RESULTS CENTRE

17 November 2020

TAKING ACTION TO STRENGTHEN PERFORMANCE

Business Highlights

• Business overcame the challenges posed by COVID-19; securing the safety and wellbeing of employees and responding to changes in consumer behaviour
• Tobacco volumes strong but sub-optimal product and market mix result in weak gross profit contribution
• A more disciplined approach in NGP reduced H2 losses after a disappointing H1
• Strengthened Executive Team with key external leadership appointments providing fresh skills and perspectives to complement existing experience
• Comprehensive strategic review underway with a capital markets update scheduled for 27 January
• Completed sale of Premium Cigars business on 29 October 2020; proceeds used to reduce debt

Financial Performance

• Group net revenue up +0.8%
• Tobacco volume decline of -2.1% reflecting better market size and share trends in several markets
• Tobacco net revenue +1.8% but weaker mix impacting gross profit contribution
• Moderation of NGP net revenue decline; H1: -43%, H2: -9% with FY down 27%
• Adjusted EPS down -5.6% reflecting reduced tobacco profit with COVID-19 and regulatory costs; and losses in NGP
• Reported EPS up 49.4% at 158.3p reflecting prior year impairment charge for Premium Cigar sale
• Strong cash conversion 127%; 107% excluding timing benefit on duty payments
• Annual dividend of 137.7 pence per share reflecting rebased payment announced in May