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EXCELLENT PERFORMANCE DRIVEN BY MARKET SHARE GROWTH

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Key financials

Full year highlights
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• Group cigarette volume fell by 0.5% to 663 billion, an organic decline of 0.8% excluding the acquisition of TDR in Croatia, against an estimated industry decline of 2.3%. Total tobacco volume was 0.8% lower than the previous year.
• The Group’s cigarette market share¹Ìýin its Key Markets²Ìýcontinued to grow strongly, higher by over 40 basis points (bps), driven by our Global Drive Brands which grew volume by 8.5% and market share by 120 bps.
• Group revenue was up by 5.4% at constant rates of exchange. Reported revenue was down 6.2%, as a result of adverse exchange rate movements.
• Adjusted Group profit from operations increased by 4.0% at constant rates of exchange. Excluding the transactional effect of foreign exchange on raw materials and leaf this would have been an increase of around 10%. Adjusted Group profit from operations was down by 7.6% at current rates.
• Profit from operations, at current rates of exchange, was 0.2% higher at £4,557 million, impacted by adverse exchange movements, on a translational and transactional level.
• Without the adverse transactional impact of foreign exchange, operating margin would have improved by around 160 bps. However, at current rates it fell by 60 bps to 38.1%.
• Adjusted diluted earnings per share, at constant translational rates of exchange, were up by 10.1% despite the transactional headwinds from foreign exchange. At current rates, they were up 0.1% at 208.4p.
• Basic earnings per share were 38.2% higher at 230.9p (2014: 167.1p), benefiting from one off gains as a result of the acquisition of Lorillard Inc. by the Group’s associate Reynolds American Inc. (RAI).
• The Group invested US$4.7 billion to maintain a 42% shareholding in the enlarged RAI, concluded the £1.7 billion acquisition of the shares not already owned by the Group in Souza Cruz S.A. and acquired TDR in Croatia for €550 million.
• The Group acquired the leading e-cigarette business in Poland (CHIC) and signed a vapour collaboration agreement with RAI.
• The Board has recommended a final dividend of 104.6p, to be paid on 5 May 2016. This will take the 2015 total dividend to 154.0p per share, an increase of 4%.