Good morning everyone, and welcome to our 2022 Full Year Results Presentation. I am Jack Bowles, Chief Executive of BAT. With me this morning is Tadeu Marroco, our Group Finance and Transformation Director. I am proud to share with you today that we have reached an exciting inflection point in our transformation. Over the last few years, New Categories have rapidly become a significant part of our business and are now a strong contributor to our financial performance. As a result, last week we announced our new regional structure and management team realignment to drive us through the next phase of our transformation journey. Our presentation today will take on a new format. First, I will give some highlights of the progress. Tadeu will take you through the details of our results, highlighting how in 2022, we continued transforming the business, delivered strong financial results, and successfully navigated a challenging macro-economic environment. Then I will talk about how we are taking BAT’s strategy to the next level, and why we are confident in bringing forward our New Category profitability target by one year to 2024, as our transformation accelerates. As usual, once Tadeu and I have taken you through the presentation, there will be an opportunity to ask questions. Before we start, I would like to take this opportunity to give you an update on the progress of the transfer of our businesses in Russia and Belarus: As we have already shared, we are working as quickly as possible to transfer the businesses in compliance with international and local laws. We are now in advanced discussions with a joint management distributor consortium with a view to completing the transfer in 2023. Our priority remains supporting our employees in the affected areas and safeguarding their employment. Upon completion, BAT will no…

Thank you Jack. I am delighted to share more details on how we have delivered on our guidance in 2022. I am proud to say, as Jack has highlighted, that we are accelerating the Transformation of our business and delivering robust financial results while successfully navigating an increasingly challenging macro environment as we moved through the year. Our reported results were impacted by a number of mostly non-cash one-off items, including, a full-year non-cash impairment of our businesses in Russia and Belarus. A provision recognized in respect of the DOJ and OFAC investigations. And restructuring charges driven by Project Quantum. These were partially offset by VAT credits in Brazil relating to prior periods. To better understand the key drivers of our performance, we will now focus on constant currency adjusted results, unless otherwise stated. In 2022, we delivered revenue growth of 2.3% driven by New Category growth of 37%, and a strong combustibles price mix of nearly 5%. Profit from operations was up 4.3%, driven by a reduction in New Category losses of nearly £600 million and continued Quantum savings. Altogether, we achieved a 150 basis points increase in our operating margin at current rates. This drove adjusted diluted EPS up 5.8%, or 12.9% on a current currency basis. Turning to New Categories, we delivered strong revenue growth with all three categories growing in excess of 25%, driven by share growth, innovation and Geo expansion. This demonstrates the importance of a global multi-category strategy with strong brands and great products, in the right markets. I will now share more details on our key category drivers. Full market shares across our key markets are available in the appendix. In Vapour, we extended our value share leadership position with Vuse achieving 35.9% in the key vapour markets up 2.5 percentage points. In…

Thank you Tadeu. At the start of today’s presentation, I highlighted the significant progress BAT has made since the launch of our purpose-led A Better Tomorrow strategy in 2020, building a New Categories’ consumer base, growing powerful global brands, and developing capabilities for the future. The speed of our transformation over the last three years means that now is the time to take BAT’s strategy to the next level. In 2022 we have shown that our multi-category model is working, meaning that we can both continue to invest, and deliver improved profitability. In this final section, I will share how we are getting Fit for Growth with our new operating model. This means that alongside investing more, we will also be investing smarter. Enabling us to accelerate New Category profitability and reach our target one year early, while also preparing the business for sustainable long-term profitable growth. Firstly, let me remind you of the opportunity. Total Nicotine industry revenue is growing, with a 3.5% expected CAGR to 2025. This means an additional £11 billion revenue at industry level. 75% of this industry growth is expected to come from New Categories with a forecast of 15% growth CAGR. This is supported by the growing number of New Category consumers increasing from around 80 million today, to an estimated 130 million by 2025. The percentage of smokers interacting with New Categories is growing fast especially in established New Category markets. Variations between markets are largely driven by regulatory environments, alongside differing consumer tastes and pricing relativities. Sustainable New Category growth is also supported by consumer demographics. In established New Category markets, Solus usage is now above combustible levels among adults under 45. This shows the clear potential to make a significant positive impact on public health and deliver sustainable high-quality growth. Alongside…

[Operator Instructions] We will now take our first question from Nik Oliver from UBS. Your line is open, please go ahead.

Good morning. Thanks for the question. Good morning, guys. I had two from my side. First one on the U.S. On the minus 15.5% combustible performance, is it possible to disentangle how much of that was industry the inventory moves and then some of the share losses that you mentioned? And then I guess, as we look forward, is the better way to think about the U.S. in terms of total nicotine share as opposed to just focus on combustibles? That's question one. And then question two just on the...

We start with this one. I mean first of all, we are having a very strong portfolio in the U.S. And as you know, we've grown in the last three years value share, volume share and profit and operating margin. So our position in the U.S. is extremely strong. Now related to the 15% versus the 10%. Of course, you saw that we have lost a little bit of share. But the premium is very resilient, only losing 50 bps and the law is not growing more than 90 bps. At the same time, the price elasticity is 0.4%. So I think that the market is very resilient. When you see the average of the last three years, you see very clearly that the average reduction in terms of volume has been around 5%. So you saw that we lost a little bit of market share, okay? That's fine. And then we said last time that we had around £200 million in terms of stock that we would have to unwind and now we are doing that at pace, and we are at halfway through the journey related to that. So I think that we're going to do a further enhancement of our performance in 2023. The second part of your question is related to looking at total nicotine. And you're absolutely right. I mean the reason why our performance in the U.S. is strong, it's because we have a very resilient combustible business. The macros are now improving. So you will see improvements related to the macros in the U.S. that will benefit to the size of the market. And the second thing is our performance in terms of new categories is just stellar. I mean remember three years ago, everybody said that we will never take a position related to e-cigarettes. Now we're not only the leader, but we are the leader in the U.S. with price index to competition at 140. So we are doing extremely well, and we're continuing to grow in terms of New Categories. So I think that looking now holistically at the total market is something that makes total sense moving forward.

That's right. And just to be clear about the 15.5% and the 10%, most of the gap is related to the unwind of the stock addition be a surprise because we have flagged that a year ago.

So I'm confident in the progressive recovery of the U.S. market and our strong position in terms of our portfolio. I mean, we have at the upper end of the market, you have American Spirit that is super premium, if you want to call it this way. There is growing share and value share. And you have the most successful launch in the in the VFM with Lucky Strike, which is now reaching three points of share. That's the most successful launch in the last at least 15 years in the U.S. So we have a very well-balanced portfolio. And now we have to do price laddering through the different brands in order to make sure that we help the consumers to navigate. Also always remember, the U.S. is a very large market, and I spoke about price elasticity at 0.4. You have to remember that some prices in some states are at $11 and some are $6. So there's a lot of gamuts of different markets. And you see that the price elasticity, in average, is 0.4. So I think that we have a very strong business over there that has grown share and value share in the last three years. And the operating margins are going in the right direction. We are delivering 3.5% profit growth in 2022, and we are confident in the U.S. business.

Great. And then just the one final one for me, and then I'll hand over. Just on the -- obviously, the no new buyback this year was kind of quite topical with investors this morning. But I guess in the press release, you mentioned that would be reviewed during the year. Maybe today, just a few words on the thought process of one -- not announcing one now and then what would need to change for that to happen later in the year?

Yes. Nick, we have been focused on cash generation at least for the last three, four years in a very intense way. That's reflecting our conversion being consistently at 100%, and we managed to deleverage the company to the corridor of 3 to 2. But we are still in an uncomfortable position to be at the high end of this range. And the world has changed. We have a very high levels of cost of capital today after 7 interest hikes in the U.S. alone throughout 2022. Our cost of capital is much higher than before, and we are still seeing a lot of volatilities in that environment. So one thing that we would like to observe more clearly is where this will stabilize. For sure, when the Board takes a decision in terms of capital allocation, it's always looking ahead. And from the regulatory side, the litigation side, you note that we have provided for investigations that we have around DOJ or FAC and we still have to pay for those. We don't know exactly when these get concluded. We expect to be in 2023, but it's not completely up to us. And also, we have a CC88 [ph]. There is a mediation processing in place. I cannot comment further on that. But in the medium term, we have to prefer the company for that. So the reason why we want to accelerate to land in the mid of the range is to create this space so we can have a more resilient balance sheet and a much more financial agility moving forward, and this is a benefit for us in the medium and long term of the company.

I mean to speak clearly, since three years, we have done a lot of transformation. We have done a lot of acceleration in terms of our business. Now we have the possibility to decide. Last year, we did $2 billion of share buyback. The interest rates are going up. Deleveraging is important, taking care of our balance sheet. We want to be in that corridor of three to two and to accelerate faster to the mid of that corridor. That's the pragmatic way of looking at it. And frankly, share buyback, we are convinced with share buyback. We did 2 billion last year, and we will review in the course of the year. And we'll make the decisions as we see pragmatic to do so and continue on that journey. I like share buyback.

Great. Thanks so much, Jack and Tadeu. That was very clear. Thank you.

Next up, we have Richard Felton from Goldman Sachs. Your line is open, please go ahead.

Good morning, Jack. Good morning, Tad. My first question is a follow-up on U.S. combustibles and your relative performance. So the numbers you've given in your prepared remarks, 10% industry decline and the 15.5% decline in your portfolio, is on a full year basis. Now if I think about the second half specifically, it does look like that gap versus the market has got a little bit larger. So my question is, what has sort of driven that? Where are you seeing the relative weakness in your portfolio? And what actions are you taking to narrow that gap into 2023? That's the first question.

Just to make the more clearly because it's difficult to analyze by half because there were a lot of movements in the U.S. We mentioned the unwind of stocks. But remember that in the first half of 2022, we also introduced our TAU [ph] system. We’ve rolled out the TAU system. So we had to build up stocks just before that. So your first -- the unwind of stocks in reality materialized more towards the second half of the year. So that's why you see a different picture in the second half as compared with the first. And this also explained the reason why we expect to be more second weighted this year because we are lapping our first half of last year that was impacted by the stock build from the introduction of the TAU system in the U.S. So I just want to make this point clearly. In terms of the -- as the macro became much more visible throughout the second half of the year, we start taking commercial initiatives related to that. As we presented in the presentation, we have much more been -- much more active in terms of revenue growth management, granular in terms of pricing decisions at state level, channel levels. We have been laddering now in different price points. So we are ending the year to in a much more competitive basis. And we saw that in terms of our share performance in Q4 compared with Q3, where we see some stabilization of that. And we continue this trend to grow in '23 as we approach '23.

In the big players, not in the low, I mean, you saw that we defended share much better than competition, and we have a pricing environment. Where you always have to remember that the pricing that has been taken by the industry even in Q3, Q4 was far less than CPGs in general, yes. So we had a much more linear pricing activity in the second half of the year than CPGs. That give us some runway in terms of pricing in 2023. So I think that the overall market has suffered in terms of size. The consumers -- we always speak about the price of oil, but it's not only the disposable income. It's also the Americans go less to the shops. And if they go less to the shops with the product that they buy every day or every second day, then you have a bit of reduction in terms of the total market. But I think that with the performance that we have in premium where we're growing and the down trading that has been very reasonable in that environment, and the price elasticity at 0.4 and the portfolio that we have. I'm confident on the U.S. for 2023, but it's going to be more geared towards the second half or the stock issues and for the recovery of the macros moving forward. And always remember, I think that the point I was made before is very important, Total Nicotine. And in Total Nicotine, including e-cigarettes, you see that the performance is extremely good in that environment. Cost of access to e-cigarettes is lower for consumers in the U.S. than in cigarettes. So I'm confident.

Thank you. That's very helpful. My follow-up is going to be on e-cigarettes in the U.S. So obviously, very impressive performance on views on a top line basis and on improving profitability, but my question is on the volume performance of U.S. paper. Looking at the numbers on the second half, it looks like volume growth did decelerate a little bit. So my question is, how to think about the growth drivers for Vuse in the U.S. moving forward? I mean, should we expect it to be continued to be pricing-led growth? Or are there more investments that you need to make to reaccelerate the volume performance of Vuse and, I suppose, the overall category? That's the follow-up. Thank you.

Yes. I think what's important to consider is first -- there has been a new category that has emerged in the U.S., which is the disposable with synthetic nicotine, okay? And you saw that it grew very fast and especially in non-organized trade. So that has taken some consumers in terms of the cigarette business that have moved to these kind of categories. But in reality, it's an additional pool of consumers that have been created, and the FDA now wants to regulate that environment and that will allow us to have even more oxygen, so just in the transition. But what's very interesting to see is that the vapour -- traditional vapour pods has continued to grow. It did not replace one another. The traditional is continuing to grow. There will be more regulation in synthetic nicotine products. So then that will create an additional expansion bubble, if you want, for us for the next few years to come. So I think that not only we have the best brand in the market. We have, as I said before, a price index of 140 to the nearest competitor. And we're continuing to grow. The market is continuing to grow at a smaller space. And we have that additional bubble of oxygen that is coming our way with regulation related to the FDA. So I think that we own for something very good in terms of e-cigarettes in the U.S. And at the same time, you saw the profitability. I mean, the numbers speak for themselves, if I may say so.

Thanks very much.

Next up, we have Rey Wium from SBG Securities. Your line is open, please go ahead.

Good morning, Jack and Tadeu. Also just two questions from my side. I just want to quickly focus on the combustible market share. You mentioned it was down 20 basis points. So it's a bit of a reversal of what we've seen in prior years. And I know you mentioned it is the U.S., but in your report, you also state that the market share was lower in AMSA in Europe. So I was just curious about where you've seen market share declines and what you can do to reverse that in the combustible side?

Yes. I think that the first thing to consider is that 2022 has been a year where there were more tensions in terms of pricing across the globe. Let's put it this way. Then also, you had the macroeconomics that we are hurting the consumers in the second half of the year. So I think that what we start to see in the last quarter is that resilience is transforming again into growth in terms of volume. And there is more benign pricing environment, i.e., the pricing is coming through. As I said earlier, always remember a lot of FMCG, CPG company, took a lot of pricing in Q4, then it's different for us. We took reasonable pricing because consumers buy every day, and we can continue to take that pricing. So we see the volume and the pricing in a good environment for 2023.

Yes. I just want to compliment about -- I think that we have -- what we saw in '22 is a very resilient combustible business to start with. We referred to 1.2% FMC THP worldwide decline. If you see combustible loan, it's around 2%. And if you see emerging market was pretty much flattish. We saw volume growth in place like Brazil, which we are very strong as well as Bangladesh, Malaysia, Vietnam. So a lot of markets and we decided even in places like Italy, Spain and Europe. So we had a number of markets where with all the macroeconomic headwinds, inflation, we still saw volume growth. In terms of our performance in market share, we are not really concerned about that. This is very specific for some specific markets for Brazil, for example, we had some price schemes there and we prioritize some value. And we had in Turkey because of this macroeconomic situation, we saw a lot of increase illicit trade, and we are more exposed because we are strong on the low end of the market. So we lost some share there and has a big weight. So -- but it's not something -- it's very specific for some countries, but I think the key message is that we are seeing a very resilient business across the world.

Excellent. And then just a question for you about the interest guidance of £1.9 billion. It looks a bit high to me. So I just want to know -- I mean, it sort of went up of my calculations like an average coupon rate of about 5%. Now is it an issue of that you probably expect your free cash flow to be a bit lower this year? Because, I mean, I just want to tie the two ends together here.

Okay. No, it's not that. It's -- well, we had our starting point will be a £1.6 billion in terms of interest cost in 2022. And then what we are seeing, and that's why I referred to 18% in terms of our exposure for 2023. We have some refinance to do it. So we used to refinance at 4%, 4.5%, and this is higher than that. And I don't think that is as high as we saw in October because the market has come down a bit more this year, but can be much higher than the average cost of capital. And we also have needs in terms of working capital, CP markets, bilateral, and those rates were very, very minimal back in early stage of 2022 and now went up substantially. So that's where you see this -- when you see the gap between where it was, where is now plus the commitments that we have in terms of other finance costs and in terms of maturities that adds up to something close to 18% of our needs, you come to this number of 1.9%. And it's important to flag that because we will be seeing this annualized impact in 2023. So it's a one-off that we see in '23, and then we create a new base moving forward.

And in terms of cash conversion, I mean, you saw that we had 100% in average in the last three years, and we have a number of 95% and higher. So I mean we are very dedicated to that. And after that, the free cash after dividend. What you see is that last year it was £2.1 billion last year, 2021. 2022 was £2.7 billion, and we continue to make a lot of efforts. Also, you saw that we had the program of Quantum that was £1 billion originally three years ago. We delivered £1.9 billion -- and we just said that we're going to do another £1 billion in the few years to come. So I think that it's -- we're getting to a position where financials make a lot of sense where our business is making a lot of sense where we're accelerating our transformation. And we're on the midterm to long term. So it's about now at the moment, the balance sheet, the corridor 2 to 3 and we'll review during the year. So I'm very confident in the quality of the business that we have. We take some decisions because we have the possibility to take decisions, and we have the choice, and we exercise that choice because it's for the good of the growth of the company and the sustainability moving forward.

Thank you very much.

Next up, we have Jared Dinges from JPMorgan. Your line is open, please go ahead.

Yes. Hi guys. Maybe first to come back to the U.S. What impact the expect on the California flavor ban across your portfolio? And maybe you could talk a bit about -- maybe some very early signs if you have data from there so far?

Yes, good question. I mean California represents around, what, 5% of the total market in the U.S. and it's a market that we are looking at, of course, very carefully. It's very difficult to read the early signs in the California market because you had a lot of stock movements in December. As you know, the ban came in 21 of December. There was still a lot of stock that was available in the shops in January. So you'll have to wait April, May in order to read all this. If you look at the size of the market and the way the market is faring at the moment, it's robust, but you have to offset all these movements in terms of stocks. Our brands are doing well. We've launched new SKUs and e-cigarettes is doing very well also. So we'll have to navigate all this. And it would be too early or too confident from my side to say that the job is done. It's going to happen in the next few months. And I'm optimistic in terms of the solidity of the business. Remember, in all the different geographies where you had that kind of things that happened, in Canada, in Europe, in Turkey or in other places, the retention rate was around 95% and more. And then on top of that, you had related to New Categories, another increase in terms of retention rates. So the jury is out, but the start is very good, but very mixed in terms of numbers. You would not be able to find your ducklings in there because it's all stock movements, trade, availability in trade. There is the key accounts, the organized trade that has been more speedy in terms of stopping these products. General trade is very important in California and that is less measured accurately. So, give it a bit of time. But I think that is going to be a good outcome for us.

Got it. And then maybe switching gears over to THP. It was another good year, but I noticed in the second half of the year, especially the price/mix was weaker, especially in Asia. Can you talk maybe a bit about what's driving that, especially given that you had the launch of Hyper X2 and good device sales? I would have thought you would have had a mixed boost from that?

Yes. As you see, I mean, we have now close to £3 billion in terms of new category revenues to a point that represents 50% of the total company. And you saw that in the different categories, vapour grew very fast, and the percentage of growth of THP has slowed down a little bit, and there is more price competition within the different segments. So you have different competitors that have come in at different price points, different product offerings. So I think that there's a bit more of internal competition in the segment. I must say that we are very happy with our performance, and we continue to plow forward. We're only in 50% of the markets that are carrying THP, as we speak today. So we still have a lot of geo expansion to do, and we're improving our pricing as we go along our price index as we go along. So I think that we have a very good start with glo X2 in Japan. It has reached a record share in December, and we grew during the year. So there is more intense competition, but we have a lot of space to grow in. And when you look at, for instance, Europe, that is the nearly 50% of the total market, I mean, we are doing extremely well and growing fast. Overall New Categories, as we said in the presentation, in 11 markets where we have already 30% of our revenue that is there, yes, for the total company. So we are strong, and we'll have an innovation pipeline that is strong, not only in 2023, but also in 2024. So we have more launches that are coming, and we are doing the rollout of X2 that is very well accepted by the consumers. It's smaller, it's lighter, delivers more flavor. And we've done a lot of improvement also in terms of the consumer models. So I'm confident.

Just to complement that in Japan, and it's not different in Europe, every single product we sell in THP has higher margins than our combustible products. So even the newly launched the Lucky Strike that we did to complement our range in the market has higher margins than the combustible on. So, for us, is a financial opportunity to strength our business in all those locations. We are very pleased with the -- to be honest, with the progress that we have made in all categories throughout 2022, margin-wise. We have read in THP on the consumables side margin that is higher than combustible. The same is happening in Modern Oral. And in vapor, we have reached worldwide, a 50% gross margin compared with the cigarettes, which is around 68%. And in the U.S. alone is even higher than that. So it's a big improvement. That's what is really driving the reduction in loss as well. And we are really heading towards a very sustainable business where we're being different between you selling cigarettes or selling one of these products.

I mean we took the view three years ago to do multi-category. And that's starting to pay off because you have more interaction between the different categories. Tadeu was speaking about the fact that there is now a relations between THP users and Modern Oral, for instance, or in other markets, THP with Vapour. Just remember that the number of consumers in Vapour is close to the double of the ones in THP. And this is interesting to see that increased interaction between the categories. So being truly multi-category as we’re now and having done that for three years gives us a head start in terms of being able to serve better the consumers, and we have now a profitability that is coming through in vapour. So all they put together gives us a very strong position, where, again, I insist, we said we will invest in '23 and in '24, and we prioritize that because as we saw, we can grow volume and revenue faster and reduce our losses by £600 million. Guys, it's not a small thing. When we said a few years ago that we will be profitable in 2025. People said, ha-ha. Now we're saying we're going to be profitable in 2024, and we're going to continue to invest more because we have the brands, we have the capabilities. We have reorganized the company three times in a row. Not redoing everything every time, no, it's blocks of transformation that we did Quantum 1, Quantum 2 and Quantum 3 to be able to do what we are doing as a transformation today in order to accelerate the delivery. So we're on big guys. I mean, we really believe that the strategy not only is paying off, but is putting really the company forward in terms of delivery of our transformation and accelerating the delivery. Of course, at the same time, you have the net debt to EBITDA, you have to take care of that. Your balance sheet and everything. So we continue to invest hard and continue to plow through. I'm on the mid-to long term. Tadeu and myself, we see these numbers all the time, and of course, we want to do the best for the business, and you will see us for some time.

Next up we have Gaurav Jain from Barclays. Your line is open, please go ahead.

Hi. Good morning, thank you. I have three questions. So first, Tadeu for you on the restructuring charge in the comment you said. So last year, BAT had restructuring of £770 million. And over the last 12 years, it is £400 million on average. And now you are saying, going forward, it will be zero. So if I had assumed a £400 million restructuring charge for next year your adjusted EPS growth will be high single digit. Is that the right way to think about that it?

Good one.

First of all, just to some color on the £770 million that you are referring to. We -- as we highlighted in the announcement, we -- within that, we have a factory closure in very costly locations, that's there. We have pulled out of -- we are closing operations in some markets, as you saw, and a place like Egypt, Yemen and they come also with some tax liabilities that need to be settled this is in there as well. And we have, like Jack said, with all the archetypes of markets and the closure of factories, we have almost 2,000 employees leaving in the next coming years and most of it in '23. So it's also provide there. So what we are referring you absolutely right in the sense that we believe that with the conclusion of Quantum now, we are not incurring in the restructuring, adjusted items anymore. This will be a positive for the cash, to be honest, because when you see adjusted numbers, we are taking this out. But on the cash, there still cash outflow, some of that. There are some other elements that are noncash items. But this will be helping us more, I would say, in '24 because a lot of this provision will result in some cash outflow happening in '23. But from '24, is where we expect the major benefits coming from the cash side.

Sure. My second question is on the NGP breakeven guidance for FY'24. And a lot of people are concerned about the U.S. e-cigarette business because see, 30% of your NGP is U.S. e-cigarettes, where FDA has given two Vuse vibe menthol variants and MDO. And they also commented that Vuse was second ranked in the FY'22 youth prevalent survey. So most likely Vuse Alto menthol will also get an MDO and maybe a tobacco product also gets an MDO. So with all this regulatory uncertainty, how certain are you that you will hit NGP breakeven, in FY'24?

Yes. I mean, to be blunt, we would not say that we accelerate the profitability of NGP to 2024. We would not have looked at all these things, but it's a very valid question. I think what you have to see is the consumers are increasingly coming to our portfolio and to our brands. And we have now 22.5 million consumers that are there, which only represents a small portion of the 80 million that are existing at the moment. So we have a lot of space to grow and to grow against competitors. The second thing is the FDA is, of course, doing all the regulatory work, but it has slowed down dramatically, because they have a lot of things to do, which I understand. So I think that the speed at which regulation and new regulation will come in and reglementation related to all these is going to be slow. And I think that we have adapted very well in the past to all the regulators. And we know that we have very strong brands. So we have space to grow, and we know that we have very strong brands. So I'm confident in the way forward. These things are multiyear things with a lot of litigation, regulation, discussions and all this will take time. We have this kind of debate is now five years, and it's only starting to move slowly and there is not even a definitive view in terms of what is going to happen. So we'll take the time and we'll make sure that we do the right thing for the business. And we reiterate -- I reiterate the fact that we'll be profitable in New Categories by 2024. I could even be profitable sooner, but I want to invest the money in order…

Yes. The only add to what I would say to your question; is that the FDA has embraced the risk continue. So you would believe that all the decisions they will take is actually aligned with that and not incentivize consumers should go back to cigarettes.

I think it's a very important point of Tadeu. The fact that they give PMTAs to e-cigarette means that it's a less risky product recognized, yes? So it starts there. So that gives a lot of traction also in the rest of the world.

Okay. Sure. And my last question is on -- you will have a new competitor next year entering the market in the U.S. with heated tobacco product. And you have filed for the glo Hyper PMTA in December '21, if I remember correctly. So when can we expect that PMTA to come? And would you launch soon after in the U.S. market?

Yes. First of all, you have to take it piece by piece. First. Combustible business is extremely important in the U.S., yes. Even if you don't like it pays your bills every day. That gives you the resources to be able to invest, that's number one. The second thing is there is already 20% of the market that is in New Categories, mostly e-cigarettes, that's already there. And that's I think very, very interesting in terms of margins per 1,000, okay? The second -- the third thing is there is a lot of things that have been said in terms of THP in the U.S. It has been on the market for two years, it has not worked and the high tar levels and everything. But at the end of the day, what is important is what position you have in New Categories in the U.S. And we have a presence in the three categories. We have PMTAs that are in progress, and this is going to be more in two years from now or at least. So you have to take your time and look at what is there, what is growing, and then that's for the mid- to long term. And I'm confident that when you see what has happened in Europe between THP and e-cigarettes, there has always been a very strong space for e-cigarette in high tar markets. In Japan, it is different because there is very low tar nic consumers that are already there. So the satisfaction gaps are lower, and you have always in the process of PMTAs. You have to have the science that goes with it. So you don't have the latest product that comes to the U.S. You have the products that were there three, four years ago where you have the science that you have to take the time for making the science, and then you can come with the -- to the market with a product that has been there a long time ago in other markets. So that's an iteration process, where New Categories, I'm very pleased to say, is growing in the U.S. and where there will be more opportunities in the three to five years to come. Okay? And as you see in our results in the U.S., now the New Categories, the e-cigarette is having a major part in terms of our profitability and our financial numbers, which we are very pleased with, okay?

Sure. Thank you so much.

It appears that there are no further questions at this time. I would like to turn the conference back to Mr. Jack Bowles for closing remarks.

So thank you very much for joining us today. I'm very proud of our performance in 2022. Our results show that we are transforming the business at speed and delivering strong results in a challenging macro environment. We expect 2023 to be a stronger year with organic revenue of between 3% and 5%, led by new categories and stronger combustibles. While higher interest costs and our exit from Russia and Belarus, means that we are guiding mid-single figure NPS for this year. We are also making active choices as our New Category growth model continues to accelerate and deliver. This means that we will invest more and achieve new category profitability in 2024, one year early. We have made choices, and this is the right thing for us to do. I'm excited that building on the strong progress that we have made today will continue to transform, driven by our brands, our capabilities and determination to drive long-term value creation for all our stakeholders. So thank you very much for listening, and have a very good day.