (2022: 605 billion sticks), as volume growth in Bangladesh, Brazil and Türkiye was more than offset by lower volume in the U.S., the impact of significant excise increases in Pakistan and the sale, partway through the year, of the Group's businesses in Russia and Belarus. On an organic basis, volume was down 5.3%.

In the U.S., industry volume declined 7.5%, largely driven by macro-economic pressures impacting consumer behaviour. As a result of our premium-skewed portfolio, combustibles volume was down 11.3%, with downtrading driving a greater proportional effect on the Group. In addition, cigarette volume was negatively impacted by the flavour ban in California and the increase of solus-usage of alternative nicotine products, driven by the growth of illicit single-use Vapour products. Our commercial plans have driven sequential volume share growth during 2023. Our value share of the premium segment has grown 60 bps since January 2023, while the total premium sector remains under pressure, down 30 bps (compared to H2 2022).

Total Group revenue from combustibles declined 4.0% to £22,108 million (2022: £23,030 million), due to the decline in volume and a translational foreign exchange headwind of 3.2%. Revenue at constant rates of exchange was down 0.8% to £22,846 million, impacted by a lower comparable performance from Russia and the timing of the sale of the Group's businesses in Russia and Belarus. On an organic, constant currency basis, revenue grew 0.6%. Strong pricing most notably in Pakistan, Türkiye, Canada and Germany, more than offset negative geographic mix (driven by the U.S.), delivering an overall price/mix of 7.5% on a constant currency basis.

Following a review of the U.S. market reflecting continuing macro-economic headwinds, growth of illicit single-use Vapour products and uncertainty regarding menthol regulation, from 1 January 2024 the Group will commence amortising certain U.S. brands (Newport, Camel, Natural American Spirit and Pall Mall) over a period not exceeding 30 years. The non-cash charge is estimated to be £1.4 billion per year and will be treated as an adjusting item.

Traditional Oral

Group volume declined 10.3% to 6.6 billion stick equivalents. Total revenue was £1,163 million (2022: £1,209 million), down 3.8% or 3.1% at constant rates. Continued strong pricing in the U.S. drove Group price/mix of +7.2% at constant rates of exchange. This was more than offset by the reduction in volume in both the U.S. (down 10.9%) and AME (down 5.2%) in 2023.

In the U.S. (which accounts for 97% of Group revenue from the category), revenue declined 3.4% (at constant rates of exchange) as pricing was insufficient to offset the volume decline (down 10.9%), negatively impacted by the normalisation of inventory levels (being a drag of 1.7%). 2023 was also negatively impacted by the continued strong macro-economic headwinds leading to downtrading, accelerated cross-category switching and reduced consumption. Value share in Traditional Oral increased 40 bps, with volume share down 20 bps.

Beyond Nicotine

Btomorrow Ventures (BTV), the Group's corporate venture capital arm, has completed 25 investments (with three successful exits) since its launch in 2020, and continues to invest in innovative, consumer-led new sciences and technologies and sustainability to support the Group's transformational strategy for A Better TomorrowTM.

Throughout 2023, BTV has continued to support its portfolio of companies with a number of follow-on investment rounds and commercial partnerships with BAT, including investments in a UK-based bioplastics company, FlexSea, a U.S.-based organ-on-a-chip technology company, Hesperos Inc., and a Brazilian supplements company, Mais Mu.

In addition to the BTV investments mentioned above, in April 2023, a BAT subsidiary entered into a joint venture agreement with Charlotte's Web. This investment reinforces BAT's commitment to Charlotte's Web and represents another step for the Group in its exploration beyond nicotine.

In November, BDI, a BAT subsidiary company, announced it will strengthen its strategic partnership with Organigram Holdings Inc. (Organigram), a leading Canadian licensed producer of cannabis. The investment of approximately £74 million is subject to customary conditions and is expected to be completed in three equal tranches between January 2024 and February 2025. Based on Organigram's current outstanding share capital, this investment will increase the Group's equity position from c.19% to c.45% (restricted to 30% voting rights) once all tranches have been completed. This investment enhances the Product Development Collaboration between Organigram and BAT, which was established in March 2021 and is further focused on R&D and product innovation in the cannabis space. As described on page 21, the Group made the first tranche of this additional investment of CAD$41.5 million (£24.1 million) on 24 January 2024.

The Group has continued its exploration of Beyond Nicotine via its subsidiary, The Water Street Collective Ltd, with a series of pilot launches of our own functional shot brand, Ryde, offering a scientifically formulated range of Energy, Focus and Relax products in two markets - Australia and Canada.

Please see page 21 for more information on our investments.

Regional Review

The performances of the regions are discussed below. The following discussion is based upon the Group's internal reporting structure.

All references to volume share or value share movement in the following discussion are compared to FY 2022. See page 44 for a discussion on the use of this measure. Our products as sold in the US, including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance.

United States (U.S.):

- Vuse revenue growth of 13.1%, or 13.8% at constant rates of exchange, and extended value share leadership, in tracked channels

- Combustibles volume down, driven by macro-economic pressures

- £27 billion impairment, largely against the carrying value of the acquired U.S. brands

- Sequential growth in our U.S. volume share in 2023, with sharper portfolio management driving stabilisation

Volume/Revenue

Please see page 53 for a full reconciliation to constant currency and organic metrics, including prior year data.

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

Reported revenue decreased 5.1%, partly due to a foreign exchange headwind of 0.6%. On a constant currency basis, revenue declined 4.5%. Continued growth in New Categories was driven by Vuse with revenue up 13.1%, or 13.8% at constant rates of exchange, but this was more than offset by combustibles volumes, which were down 11.3% (see below).

Non-Combustibles now represent 18.2% of total revenue.

On a constant currency basis (excluding translational foreign exchange), which we believe reflects the operational performance:

- In Vapour, where the U.S. is the world's largest Vapour market, Vuse extended leadership in value share (of total Vapour in tracked channels) by 470 bps to 45.6%, with revenue up 13.8%. This was despite a decrease in consumables volume (down 6.6%) due to the growth of illicit single-use products which we estimate to be more than 60% of the total Vapour market. We believe that public health officials, legislators, and regulators -especially the FDA- should be concerned about the continued influx of illegal single-use vapour products into the U.S. market. It is unacceptable that these products, marketed in youth-appealing flavours such as Bubble Gum and Cotton Candy, continue to be sold. We call on the FDA, in conjunction with state and local authorities, to enforce against these products;

- Modern Oral revenue declined 31.8%, driven by lower volume (down 1.3%) while we continue to await the outcome of our PMTA submission for our successful European product, Velo 2.0;

- Traditional Oral revenue declined 3.4% as pricing was insufficient to offset the volume decline (down 10.9%), negatively impacted by the normalisation of inventory levels (being a drag of 1.7%). 2023 was also negatively impacted by the continued strong macro-economic headwinds leading to downtrading, accelerated cross-category switching and reduced consumption. Value share in Traditional Oral increased 40 bps, with volume share down 20 bps; and

- In combustibles, industry volume declined 7.5%, largely driven by macro-economic pressures impacting consumer behaviour. As a result of our premium-skewed portfolio, combustibles volume was down 11.3%, with downtrading driving a greater proportional effect on the Group. In addition, cigarette volume was negatively impacted by the flavour ban in California and the increase of solus-usage of alternative nicotine products, driven by the growth of illicit single-use Vapour products. Our combustibles volume share fell 10 bps with value share down 60 bps, although during 2023 volume share has returned to sequential growth.

Profit from operations and operating margin

Please see page 50 for a full reconciliation to constant currency and organic metrics, including prior year data.

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

Reported profit from operations declined by 435%, due to the £4.3 billion impairment of goodwill and £23.0 billion impairment of the carrying value of some of the Group's U.S. acquired brands, with the combustible brands to be reclassified as definite-lived intangible assets from 1 January 2024. Translational foreign exchange was a headwind of 1.6%. Accordingly, reported operating margin was down 222 ppts to -173%.

On a constant currency basis, and excluding adjusting items, adjusted profit from operations was marginally higher, up 0.4% to £6,863 million as the continued improved financial performance in Vapour performance was partly offset by the impact of lower combustibles volume (described above).

Following a review of the U.S. market reflecting continuing macro-economic headwinds, growth of illicit single-use Vapour products and uncertainty regarding menthol regulation, from 1 January 2024 the Group will commence amortising certain U.S. brands (Newport, Camel, Natural American Spirit and Pall Mall) over a period not exceeding 30 years. The non-cash charge is estimated to be £1.4 billion per year and will be treated as an adjusting item.

Regional Review

Continued

Americas and Europe (AME):

- Multi-category region with Non-Combustibles now representing 17.5% of revenue

- New Category revenue growth of 28.8%, or 29.6% at constant rates of exchange

- Resilient combustibles performance led by pricing, despite headwind due to sale of the Russian and Belarusian businesses partway through the year

- Combustibles volume share up 10 bps and value share flat

Volume/Revenue

Please see page 53 for a full reconciliation to constant currency and organic metrics, including prior year data.

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

Reported revenue was up 5.4% at current rates, driven by New Category revenue growth of 28.8% and a robust performance in combustibles (despite a £456 million negative drag on the regional performance which comprises the combined impact of a lower performance from Russia compared to 2022 and the timing of the sale of the Group's businesses in Russia and Belarus partway through the year), which was partly offset by a 2.2% translational foreign exchange headwind.

Non-Combustibles now represent 17.5% of total revenue. On a constant currency basis (excluding translational foreign exchange), which we believe reflects the operational performance, revenue increased by 7.6%, driven by:

- Higher revenue from combustibles (up 2.9%), driven by a favourable pricing environment across the region coupled with volume performance in Brazil, Türkiye, Germany, Mexico and France, which more than offset the impact of lower volume (in Chile, Canada and Romania) and the sale partway through the year of the Group's businesses in Russia and Belarus;

- Continued growth in Vapour revenue (up 46.9%), largely due to the performance of Vuse in the Germany, Italy, Poland, France, Romania, the UK, Greece and the Czech Republic. Single-use vapour products continued to grow across all key markets;

- A good performance in HP (up 3.0%), although this was negatively impacted by the timing of the sale of the Group's businesses in Russia and Belarus. On an organic basis, HP revenue was up 23.1% (with volume up 23.4%) driven by Poland, the Czech Republic, Greece and Romania; and

- Modern Oral revenue growth of 44.6%, driven by Sweden, Norway, the UK and the Czech Republic, as we maintained volume share leadership in 14 markets.

On a constant currency, organic basis (excluding the results of Russia and Belarus), revenue increased by 13.0% to £9,439 million.

Profit from operations and operating margin

Please see page 50 for a full reconciliation to constant currency and organic metrics, including prior year data.

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

Reported profit from operations increased by 9.2%, despite a translational foreign exchange headwind of 2.5%. The growth was partly due to a number of charges that impacted the prior year, including charges related to the sale of the Group's businesses in Russia and Belarus and Quantum-related restructurings, which were in aggregate £449 million lower in 2023. The comparative regional performance was also affected by the settlement of historical VAT and excise tax claims in Brazil accounting for income of £167 million in 2023, compared to £460 million in 2022.

Excluding the impact of foreign exchange and adjusting items, the increase was driven by an improved operational performance in

- Germany and Türkiye (where the combustibles portfolio performed well with higher volume and pricing);

- Poland, Sweden and the Czech Republic, which all improved their New Categories financial performance; and

- Ukraine, where the Group had temporarily suspended operations in the first six months of 2022.

These were partly offset by a combination of the timing of the sale of the Group's businesses in Russia and Belarus and a lower operational delivery from Russia. Adjusted profit from operations was up 5.9%, or 9.7% on an adjusted organic constant currency basis.

In June 2023, the Group's new Innovation Hub in Trieste, Italy, was opened, manufacturing Velo, to support our global supply chain. It also houses an Innovation Lab (our first in Europe) and a Digital Boutique (to accelerate BAT's digital transformation). The facility uses 100% renewable electricity.

Regional Review

Continued

Asia-Pacific, Middle East and Africa (APMEA):

- New Category revenue declined 4.5%, but was up 2.6% at constant rates of exchange, driven by the growth of Vapour in South Africa

- Combustibles performance impacted by a translational foreign exchange headwind with constant rate growth led by robust pricing

- Combustibles value share down 60 bps with volume share down 20 bps

Volume/Revenue

Please see page 53 for a full reconciliation to constant currency and organic metrics, including prior year data.

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

Reported revenue declined 4.0% due to a translational foreign exchange headwind of 9.5% largely related to the relative movement of sterling against the Pakistani rupee, Bangladeshi taka and Japanese yen. Constant currency revenue was 5.5% higher, due to combustibles pricing (notably in Pakistan) more than offsetting lower total combustibles volume (down 10.6%) as a decline in Pakistan more than outweighed higher volume in Bangladesh.

Non-Combustibles now represent 11.2% of total revenue.

On a constant currency basis (excluding translational foreign exchange), which we believe reflects the operational performance, New Categories increased by 2.6%, driven by growth in revenue from:

- Vapour, driven by increases in South Africa, New Zealand, Malaysia and Indonesia; and

- Modern Oral, mainly driven by strong volume performances in Pakistan and Kenya. In Pakistan, through stronger consumer acquisition, we have achieved our highest active consumer base (as a % of population) in Modern Oral globally. In Kenya, our accelerated national roll-out in January 2023 has driven a near fourfold increase in adult consumer numbers.

These were offset by lower revenue from HP as, despite an increase in volume of 4.9%, revenue was negatively impacted by the price repositioning in the highly competitive Japanese market, including the impact of the final step in the five-year excise harmonisation programme.

Profit from operations and operating margin

Please see page 50 for a full reconciliation to constant currency and organic metrics, including prior year data.

Constant currency measures are calculated based upon a re-translation, at the prior year's exchange rates, of the current year's results of the Group and, where applicable, its segments.

Profit from operations was 32% higher, as the prior year was adversely affected by charges related to the DOJ and OFAC resolutions of investigations into suspicions of sanctions breaches described on page 20 (2023: £75 million; 2022: £450 million) and other charges (in respect of Quantum and the exit from Egypt) that did not repeat in 2023. 2023 was also negatively impacted by a translational foreign exchange headwind as described above, and an impairment of goodwill in respect of South Africa of £291 million due to the continued negative impact of illicit trade.

Excluding adjusting items and translational foreign exchange, the performance was driven by:

- Pakistan, where pricing more than offset a reduction in combustibles volume;

- Sri Lanka, largely due to pricing in combustibles as macro-economic stability returned;

- Uzbekistan, driven by combustibles pricing; and

- Asset sales in West Africa related to various market exits.

These more than offset a decline in Japan, largely due to the highly competitive pricing environment in combustibles and HP (including the final step in the five-year excise harmonisation programme).

Adjusted profit from operations at constant rates of exchange (which excludes the impact of adjusting items and translational foreign exchange) increased by 6.9%.

Other Financial Information

Analysis of profit from operations (by segment) and diluted earnings per share

Prior year data is provided in the table on page 49.

1. Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence.

2. CC: 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.

3. In 2023, the Group reported a loss for the year. Following the requirements of IAS 33, the impact of share options would be antidilutive and are therefore excluded, for 2023, from the calculation of diluted earnings per share, calculated in accordance with IFRS, for 2023.

Net finance costs

Net finance costs were £1,895 million, compared to £1,641 million in 2022. This was an increase of 15.5%, largely due to:

- Higher interest expense, as the Group's average cost of debt has increased to 5.2% compared to 4.0% in 2022 in line with higher interest rates in the market; and

- Charges incurred as the Group completed a tender offer to repurchase sterling-equivalent £3,133 million of bonds, including £43 million of accrued interest.

Translational foreign exchange was a marginal headwind due to the relative movement of sterling.

These were partly offset by higher interest income (2023: £186 million; 2022: £92 million), of which £97 million (2022: £42 million) relates to income on cash and cash equivalents on restricted cash balances (in Canada due to the cash build up in that market) with the remainder driven by higher interest rates on local deposits.

The Group has debt maturities of around £3.2 billion annually in the next two years. Due to higher interest rates, net finance costs are expected to increase as debts are refinanced.

Also in 2023, in line with IAS 33 Earnings Per Share, £45 million (2022: £49 million) has been recognised as a deduction to EPS related to the perpetual hybrid bonds issued in 2021, as the coupons paid on such instruments are recognised in equity rather than as a charge to the income statement in net finance costs.

On a constant currency basis, and after adjusting for items including the costs incurred in respect of the early repurchase of bonds and finance costs related to the Franked Investment Income Group Litigation Order (FII GLO, as described on page 42), adjusted net finance costs were £1,799 million, an increase of 11.9% (2022: £1,607 million). Please refer to page 35 for discussion of the adjusting items within net finance costs. For a full reconciliation of net finance costs to adjusted net finance costs at constant rates, see page 55.

Results of associates and joint ventures

The Group's share of post-tax results of associates and joint ventures increased from £442 million to £585 million which largely relates to the performance of the Group's main associate, ITC Limited (ITC) in India. The Group's share of ITC's post-tax results was 19.8% higher at £616 million (2022: £514 million). The movements are largely due to the economic recovery in India in 2023 from COVID-19 which led to difficult trading conditions in 2022, more than offsetting a translational foreign exchange headwind.

On 24 July 2023, ITC announced a proposed demerger of its 'Hotels Business' under a scheme of arrangement by which 60% of the newly incorporated entity would be held directly by ITC's shareholders proportionate to their shareholding in ITC. On 14 August 2023, ITC's Board of Directors approved the scheme of arrangement subject to necessary regulatory approvals. The demerger is expected to be completed by the end of 2024.

The Group recognised an impairment charge of £34 million (net of tax) in respect of the Group's investment in Organigram, after having recognised an impairment charge of £59 million (net of tax) in 2022. The charge was treated as an adjusting item in both periods.

Included in the results of associates and joint ventures above is other adjusting income of £42 million (2022: adjusting costs of £3 million). It is mainly related to a deemed income of £40 million (2022: £3 million loss) on dilution of the Group's holding in ITC.

Excluding these adjusting items and the impact of translational foreign exchange, on an adjusted constant currency basis, the Group's share of post-tax results from associates and joint ventures was higher than 2022, up 14.5% to £611 million. Please refer to page 35 for discussion of the adjusting items within the Group's share of post-tax results from associates and joint ventures.

Other Financial Information

Continued

Taxation

The tax rate in the income statement was 16.8% for 2023 (2022: 26.6%). The Group's tax rate is affected by the impact of the adjusting items referred to on pages 31 to 35 and by the inclusion of the share of associates and joint ventures post-tax profit in the Group's pre-tax results.

Excluding these, the Group's underlying tax rate for subsidiaries reflected in the adjusted earnings per share on page 39 was 24.5% for 2023 (2022: 24.8%). The effective and underlying rate in 2023 reflects the mix of profits.

A full reconciliation from taxation on ordinary activities to the underlying tax rate is provided on page 56.

On 15 December 2023, a further judgment was issued regarding the Netherlands Tax disputes for the 2003 - 2016 period. The disputes have a potential aggregate net liability of £1,148 million. Having considered the judgment and the Dutch judicial and international proceedings available to it, the Group has recognised a further adjusting charge of £70 million in 2023, with a total provision of £145 million recognised by 31 December 2023. The findings of the December judgement have been appealed.

In December 2021, the Organisation for Economic Co-operation and Development (OECD) released model rules for a new global minimum corporate tax framework applicable to multinational enterprise groups with global revenues over ?750 million (so called Pillar Two rules). The UK substantively enacted legislation implementing these rules on 20 June 2023 and the rules apply to the Groupas of 1 January 2024. The Group is reviewing this legislation together with developing guidance. The Group is also monitoring the status of implementation of the model rules outside of the UK to assess the potential impact. Based on the information currently available, the impact of these rules on the Group tax position is not expected to be material. The Group has applied the mandatory exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes in accordance with IAS12 Income Taxes.

Cash flow

In the Group's cash flow, prepared in accordance with IFRS and presented on page 30, net cash generated from operating activities increased by 3.1% to £10,714 million (2022: £10,394 million). This was driven by:

- the realisation of tax credits in Brazil (related to the previously disclosed VAT and excise on social contributions); and

- higher dividends received from the Group's associates of £506 million (2022: £394 million), mainly related to ITC.

These were partially offset by:

- payments in respect of the settlement agreements with the DOJ and OFAC (2023: £262 million; 2022: £nil million);

- increases in tax paid of £2,622 million, compared to £2,537million in 2022; and

- a payment of £59 million to settle the investigation by the Nigerian Federal Competition and Consumer Protection Commission (FCCPC).

In 2023, other litigation payments (mainly related to Engle) were lower at £73 million (2022: £181 million).

The Group made interim repayments to HMRC of £50 million in both 2023 and 2022, and intends to make further interim repayments in future periods in respect of the Franked Investment Income Group Litigation Order (FII GLO), as described on page 42.

Operating cash conversion and free cash flow (before and after dividends paid to shareholders)

The Group's operating cash conversion rate (based upon adjusted profit from operations and defined on page 57) was 100% (2022: 100%).

This exceeded our target of at least 90%, demonstrating the ongoing strength of the Group in turning operating performance into cash.

Free cash flow (before the payment of dividends), as defined on page 58, was £8,360 million for 2023 (2022: £8,049 million), an increase of 3.9%. This was driven by the improvement in net cash generated from operating activities and lower net capital expenditure (2023: £487 million; 2022: £599 million), partly offset by higher net interest paid (2023: £1,682 million; 2022: £1,578 million) due to the increase in interest rates.

After paying dividends of £5,055 million (2022: £4,915 million), free cash flow (after dividends paid to shareholders), as defined on page 58, was £3,305 million for 2023 (2022: £3,134 million).

For a full reconciliation of net cash generated from operating activities to free cash flow before and after dividends, see page 58.

Other Financial Information

Continued

Borrowings and net debt

Borrowings (which includes lease liabilities) were £39,730 million at 31 December 2023, a decrease of 7.9% compared to £43,139 million at 31 December 2022. This was partly due to the foreign exchange movements, mainly related to the US dollar and sterling.

The Group remains confident of its ability to access the debt capital markets successfully and reviews its options on a continuing basis.

The Group's average centrally managed debt maturity was 10.5 years at 31 December 2023 (31 December 2022: 9.9 years), and the highest proportion of centrally managed debt maturing in a single rolling 12-month period was 15.7% (31 December 2022: 18.6%).

The Group defines net debt as borrowings (including related derivatives and lease liabilities), less cash and cash equivalents (including restricted cash) and current investments held at fair value. Closing net debt was £34,640 million at 31 December 2023 (31 December 2022: £39,281 million). A reconciliation of borrowings to net debt is provided below.

The movement in net debt includes the free cash outflow, after payment of dividends to shareholders, of £3,305 million (2022: £3,134 million outflow), as described on page 58. Also impacting the carrying value of net debt at the balance sheet date are:

- Cash payments related to share schemes and investing activities of £303 million (2022: £635 million), which, in 2023, was lower mainly due to the movement in foreign exchange dividend hedges due to the movement in sterling, predominantly against the US dollar;

- Other non-cash movements of £226 million (2022: £84 million);

- The reclassification of certain balances previously held-for-sale related to the proposed sale of the Group's operations in Russia and Belarus of £368 million inflow (2022: £352 million outflow); and

- Foreign exchange impacts related to the revaluation of foreign currency denominated net debt balances being a net tailwind of £1,338 million (2022: £3,030 million headwind).

In 2022, the Group purchased £2 billion of own shares under the Group's share buy-back programme, which ended in December 2022.

These movements can be summarised as follows:

Investments held at fair value through profit and loss above include restricted amounts of £446 million (31 December 2022: £396 million) due to investments held by subsidiaries in CCAA protection, as well as £89 million (31 December 2022: £78 million) subject to potential exchange control restrictions.

Cash and cash equivalents include restricted amounts of £1,904 million (31 December 2022: £1,411 million) due to subsidiaries in CCAA protection and £392 million (31 December 2022: £324 million) principally due to exchange control restrictions.

Other Financial Information

Continued

Borrowings and net debt (continued)

Adjusted net debt and adjusted net debt to adjusted EBITDA

For the purposes of assessing the Group's ability to service and repay borrowings, the Group uses the ratio of adjusted net debt to adjusted EBITDA. Adjusted EBITDA is defined as profit for the year (earnings) before net finance costs, taxation on ordinary activities, share of post-tax results of associates and joint ventures, depreciation, amortisation, impairment costs and adjusting items. Please refer to page 59 for a reconciliation of adjusted EBITDA to profit for the year.

The Group also adjusts net debt for items held-for-sale and for the purchase price allocation adjustment to the debt, included within borrowings, acquired as part of the acquisition of Reynolds American Inc. This is an accounting adjustment and does not reflect the enduring repayment of the instrument. The Group Management Board believes that this additional measure, which is used internally to assess the Group's financial capacity, is useful to the users of the financial statements in helping them to see how the Group's financial capacity has changed over the year. The adjusted net debt position is provided below:

The Group's ratio of adjusted net debt to adjusted EBITDA as at 31 December 2023 was 2.6x (2022: 2.9x).

The calculation of adjusted net debt to adjusted EBITDA is provided on page 59.

Global patent settlement

As previously announced, BAT has reached a global settlement with Philip Morris International Inc. (PMI) that resolves all ongoing patent infringement litigation between the parties related to our HP and Vapour products.

The settlement includes non-monetary provisions between BAT and PMI that resolve all ongoing global patent infringement litigation, encompassing all related injunctions and exclusion orders, and prevents future claims against current heated tobacco and vapour products. The settlement also allows each party to innovate and introduce product iterations. BAT is committed to continued innovation in reduced-risk products to further advance Tobacco Harm Reduction.

Dividends summary

The Board has declared an interim dividend of 235.5p per ordinary share of 25p for the year ended 31 December 2023, payable in four equal quarterly instalments of 58.8795p per ordinary share in May 2024, August 2024, November 2024 and February 2025. This represents an increase of 2.0% on 2022 (2022: 230.9p per share), and a pay-out ratio, on 2023 adjusted diluted earnings per share, of 62.7%.

The quarterly dividends will be paid to shareholders registered on either the UK main register or the South Africa branch register and to holders of American Depositary Shares (ADSs), each on the applicable record dates below:

Other Financial Information

Continued

Foreign currencies

The principal exchange rates used to convert the results of the Group's foreign operations to pounds sterling for the purposes of inclusion and consolidation within the Group's financial statements are indicated in the table below. Where the Group has provided results "at constant rates of exchange" this refers to the translation of the results from the foreign operations at rates of exchange prevailing in the prior period - thereby eliminating the potentially distorting impact of the movement in foreign exchange on the reported results.

The principal exchange rates used were as follows:

1. As a result of the disposal of the Russian businesses, the 2023 rates reflect the average for the period ended and as at 13 September 2023, respectively.

Other Information

Risks and uncertainties

The Board carried out a robust assessment of the Principal Risks and uncertainties facing the Group for the period, including those that would threaten its business model, future performance, solvency, liquidity and viability. The Board also maintained close oversight of the Group's response to critical external uncertainties, recognising current macro-economic and geopolitical challenges.

All Group risks are reviewed biannually by the Audit Committee and annually by the Board. Sustainability is core to the Group's long-term business strategy and ESG risk factors are embedded across the Group's risks in accordance with the Group's Risk Management Framework.

In 2023, the Board identified two additional risks to the Group: "Cyber security", to reflect the evolving complexity of the cyber-threat environment and increased digital interaction with consumers and "Supply chain disruption", in view of the macro-economic and geopolitical environment and the complexity of the New Categories supply chain.

The Principal Risks facing the Group are summarised under the headings of:

- Competition from illicit trade;

- Geopolitical tensions;

- Tobacco, New Categories and other regulation interrupts the growth strategy;

- Supply chain disruption;

- Litigation;

- Significant increases or structural changes in tobacco, nicotine and New Categories related taxes;

- Inability to develop, commercialise and deliver the New Categories strategy;

- Disputed taxes, interest and penalties;

- Injury, illness or death in the workplace;

- Solvency and liquidity;

- Foreign exchange rate exposures;

- Climate change and circular economy; and

- Cyber security.

A summary of all the risk factors (including the Principal Risks) which are monitored by the Board through the Group's risk register will be included in the Annual Report and Accounts and Form 20-F for the year ended 31 December 2023.

Update on investigations into misconduct allegations

From time to time, the Group investigates, and becomes aware of governmental authorities' investigations into allegations of misconduct, including alleged breaches of sanctions and allegations of corruption at Group companies. Some of these allegations are currently being investigated. The Group cooperates with the authorities, where appropriate.

On 25 April 2023, the Group announced that it had reached settlement agreements with the DOJ and OFAC in the U.S. related to breaches of sanctions related to North Korea, which resulted in the imposition of fines against the Group totalling US$635 million. British American Tobacco p.l.c. (the "Company") entered into a three-year deferred prosecution agreement (DPA) with the DOJ and a civil settlement agreement with OFAC. The DOJ's charges against the Company - one count of conspiring to commit bank fraud and one count of conspiring to violate sanctions laws - were filed and will later be dismissed if the Company abides by the terms of the DPA. In addition, a BAT subsidiary in Singapore, British-American Tobacco Marketing (Singapore) Private Limited, pleaded guilty to the same charges. The total amount payable to the U.S. authorities is US$635 million (£499 million) plus interest, which will be paid by the Company.

Having recognised an initial provision of £450 million (US$540 million), in line with the requirements of IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), in the 2022 interim and full year results, the Group has recognised an additional charge of £75 million in 2023. Having made payments of £4 million (US$5 million) in April 2023 and £258 million (US$321 million) in September 2023, the remainder will be paid in the first half of 2024.

Update on Quebec class action and CCAA

There have been no substantial developments in respect of the Quebec Class Action and subsequent grant of protection of the Group's subsidiary, Imperial Tobacco Canada Ltd (ITCAN), under the Companies' Creditors Arrangement Act (CCAA). The stays are currently in place until 29 March 2024. While the stays are in place, no steps are to be taken in connection with the Canadian tobacco litigation with respect to ITCAN, certain of its subsidiaries or any other Group company.

In accordance with the CCAA process, the parties continue to work towards a plan of arrangement or compromise in a court-ordered confidential mediation. The length and ultimate outcome of the CCAA process, including the resolution of the underlying legal proceedings, remains uncertain.

In line with IFRS 10 (Consolidated Financial Statements), ITCAN is consolidated in the Group's results. For ease of reference and to assist the users of this Preliminary Announcement, in 2023, ITCAN's contribution to the financial performance of the Group was:

- Revenue: £1,003 million;

- Profit from operations: £600 million;

- Adjusted profit from operations: £604 million; and

- Adjusted EBITDA: £613 million.

At 31 December 2023, restricted cash in ITCAN was £1,904 million and restricted investments held at fair value were £446 million, with ITCAN goodwill recognised on the balance sheet of the Group at £2,386 million.

For a summary of the case, please see the Contingent Liabilities section on page 40. Full details of the case and the assessment of goodwill will be included in the Group's Annual Report and Accounts and Form 20-F for the year ended 31 December 2023 (note 12 Intangible Assets and note 31 Contingent Liabilities and Financial Commitments).

Other Information

Continued

Changes in the Group

Russia and Belarus

On 11 March 2022, as discussed on page 33, the Group announced the intention to transfer its Russian business in compliance with international and local laws. At that time, the Group had two subsidiaries in Russia (BAT Russia), being JSC British American Tobacco-SPb and JSC International Tobacco Marketing Services.

In September 2023, we formally entered into an agreement to sell the Group's Russian and Belarusian businesses to a consortium led by then members of BAT Russia's management team, in compliance with local and international laws. As previously announced, due to operational dependencies between BAT Russia and the Group's subsidiary in Belarus (International Tobacco Marketing Services BY) (BAT Belarus), the Belarusian business was included in the sale. The transaction was completed on 13 September 2023 and, since completion, the buyer consortium has wholly owned both businesses. These businesses are now known as the ITMS Group.

Throughout the transfer process one of our key priorities was the interests of our colleagues in Russia and Belarus. As part of the agreement, their employment terms will remain comparable to their prior BAT terms for at least two years post-completion.

In accordance with IFRS, the assets and liabilities of the subsidiaries comprising BAT Russia and BAT Belarus were classified as held-for-sale at 31 December 2022 and presented as such on the balance sheet at an estimated recoverable value. Impairment charges (and associated costs) of £612 million were recognised in 2022 (and treated as a non-cash adjusting item).

Upon completion, the businesses were deconsolidated from the Group's balance sheet. This included assets primarily composed of £177 million of property, plant and equipment and other non-current assets, £342 million of trade and other receivables, £266 million of cash and cash equivalents and £211 million of other current assets principally relating to inventories. This was offset by liabilities primarily composed of £7 million of borrowings and £219 million of trade creditors and other current liabilities, resulting in a net asset position of £770 million.

As shown in the cash flow statement on page 30, proceeds of £425 million were received in 2023 (net of cash disposed of £266 million). This resulted in an impairment charge of £345 million. However, the impairment charge of £554 million in 2022 (net of £14 million utilised) was reversed, leading to a net partial reversal of the previously recognised impairment charge of £195 million.

In addition to this, £554 million of foreign exchange previously recognised in the statement of other comprehensive income has been reclassified to the income statement upon completion of the transaction, which has been treated as a non-cash adjusting item. Other disposal-related costs of £3 million and £9 million of foreign exchange gains on proceeds received were also recognised in 2023.

Combined with the aforementioned partial reversal of impairment charges, this resulted in a net charge to the income statement of £353 million. Refer to page 33 for a detailed analysis of the charge.

As part of the disposal agreements, the Group holds call options to reacquire the ITMS Group entities. No value has been ascribed to these options as they cannot be sold or transferred outside the BAT Group, they expire within two years of the completion of the transaction and current sanctions and countersanctions would restrict the ability of the Group to exercise these options. Assuming the higher returns that any market participant would require given the perceived risk of investing in Russia going forwards, and a consequent high discount rate, any value associated with exercising the options would be immaterial.

The transfer of the Russian and Belarusian businesses does not have a material impact on the remainder of the Group's supply chain.

To supplement the Group's results presented in accordance with IFRS, the Group's Management Board, as the chief operating decision-maker, reviews the Group's results, including volume, revenue, profit from operations and operating margin excluding businesses sold, held-for-sale or acquired that have a significant impact on the users' understanding of the Group's performance between periods. Although the Group does not believe that these measures are a substitute for IFRS measures, the Group does believe that such presentation of the results (excluding the impact of businesses sold or to be held-for-sale, and referred to as "on an organic basis") provides additional useful information to investors regarding the underlying performance of the business on a comparable basis and in the case of the sale of the Group's businesses in Russia and Belarus, the impact these businesses had on revenue and profit from operations. Accordingly, the organic financial measures appearing in this document should be read in conjunction with the Group's results as reported under IFRS.

Please see the reconciliations of volume to organic volume, revenue to organic revenue, profit operations to adjusted organic profit from operations and operating margin to adjusted organic operating margin on page 49.

Other changes

In April 2023, the Group announced a strategic joint venture agreement with Charlotte's Web. Under the terms of the transaction, a Group subsidiary acquired a 20% stake in the new JV entity (DeFloria LLC) at a cost of c.£7.9 million (US$10 million).

In November 2023, the Group announced the signing of an agreement for a further investment in Organigram. At 31 December 2023, the proposed investment of CAD$125 million (approximately £74 million) was subject to customary conditions, including necessary approvals by the shareholders of Organigram, which was given on 18 January 2024. On 24 January 2024, BAT made the first tranche investment of CAD$41.5 million (£24.1 million) acquiring a further 12,893,175 common shares of Organigram at a price of CAD$3.22 per share. Subject to certain conditions, the remaining 25,786,350 shares subscribed for shall be issued at the same price in two further equal tranches by the end of August 2024 and February 2025, respectively.

Based on Organigram's current outstanding share capital, this investment will increase the Group's equity position from c.19% to c.45% (restricted to 30% voting rights) once all three tranches have been completed.

External Audit Tender Process

As previously announced, during 2023 the Audit Committee undertook a formal competitive audit tender process in respect of the audit for the 2025 financial year. That process was concluded in 2023 and the Board approved the re-appointment of KPMG LLP.

A resolution proposing the appointment of KPMG LLP as external auditors for the 2025 financial year will be put forward to shareholders for approval at the 2025 Annual General Meeting. Details of the external audit tender process and evaluation criteria will be reported in the Group's Annual Report and Form 20-F 2023.

Other Information

Continued

Changes to the Main Board

As previously announced, the following Board changes have taken place:

- Savio Kwan stepped down from the Board as a Non-Executive Director with effect from 19 April 2023.

- Jack Bowles stepped down from the Board as Chief Executive with effect from 15 May 2023.

- Tadeu Marroco was appointed as Chief Executive with effect from 15 May 2023.

- Murray S. Kessler joined the Board as an independent Non-Executive Director and member of the Nominations and Remuneration Committees with effect from 6 November 2023.

- Serpil Timuray joined the Board as an independent Non-Executive Director and member of the Nominations and Remuneration Committees with effect from 4 December 2023.

Sue Farr and Dimitri Panayotopoulos will step down from the Board with effect from the conclusion of the Company's 2024 AGM to be held on 24 April 2024 and will not stand for re-election.

As previously announced, Soraya Benchikh has been appointed to the role of Chief Financial Officer and Executive Director and will join the Main Board and Management Board with effect from 1 May 2024.

Changes to the Management Board

With effect from 15 May 2023, Tadeu Marroco was appointed Chief Executive and Javed Iqbal was appointed Interim Finance Director. Javed retained his role as Director, Digital & Information.

With effect from 1 July 2023, Johan Vandermeulen was appointed to the new role of Chief Operating Officer, reporting to the Chief Executive. Reporting to Johan are:

- David Waterfield, appointed to the Management Board as President & CEO, Reynolds American Inc.

- Fred Monteiro (Director, Americas & Europe) and Michael Dijanosic (Director, Asia Pacific, Middle East & Africa).

- Zafar Khan (Director, Operations) and Javed Iqbal (Director, Digital & Information). Javed also continues to serve as Interim Finance Director.

With effect from 1 September 2023, Kingsley Wheaton, previously Chief Growth Officer, was appointed to the new role of Chief Strategy & Growth Officer, reporting to the Chief Executive. Reporting to Kingsley are:

- Luciano Comin, appointed to the new role of Marketing Director, Combustibles & New Categories, with effect from 1 July 2023.

- Paul McCrory, appointed to the new role of Director, Corporate & Regulatory Affairs, with effect from 1 September 2023.

- James Barrett, appointed to the new role of Director, Business Development, with effect from 1 September 2023.

James Murphy, Director, Research & Science and Jerome Abelman, Director, Legal & General Counsel, continue in their roles reporting directly to the Chief Executive.

With effect from 1 November 2023, Cora Koppe-Stahrenberg was appointed to the new role of Chief People Officer, reporting directly to the Chief Executive.

Other Information

Continued

Going concern

A description of the Group's business activities, its financial position, cash flows, liquidity position, facilities and borrowings position, together with the factors likely to affect its future development, performance and position, are set out in this announcement. Further information will be provided in the Strategic Report and in the Notes on the Accounts, all of which will be included in the Group's 2023 Annual Report and Accounts and Form 20-F.

The Group has, at the date of this Preliminary Announcement, sufficient existing financing available for its estimated requirements for at least 12 months from the date of approval of this condensed consolidated financial information. This, together with the ability to generate cash from trading activities, the performance of the Group's Strategic Portfolio, its leading market positions in a number of countries and its broad geographical spread, as well as numerous contracts with established customers and suppliers across different geographical areas and industries, provides the Directors with the confidence that the Group is well placed to manage its business risks successfully through the ongoing uncertainty, the current macro-economic financial conditions and the general outlook in the global economy.

After reviewing the Group's forecast financial performance and financing arrangements, the Directors consider that the Group has adequate resources to continue operating for at least 12 months from the date of approval of this preliminary announcement and that it is therefore appropriate to continue to adopt the going concern basis in preparing the Group's 2023 Annual Report and Accounts and Form 20-F.

Additional information

In addition to this Preliminary Announcement, the Group wishes to inform the reader that additional information will be available in documents filed with the LSE and SEC on 9 February 2024 and which should be referred to in addition to this Preliminary Announcement. Additional information includes:

- The Group's audited Financial Statements;

- Exchange rates;

- Reconciliations of all non-GAAP measures from the most relevant IFRS equivalent;

- Information regarding contingent liabilities and financial commitments;

- Information for shareholders on dividends;

- Information with regards to the Group's Principal Risks;

- Key dates in respect of the year ending 31 December 2024; and

- Glossary and definition of key terms.

This information will be an extract of information that will be included in the Group's 2023 Annual Report and Accounts and Form 20-F for the 12 months ended 31 December 2023 which is expected to be published on 9 February 2024.

Financial Statements

Contents

Financial Statements

Group Income Statement