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28 JULY 2021- INTERIM RESULTS BRITISH AMERICAN TOBACCO p.l.c. HALF - YEAR REPORT TO 30 JUNE 2021 Cigarette and THP volume share Cigarette and THP value share Consumers of non - combustible products¹ STRONG BRANDS DRIVE NEW CATEGORY ACCELERATION PERFORMANCE HIGHLIGHTS ADJUSTED Operating margin ( % ) Diluted EPS ( pence ) Revenue ( Em ) Revenue from New Categories ( £ m ) Profit from operations ( £ m ) Net cash generated from operating activities ( £ m ) Free cash flow after dividends ( £ m ) Cash conversion ( % ) ² New Categories revenue up 50 % to £ 942m * ● Our highest ever non - combustible product ● Vapour revenue up 59 % * , Vuse approaching global category value share leadership glo revenue up 38 % * , with glo Hyper volume share gains in ENA and Japan Velo revenue up 63 % * , with our T5 volume share of the Modern Oral category at 39.5 % up 280 bps Further incremental increase of £ 346m investment in H1 , capitalising on strong momentum in all three New Categories ● Full Year New Category losses expected to reduce ● ● ● ● consumer acquisition + 2.6m to 16.1m in H1 , with 11.8 % of Group revenue delivered by non - combustible products ● Current rates REPORTED £ 12,175m £ 883m £ 4,907m 40.3 % 141.6p £ 2,254m 16.1m 45.9 % £ 45,010m ● ● ● Vs 2020 +20 bps +10 bps + 2.6m Borrowings3 ( £ m ) Adjusted Net Debt ( £ m ) £ 40,490m -7.6 % The use of non - GAAP measures , including adjusting items and constant currencies , are further discussed on pages 54 to 58 , with reconciliations from the most comparable IFRS measure provided . Note - 1 . Internal estimate . 2. Movement in adjusted operating margin and operating cash conversion is provided at current rates . 3. Borrowings includes lease liabilities . Accelerating our Transformation Strong H1 Results -0.8 % + 40.4 % -3.7 % -120 bps -6.0 % -35.3 % BAT -22.5 ppts -10.8 % A BETTER TOMORROW Current Rates £ 12,175m £ 883m £ 5,235m 43.0 % 154.2p ( £ 1,163 ) m 66.7 % Vs 2020 ( constant ) + 8.1 % + 50.0 % + 5.4 % -70 bps² + 6.1 % Not meaningful -13.5 ppts Jack Bowles , Chief Executive : " This has been an exciting period of growth in New Categories , with New Category constant currency revenue up by 50 % in the first half . We added 2.6m consumers , our highest ever increase , to our non - combustible product consumer base , to reach 16.1m . This demonstrates our accelerating transformation driven by our multi - category portfolio , with continued key market share gains in all three New Categories . Revenue up 8.1 % * led by New Category growth and a partial recovery from prior - year COVID - 19 impacts Combustible revenue up 5.8 % * with price / mix of 4.3 % , reflecting Emerging Market ( EM ) recovery Cigarette value share up 10 bps , and volume share up 10 bps reflecting strong EM performance Further £ 256m cost savings , driven by Quantum , target increased to £ 1.5bn ( previously £ 1bn ) by 2022 Adjusted profit from operations up 5.4 % * includes a transactional FX impact of 2 % Adjusted operating margin down 70 bps , driven by increased New Category investment , geographic mix and transactional FX We are building strong , global brands of the future with Vuse , Velo and glo . These are underpinned by industry leading multi category consumer insights and science , with increasing digitalisation . We have invested a further incremental £ 346m in the first half , funded by continued value growth from combustibles and expect to reach our £ lbn Quantum savings target 12 months early . We have now increased our savings target to £ 1.5bn by 2022 . Adjusted diluted EPS up 6.1 % * Operating cashflow conversion of 67 % , reflecting phasing of excise payments in the US in 2020 Our rapid growth in New Categories is driving significant scale benefits and 2021 is shaping up to be a pivotal year in our journey towards A Better Tomorrow . Our focus on New Categories growth and business sustainability puts ESG at the core of our strategy . There is great momentum across the business and we are well on track to meet our targets of £ 5bn of New Category revenue by 2025 and 50m non combustible product consumers by 2030 . We are committed to reducing the health impact of our business . Our ambition remains a sustainable , high growth , multi - category , consumer products business . I am excited about the future for BAT . " On track for FULL YEAR 2021 guidance : Global tobacco industry volume now expected to be down c . - 1.5 % ( from c . - 3 % ) , driven by strong EM recovery . US industry volume expected to be down c . - 5.5 % , given continuing macro - economic uncertainties and a strong comparator . Constant currency revenue growth above 5 % and continued strong progress towards £ 5bn New Categories revenue in 2025 . Mid - single figure constant currency adjusted EPS growth , including continued expectation of c.2 % transactional FX headwind . Expected translational FX headwind of c.7 % on full year adjusted diluted EPS growth . Operating cashflow conversion in excess of 90 % , Adjusted Net debt / Adjusted EBITDA around three times . Commitment to 65 % dividend pay - out ratio and growth in sterling terms . * at constant rates of exchange