Good morning, everyone. I'm delighted to welcome you to our 2024 Preliminary Results Presentation. With me this morning is Soraya Benchikh, CFO and Victoria Buxton, Group Head of Investors Relations. I will begin with our transformation highlights and the progress we have made during our investment year. Soraya will then take you through our financial results in more detail before I return to talk more about our performance outlook ahead of Q&A. With that, I would like to draw your attention to the disclaimers on Slide 2 and 3. Let's begin by looking at the positive transformation momentum we are driving, starting with some highlights. 2024 was a key moment in our transformation journey as we sharpened our execution, enabling us to navigate near-term market challenges and deliver an improved performance in the second half. We have delivered group results in line with expectations, which Soraya will talk about in more detail. Smokeless accounts for 17.5% of group revenue, up 1 percentage point versus last year. We added 3.6 million smokeless consumers, reaching 29.1 million, mainly driven by our continued success in Modern Oral. Our focus on quality growth, balancing top and bottom line delivery, has driven a further improvement in new category contribution, up GBP251 million and a 7 percentage point increase in our category contribution margin on an organic constant rates basis. We are committed to rewarding shareholders with strong cash returns, and I'm pleased with our progress improving financial flexibility. Enabling the initiation of sustainable share buyback, continued progress on the leverage to within our target range at 2.4 times, alongside our progressive dividend with 2% growth announced today. Our foundations are solid, and I'm confident that the choices we have made and the actions we have taken through our investment year are the right way forward for BAT. I have been clear that we needed to invest to strengthen our U.S. business, accelerate innovation momentum, and enhance capabilities that support our strategic delivery. While there is more to do, we are making clear progress. Our previously announced commercial plans in the U.S. are completed, and I'm encouraged that our performance accelerated in the second half. Through our improved innovation ecosystem, our new category growth accelerated in the second half, driven by Glo, Hyper Pro, and our refreshed Velo Mix in the U.S. Furthermore, we are excited about the Q4 launchings of our latest innovations, including Velo Plus. As previously highlighted, we do not expect the journey ahead to be linear. We will share more detail on the key drivers and assumptions behind our 2025 guidance later in the presentation. We remain committed to returning to 3% to 5% revenue and 4% to 6% APFO growth adjusted for Canada at constant rates in 2026. And with that, I will hand over to Soraya to take you through our results in more detail.

Thank you, Tadeu, and good morning, everyone. Before diving into the results and to set the context, I would like to remind you of my key focus areas. The first is to fuel our transformation by maximizing sustainable value from combustibles. The second is to drive quality growth in new categories by investing capital in a disciplined manner, targeting the largest profit pools and maintaining a laser focus on returns. The third is to strengthen our financial resilience. And even though we have reached our target debt corridor, including Canada in 2024, by 2026, we aim to be within this corridor, excluding Canada whilst remaining committed to our balanced capital allocation. Now with this in mind, I'd like to share our progress in 2024 as we move to the results. I am pleased to share that we delivered organic constant currency results in line with guidance. Whilst our reported results reflect a number of adjusting item, including our exit from Russia and Belarus, a provision of GBP6.2 billion for Canada's CCAA proposed plan, a charge in Romania and respect of an excise assessment, and the GBP1.6 billion gained due to the partial sale of our ITC investment. To understand the underlying performance, we will focus on organic adjusted constant currency results. More details on adjusting items are in the appendices. So, in line with our guidance, group revenue grew by 1.3%, new category revenue grew by 8.9%, and adjusted operating profit rose 1.4%. And diluted EPS increased by 3.6%. So looking at some of the key drivers [indiscernible] combustibles price makes growth, with pricing up nearly 9% offset by next year. Adjusted gross profit expanded by GBP400 million, supported by revenue growth management and new category scale benefits. Excluding the U.S., we delivered 5.1% revenue growth, and 7.5% operating profit…

So thank you Soraya. I would now like to spend a few moments outlining the pathway ahead. BAT is transforming with our multi-category strategy and global footprint we are well positioned in a growing industry. I believe we have the right strategy, the right capabilities and the right people to deliver a profitable transformation, while delivering strong returns to shareholders and making progress towards our vision of building a smokeless world. At our Capital Market Day in October, I shared these 10 key reasons why I fundamentally believe in the future growth prospects of BAT. Many of the broader themes have been touched on by Soraya and I would like now to share some additional color on our confidence in these six key areas highlighted in the slides. First, BAT is well positioned within the value of the nicotine industry growing at an accelerated pace, as consumers around the world increasingly switch to new categories. Second, we have transformed our entire innovation ecosystem. This has allowed us to step change our product portfolio based on our consumer insights. We have developed an exciting innovation pipeline across our new categories that we will deploy in a target way through 2025. As highlighted at our CMD, Glo Hilo is a breakthrough system that we believe will reshape the way Glo is positioned in the category, allowing us to compete effectively in the premium segment that represents over 80% of industry value. We launched our first two-piece premium device in Serbia in November. We are collecting insights and learnings and we are encouraged by the results in the markets to date. Hilo and our new consumables Vivto and Rebo [ph] are resonating well with the majority of acquired consumers new to the Glo brand family. We will share further updates as we continue…

Thank you, Tadeu and Soraya, and good morning, everyone. [Operator Instructions] Tadeu and Soraya will be very happy to take your questions, and I will now hand over to the conference call operator.

Thank you very much, Victoria. Today's very first question is coming from Faham Baig of UBS. Please go ahead. Your line is open.

Good morning, guys. Thank you for taking my questions. I may take the liberty of three, please. Two clarification ones. I want to start with the U.S., please. I think you mentioned twice in your remarks that you expect a recovery in the U.S. financial performance and a return to growth despite continuing to assume a challenging environment from a macro perspective and illicit vape enforcement. So could you maybe clarify some of the factors that will result in the U.S. growing, and I presume that means revenue growth and profit growth. I'd like to start there.

Yeah, you are right, Farham. Our expectation is that the U.S. goes back to growth. We have three difficult years in combustible since 2022, ‘23, ‘24. The last two years, basically an investment year for us to get back where we should. We fixed and we invested in a number of areas that I described in my presentation. Obviously, we'll be lapping a lower base in 2024. This is one of the reasons why we will be having the comparator will be a lower base in ‘24. And also, we'll be building on the positions that I just show in terms of where we stand in terms of market share. We have great momentum behind the Luck Strike brand, but also Newport has stabilized. And now, with all the lettering that we have done. And we believe that with the expansion in the trade coverage that I refer to, plus capabilities on the digital sides that we have been investing, we have more an expectation that we'll be back to the positive territory in 2025. On the new categories, obviously, Velo Plus is doing extremely well. And as I mentioned, this will be very supportive of the progress in the categories in the U.S. The concern we have, as I described it, we are not expecting major change in terms of the dynamic of the legal vapor market. This will be a headwind in 2025 that we hope that we can cover through the new categories in more than our specifically. So overall, we expect the U.S. being back on growth from 2025 onwards.

Thanks, Tadeu. And maybe I'd like to spend a bit of time on Velo Plus. Could you clarify that volume share for Velo was 10% in the latest reading? And what would that number be for, I guess, just Velo? And maybe if you could share some insights into where are we on distribution for this product? Where do we expect it to go? Where are we on capacity? And I'd like to get your view on how you view moist and wet pouches versus the existing dry offerings in the U.S. What type of consumers is it attracting? And do you think the U.S. consumer is willing to switch from dry to wet?

Out of the above 10%, slightly above 10% that I was referring from the latest reading, Velo Plus accounts for something close to 7%, 7% of this number. The Velo trifecta that is the internal project that we call the refreshed Velo launch last year, accounts for 3%, 3.5%. What we have been seeing in terms of the Velo growth is that no more than 30%, 35% is coming from our previous Velo. So the majority is coming from outside the previous Velo, which in New York, we are getting close now to 20% reading when you consider both the Velo Plus and the previous one. And obviously, the biggest feature of Velo Plus is the moisture. And we see that this resonates with all types of consumers, because we are using higher moisture outside the U.S. in markets where we have traditional oral, i.e., consumers coming from snus and some other oral products, and consumers that are coming from cigarettes or vapors. So moisture is a key feature and is the main driver behind that. We have now established our presence around 75,000 outlets in the U.S. and we plan to get to 110 outlets from April, actually, which is the second quarter of the year.

Brilliant. That's super clear. And then one question, I guess, probably a clarification. I do want to go back to Bangladesh and this sort of 1 percentage point profit impact that you're facing from Bangladesh. I guess I want to take you back to two years, and I want to take you to Pakistan, where you had, I guess, an even larger excise tax increase, an even larger price increase. Volumes were down to 33% in 2023. But your profits, if I'm not mistaken, in local currencies actually grew 33%. So why is Bangladesh different? Why are you anticipating profits to decline in that market with this price increase?

Yeah, let me tell you about Bangladesh. Normally, you see an excise policy every middle of the year, June. So what happened is that the government in the pressure to raise tax collection, they decided to do an ad hoc increase, not just in cigarettes, but they increased VAT and duties over 100 products, including cigarettes. And then an excise increase in all tier points, including the above inflation, the floor price. So it's a question of really affordability, because consumers were already struggling, as many other consumers in the world, with the cost of living, food price increase, inflation of food price, and then on top of that had to face 100 products increase in price, and we had to increase across the board the price of cigarettes to cope with those excise increase. Now, this is most of the 1 percent impact. There is also the Australia case that we highlighted. But what we saw, and Pakistan is a good example, when geographies go too far in terms of excise shocks, they will reflect that this is counterintuitive in terms of their desire to increase tax collection, because what happened is exactly the opposite in the second year. After the establishment of a legal market, government tried to mitigate and take some actions to avoid this from happening. And this is our working assumption for 2026 that we'll be lapping in ‘25 and not getting even further the impact in ‘26 related to that, because the government in Bangladesh, 10% of overall tax collection is coming from tobacco, which means that they are very reliant on that. They cannot afford to see the spread of illegal markets across different years. And that's where we talk about the lapping in 2025.

Thanks, Tadeu. I appreciate that.

Thank you so much for your questions, Mr. Baig. We'll now move to Rashad Kawan of Morgan Stanley. Please go ahead. Your line is open, sir.

Hey, good morning, guys. Thank you for taking my questions. Two for me, please. So, first one, I know it's still relatively early, but you reiterated getting to your midterm guide by 2026. I guess what gives you confidence in being able to achieve that? How much of an improvement does that assume in U.S. combustibles volumes and enforcement and illicit vapes? And then second question, you talked about sustainable buybacks again today. And again, as you think about 2026, should we assume buybacks will continue irrespective of the Canadian settlement? I know you obviously have some flex from the ITC hotel stake, but potentially could you also look to monetize more of the ITC stake there to fund future buybacks? I guess just any thoughts around how that fits within your capital allocation priorities would be helpful. Thank you.

Okay, thank you for the question. I'm going to leave, sorry, to talk about the capital allocation question. On the 2026, well, we just spoke about Bangladesh, which accounts for most of the 1%. The underlying revenue growth of ‘25 would have been around 2%, which is pretty much in line with what we have in mind in this journey towards our midterm algorithm in 2026. So like I just explained with our question, we believe that we'll be lapping that in 2025. And the other point is obviously we have invest into a completely reshuffle of our innovation ecosystem during 2024. And the reason why we call 2025 a deployment year is that throughout the year we'll be launching these new initiatives. Glo Hilo, for example is a very different product than the one that we have currently. So we will increase substantially our competitiveness in tobacco heating products. Vilo Plus in the U.S. now complements already a very successful and winning product that we have outside the U.S. in the fastest growing new category in the world today, which is Modern Oral. It's growing in incidence and growing every daily consumption everywhere that we launch this product. And we are clearly a leader in that space. And also vapor, we will be working in terms of establishing a premium, creating actually a premium subcategory within vapor with our new product. So when you come to 2026, you have all these products already in the market. So we will have a full year benefit of those products that will come throughout 2025. So that's another reason. In the U.S., we expect to see a more supportive macroeconomic environment that will resonate better in terms of low income consumers that has been impacted heavily over the last few years with…

Can I just make an addition? Today, you referred to the revenue impact on 2025, so one percent from Bangladesh and Australia, whereas on APFO, there is a 2% impact. So if you think about that in terms of our 1.5% to 2% guidance, then on an underlying basis, it will be 3.5% to 4.5%. Okay, just taking your question on sustainable buybacks in 2026. As Tadeu mentioned, we will be back to our 3 to 5, 4 to 6 growth algorithm in 2026. And as I mentioned earlier in the presentation, excluding Canada takes us to a leverage of 2.75 times. So looking in terms of capital allocation in 2026, we will aim to get back into our leverage corridor of 2 to 2.5. And we will continue to balance cash returns between basically our progressive dividend policy. We announced 2% this year, and we will continue with this policy because having met a lot of our shareholders, I know how much they value the dividends. But we will also look at, we will be generating enough cash. I think mentioned in the CMD, once we reach our midterm algorithm, we'll be generating around GBP8 billion of cash per annum. So we'll have sufficient to be able to balance the progressive dividend policy with a sustainable buyback, share buyback. So in answer to your question, yes, we will be looking to maintain. I'll remind you that we've just completed a GBP700 million share buyback, and we are committed to doing the share buyback of GBP900 million this year.

Thank you very much. Very clear.

Thank you, sir. We will now move to Gaurav Jain of Barclays. Please go ahead.

Hi, good morning Tadeo. Good morning. So I have three questions from me as well. So one is, on the ITC hotel stake you own directly 15% I think, of that company. What would be your plans for that?

Okay, as I have referred to in the past, Gaurav, BAT has no interest to become a long-term shareholder of a hotel chain in India. And as a consequence, in the right moment that will be decided, where is the best moment to maximize shareholder value? We will be divesting, and we will be using proceeds to making sure that we get to the leverage corridor of 2.5 and 2 by 2026.

Sure, thank you. The second is, just on heated tobacco, and I hear the comments that there's a new platform getting launched this year. But, I mean, I know there was a divestiture of Russia and Ukraine which has in fact reported numbers the way we see it. But if you just look at APMEA numbers which is largely Japan and Korea. It is like flat when competitors have clearly grown much, much higher. So do you believe that you will be able to accelerate this growth to in line with market growth?

Yeah. Yes. What will happen in Japan across 2024, we used to have a legacy system there, which is a super-slim product. And this system got completely replaced by Glo Hyper, basically. And we actually increased price in order to accelerate this migration from the super-slim to the demi-slim, which is the whole Glo Hyper. So as a consequence, you haven't seen much difference in terms of the volumes, the revenue increase. But at the end, we know that Glo Hyper Pro is a much more attractive platform than the previous super-slim that we used to have. They have a higher retention, they have average daily consumption, which is higher and resonates in terms of brand attributes with consumers in a much better way than the previous one. So that's basically the story in Japan in 2024 in Hyper. And this has impacted the whole region performance, because most of the HP in the region is coming from Japan. And obviously, with the Glo Hilo, as we said, this is not happening until middle of the year. But in the second half of the year, we expect to complement the offer that we have today with a much more improved and our expectations that we're going to be in a much better position to make better inroads in terms of category share of the tobacco heating products.

Sure. And my last question is on the U.S. So this year, in FY’24, your revenue declined 3.5%. And your cigarette volume is down 10%, your revenue is down 4%, so your price is clearly lagged what the industry leader there was taking. So when you are saying that FY’25 U.S. revenues will be flat, it's more or less that now the pricing on combustibles will start aligning with the industry leader. Is that how I should think about it?

Well, we cannot talk about pricing, Gaurav. But like I said before, we'll be left with a weaker comparator because we had to do the investments that we referred to and we had to ladder the brands to make it more adapted to the reality of the U.S. consumer. And this all has an implication in terms of the top line of the company. But the important thing is that all these initiatives now has been concluded, and then we start in 2025 with a different dynamic.

Thank you so much.

Thank you, Mr. Jain. We'll now move to Rey Wium Anchor SB. Please go ahead.

Good day, Tadeu and Soraya. I just want to maybe just quickly just focus on the Canadian situation. This question, I just want to know whether the annual settlements that will come through, and I appreciate it's a bit early, but will those be tax deductible for ITCAT [ph]?

Sure. Currently, I mean, it's only a proposed plan. I'm sure you can appreciate the scale and complexity of the settlement. But our current early interpretation is that they will be tax deductible. But obviously, we'll get further clarification once the settlement is done.

Good. Now, the other interesting question that I have is the total settlement amount, which is CAD32 billion, obviously needs to be paid over the years through profits. Is there a minimum liability that you face? Let's say, for instance, the cigarette industry declines at such a rapid rate that Canada goes smoke-free, let's say, after 10 years. And the total payments, let's say have amassed to about CAD20 billion. Is there a top-up that you will need to do, let's say, industry-wise, for the other CAD12 billion, for instance?

No. There is no minimum liability. The provision that we've made in the accounts this year of CAD6.2 billion is basically split into two amounts, the CAD3.7 billion is obviously our estimate of the liability, and CAD2.5 billion is the current cash that we hold. But obviously, depending on the evolution of the industry, that's what will be paid out. But this is our best estimate, is the CAD3.7 billion, obviously on a discounted basis.

Excellent. And have you sort of finalized what your share will be of these payments between the main industry players?

As I said, it's our current estimate. It's our current estimate of what the liability would be. And the next milestones in the case is by the March 3, the judge needs to either approve the plan or we're back into negotiation. And then we have a 21-day window for appeal where the judge needs to approve the basis for the appeal. That's basically the next steps. But under IFRS, obviously that's our estimate. Sorry, go ahead.

Yeah. I'd just like to quickly stop the situation in Australia. The market has declined at a material rate in recent years. I mean, I think based on what your competitor says, the market was like well basically 5 billion sticks in 2024. I just want to know, is Australia still profitable for you? And how long can you continue to operate in such a diminishing market until you maybe decide also to exit that market?

Yeah, look, it's clearly a new thought policy that we are seeing in real life. And unfortunately, in this case, I think that Australia has become one of these outliers in the world. Like we said today, 65% of nicotine consumption is already legal in Australia. You can count on a handful of fingers what are the counts that you can find in this type of very, very extreme case? And we hope that this will be at certain point recognized by the authorities and they can make something about that. Because at the end of the day, it's not just about tax collection that's reduced dramatically, but also we know that these illegal activities always come together with other criminal activities. And on top of that, for example, what's happening in vaporware, basically 100% is illegal. It will lose completely control in terms of access to youth, in terms of what consumers are consuming, because these products are completely with a very doubtful type of quality standards. So we hope that the government will wake up for that and take some action related to that. And that's the reason why we are still supportive of the country, of our people there. Obviously, it's still profitable. Otherwise, we wouldn't have had this impact in our numbers in 2025. But the reality is that we are in the hope that these things can change as soon as they can understand what the reality is.

Okay, thank you very much.

Thank you for your question, sir. We'll now move to Damian McNeela of Deutsche Numis. Please go ahead.

Hi, morning, Tadeu. Morning, Soraya. I know we've had a couple of questions already on the U.S., but I just wanted to clarify. Because I think some of the things that need to go better for you in the U.S. are a function of things that are outside of your control, like U.S. consumer and illicit trade. I just wanted to clarify, in your FY’26 return to the growth algo, at the bottom end of the range, that's been driven by everything that you can control in the U.S., but at the top end of the range, that would benefit from things that are outside of your control, is the first question. Second question is on, can you provide any quantitative or qualitative data around what drove the improvement in new category profit contribution in the period by sort of subcategory, please? They're my two questions.

Yeah, thank you. Look, the first question doesn't work precisely like that, but I was trying to articulate in line with what you are just describing. And our numbers in 2026 will be easily within the range or at the top of the range, if we see a proper meaningful enforcement on the vapor business, for example, and improvement in the macroeconomics. But like I said, we are already expecting 2025 for the U.S. to be turned into the corner, into a more supportive business for the rest of BAT. So we believe that we can deliver the range of 3 to 5, 4 to 6 in ‘26, and we expect that if we are surprised for better enforcement, better macroeconomics than we have in our plans, that we actually could be more in the upper side of the range. You want to take the –

Yes, in terms of the improvement on the new category profitability, if we look at the main drivers, firstly, we've supported the top line with RGM going forward. And also we've been able to optimize our cost of sales by driving scale. And as a result, you'll see in the results that we've actually accreted our gross margin in new categories by 500 basis points. Further down, getting to contribution, we've also been able to work on our return on investment by focusing on the largest profit pools, so reallocation of resources on the largest profit pools, but also we've been driving throughout the business, across all the business unit, dashboards with data analytics to support decision making, and a marketing spend effectiveness program which we've begun to roll out. And hopefully throughout this year we'll roll out throughout the group. And that's really been supporting the delivery and contribution. As you all have seen, we've delivered over GBP250 million in category contribution. We're up to 7%, and there's a lot more to come. We'll continue on this trajectory enhancing contribution. If I had to highlight some of the categories, I think in HP, in tobacco heating products, we drove particularly a better contribution there through RGM, as I said, supporting the top line and taking some pricing, but also reducing losses on devices and benefiting from scale. Modern Oral, as you know, is a highly profitable category, and vaping we continue to work on the profitability by focusing on the premium side of vaping whilst we roll out our innovations going forward.

Very clear. Thank you very much.

Thank you, Damian. Ladies and gentlemen, today's last audio questions or people to have dialed in from the phone will be coming from Richard Felton of Goldman Sachs. Please go ahead.

Thank you very much. Good morning, guys. Three questions for me, please. The first one is on the illicit vapor category outside of the U.S. I'd be interested to know any thoughts or observations on what you're seeing across your markets in terms of the growth of illicit vape. I know there's a lot of attention on the U.S., but are there any other markets which are following a similar pattern, and does that have any implications for your appetite to invest in that category? Second question, is there anything on your guidance in terms of phasing that you can call out? I know in the statement you say second half weighted, but is there any quantification that you can provide around that? And then the third one, apologies if I've missed it, but could you just remind us what the new tobacco regulation actually is in Australia? Thank you.

Okay. Illicit vapor category, the biggest problems that we are facing nowadays in terms of even though because of the size of the vapor market is basically U.S. and Canada. Canada, remember that Quebec has announced the ban on all flavors other than tobacco, but without any enforcement. And then the following day is exactly the same situation that you see in the U.S. All these illegal products coming in with all the flavors back to the markets and thousands of puffs and with a completely uncontrolled in terms of the quality of the products that are being sold. But these are, I would say the biggest two. Obviously, we have situations where things are much more under control. Go to France, for example, vapor is sold under tobacconist is a more controlled environment because you have retail license. That's why in the discussions we are having is happening here in the UK. We are a very strong advocate for retail license. And hopefully the government will do something about that in the final act related to that. We have a case of New Zealand that has been very well managed vapor and has a very good impact in terms of reduction of incidence of cigarettes and towards a much more controlled increase of vapors. But we also have cases like Australia that I have just spoken about which is 100% of illegal and 9% of consumption of the population all basically illegal vapor. Or the likes of Malaysia that also have opened up but without enforcement. The key thing here is not about giving up on the category even though because the category is in terms if you analyze the number of consumers using these smokeless products vapor is by far the largest category and has a lot of…

Thank you, Tadeu. I'm afraid that's all we have time for today. If your question hasn't been answered, then please don't hesitate to contact the IR team and we will help you directly. But I'd like to hand back to Tadeu for some closing remarks.

Thank you all for listening today and for your questions. To close, I'm pleased that we have delivered 2024 results in line with expectations. While there is still more to do, I'm confident the investment actions we have taken are the right way forward for BAT as we build our momentum through 2025 to deliver our medium-term algorithm in 2026. We will continue to reward our shareholders through strong cash returns, including our progressive dividend and sustainable share buyback, and build on our foundations to deliver long-term growth and value creation. Thank you again for joining us and I look forward to updating you on our progress at our half-year results.