Good morning, everyone. I'm delighted to welcome you to our 2023 Preliminary Results Presentation. With me this morning is [Technical Difficulty] Finance Director and Victoria Buxton, Group Head of Investor Relations. I will begin with our financial highlights and the progress we have made against our key areas of focus this year. Javed will then take you through our financial performance in more detail. I will return to talk more about our glidepath to Building a Smokeless World, before we move to the Q&A session. With that, I would like to draw your attention to the disclaimers on Slides 2 and 3. So let's begin with our 2023 performance. Our reported results reflect the impact of the non-cash impairment charge taken mainly against our acquired U.S. brands. We will focus on constant currency adjusted results, unless otherwise stated. I am pleased that BAT has delivered a resilient performance, in line with our guidance, reflecting the benefit of our global multi-category strategy. The breadth and scale of our global footprint, enables us to consistently deliver balanced results. This is demonstrated by our strong performances in AME and APMEA, delivering combined double-digit revenue growth offsetting the U.S. Overall, we have delivered, organic revenue up 3.1%, which excludes Russia and Belarus from both periods. Profit from operations up 3.1%, or 3.9% organically and diluted EPS up 4%, with organic growth up 5.2%. I am particularly pleased with our performance in new categories, with revenue up nearly 18%, and 21% organically, with Vuse and Velo delivering strong volume led revenue growth. Our consumer numbers reached 23.9 million, excluding 1.5 million consumers in Russia. We added over 3 million consumers year-on-year with 1.1 million in Q4 alone. At the half year, I shared a clear set of objectives to sharpen our execution and build a…

Thank you, Tadeu, and good morning, everyone. Our results, demonstrate the resilience of our business. We delivered organic revenue growth of 3.1% with New Category revenue up 21%, and Combustibles price mix of 6%. Adjusted profit from operations was up 3.1%, with operating margin up 60 basis points, driven by a strong improvement in New Category contribution, and our continuous focus on efficiencies. Adjusted diluted EPS grew by 4%, or 1.1% on a current currency basis. On an organic basis, excluding Russia and Belarus from both periods, adjusted profit from operations was up 3.9% and adjusted diluted EPS was up 5.2%. These results were delivered despite the absorption of a 2.5% transactional FX headwind. We continue to drive strong organic New Category revenue growth. This performance clearly reflects the strength of our multi-category portfolio, driven by Vuse and Velo. As a result, we continue to transform rapidly, with smokeless already reaching over 30% of our revenue in 24 markets. This represents nearly one-third of the 76 markets where we are in currently present in New Categories. And our transformation is even more advanced in many markets. Smokeless now represents 16.5% of Group revenue, up 1.7 percentage points from 2022. Excluding our U.S. Combustibles business, smokeless now represents more than a quarter of Group revenue. I will now share more details on our key category drivers, market shares are available in the appendix. In Vapour, we extended our value share leadership with Vuse to 36.1% in tracked channels in the key Vapour markets. We continue to make good progress on driving profitability with Vapour now having a positive contribution in four of the five key markets. The fundamentals of the Vapour category as a reduced-risk alternative for adult smokers are strongly positive. The total number of Vapour consumers is accelerating and…

Thank you, Javed. I would like you to take away two key messages from our presentation so far this morning. First, we have taken significant action to sharpen our execution and we are making strong progress. And second, whilst we are facing some challenges, our performance remains resilient, reflecting the benefits of our broad portfolio. I would now like to spend a few moments outlining the opportunity and pathway ahead for BAT. And why it's going to deliver strong outcomes for our shareholders. First, the Nicotine market is growing. Based on our estimates using the latest industry data and trends, New Category revenue will be incremental to Combustibles. And going forward New Category volume will offset the decline in Combustibles as smokers continue to switch to smokeless products. As a result, the quality of our top-line growth will be much improved as it will be volume driven. Our multi-category strategy is the right way to access this growing market. Consumers are choosing different alternatives to cigarettes. Markets and consumers are not homogeneous. And no single solution is capable of meeting all consumer preference. In addition, data shows that as you move into higher tar markets, for example Canada and the U.S., there is a much higher penetration with Vapour. And Heated Products stand a greater chance of success, in lower cigarette strength markets. Japan is a clear example of this. Executing on multi-category will deliver on our A Better Tomorrow purpose. We are committed to our new vision to Build a Smokeless World and to become a predominantly smokeless business with 50% of our revenue in smokeless products by 2035. By deploying our global multi-category portfolio we can actively encourage smokers to Switch to Better. To enable this, we have refined our Group strategy. To ensure a clear line of…

Thank you, Tadeu, and good morning, everyone. [Operator Instructions]. We will first be taking questions from the telephone lines.

Thank you. We have our -- Richard Felton of Goldman Sachs. Richard, please go ahead. Your line is open.

Good morning. Thanks very much. So just two questions for me please. The first one is on the U.S. Vapour category. I appreciate it's maybe difficult to put a precise number on it, but can you share any color on how quickly you think the overall U.S. Vapour category is growing that's across both the illicit and the tracked channels, please. Then my second question is on U.S. Combustibles. Thanks very much for sharing the encouraging data points on BAT's relative performance in the market. But overall, the category does still remain under a bit of pressure and we're seeing larger volume declines than has been the case historically. So I know there's lots of moving parts, there's illicit Vapour, macros are tough, there's still some COVID unwind. But as you think about the U.S. Combustible market from a medium term perspective, what do you see as the normalized rates of volume declines? And then given BAT's commercial strategy, your outlook on pricing in that market, do you still see U.S. Combustibles as a source of EBIT growth? Thank you.

Okay. So let me digest your questions. The first one in the Vapour category. Vapour is growing substantially in the U.S. markets. We believe that we have now around 29 million [indiscernible] Vapours in the U.S. And but most of the growth and I would say that we have grown something like 20% over the last year or so, is concentrate on this illegal modest product in the first place. We believe that there is currently a revenue pool in Vapour around £10 billion in which 60% of that is related to this illegal product. So we have built over time, a very strong Vapour business in the U.S. As you saw in our disclosure, we have reached more £1 billion in terms of revenue. Our level of operating margin now is very similar to cigarettes, not even gross margin, referring to the operating margin. So it's a big business in the U.S. that we have built and we are very proud of the efforts. For sure that we are frustrated with the fact that there is no current level playing field in the U.S. We know that the FDA is acting to improve enforcement. We believe that there is much more that needs to be done on that. When they finally finish the conclusion of the PMTAs will be a first step, because then we can see what are the illegal products that shouldn't be in the market in the first place. But it's encouraging to see that some states are taking the matter on their own hands and passing bills to try to certificate PMTAs and linking that with products that they will be trying to enforce in their own local markets. We are -- as we disclosed in the presentation, all we can to work together with…

Faham Baig of UBS. Faham, please go ahead. Your line is open.

Good morning, Tadeu, Javed and Victoria. A couple from me as well, please. Can I begin with the stake in ITC, could you please remind us where we are on the approvals to reduce the stake, the anticipated timeline? And importantly, what we should expect BAT to use the net proceeds for? In other words, could the proceeds be returned to shareholders through a buyback? And secondly on heated tobacco, do you have any early readings on the market impact from the EU Flavour ban, I think you mentioned that BAT was able to retain its share. And in the back, I think you highlighted in Czech Republic your share has actually grown. So could you just maybe give us more color on how's BAT share faring as glow has historically been over indexed to Flavours? Thank you.

Okay, sure. Let me start with your question, ITC. And we're going to use that just to give some background and because it's important for us to remind where we are coming from. BAT is a very highly cash generative company. Every single year, we are able to generate more than £80 million of free cash flow. So this means that when we consider our growing dividend approach and without any major or material, if you want M&A. On a business as usual base, we are able to deleverage the company around 0.2x, 0.3x, like we just subject to the FX at the year end. We have just demonstrated that through 2023. And the reason why we have said that we want to at least reach the mid of the range is for basically two reasons. One is the world has changed, and we have seen from 2022 an unprecedented increase in interest rates and that culminates with very high levels of the cost of capital compared with where we have been over the last decade, if you want. And this has even if we expect the interest rates start coming down, we've probably not -- never been to the point that we were before. So the world has changed. The cost of capital is -- its more expensive than it used to be. That's one point. It's clear. The second point is very particular to BAT. We still have out there a headwind related to Canada, the CCAA, and I have been very clear and transparent about that. And we have currently something as £2.3 billion of cash trapped in Canada. And once we -- and if we finally -- and I cannot give much information around the process that is going through with the plaintiffs in Canada. But…

Second was HP ban.

Yes, the HP product. Yes, the EU flavour ban. Well first of all, around 50% of the consumables in Heated Products in Europe is flavoured. In our case, we are over indexed to that is more than 7% of our portfolio that we sell in Heated Products in Europe are flavoured. So that's why it was important to launch this new herbal product that we did, the first in the market and we are very pleased with the level of competitiveness of this product, and this resonate quite nicely with consumers. It's up to the European markets to set their own timing. We have seen some markets that hasn't done. So Czech, like you quoted is one of them. Romania is another one. In those markets that we have seen that the flavour ban has already happening in the market, we managed to hold and sometimes even grow our overall share with veo, which is very pleased to see. There are some other important markets like Poland, Italy, still to come. So this is a process that we expect to come to a conclusion in terms of introduction of these flavour bans by mid of this year, and we are very well pleased with that because not just, it's a great alternative, but also in the same time, we are rolling out this new device, which is the glo Hyper pro which has enhancement capabilities, new to the wall display. Also, the heating is much brings a higher temperature, hence, it's more satisfying -- satisfaction. The timing of the session is longer as well. So we are progressing in the right direction.

Another question from the telephone lines.

Thank you. The next question goes to Gaurav Jain of Barclays. Gaurav, please go ahead. Your line is open.

Hi, good morning. Thank you. I have three questions. So first question is on the Newport pricing trends. So clearly, you have a stabilized share and the share is growing, well, it is coming at the expense of pricing and there is a concern that what you are doing could lead to the breakdown of pricing discipline in the U.S. cigarette market. So could you please comment on that? The second question I have is on new product launches. So you are highlighting the glo new product launch, can you also talk of new product launches in the other two segments, i.e. Modern Oral and e-cigarettes? And the third question is on leverage. So your competitors are now they are all operating at less than 2x leverage and that's where PM is also guiding to. So is the right leverage for you also closer to 2x rather than the middle of 2x to 3x? Thank you.

Okay, Gaurav. On Newport, we are doing, we are introducing, laddering in the brand and which is aligned with the commercial practice that we have seen in the markets. So in that sense, we are not really doing something unique. It's just a recognition that, when we have an economic downturn, our consumers have absolutely no safeguard to continuing the brand. So we introduced a soft pack. We pilot that in some states in 2023 very successfully, as you could see in the numbers that we have demonstrated, and we expect to roll out this practice for throughout 2024. And it's important, despite the fact that there is a mix impact on that should keep consumers in the family because we have seen from the past that when the economic cycle changed the consumer uptrends. And so it's important that we keep them in the family and that's exactly what we want to achieve with the introduction of the laddering, the Newport specifically. For sure, it's not just that, that we are doing. We are also assessing, reassessing some channels that we haven't been really present before as we should, like for example deeper discount channels, $1 channels that consumers start migrating to and we are establishing some trade practice that can be competitive in those channels to support our brands as well. And on top of that, like I mentioned during the presentation, we are increasing our trade reps and all that has a positive consequence in the market. So we are very thoughtful in the way we are doing that, very measured in the way we are doing that, that's why we said since day one that this is a process that will not take months, will take more than that and we are carrying on doing what…

Another question from the lines.

Thank you. The next question goes to Rashad Kawan of Morgan Stanley. Rashad, please go ahead. Your line is open.

Yes. Thank you and good morning, Victoria, Tadeu and Javed. Thanks for taking my questions. Just a couple from me. One, just to go back on heated tobacco, The settlement with PMI, can you just explain whether the legal disputes impacted your ability to innovate and how you think this will change your prospects if at all in the category going forward in the medium term? And then my second question just to drill down a bit more on U.S. Combustibles, I know you don't want to give 2024 guidance on the U.S. but if I can ask things a bit differently, given how you've preliminarily guided on 2025, do you expect the level of competitiveness in the marketplace and the down trading that we're seeing to continue into next year? Thank you.

Okay. On the IP deal with PMI was primarily related to settle all this pending case that we have around the globe, and we did that, it's important to say without any compensation, monetary compensation. So for us immediately this reflects into the case that we had against Vuse Alto in Virginia, in the U.S, also a number of litigations that were in dispute around glo in Europe and also Vuse in Germany, to mention some. Now this deal also gives us for both companies actually to give peace of mind for us to be focused on developing and accelerating the Tobacco Harm Reduction agenda and innovate according to that. So we're going to have more freedom to do it in the future, and this will be very positive not just for BAT but also for the industry as a whole because I think that, all the industry wants actually to have a better prospect of with the different stakeholders around, how important it is that Tobacco Harm Reduction gets accelerated in the many jurisdictions. So this was a strong step forward, I have to say. The Combustible business, yes, you are right, it's difficult for me. But at the end of the day, I'm trying to and anyone can be doing this type of analogy. It's a lot of the downsides we are seeing today is related to the macroeconomics. And then the macroeconomics, my expectation for next year is to improve compared with this year because we are seeing already discussions around eventually, interest rates start to reduce, we know that there is a correlation between consumer confidence and sales of cigarettes. And once we have seen the past that once interest rates start coming down, the whole sentiment change and eventually, the confidence can recover back and this will have a positive impact on cigarettes. So the assumption is that next year will be better. And for sure, one thing that is a big unknown, like I said before, it's the enforcement around Modern disposal, which also impacts the Combustible side. But from the macro point of view, we would expect the business to improve from '25 onwards.

I believe we've got another question from the line.

Yes. The next question goes to Jonathan Leinster of Societe Generale. Jonathan, please go ahead. Your line is open.

Okay. Thank you and good morning, gentlemen. Yes, few questions if I may. First of all, the launch of the glo Hyper Pro, I mean you mentioned that as a premium product. Does that mean it's actually going to be priced differently from previous iterations and are the consumables any different? So is this a sort of step up to try and avoid the sort of price discount we've seen in some of the key markets in terms of the sort of Mainline glo Hyper?

Yes, Jonathan, the device is already being priced at a higher price compared with the previous one. Clearly, it's a much improved device, and we have space for that. So this is one. The consumables will be improved consumables and this question depends a lot on the circumstance of each market. It's very difficult to give a kind of one size fits all answer to that. We have something in our hands that we believe that is much improved compared in terms of consumer compared with the past. And we want to reassess always, there is a lot of activities in the below WAP as we speak today in Tobacco Heating Products. So it's not just a question of what we want to do, it's how we see the competitive landscape as usual in this case.

I'm afraid we're out of time. Jonathan, sorry, I'll let you finish your questions.

I think he has another one. Yes, Jonathan.

Yes. Okay. Very quickly, well probably not that quick. On the Vaping markets across internationally, there's been a number of countries that have sort of formalized the market having previously been sort of a bit of a gray area. Is that something that -- is there major markets out there, which you expect to sort of formalize the vaping markets, which would represent a real opportunity to you?

Well, we are seeing, we are encouraging to see some markets taking the Tobacco Harm Reduction in a very prominent basis, we just saw, for example, New Zealand very supportive of vaping, which is very favorable. Even the U.K., they want to regulate further, but they have all in mind that it's a very important tool to reduce incidence of smokers in general. Canada is the same. It's a question of how you finetune the regulation. We are seeing more recently accounts like Chile, where we're expecting at any time them to open up the market for Vapour. And we note that there are discussions in big markets like Brazil, for example, they have a public consultation running as we speak in terms of, if they will regulate or not Vapour. Turkey is another big market. In our current assumptions, we are not expecting any of those big markets to make big moves in the short term. But we expect this as we progress to and this is one focus area, like I said the sustainable future is about that. We expect to have more and more evidence based science, fact based points to engage with all of those different authorities, governments in order to be able to unlock the potential that could make a tremendous positive impact for the currency smokers in those markets.

Okay. Thanks.

Thank you very much.

So as I was saying, I'm afraid we've run over time, but I think we've got one more question on the line which we will take.

Thank you. The next question go to Joffrey Bellicha Meller of Bank of America Merrill Lynch. Joffrey, please go ahead. Your line is open.

Thank you very much and thank you for taking the time. I have a couple of questions. The first one is on ITC's hotel demerger, I was wondering how you were thinking about your future stake in that company and if you would be immediately disposing it, assuming that you get the regulatory approvals for it. And the second question is on the U.S. Combustibles margins, when you discussed about the laddering of the products, are the introduction of the soft packs for example with Newport as margin at the same level of margin as your regular Newport products? Thanks very much.

Okay, so Joffrey, the first question, what I have said to you is that there is no strategic intent from BAT to be a minority shareholder of a hotel in the Indian market. Now you have to bear in mind that they are floating 60% of the hotel business, it is floating 6% of their hotel business. Early to know exactly the timing of that, we expect to be more towards the end of the year, and the decision around what to do with the stake will be take on board by the board when it comes to time. And so I'm going to leave the question on the hotel. The second one is the laddering in Newport. We cannot keep the same level of margins of the price at the very top. But more important, when we consider the level of cannibalization that we have and more importantly, retention of consumers, we think that is a very positive move and that's why we have pilots, we have taken our conclusions and then we start to roll out throughout 2024.

Thank you very much, Tadeu and Javed. And many thanks to everybody for all your questions. I apologize that we haven't managed to get to the questions online, but we the IR team will be responding to those later on today. And with that, I'll hand back to Tadeu for closing remarks.

Okay. Thank you all for listening today. To close, while there is still more to do, I'm confident the investment choice we are taking will take a sharp execution and build the foundation for long-term growth and value creation. Thank you again for joining us today. I look forward to keeping you updated as our progress and we build as more closely work together.