Half Year Results Statement

Business highlights

• Aggregate market share gains (+6 bps) in our five priority markets – ahead of our strategic objective
• Strong tobacco pricing more than offsetting volume declines
• NGP net revenue up 15.4% with growth in all categories; NGP reported revenue up 14.7%
• Strong tobacco result at Logista offset by performance in long-distance transportation
• Adjusted and reported earnings per share up 6.0% and 0.7% respectively, driven by further share count reduction
• 12-month free cash flow of £2.4bn reflecting strong cash conversion at 99% on 12-month basis
• Capital returns underway: £1.25bn share buyback and increased interim dividend
• On track to deliver full-year results in line with guidance

Stefan Bomhard, Chief Executive

“We have delivered another six months of broad-based constant currency growth across all regions, demonstrating the strength of our distinctive challenger approach and the benefit of long-term investments in our consumer capabilities, sales execution and performance culture.

“In tobacco, we grew aggregate market share in our five priority markets by 6 basis points – ahead of our strategic objective to hold share. At the same time, we delivered strong price mix of 5.9% across our overall combustible footprint.

“In NGP, we increased market share and net revenue in all three categories to support overall NGP net revenue growth of 15.4% and adjusted operating losses reduced by 14.0%. Our modern oral portfolio has grown strongly across all markets, including further share gains from the successful roll-out of Zone in the USA.

“Our operational delivery is driving a consistent financial performance and strong cash flows, which underpin both investment in growth initiatives and enhanced capital returns to shareholders. This year, shareholders will benefit from an accelerated cash payment as we rephase the dividend to four equal instalments and from the ongoing £1.25 billion share buyback programme.

“Despite the uncertain global economic environment, we are on track to deliver our full-year results in line with our guidance, supported by tobacco pricing already taken in the first half and continued momentum in NGP.

“Looking beyond the current fiscal year, we remain committed to the plans and medium-term guidance we provided in our 2030 strategy in March. These plans set out the focused choices we will make to further strengthen our combustible and NGP businesses and generate another five years of sustainable growth and long-term shareholder value through a progressive dividend and an evergreen share buyback.”