����̽��

Good morning, ladies and gentlemen.

It is my pleasure to welcome you to BAT’s 2023 Annual General Meeting.

All of your Directors are here today, apart from Holly Keller Koeppel who is unable to attend.

Reflecting on 2022, I am delighted to say that the business continued to make great progress against our strategy. This was achieved despite a difficult, and rapidly changing, external environment.

As you will have seen, the title of our 2022 Annual Report is ‘Delivering Transformation’. I think this is a very apt description of what is happening at BAT.

• ��Our New Category business delivered strong volume, revenue and market share growth.
• ��The Group delivered a 150 basis points improvement in adjusted operating margin at current rates and delivered another year of 100% operating cash conversion.
• ��We also returned £6.9 billion to shareholders through dividends and share buy-backs.
  ��

The multi-category, purpose-led strategy that the management team put in place in 2019 is working. It is delivering for all stakeholders.

For shareholders, we have delivered 40% total shareholder return (“TSR”) since the launch of our new strategy in March 2019, materially outperforming tobacco peers and the FTSE.

The cornerstone of our purpose to build A Better Tomorrow™ is to provide adult smokers with a range of reduced-risk alternatives to cigarettes^*†.

In order to help adult smokers switch to these less risky, Non-Combustible products^*†, we must ensure that they are both satisfying and meet evolving consumer preferences.

The fact that around 15% of our revenue is now generated from Non-Combustible products, a two-fold increase since 2018, is testament to our progress.

At the end of 2022, we had 22.5 million consumers of our Non-Combustible products**. The upward trajectory, and the momentum we have, provides a clear pathway to reaching our goal of 50 million consumers by 2030.

In countries which have embraced the concept of “Tobacco Harm Reduction”, countries like Sweden, the UK and Japan, we have seen significant declines in smoking rates.^{1. 2. 3.}

These examples show the importance of adult smokers having access to less risky alternatives^*†. If more countries were to embrace Tobacco Harm Reduction as a policy tool, further progress to reduce smoking rates could be made; even more quickly.

The weight of evidence suggests this is the best route to reducing smoking rates.

Of course, we recognise that there remains scepticism among some stakeholders around the role of reduced-risk products^*†. Some still need to be convinced of the science that supports them.

It is the reason why we place such emphasis on scientific research, bolstering the evidence and advocacy that underpins Tobacco Harm Reduction.

It is also the reason why our Group is aligned around A Better Tomorrow™.

However, reducing the health impact of our business cannot be achieved just by BAT.

Our efforts alone will not deliver the wholesale transformation of BAT, or of this industry.

Policymakers, regulators and public health advocates must help build the science base, and create the policy frameworks necessary, for adult smokers to switch to less risky alternatives^*†.

As a Board, it is our responsibility to make sure that BAT’s own transformation continues apace.

Fundamental to that is regularly reviewing capital allocation choices. We do this to ensure that the business retains the right balance between driving a step change in New Categories and generating value from the combustibles business to invest in further growth. Furthermore, we give due consideration to other factors, including capital structure and returns to shareholders.

As we evolve on our transformation journey, we have implemented further organisational changes in January this year; streamlining the business, driving increased focus, and sharpening execution to deliver on our 2025 and 2030 targets through:

• ��Reducing our regional structure from four to three;
• ��Optimising the number of business units from 16 to 12; and
• ��Creating new Management Board roles dedicated to transformation and the combustibles’ business.

��

Outlook

��

Turning to our outlook, we continue to expect full year constant currency organic Group revenue growth of 3 to 5% excluding Russia and Belarus; and EPS growth, on a constant currency adjusted^◊��diluted earnings per share basis, of mid-single figure.

Given the macro-economic outlook, and in line with our February 2023 guidance, we expect our performance, on an organic basis^‡, to be second half weighted.

• ��On a year-to-date basis our Non-Combustible consumer** base increased further, by more than 700,000 consumers.
• ��We are making strong progress towards our 2024 New Category profitability target.
• ��We continue to accelerate our investment in New Categories. In 2023 the phasing of investment plans will be weighted to the second half of the year.
• ��We are making good progress towards reducing our leverage closer to the middle of our target 2-3x net debt / EBITDA range by the end of 2023, driven by continued strong cash generation.

��

In line with our strategy, we are rapidly transforming our business and building A Better Tomorrow™:

• ��In Vapour, Vuse continues to further strengthen its global value share*** leadership, with year-to-date share up 3.5 percentage points, driven by a strong performance in the U.S.
• ��Our volume share*** of THP and combustibles combined is up by 10 basis points. glo continues to perform well in Europe supported by the roll out of our X2 platform, offset by a highly competitive pricing environment in Japan. We expect our performance to accelerate in the second half supported by a strong investment programme.
• ��In Modern Oral, we remain clear leaders in Europe, while unlocking potential in emerging markets. In the U.S., we await the outcome of our Velo 2.0 Premarket Tobacco Product Authorisation (“PMTA”) submission. Year to date, Velo has grown global volume share*** of total oral by 60 basis points.

��

Our combustibles business continues to fuel our transformation and underpin Group delivery driven by robust pricing, while macro-economic conditions and geographic mix have impacted our year-to-date performance:

• ��Group combustibles volume and value share versus full year 2022, is down 20 basis points and 50 basis points respectively, largely driven by the weight of the U.S. market.
• ��Since the beginning of the year, we have delivered volume share growth with Group volume share up 10 basis points versus the second half of 2022.
• ��The U.S. Industry Premium segment, which is more than half of the market, declined 60 basis points in 2022, and now shows early signs of stabilisation. Our premium volume share has sequentially grown through the first quarter.
• ��Our U.S. first-half volume will be impacted by inventory phasing, mostly driven by the prior year implementation of our global SAP platform. Consequently, our full year performance will be second half weighted.

��

To summarise, we remain on track to achieve:

• ��Our 2023 Group guidance;
• ��£5 billion New Category revenue target in 2025; and
• ��New Category profitability one year early, in 2024.

��

We are delivering, and we are committed to invest in our transformation and build A Better Tomorrow™, in line with the purpose of the Group.

Board composition

��

Now, let me turn to the composition of our Board. I am delighted to welcome Véronique Laury who, in September 2022, joined the Board as an independent Non-Executive Director and member of the Nominations and Audit Committees.

And let me express my thanks to Dimitri Panayotopoulos for his tenure as Senior Independent Director, and to Sue Farr for assuming the role as of August 2022. Dimitri remains as the Chair of the Remuneration Committee.

I would also like to thank Savio Kwan, who has served on the Board since January 2014, and will step down as a Non-Executive Director from the Board at the conclusion of this AGM. I would like to thank him for his valuable contributions over his nine years of service.

My thanks

��

Before we move to the Resolutions, and reflecting on the success of 2022, let me thank my fellow Directors on the Board, our Chief Executive, Jack Bowles and the management team, as well as all of our employees around the world. It is through their ongoing resilience, focus and effort that the Group continues to succeed.

Undoubtedly, 2023 will remain demanding as we face challenges – both geopolitical and macro-economic. The priorities for ����̽��are clear and we have the strategy, people and capabilities in place to continue building A Better Tomorrow™.