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BRITISH AMERICAN TOBACCO PLC - Annual Report for the Year Ended 31 December 2018

Release Date: 15/03/2019 14:25
Code(s): BTI     PDF:  
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Annual Report for the Year Ended 31 December 2018

British American Tobacco p.l.c.
Incorporated in England and Wales
(Registration number: 03407696)
Short name: BATS
Share code: BTI
ISIN number: GB0002875804
("British American Tobacco p.l.c." or "the Company")


Annual Report for the Year Ended 31 December 2018

In compliance with Listing Rule 9.6.1, British American Tobacco p.l.c. (the “Company”) reports that
its Annual Report 2018 (including the Strategic Report 2018) will be shortly submitted to the
National Storage Mechanism and will be available for inspection via the following link:

The Company’s Annual Report 2018 has been published to be viewed or downloaded on the British
American Tobacco website at

In addition, in accordance with Section 203.01 of the New York Stock Exchange Listed Company
Manual, the Company announces that today it filed with the Securities and Exchange Commission an
Annual Report on Form 20-F that included audited financial statements for the year ended 31
December 2018. The Annual Report on Form 20-F will be available online at the British American
Tobacco website at and also online at

The Annual Report 2018 and other ancillary shareholder documents will be mailed and made
available to shareholders on 21 March 2019. Investors have the ability to receive a hard copy of
BAT’s complete audited financial statements, free of charge, upon request, by contacting the below:

 United Kingdom
 British American Tobacco Publications      Telephone: +44 20 7511 7797
 South Africa
 The Company’s Representative Office        Telephone: +27 21 003 6712
 United States
 Citibank Shareholder Services              Telephone: +1 888 985 2055 (toll-free)

The Company made its preliminary announcement of its audited results (which included a
condensed set of the Company's financial statements, extracts of the management report and a
Directors’ responsibility statement) in respect of the year ended 31 December 2018 (the
“Preliminary Announcement”) on 28 February 2019. Further to the Preliminary Announcement and
with reference to the requirements of Rule 6.3.5 of the Disclosure Guidance and Transparency Rules,
the following disclosures are made in the Appendices below.

Appendix A to this announcement contains a description of the Principal Group Risks (page 48 of the
Annual Report 2018) and Appendix B is a statement of related party disclosures (page 190 of the
Annual Report 2018). Together these constitute the material required by Rule 6.3.5 of the Disclosure
Guidance and Transparency Rules to be communicated to the media in unedited full text through a
Regulatory Information Service. This material is not a substitute for reading the full Annual Report
2018. Any page numbers and cross-references in the extracted information below refer to page
numbers in the Annual Report 2018.

P McCrory
Company Secretary

15 March 2019


Investor Relations
Mike Nightingale/Rachael Brierley/John Harney
+44 20 7845 1180/1519/1263

British American Tobacco Press Office
+44 (0) 20 7845 2888 (24 hours) | @BATPress




The principal risks that may affect the Group are set out on the following pages.

Each risk is considered in the context of the Group’s strategy, as set out in this Strategic Report on
pages 8 and 9. Following a description of each risk, its potential impact and management by the
Group is summarised. Clear accountability is attached to each risk through the risk owner.

The Group has identified risks and is actively monitoring and taking action to manage the risks. This
section focuses on those risks that the Directors believe to be the most important after assessment
of the likelihood and potential impact on the business. Not all of these risks are within the control of
the Group and other risks besides those listed may affect the Group’s performance. Some risks may
be unknown at present. Other risks, currently regarded as less material, could become material in
the future.

The risks listed in this section and the activities being undertaken to manage them should
be considered in the context of the Group’s internal control framework. This is described in the
section on risk management and internal control in the corporate governance statement on pages
68 to 70. This section should also be read in the context of the cautionary statement on page 296.

A summary of all the risk factors (including the principal risks) which are monitored by the Board
through the Group’s risk register is set out in the Additional disclosures section on pages 270 to 284.

Assessment of Group Risk

During the year, the Directors have carried out a robust assessment of the principal risks and
uncertainties facing the Group, including those that would threaten its business model, future
performance, solvency or liquidity.
The principal risks facing the Group have remained broadly unchanged over the past year with
regards to Marketplace, Excise and Tax, Operations, Regulation and Litigation risks. Due to improved
pricing delivery over recent years and better geographical diversity following the acquisition of RAI
the ‘inability to obtain price increases and impact of increases on consumer affordability thresholds’
is no longer a principal risk.

The viability statement below provides a broader assessment of long-term solvency and liquidity.
The Directors have considered a number of factors that may affect the resilience of the Group.
Except for the risk ‘injury, illness or death in the work place’ the Directors have also assessed the
potential impact of the principal risks that may impact the Group’s viability.

Viability Statement

The Directors have assessed the viability of the Group, in accordance with provision C.2.2 of the
2016 revision of the UK Corporate Governance Code. Whilst the Directors have no reason to believe
the Group will not be viable over a longer period, owing to the inherent uncertainty arising due to
ongoing litigation and regulation the period over which the Directors consider it possible to form a
reasonable expectation as to the Group’s longer-term viability is three years.

In making this assessment the Directors have considered the Group’s continued strong cash
generation from operating activities. This assessment included a robust review of the principal risks
that may impact the Group’s viability (as indicated on pages 49 to 52) which are considered, with the
mitigating actions, at least once a year. The Directors also took account of the Group’s operational
and financial processes, which cover both short-term (1-2 year financial forecasts, 2-3 year capacity
plans) and longer-term strategic planning. The assessment included reverse stress testing core
drivers that underpin the specific risks to ensure the business is able to continue in operation, whilst
not breaching the required gross interest cover of 4.5 times (see page 39). Each impact would,
individually, have to be between 5 times and 10 times worse than a prudent annual forecast, or
would all have to arise simultaneously with no mitigating or corrective actions to affect the Group’s
ability to meet the liabilities as they fall due.

Due to the level of borrowings carried on the balance sheet, the Group may be exposed to
movements in interest rates. The Directors noted that, as stated in note 23 in the Notes on the
Accounts, the Group sets a minimum of 50% of interest rate as fixed on short- to medium-term
borrowings, minimising the risk of interest rate fluctuation impacting viability over the period. At 31
December 2018, the ratio of floating to fixed rate borrowings was 21:79 (2017: 19:81).

The Directors noted that the Group would be able to adjust certain capital requirements, including
but not limited to the investment in the Group’s manufacturing infrastructure in the short term and
the £6 billion credit facility (2018 undrawn), to mitigate the impact of the effect of the above
principal risks, each of which have specific mitigation activities as disclosed on pages 49 to 52.

The Group is subject to inherent uncertainties with regards to regulatory change and litigation, the
outcome of which may have a bearing on the Group’s viability. The Group maintains, as referred to
in note 28 in the Notes on the Accounts ‘Contingent Liabilities and Financial Commitments,’ that,
whilst it is impossible to be certain of the outcome of any particular case, the defences of the
Group’s companies to all the various claims are meritorious on both law and the facts. If an adverse
judgment is entered against any of the Group’s companies in any case, an appeal may be made, the
duration of which can be reasonably expected to last for a number of years.

Competition from illicit trade
Increased competition from illicit trade – either local duty evaded, smuggled illicit white cigarettes or

Time frame
Long term

Strategic impact

Considered in viability statement

Erosion of brand equity, with lower volumes and reduced profits.
Reduced ability to take price increases.
Investment in trade marketing and distribution is undermined.

Mitigation activities
Dedicated Anti-Illicit Trade (AIT) teams operating at global and country levels; internal cross-
functional levels; best practice shared.
Active engagement with key external stakeholders.
Cross-industry and multi-sector cooperation on a range of AIT issues.
Global AIT strategy supported by a research programme to further the understanding of the size and
scope of the problem.
AIT Engagement Team (including a dedicated analytical laboratory) works with enforcement
agencies in pursuit of priority targets.

Tobacco, nicotine and other regulation inhibits growth strategy
The enactment of regulation that significantly impairs the Group’s ability to communicate,
differentiate, market or launch its products.

Time frame
Medium term

Strategic impact
Growth and Sustainability

Considered in viability statement

Erosion of brand value through commoditisation, the inability to launch innovations, differentiate
products, maintain or build brand equity and leverage price.
Regulation in respect of menthol may adversely impact individual brand portfolios.
Adverse impact on ability to compete within the legitimate tobacco or nicotine industry and also
with increased illicit trade.
Reduced consumer acceptability of new product specifications, leading to consumers seeking
alternatives in illicit trade.
Shocks to share price on the announcement or enactment of restrictive regulation.
Reduced ability to compete in future product categories and make new market entries.
Increased scope and severity of compliance regimes in new regulation leading to higher costs,
greater complexity and potential reputational damage or fines for inadvertent breach.
Proposed EU Directive on single-use plastics could result in increased operational costs and/or a
decline in sales volume.

Please refer to pages 285 to 288 for details of tobacco and nicotine regulatory regimes under which the Group’s
businesses operate.
Mitigation activities
Engagement and litigation strategy coordinated and aligned across the Group to drive a balanced
global policy framework for the nicotine category.
Stakeholder mapping and prioritisation, developing robust compelling advocacy materials (with
supporting evidence and data) and regulatory engagement programmes.
Regulatory risk assessment of marketing plans to ensure decisions are informed by an understanding
of the potential regulatory environments.
Advocating the application of integrated regulatory proposals to governments and public health
practitioners based on the harm reduction principles.
Development of an integrated regulatory strategy that spans conventional combustibles and Next
Generation Products.

Market size reduction and consumer down-trading
The Group is faced with steep excise-led price increases and, due in part to the continuing difficult
economic and regulatory environment in many countries, market contraction and consumer down-
trading is a risk.

Time frame
Short/Medium term

Strategic impact

Considered in viability statement

Volume decline and portfolio mix erosion.
Funds to invest in growth opportunities are reduced.

Mitigation activities
Geographic spread mitigates impact at Group level.
Close monitoring of portfolio and pricing strategies, ensuring balanced portfolio of strong brands
across key segments.
Overlap with many mitigation activities undertaken for other principal risks facing the Group, such as
competition from illicit tobacco trade and significant excise increases or structure changes.

Product liability, regulatory or other significant cases may be lost or compromised resulting in a
material loss or other consequence.

Time frame
Long term
Strategic impact

Considered in viability statement

Damages and fines, negative impact on reputation, disruption and loss of focus on the business.
Consolidated results of operations, cash flows and financial position could be materially affected, in
a particular fiscal quarter or fiscal year, by region or country, by an unfavourable outcome or
settlement of pending or future litigation.
Inability to sell products as a result of a successful patent infringement action may restrict growth
plans and competitiveness.

Mitigation activities
Consistent litigation strategy across the Group.
Expertise and legal talent maintained both within the Group and external partners.
Ongoing monitoring of key legislative, case law and tobacco developments.

Please refer to note 28 in the Notes on the Accounts for details of contingent liabilities applicable to the Group.

Geopolitical tensions
Geopolitical tensions, civil unrest, terrorism and organised crime have the potential to disrupt the
Group’s business in multiple markets.

Time frame
Medium term

Strategic impact

Considered in viability statement

Potential loss of life, loss of assets and disruption to normal business processes.
Increased costs due to more complex supply chain arrangements and/or the cost of building new
facilities or maintaining inefficient facilities.
Lower volumes as a result of not being able to trade in a country.

Mitigation activities
Physical and procedural security controls are in place, and constantly reviewed in accordance with
our SRM process, for all field force and supply chain operations, with an emphasis on the protection
of Group employees.
Globally integrated sourcing strategy and contingency sourcing arrangements.
Security risk modelling, including external risk assessments and the monitoring of geopolitical and
economic policy developments worldwide.
Insurance cover and business continuity planning, including scenario planning and testing, and risk
awareness training.

Disputed taxes, interest and penalties
The Group may face significant financial penalties, including the payment of interest in the event of
an unfavourable ruling by a tax authority in a disputed area.

Time frame
Short/Medium term

Strategic impact

Considered in viability statement

Significant fines and potential legal penalties.
Disruption and loss of focus on the business due to diversion of management time.
Impact on profit and dividend.

Mitigation activities
End market tax committees.
Internal tax function provides dedicated advice and guidance, and external advice sought where
Engagement with tax authorities at Group, regional and individual market level.

Significant increases or structural changes in tobacco-related taxes
The Group is exposed to unexpected and/or significant increases or structural changes in tobacco-
related taxes in key markets.

Time frame
Long term

Strategic impact

Considered in viability statement

Consumers reject the Group’s legitimate tax-paid products for products from illicit sources or
cheaper alternatives.
Reduced legal industry volumes.
Reduced sales volume and/or portfolio erosion.
Partial absorption of excise increases.

Mitigation activities
Requirement for Group companies to have in place formal pricing and excise strategies, including
contingency plans, with annual risk assessments.
Pricing, excise and trade margin committees in markets, with regional and global support.
Engagement with local tax and customs authorities, where appropriate, in particular in relation to
the increased risk to excise revenues from higher illicit trade.
Portfolio reviews to ensure appropriate balance and coverage across price segments.
Monitoring of economic indicators, government revenues and the political situation.
Foreign exchange rate exposures
The Group faces translational and transactional foreign exchange (FX) rate exposure for
earnings/cash flows from its global business.

Time frame
Short/Medium term

Strategic impact

Considered in viability statement

Fluctuations in FX rates of key currencies against sterling introduce volatility in reported Earnings per
share (EPS), cash flow and the balance sheet driven by translation into sterling of our financial
results and these exposures are not normally hedged.
The dividend may be impacted if the payout ratio is not adjusted.
Differences in translation between earnings and net debt may affect key ratios used by credit rating
Volatility and/or increased costs in our business, due to transactional FX, may adversely impact
financial performance.

Mitigation activities
While translational FX exposure is not hedged, its impact is identified in results presentations and
financial disclosures; earnings are re-stated at constant rates for comparability.
Debt and interest are matched to assets and cash flows to mitigate volatility where possible and
economic to do so.
Hedging strategy for transactional FX and framework is defined in the treasury policy, a global policy
approved by the Board.
Illiquid currencies of many markets where hedging is either not possible or uneconomic are
reviewed on a regular basis.

Injury, illness or death in the workplace
The risk of injury, death or ill health to employees and those who work with the business is a
fundamental concern of the Group and can have a significant effect on its operations.

Time frame
Short term

Strategic impact

Considered in viability statement

Serious injuries, ill health, disability or loss of life suffered by employees and the people who work
with the Group.
Exposure to civil and criminal liability and the risk of prosecution from enforcement bodies and the
cost of associated fines and/or penalties.
Interruption of Group operations if issues are not addressed immediately.
High staff turnover or difficulty recruiting employees if perceived to have a poor Environment,
Health and Safety (EHS) record.
Reputational damage to the Group.
Mitigation activities
Risk control systems in place to ensure equipment and infrastructure are provided and maintained.
An EHS strategy ensures that employees at all levels receive appropriate EHS training and
Behavioural-based safety programme to drive Operations’ safety performance and culture closer to
zero accidents.
Analysis of incidents undertaken regionally and globally by a dedicated team to identify increasing
incident trends or high potential risks that require coordinated action.

Solvency and liquidity
Liquidity (access to cash and sources of finance) is essential to maintaining the Group as a going
concern in the short term (liquidity) and medium term (solvency).

Time frame
Short/Medium term

Strategic impact

Considered in viability statement

Inability to fund the business under the current capital structure resulting in missed strategic
opportunities or inability to respond to threats.
Decline in our creditworthiness and increased funding costs for the Group.
Requirement to issue equity or seek new sources of capital.
Reputational risk of failure to manage the financial risk profile of the business, resulting in an erosion
of shareholder value reflected in an underperforming share price.

Mitigation activities
Group policies include a set of financing principles and key performance indicators including the
monitoring of credit ratings, interest cover, solvency and liquidity with regular reporting to
the Board.
The Group targets an average centrally managed debt maturity of at least five years with no more
than 20% of centrally managed debt maturing in a single rolling year.
The Group, through B.A.T. International Finance p.l.c., holds a two- tranche revolving credit facility of
£6 billion syndicated across a wide banking group. This consists of a 364-day revolving credit facility
of £3 billion (with a one-year term-out option), and a £3 billion revolving credit facility maturing in
Liquidity pooling structures are in place to ensure that there is maximum mobilisation of cash
liquidity within the Group.
The Group has an externally imposed capital requirement for its centrally managed banking facilities
of maintaining gross interest cover above 4.5 times. The Group targets a gross interest cover of
greater than 5 times.
Going concern and viability support papers are presented to the Board on a regular basis.
        Inability to develop, commercialise and roll-out Potentially Reduced-Risk Products
        Risk of not capitalising on the opportunities in developing and commercialising successful and
        consumer-appealing innovations.

        Time frame
        Long term

        Strategic impact

        Considered in viability statement

        Failure to deliver Group strategic imperative and 2020 growth ambition.
        Potentially missed opportunities, unrecoverable costs and/or erosion of brand.
        Reputational damage and recall costs may arise in the event of defective product design or
        Loss of market share due to non-compliance of product portfolio with regulatory requirements.

        Mitigation activities
        Focus on product stewardship to ensure high-quality standards across portfolio.
        Collaboration between internal legal, external affairs and R&D in order to identify current and future
        regulations and align the innovation pipeline.

        APPENDIX B


        The Group has a number of transactions and relationships with related parties, as defined in IAS 24
        Related Party Disclosures, all of which are undertaken in the normal course of business. Transactions
        with CTBAT International Limited (a joint operation) are not included in these disclosures as the
        results are immaterial to the Group.

        Transactions and balances with associates relate mainly to the sale and purchase of cigarettes and
        tobacco leaf. Amounts receivable from associates in respect of dividends included in the table below
        were £nil million (2017: £nil million; 2016: £221 million). The Group’s share of dividends from
        associates, included in other net income in the table below, was £211 million (2017: £688 million;
        2016: £1,024 million).

                                                                                             2018        2017     2016
                                                                                              £m          £m       £m
– revenue                                                                                     473        366      370

– purchases                                                                                  (101)       (218)   (298)

– other net income                                                                            216        699     1,023
Amounts receivable at 31 December                                                              26         40      270

        As explained in note 24 [in the Notes on the Accounts], in 2017, the Group completed the acquisition
        of the remaining 57.8% of RAI not already owned. This transaction has not been included in the table
        On 17 December 2012, a wholly owned subsidiary of the Group, BATUS Japan Inc. (BATUSJ), entered
        into an Amendment and Extension Agreement (referred to as the Amendment) with a wholly owned
        subsidiary of RAI, R.J. Reynolds Tobacco Company (referred to as RJRTC). The Amendment modifies
        the American-blend Cigarette Manufacturing Agreement (referred to as the 2010 Agreement),
        effective as of 1 January 2010.

        Prior to the Amendment, the term of the 2010 Agreement was scheduled to expire on 31 December
        2014, subject to early termination and extension provisions. Pursuant to the Amendment, the
        Manufacturing Agreement would remain in effect beyond 31 December 2014, provided that either
        RJRTC or BATUSJ may terminate the Manufacturing Agreement by furnishing three years’ notice to
        the other party. Such notice was given in January 2016. As a result of early termination of this
        agreement the Group agreed to a compensation payment of US$90 million of which US$7 million
        were paid to RJRTC on 22 September 2016, with the Group recognising the full expense of US$90
        million as required by IFRS in 2016. The balance was paid in March 2017.

        During 2018, the Group acquired a further 44% interest in British American Tobacco Myanmar
        Limited and a further 11% interest in British American Tobacco Vranje.

        During 2017, the Group acquired the remaining 49% interest in IPRESS d.o.o. and a further 0.01%
        interest in British American Tobacco Chile Operaciones S.A. The combined costs are less than £1

        During 2016, the Group received proceeds of £23 million in respect of its participation in the share
        buy-back programme conducted by RAI. This programme ceased in the fourth quarter of 2016.

        During 2016, the Group acquired the remaining 1% interest in Souza Cruz at a cost of £70 million.
        This transaction is shown as a £4 million increase in reserves attributable to the owners of the
        parent and a £4 million reduction in reserves attributable to non-controlling interests in note 19.

        As explained in note 12 [in the Notes on the Accounts], contributions to the British American
        Tobacco UK Pension Fund are secured by a charge over the Group’s Head Office (Globe House) up to
        a maximum of £150 million.

        The key management personnel of British American Tobacco consist of the members of the Board of
        Directors of British American Tobacco p.l.c. and the members of the Management Board. No such
        person had any material interest during the year in a contract of significance (other than a service
        contract) with the Company or any subsidiary company. The term key management personnel in this
        context includes their close family members.

                                                                                              2018      2017      2016
                                                                                               £m        £m        £m
The total compensation for key management personnel, including Directors, was:
– salaries and other short-term employee benefits                                              21         24       18

– post-employment benefits                                                                      4             5     3
                                                                                               18         16       12
                                                                                               43         45       33

        The following table, which is not part of IAS24 disclosures, shows the aggregate emoluments of the
        Directors of the Company.
                                  2018         2017         2016    2018    2017    2016         2018        2017       2016           2018         2017        2016
                                  £’000        £’000        £’000   £’000   £’000   £’000        £’000       £’000      £’000          £’000        £’000       £’000

Salary; fees;
incentives                      2,211        2,122        2,057        –       –       –            –            –          –      2,211          2,122       2,057
– salary                               –            –           –   680     660     645      1,092          1,042      1,051       1,772          1,702       1,696
– fees                             427          385          335    116     129     106          303          195        122           846           709        563
– taxable benefits              5,031        4,689        4,622        –       –       –            –            –          –      5,031          4,689       4,622
Sub-total                      12,969 17,388 11,497                 796     789     751      1,395          1,237      1,173      15,160 19,414 13,421
                                   921          612          634       –       –       –            –            –          –          921           612        634
– pension
                                   50     50     44                                                                                   50     50     44
Sub-total                        971    662     678                   –       –       –          –              –          –        971    662     678
Total emoluments               13,940 18,050 12,175                 796     789     751      1,395          1,237      1,173      16,131 20,076 14,099

Aggregate gains on LTIP shares exercised in the year
                                                                                                                                               Price        Aggregat
                                                                                                          Exercised                               per            e
                                                                                    Award date           LTIP shares   Exercise date                 (£)           (£)

Nicandro Durante                                                                    27 Mar 2015          122,477       27 Mar 2018              39.46 4,832,942
Ben Stevens                                                                         27 Mar 2015           66,925       27 Mar 2018              39.46 2,640,861

LTIP – Value of awards 2015
                                                                                                                                               Price             Face
                                                                                                                                                  per           Value
                                                                                                                                Shares            share
                                                                                                                                                    (£)1          (£)

Nicandro Durante                                                                                                           127,448              36.25 4,619,990
Ben Stevens                                                                                                                  69,641             36.25 2,524,486

1.   For information only as awards are made as nil cost options.

            In 2018, no Sharesave were exercised by Executive Directors.

            Forward looking statements

            This announcement contains certain forward-looking statements, including “forward-looking”
            statements made within the meaning of Section 21E of the United States Securities Exchange Act of
            1934. These statements are often, but not always, made through the use of words or phrases such
            as “believe,” “anticipate,” “could,” “may,” “would,” “should,” “intend,” “plan,” “potential,”
            “predict,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “outlook”, “target” and
            similar expressions. These include statements regarding our intentions, beliefs or current
            expectations concerning, amongst other things, our results of operations, financial condition,
            liquidity, prospects, growth, strategies and the economic and business circumstances occurring from
            time to time in the countries and markets in which the Group operates.

            All such forward-looking statements involve estimates and assumptions that are subject to risks,
            uncertainties and other factors that could cause actual future financial condition, performance and
            results to differ materially from the plans, goals, expectations and results expressed in the forward-
            looking statements and other financial and/or statistical data within this announcement. Among the
            key factors that could cause actual results to differ materially from those projected in the forward-
            looking statements are uncertainties related to the following: the impact of competition from illicit
            trade; the impact of adverse domestic or international legislation and regulation; changes in
            domestic or international tax laws and rates; adverse litigation and dispute outcomes and the effect
of such outcomes on the Group’s financial condition; changes or differences in domestic or
international economic or political conditions; adverse decisions by domestic or international
regulatory bodies; the impact of market size reduction and consumer down-trading; translational
and transactional foreign exchange rate exposure; the impact of serious injury, illness or death in the
workplace; the ability to maintain credit ratings and to fund the business under the current capital
structure; the inability to develop, commercialise and roll-out Potentially Reduced-Risk Products;
and changes in the market position, businesses, financial condition, results of operations or
prospects of the Group.

It is believed that the expectations reflected in this announcement are reasonable but they may be
affected by a wide range of variables that could cause actual results to differ materially from those
currently anticipated. Past performance is no guide to future performance and persons needing
advice should consult an independent financial adviser. The forward-looking statements reflect
knowledge and information available at the date of preparation of this announcement and the
Group undertakes no obligation to update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise. Readers are cautioned not to place undue
reliance on such forward-looking statements.

No statement in this communication is intended to be a profit forecast and no statement in this
communication should be interpreted to mean that earnings per share of BAT for the current or
future financial years would necessarily match or exceed the historical published earnings per share
of BAT.

Additional information concerning these and other factors can be found in the Company’s filings
with the U.S. Securities and Exchange Commission (“SEC”), including the Annual Report on Form 20-F
filed on 15 March 2019 and Current Reports on Form 6-K, which may be obtained free of charge at
the SEC’s website,, and the Company’s Annual Reports, which may be obtained
free of charge from the British American Tobacco website

15 March 2019

Sponsor: UBS South Africa (Pty) Ltd

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