Good morning, everyone, welcome to our 2022 full- year results presentation. I am Jacques Bowles, Chief Executive of BAT, with me this morning is Tadeu Marroco, our Group Finance and Transformation Director. I am proud to share with you today that we have reached an exciting inflection point in our transformation. Over the last few years, new categories have rapidly become a significant part of our business and are now a strong contributor to our financial performance. As a result, last week, we announced our new regional structure and management team realignment to drive us through the next phase of our transformation journey. Our presentation today will take on a new format. First, I will give some highlights of the progress. Tadeu will take you through the details of our results, highlighting how in 2022 we continued transforming the business, delivered strong financial results, and successfully navigated a challenging macroeconomic environment. I will talk about how we are taking BAT's strategy to the next level and why we are confident in bringing forward our new- category profitability target by one year to 2024 as our transformation accelerates. As usual, once Tadeu and I have taken you all through the presentation, there will be an opportunity to ask questions. Before we start, I would like to take this opportunity to give you an update on the progress of the transfer of our businesses in Russia and Belarus. As we have already shared, we are working as quickly as possible to transfer the businesses in compliance with international and local laws. We are now in advanced discussion with the joint management distributor consortium, with a view to completing the transfer in 2023. Our priority remains supporting our employees in the affected areas and safeguarding their employment. Upon completion, BAT will no longer have a presence in Russia and Belarus. With that, I take it that you have all seen the disclaimers on Slide 2 and 3. I am delighted to share with you today our progress and delivery against the three priorities we set out in 2019. We are delivering a step change in new categories, enabling us to bring forward our profitability target, driving value from our combustible business, and at the same time, significantly simplifying BAT, our structure, processes, and ways of working to drive greater efficiency. Since 2018, we have grown our non-combustible product consumer base by 30% on a CAGR basis, reaching 22.5 million in 2022, with again, more than 4 million added in the last 12 months. We will remain confident on our target of 50 million consumers of non-combustible products by 2030. Over the last four years, we have grown new category revenues by a CAGR of 33%, and we are confident in achieving our GBP 5 billion revenue target by 2025, regardless of the transfer of our business in Russia and Belarus. Non-combustible revenue as a percentage of Group revenue has more than doubled from 7% in 2018 to 15% today and grew by over two percentage points in 2022. In just a few years with Vuse and glo, we have built two GBP 1 billion global brands. This is an enviable performance relative to any global CPG brand. In 2022, Vuse further built on its market leadership position in vapor and delivered a third consecutive year of over 40% revenue growth. glo continues to outpace global THP category growth, delivering in excess of 25% revenue growth. In modern oral, Velo delivered another year of over 40% constant currency revenue growth and maintained its leadership position in Europe. ESG is at the center of our strategy. All this is supported by a clear environmental focus underpinned by science for each of our new- category brands and is actively contributing to our Group sustainability targets. We continue to develop and publish a substantial body of scientific evidence, and we are investing in the R&D of products that have lower environmental impact and improve circularity. This means we are seeking to design products that are easier to dismantle at end of life, improve ways to enhance reusability and recyclability, and convert to more sustainable packaging. More broadly, as we reduce the health impact of our business, we must also drive progress across all other material ESG areas. In 2022, we appointed Mike Nightingale as our first Chief Sustainability Officer, implemented a new Double Materiality-led approach to inform on sustainability agenda, and continued to embed sustainability across BAT. While we recognize we have a lot more to do, we are making very good progress. In 2022, we achieved our renewable energy use targets three years early. Which is why we have increased our target to 50% by 2030. In addition, we're on track to reach our gender representation target across our wider workforce with women in management roles at 41%, and we are delighted to be included in the 2023 Bloomberg Gender-Equality Index. Alongside this, our continued efforts have been recognized with the CDP A rating in climate change and inclusion in the Dow Jones Sustainability Indices for the 21st consecutive year. Central to our purpose is reducing the health impact of our business. In our established markets, we continue to transform at speed, with non-combustible already representing over 30% of our revenue in a total of 11 markets where we have been most active with our multi-category strategy. We expect more markets to exceed this 30% level in 2023 as we take our transformation to the next level. I am especially proud that since 2020, we have improved new- category contribution by nearly GBP 700 million, while also investing over GBP 4.5 billion. Our new category model is now meaningfully contributing to Group results. Our progress to date makes us confident that we will achieve group profitability in 2024, one year early. Our transformation continues to be fueled by combustible value growth. Over the last four years, we have delivered robust revenue, profit, and value share growth, while significantly reducing complexity to drive further efficiencies. We have also delivered a total of GBP 1.9 billion of annualized cost savings over the last three years through Quantum, nearly double our initial GBP 1 billion target. Project Quantum has enabled new ways of working that are now fully embedded within BAT. Our strategy has enabled us to materially increase our free cash flow generation with four consecutive years of at least a 100% operating cash conversion. We have been able to return a total of GBP 19.2 billion to shareholders through dividends alone over the last four years, which is around 30% of our current market capitalization. We know that innovation and transformation is fed by a broad diversity of views and experiences. Over the last 4 years, we increasingly attracted new talent to BAT with over 3,000 new capabilities hires focused on areas of science, innovation, ESG, digital, and data analytics. We have accelerated our diversity agenda with 47% of our new hires being female. We have also improved our new- hire turnover to a level well below market norms. I am proud that our achievements are being recognized externally, including most recently being certified a Global Top Employer for the sixth consecutive year. We have come a long way on our "A Better Tomorrow" journey, and I'm proud of what we have achieved. Our strong momentum has continued in 2022. I will now hand over to Tadeu, which will take you through the details of our 2022 financial performance. Tadeu. Thank you, Jack. I'm delighted to share more details on how we have delivered on our guidance in 2022. I'm proud to say, as Jack has highlighted, that we are accelerating the transformation of our business and delivering robust financial results while successfully navigating an increasingly challenging macro environment as we moved through the year. Our reported results were impacted by a number of mostly known cash one-off items, including a full- year non-cash impairment of our business in Russia and Belarus, a provision recognized in respect of the DOJ on OFAC investigations, and restructuring charges driven by Project Quantum. These were partially offset by VAT credits in Brazil relating to prior periods. To better understand the key drivers of our performance, we will now focus on constant currency adjusted results unless otherwise stated. In 2022, we delivered revenue growth of 2.3%, driven by new category growth of 37% and a strong combustible price mix of nearly six- five percent. Profit from operations was up 4.3%, driven by a reduction in new category losses of nearly GBP 600 million and continued Quantum savings. Altogether, we achieved a 150 basis points increase in our operating margin at current rates. This drove adjusted diluted EPS up 5.8% or 12.9% on a current currency basis. Turning to new categories. We delivered strong revenue growth with all three categories growing in excess of 25%, driven by share growth, innovation, and geo expansion. This demonstrates the importance of a global multi-category strategy with strong brands and great products in the right markets. I will now share more details on our key category drivers. Full market shares across our key markets are available in the Appendix. In vapor, we extended our value share leadership position, with Vuse achieving 35.9% in the key vapor markets, up 2.5 percentage points. In the U.S., Vuse strengthened its number one position, reaching 40.9% of the value share, up 8.4 percentage points. We expect further upside in the U.S. going forward, driven by existing vapor consumers switching to products that receive marketing authorization from FDA, together with increased enforcement. In addition, given the excise advantage of vapor over combustibles, we see a strong runaway of growth as consumers can benefit from significant savings. In Europe, our closed system value share, excluding disposables, grew strongly and is now over 64%. In Canada, we extended our value share leadership position, growing 8.9 percentage points to around 90%. We launched the Group's first connected vapor device, Vuse ePod 2 Plus, driving increased pod consumption. Through our growing scale, we are making continued progress on driving profitability in vapor, reaching a positive contribution in three of the five key markets in 2022. Growth in the global vapor category has accelerated, driven by modern disposables, which have expanded the category. We launched our modern disposable, Vuse Go, with a premium price positioning and volumes which are accretive to our ePod platform. We have rapidly rolled out Vuse Go and are already the value- share number two in the U.K., France, South Africa, and Germany. In addition, we are starting to see some accelerating pod usage with modern disposables coming from THP, which creates a significant opportunity for us. We are approaching modern disposables in a responsible way, supported by our well-embedded marketing practices, including age verification process for retail and take-back schemes. In THP glo's sequential revenue growth accelerated in the H2. Consumable volume growth outpaced the industry 1.7x. The continued momentum of glo Hyper drove category volume share in key THP markets up 1.4 percentage points to reach 19.4%. All key European markets continued to grow strongly. In Japan, glo's volume share of the total nicotine market reached 7.4%, up 60 basis points, with a record glo share in December. glo HYPER X2 is delivering an enhanced product experience with positive early results in Japan. We broadened our price laddering with new Lucky Strike consumables, complementing our existing range. We have also expanded our multi-category offering with a Velo CT pilot, delivering attractive margins. This further demonstrates the strength of our consumer-centric approach, with more to come in 2023. Turning to Modern Oral, where revenue grew strongly at 46%. In Europe, we remain the market leader in 15 markets with aggregate European volume share broadly stable at 69%. In the U.S., the market remains small, at around 2.5% of total nicotine value, and highly competitive. Revenue was up as we pivoted to drive value, reducing promotional support for the brands, and prioritize investment behind Vuse. In order to be well-positioned for the future, we have submitted a PMTA for our new Velo product. We are also excited about the significant opportunity for Modern Oral in emerging markets. We are particularly proud of Velo's performance in Pakistan, now our third-largest modern oral market by volume. Enabled by powerful digital activations and innovations with local flavors, Velo has reached a monthly volume of over 40 million pouches. In 2022, we rapidly scale up our business and moved to localized production in markets, driving the lowest costs across the Velo brand. As a result, Velo's gross margins improved significantly during the year. Together with other pilots, this progress gives us confidence in our ability to unlock future emerging marketing opportunities. Alongside significant investments in our new category transformation, we continue to explore opportunities beyond nicotine, notably in the fast-emerging well being and stimulation space. BTV has completed 22 investments since launch. In 2022, these included five new investments and two exits. We are building world-class R&D together with our partners at Organigram, and we continue to explore opportunities to expand our cannabis ecosystem. This included a non-controlling minority stake in Sanity Group and an investment in Charlotte's Web in 2022 as we continue to monitor change in the regulatory environment. Our approach provide us with evolving capabilities for the future across both new categories and beyond nicotine. Turning now to combustibles. Our volume declined by 5.2%, mainly due to the lower U.S. industry volume, exacerbated by the partial unwind of inventory in 2022 and the sale of our Iranian business in 2021. Cigarette pricing remained strong, up 10.4%, offset mainly by geographic mix. Together, this resulted in a 0.6% decrease in revenue. Group value share was flat with the continued strong performance in the U.S. and APME, offset by lower value share in Europe and AMSA. Volume share was down 20 basis points. Our U.S. bill was impacted mainly by macroeconomics headwinds, our target portfolio of brands across price tiers enabled the delivery of a robust financial performance across APME, AMSA, and Europe. Turning now to the regions. In Europe, new category revenue was up 43%, driven total revenue up 7%. Europe is a true multi-category region. Nondurable revenue already accounts for around 20% of total revenue and continues to grow fast. Combustible revenue grew 1.2%, driven by strong pricing, partially impacted by the reallocation of the North Africa area to APME. Profit was up over 7% with improving new category contribution and further cost savings as a result of Quantum. In APME, new category revenue was up 10%, with total revenue up 7.7%. Combustible revenue grew nearly 8%, while resilient volume benefiting from the emerging market recovered post-COVID-19. Profit was up 3% with a robust combustibles performance, partially offset by negative geo mix and the disposable of the Iranian business. In AMSA, new category revenue was up 48% and was a strong contributor to the revenue growth of around 5%. Combustible revenue was up nearly 4%, driven by strong pricing and resilient volume. Profit was up over 4%. Turning to the U.S., our total nicotine value share was up 40 base points to over 37%, driven by Vuse. New category revenue was up 52%. Vuse continued to extend value share leadership, is the fastest growing brand in total nicotine in the U.S. Combustible industry volume was down around 10%, mainly reflecting post-COVID-19 normalization of consumption patterns and macroeconomic deterioration through the year. Our volume was down 15.5%, additionally reflecting the partial unwind of our prior year inventory movements, volume share loss, and lower retail inventory levels across the industry at year-end. Over the last three years, industry volume was declined in line with historical levels at around 5% CAGR. The premium industry segment remained resilient, with volume share declining by only 50 base points. As a result of the increased impact of macroeconomic headwinds, the low-end segment grew volume share by 90 base points. In this challenging environment, our value share grew 10 base points despite volume share declining by 30 base points. Value share growth was driven by the continued strength of natural American Spirit and Newport, which together drove premium value share up 20 basis points. Lucky Strike was the fastest growing combustible brand in both volume and value share terms in the U.S., reaching an exit share of nearly 3%. This more than offset losses in Pall Mall at a total industry level. In 2022, our U.S. pricing remained strong, up 10%. At the consumer retail level, our average price in the year was up 5.6%, lower than key industry peers, and significantly low elevated consumer price inflation, as we activated target commercial plans to support our consumers. Despite the more challenging macroeconomic backdrop, our profit was up 3.5%, with operating margin up 330 basis points to 53.7%. This was driven by continuing improvement in new category contribution from both Vuse and Velo, alongside cost savings initiatives. Taking a step back to look at the broader U.S. context. U.S. consumers faced strong macroeconomic headwinds in 2022, with record inflation, seven interest rate hikes, and high gas price resulting real disposable income falling by nearly 7%. Looking into 2023, we are starting to see some very early signs of recovery, with gas prices stabilizing, levels of unemployment remaining low, and the gap between wage growth and inflation narrowing. Most notably, elasticities remain stable at 0.4, are comparable to pre-COVID-19 levels, and affordability remains high. Through revenue growth management, we have target investment in specific brands, channels, and states, with price laddering across all brands. We expect the U.S. economy to stabilize as we progress through the year, and together with the unwind of our 2021 inventory movements, we expect our performance to be second half weighted. With our multi-category strategy and strong portfolio of brands, we are well-positioned to benefit from macroeconomic recovery. Group operating margin expanded strongly, up 150 basis points on an adjusted current rate basis. We successfully absorbed increased inflationary pressure and a 1.5% transactional effects headwind on profits. This was supported by our strong progress towards new category and Quantum savings. Our improved new category contribution was largely driven by increasing scale, leading to operating leverage and further automation, reducing costs of goods. With all three new categories in all regions contributing. In addition, our growing brand equity has enabled us to increase pricing on both device and consumables, supported by insights from our digital tools. We have reached an inflection point in our new category model. Having invested significantly in the base, we are now in a growth period where we can invest more and deliver improved profitability. In 2023, we will capitalize on our momentum and further invest in our transformation to accelerate our innovation cadence and drive faster geographic expansion. With that, we expect to continue to improve new category contribution in 2023, and are confident in delivering our target of profitability ahead of plan in 2024. Alongside GBP 1.9 billion savings delivered through Quantum, we continue to drive further simplification. Moving forward, we will deliver efficiencies through our established continuous improvement mindset to offset inflationary pressures and fuel our transformation. In addition, we are committed to reporting no further significant P&L impacts from adjusting items related to restructuring programs in the medium term. Turning now to EPS, we deliver constant currency adjusted diluted EPS growth of 5.8%. This reflects our robust operating performance, the benefits of the continued recovery in ITC post-COVID-19, and the share buyback, which more than offset increased net finance costs and tax. The underlying tax rate was 24.8%, with existing tax rates, we expect a similar rate of around 25% in 2023. Operating cash conversion was strong at 100%, reflecting our focus on cash delivery. As in 2022, we expect gross CapEx for 2023 to be below adjusted depreciation and amortization at around GBP 600 million CapEx. We continue to reduce leverage within the 2-3x corridor and have a manageable maturity profile with 97% of our net debt fixed, average maturity of around 10 years, and close currency matching. BAT is sheltered from unprecedented interest rate rise, it's not immune. While the majority of our net debt is fixed, we have an approximately 18% exposure to fluctuating interest rates when you consider cash holdings and refinancings. Our average cost of debt is 4%, which is below the current market rates. We expect to see the impact of higher rates in our net finance costs in 2023 and moving forward. As a result, we expect 2023 full year net finance costs to be around GBP 1.9 billion, subject to both effects and interest rate volatility. The board actively reviews our capital allocation priorities, take into account macroeconomic factors and potential regulatory and litigation outcomes. Our framework includes continuing to grow the dividend with an average payout ratio of 65% over the long term, maintaining leverage within our target corridor of 2.0x-3.0x. Adjusted net debt, adjusted EBITDA, potential bolt-on M&A opportunities, and share buybacks. At this time, the board has decided to take a pragmatic approach. Given our incremental investment plans in 2023 to further accelerate our transformation, and in light of the uncertain macro environment, higher interest rates, outstanding litigation, and regulatory matters, the board has decided to prioritize strengthening the balance sheet. This will provide greater business resilience while continuing to support future financial agility as we aim to reduce leverage more quickly towards the middle of our targeted 2-3 times corridor. We strongly believe that share buybacks have an important role to play within our capital allocation framework, and we will continue to keep it under review as we progress through the year. Finally, in line with our long-standing commitment to dividend growth, we are pleased to announce a dividend of GBP 2.309 for 2022, with growth in line with our constant currency earnings. Looking forward, 2023 results are expected to be driven by another year of strong new category growth and a further reduction in losses, alongside a resilient combustible performance supported by continued efficiency savings and strong cash generation. We expect to deliver organic revenue growth of 3%-5%, excluding Russia and Belarus. Adjusted mid-single-figure EPS growth, second half weighted, reflecting incremental new category investment, higher net finance costs, transactional FX headwind of around 2%, and a second half-weighted U.S. performance. When we think about the corridor for adjusted mid-single-figure this year, it's a little wider than usual at 3.5%-6.5%. This is because it is impacted by both the volatile macroeconomic environment at the time and the timing of the transfer of our business in Russia and Belarus. Extrapolate current export rates, we expect currency translation to be broadly neutral on the full year adjusted diluted EPS growth. Finally, as already mentioned, we expect to continue to progress towards the middle of our 2.0x-3.0x leverage corridor. In summary, we have a clear momentum behind our new category transformation, which is now a significant contributor to the group financial delivery. The current challenge we face in the U.S. are mostly macroeconomic-related, We expect stabilization from the H2 of 2023. In 2022, our results have enabled us to return a total of GBP 6.9 billion in cash to shareholders. In 2023, we are taking a pragmatic approach and prioritize strengthening the balance sheet. Share buybacks will be kept under review as we progress throughout the year. With that, I will now hand you back to Jack. Thank you, Tadeu. At the start of today's presentation, I highlighted the significant progress BAT has made since the launch of our purpose-led A Better Tomorrow strategy in 2020. Building a new category consumer base, growing powerful global brands, and developing capabilities for the future. The speed of our transformation over the last three years means that now is the time to take BAT's strategy to the next level. In 2022, we have shown that our multi-category model is working, meaning that we can both continue to invest and deliver improved profitability. In this final section, I will share how we are getting fit for growth with our new operating model. This means that alongside investing more, we'll also be investing smarter, enabling us to accelerate new category profitability and reach our target one year early, while also preparing the business for sustainable long-term profitable growth. First, let me remind you of the opportunity. Total nicotine industry revenue is growing with a 3.5% expected CAGR to 2025. This means an additional GBP 11 billion revenue at industry level. 75% of its industry growth is expected to come from new categories, with a forecast of 15% growth CAGR. This is supported by the growing number of new category consumers, increasing from around 80 million today to an estimated 130 million by 2025. The percentage of smokers interacting with the new categories is growing fast, especially in established new category markets. Variations between markets are largely driven by regulatory environment alongside different consumer tastes and pricing relativities. Sustainable new category growth is also supported by consumer demographics. In established new category markets, solus usage is now above combustible levels among adults under 45. This shows the clear potential to make a significant positive impact on public health and deliver sustainable high-quality growth. Alongside accelerated decline in cigarette solus usage in established market, polyusage within new categories is growing fast. This means that with our consumer-centric multi-category strategy, we are well-positioned to capture further growth. The opportunity is big. Given the significant variation in new category developments across market, we must prioritize our investment smartly and focus our activities and resource allocation to maximize the return. We must be fit for growth. Following our comprehensive strategic review, we have taken the decision to further simplify the group to enable greater collaboration and faster decision-making. Our new organizational design will be based on fewer, larger business units, reducing the number of regions from four to three and business units from 16 to 12. This led to the senior management changes and realignment announced last week. We are further optimizing our footprint. Phased over the next two years, we plan to exit around 30 smaller markets where we don't see a near-term opportunity to execute our new category strategy. When completed, this means that we'll be selling at least 20 billion fewer cigarettes annually with a limited impact on our P&L. This will enable us to increase profit and unlock cash through resource allocation into markets which generates higher returns. Should the conditions and the opportunity for new category products materially change, then we will reconsider our presence in these markets. In addition, we have identified six different market archetypes to guide strategic sources and resource allocation. We understand that markets vary significantly by category maturity, driven both by consumer taste and preference, and more importantly, by different regulatory environment. We continue to work hard to engage with regulators across the world to help inform them of the science that supports the potential benefits of smokers switching to reduced risk products. New category already represent a significant percentage of the revenue and growth in a number of archetypes, and we expect these archetypes to be dynamic over time. Overall, we are getting fit for high-quality, sustainable growth. Together, these projects and initiatives will deliver a reduction of over 3,000 roles in the next couple of years, with the majority of this effort happening in 2023. Moving forward, we will leverage the foundations created by Quantum. We'll keep delivering efficiencies through our established continuous improvement mindset, with an ambition to generate at least 1 billion additional saving over the next three years. These savings will help the business continue to offset inflationary pressure, fund new category investment, and improve new category profitability. We are committed to build "A Better Tomorrow". As our transformation journey gathers pace, we are further sharpening our operating model, enhancing our agility, and continuing to build new capabilities. We are transforming BAT into a high-growth, multi-category, consumer-led CPG, with a reduced impact on public health and ESG at its core. I am confident this will create value for all our stakeholders. Thank you for listening. I will now open up to questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypads. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will now take our first question from Nick Oliver from UBS. Your line is open. Please go ahead. Hey, good morning. Thank you for taking my question. Hey, good morning, guys. Just two from my side. First one on the US. On the -15.5% combustible performance, is it possible to disentangle how much of that was, you know, industry, the inventory moves, and then some of the share losses that you mentioned? I guess as we look forward, is the better way to think about the U.S. in terms of total nicotine share, as opposed to just, a focus on combustibles? That's question one. Question two, just on the pipe- Yeah, can we stop you there? you there? We start with this one. Yeah, yeah. Absolutely. Yeah, I mean, first of all, we are having a very strong portfolio in the U.S. As you know, we've grown in the last three years, value share, volume share, and profit and operating margin. Our position in the U.S. is extremely strong. Now, related to the to the 15% versus the 10%, of course, you saw that we have lost a little bit of share, but the premium, the premium is very resilient, only losing 50 basis points, and the low is not growing more than than 90 basis points. At the same time, the price elasticity is 0.4. I think that the market is very resilient. When you see the average of the last three years, you see very clearly that the average reduction in terms of volume, has been around 5%. You saw that we lost a little bit of market share. Okay, that's fine. Then we said, last time, that we had around GBP 200 million, in terms of stock that we would have to unwind. Now we are doing that at pace, and we are at halfway through the journey related to that. I think that we're going to do a further enhancement of our performance in 2023. The second part of your question is related to looking at total nicotine. I think you're absolutely right. I mean, the reason why our performance in the U.S. is strong is because we have a very resilient combustible business. The macros are now improving, you will see improvements related to the macros in the U.S. that will benefit to the size of the market. The second thing is our performance in terms of new categories is just stellar. I mean, remember years ago, everybody said that we will never take a position related to e-cigarettes. Now, we're not only the leader, but we are the leader in the U.S. with the price index to competition at 140. We're doing extremely well, and we're continuing to grow in terms of new categories. I think that looking now holistically at the total market is something that makes total sense moving forward. That's right. Just to be clear about the 15.5 and the 10%, most of the gap is related to the unwind of the stocks. This shouldn't be a surprise because we have flagged that a year ago. I'm confident in the progressive recovery of the U.S. market and our strong position in terms of our portfolio. I mean, we have at the upper end of the market, you have American Spirit that is super premium, if you want to call it this way, that is growing share and value share, and you have the most successful launch in the VFM with Lucky Strike, which is now reaching three points of share. That's the most successful launch in the last at least 15 years in the U.S. We have a very well-balanced portfolio, and now we have to do price laddering through the different brands in order to make sure that we help the consumers to navigate. Also, always remember, you know, the U.S. is a very large market, and I spoke about price elasticity at 0.4. You have to remember that some prices in some states are at $11 and some are at $6. There's a lot of gamuts of different markets, and you see that the price elasticity in average is 0.4. I think that we have a very strong business over there that has grown share and value share in the last three years, and the operating margins are going in the right direction. We are delivering 3.5% profit growth in 2022, and we are confident in the U.S. business. Great. Thank you, Jack and Tadeu. Just the one final one from me, then I'll hand over. Sure. Just on the obviously the no new buyback this year was kinda, got quite topical with investors this morning. I guess in the press release you mentioned that would be reviewed during the year. Maybe Tadeu, just a few words on the thought process of one, not announcing one now, and then what would need to change for that to have to happen later in the year? Nik, we have been focused on cash generation at least for the last fourseven years in a very intense way. That's the reflect in our conversion being consistently at 100%. We managed to deleverage the company to the corridor of three to two. We are still in a uncomfortable position be at the high end of this range. The world has changed. We have a very high levels of cost of capital today after seven interest rate hikes in the U.S. alone throughout 2022. Our cost of capital is much higher than before. We are still seeing a lot of volatilities in that environment. One thing that we would like to observe more clearly is where this will stabilize. For sure, when the board takes decision in terms of capital allocation, it's always looking ahead from the regulatory side, the litigation side, you note that we have provide for investigations that we have around DOJ or OFAC, we still have to pay for those. We don't know exactly when this get concluded. We expect to be in 2023, it's not completely up to us. Also we have the CCAA, that there is a mediation processing in place. I cannot comment further on that, in the medium term, we have to prepare the company for that. The reason why we want to accelerate the to land in the middle of the range is to create this space so we can have a more resilient balance sheet and a much more financial agility moving forward. This is a benefit for us in the medium long term of the company. Yeah, you know, I mean, to speak clearly, since three years, we have done a lot of transformation, we have done a lot of acceleration in terms of our business. Now we have the possibility to decide. Last year we did GBP 2 billion of share buyback. The interest rates are going up. Deleveraging is important, taking care of our balance sheet. You know, we want to be in that corridor of two-three and to accelerate faster to the middle of that corridor. That's the pragmatic way of looking at it. Frankly, share buyback, we are convinced with share buyback. We did GBP 2 billion last year, and we will review in the course of the year. We'll make the decisions as we see pragmatic to do so and continue on that journey. I like share buyback. Great. Thanks so much, Jack and Tadeu. That was really clear. Cheers. Thank you. Thank you for your questions. Next up, we have Richard Felton from Goldman Sachs. Your line is open. Please go ahead. Thanks. Good morning, Jack. Good morning, Tadeu. Good morning. Thanks. My first question is a follow-up on U.S. combustibles and your relative performance. The numbers you've given in your prepared remarks, the 10% industry decline and the 15.5% decline in your portfolio, is on a full- year basis. If I think about the second half specifically, it does look like that gap versus the market has got a little bit larger. My question is, what has sort of driven that? Where are you seeing the relative weakness in your portfolio? What actions are you taking to narrow that gap into 2023? That's the first question. Okay. Just to make the more clearly, because it's difficult to analyze by half, there were a lot of movements in the U.S. We mentioned the unwind of stocks. Remember that in the H1 of 2022, we also introduced our TAO system. We roll out the TAO system, so we had to build up stocks just before that. The unwind of stocks in reality materialized more towards the second half of the year. That's why you see a different picture in the second half as compared with the first. This also, you know, explain the reason why we expect to be more second weight this year, because we are lapping a first half of last year that was impacted by this stock built from the introduction of the TAO system in the U.S. I just want to make this point clearly. As the macro became much more visible throughout the second half of the year, we start taking commercial initiatives related to that. As we present in the presentation, we have been much more active in terms of revenue growth management, granular in terms of pricing decisions at a state level, channel levels. We have been laddering now in different price points. We are ending the year 2022 in a much more competitive basis. We saw that in terms of our share performance in Q4 compared with Q3, where we see some stabilization of that, and we continue this trend to grow in 2022 as we approach 2023. In the, you know, in the big players, you know, not in the low, I mean, you saw that we defended share much better than the competition, and we have a pricing environment where you always have to remember that the pricing that has been taken by the industry even in Q3, Q4 was far less than CPGs in general. We had a much more linear pricing activity in the second half of the year than CPGs. That give us some runway in terms of pricing in 2023. I think that the overall market has suffered in terms of size. The consumers, you know, we always speak about, price of oil, but it's not only the disposable income, it's also, the Americans go less to the shops. If they go less to the shops with the product that they buy every day or every second day, then you have a bit of reduction in terms of the total market. I think that, with the performance that we have in premium, where we're growing and, the down trading that has been very reasonable in that environment and the price elasticity at 0.4 and the portfolio that we have, I'm confident on the U.S. for 2023, but it's going to be more geared towards the second half for the stock issues and for the recovery of the macros moving forward. Always remember, I think that the point that was made before is very important. Total nicotine. You know, in total nicotine, including e-cigarettes, you see that the performance is extremely good in that environment. Cost of access to e-cigarettes is lower for consumers in the U.S. than in cigarettes. I'm confident. Thank you. That's very helpful. My follow-up is going to be on e-cigarettes in the U.S. Yeah. Obviously, very impressive performance on views on a top line basis and on improving profitability. My question is on the volume performance of U.S. vapor. Looking at the numbers on the second half, it looks like volume growth did decelerate a little bit. My question is how to think about the growth drivers for Vuse in the U.S. moving forward. I mean, should we expect it to continue to be pricing-led growth, or are there, you know, more investments that you need to make to reaccelerate the volume performance of Vuse and, you know, I suppose the overall category? That's the follow-up. Thank you. Yeah. I think what's important to consider is, first, there has been a new category that has emerged in the U.S., which is the disposable with synthetic nicotine, okay? You saw that it grew very fast, and especially in non-organized trade. That has taken some consumers in terms of the cigarette business that have moved to these kind of categories. In reality, it's an additional pool of consumers that have been created, and the FDA now wants to regulate that environment, and that will allow us to have even more oxygen. In, just in the transition. What's very interesting to see is that the vapor, traditional vapor with pods has continued to grow. It did not replace one another. The traditional is continuing to grow. There will be more regulation in synthetic nicotine products. That will create an additional expansion bubble, if you want, for us for the next few years to come. I think that not only we have the best brand in the market, we have, as I said before, a price index of 140 to the nearest competitor, and we're continuing to grow. The market is continuing to grow at a smaller space. We have that additional bubble of oxygen that is coming our way with regulation related to the FDA. I think that we're on for something very good in terms of in terms of e-cigarettes in the U.S. At the same time, you saw the profitability. You know, I mean, the numbers speak for themselves, if I may say so. Thank you very much. Thank you. Next up, we have Reya Wium from SBG Securities. Your line is open. Please go ahead. Good morning. Good day, Jacques and Tyler. Hi, good morning. Good. Just also just two questions from my side. I just wanna quickly focus on the combustible market share. You mentioned it's down 20 basis points. It's a bit of a reversal of what we've seen in prior years. I know you mentioned it is the U.S., but in your report, you also state that the market share was lower in Amsa in Europe. I was just curious about, you know, where you've seen market share declines and what you can do to reverse that in the combustible side. Mm-hmm. Yeah, I think that the first thing to consider is that 2022 has been a year where there were more tensions in terms of pricing across the globe. Let's put it this way. Also you had the macroeconomics that were hurting the consumers in the second half of the year. I think that what we start to see in the last quarter is that resilience transforming again into growth in terms of volume. There is more benign pricing environment, i.e. the pricing is coming through. As I said earlier, always remember, you know, a lot of FMCG, CPGs company took a lot of pricing in Q4. It's different for us. We took reasonable pricing because consumers buy every day, and we can continue to take that pricing. We see the volume and the pricing in a good environment for 2023. I just want to compliment. I think that we have what we saw in 2022 is a very resilient combustible business to start with. We refer to 1.2% FMC, THP worldwide decline. If you see combustible alone, it's around 2%. If you see emerging market, was pretty much flattish. We saw volume growth in place like Brazil, which we are very strong, as well as Bangladesh, Malaysia, Vietnam. A lot of markets. We saw it even in places like Italy, Spain, Europe. We had a number of markets where with all the macroeconomics headwinds, inflation, we still saw volume growth. In terms of our performance in market share, we are not really concerned about that. This is very specific for some specific markets. For Brazil, for example, we had some price skirmishes there, and we prioritized some value. We had in Turkey because of this macroeconomic situation, we saw a lot of increased illicit trade. We are more exposed, of course, we are strong on the low end of the market, so we lost some share there and has a big weight. But it's not something. It's very specifics for some countries, but I think the key message is that we are seeing a very resilient business across the world. Excellent. Just a question for you about the interest guidance of GBP 1.9 billion. It looks a bit high to me, you know. I just wanna know. I mean, it sort of works out, based on my calculations, like an average coupon rate of about 5%. Mm-hmm. Is it an issue of that you probably expect your free cash flow to be a bit lower this year? I mean, I just wanna tie the two ends together here. Okay. No, it's not that. It's. Well, we had. Our starting point would be at GBP 1.6 billion in terms of interest cost in 2022. What we are seeing, and that's why I refer to 18% in terms of our exposre for 2023, we have some refinance to do. We used to refinance at 4%- 4.5%. This is higher than that. I don't think that is as high as we saw in October because the market is come down a bit more to this year, can be much higher than the average cost of capital. We also have needs in terms of working capital, CP markets, bilateral, and those rates were very, very minimal back in early stage of 2022, and now went up substantially. That's where you see this when you see the gap between where it is now, plus the commitments that we have in terms of our other finance costs and in terms of maturities, that adds up to something close to 18% of our needs. You come to this number of 1.9x. Mm. It's important to flag that because we will be seeing this annualizing factor in 2023. It's one-off that we see in 2023, and then we create a new base moving forward. In terms of our cash conversion, you know, I mean, you saw that we had 100% in average in the last three years, and we have a number of 95% and higher. I mean, we are very dedicated to that. After that, the free cash after dividend, what you see is that last year was GBP 2.1 billion, last year, 2021. 2022 was GBP 2.7 billion. We continue to make a lot of efforts. Also, you saw that we had the program of Quantum that was GBP 1 billion originally three years ago. We delivered GBP 1.9 billion, and we just said that we're going to do another GBP 1 billion in the few years to come. I think that, you know, we're getting to a position where our financials make a lot of sense, where our business is making a lot of sense, where we're accelerating our transformation, and we're on the midterm to long term. It's about now at the moment, you know, the balance sheet, the corridor two, three, and we'll review during the year. I'm very confident in the quality of the business that we have. We take some decisions because we have the possibility to take decisions, and we have the choice, and we exercise that choice because it's for the good of the growth of the company and the sustainability moving forward. Okay. Thank you very much. Thank you. Thank you. Next up, we have Jared Dinges from JP Morgan. Your line is open. Please go ahead. Hi, guys. Maybe first to come back to the U.S. What impact do you expect from the California flavor ban across your portfolio? Maybe if you could talk a bit about, maybe some very early signs if you have data from there so far? Good question. I mean, California represents around what? 5% of the total market in the U.S. It's a market that we are looking at, of course,. very carefully. It's very difficul read the early signs in the California market because we had a lot of stock movements in December. As you know, the ban came in 21st of December. There was still a lot of stock that was available in the shops in January. You'll have to wait April, May in order to read all this. If you look at the size of the market and the way the market is faring at the moment, it's robust. You have to offset all these movements in terms of stocks. Our brands are doing well. We've launched new SKUs, and e-cigarette is doing very well also. We'll have to navigate all this, and it's, it would be too early or too confident from my side to say that the job is done. It's going to, you know, happen in the next few months. I'm optimistic in terms of the solidity of the business. Remember, in all the different geographies where you had that kind of things that happened, in Canada, in Europe, in Turkey, or in other places, the retention rate was around 95% and more. Then on top of that, you had related to new categories, another increase in terms of retention rates. The jury is out, but the start is very good, but very mixed in terms of numbers. You would not be able to find your ducklings in there because it's all stock movements, trade, availability in trade. There is the key accounts, the organized trade, that has been more speedy in terms of stopping these products. General trade is very important in California, and that is less measured accurately, so give it a bit of time. I think that is going to be that is going to be a good outcome for us. Got it. Maybe switching gears over to THP. Mm-hmm. You know, it was another good year. I noticed in the second half of the year especially, the price mix was weaker, especially in Asia. Can you talk maybe a bit about what's driving that, especially given that you had the launch of glo hyper X2 and good device sales? You know, I would've thought you would've had a mix boost from that. Yeah. As you see, I mean, we have now close to GBP 3 billion in terms of new category revenues, to a point that represents 50% of the total company. You saw that in the different categories, vapor grew very fast, and the percentage of growth of THP has slowed down a little bit. There is more price competition within the different segments. You have different competitors that have come in at different price points, different product offerings. I think that there's a bit more of internal competition in the segment. I must say that we are very happy with our performance and we continue to plow forward. We are only in 50% of the markets that are carrying THP as we speak today, so we still have a lot of geo expansion to do. We're improving our pricing, as we go along, our price index as we go along. I think that we have a very good start with glo X2 in Japan. It has reached record share in December. We grew during the year. There's more intense competition, but we have a lot of space to grow in. When you look at, for instance, Europe, that is the nearly 50% of the total market, I mean, we're doing extremely well and growing fast. Overall, new categories, as we said in the presentation, in 7 markets where we have already 30% of our revenue that is there, yeah, for the total company. We are strong, and we'll have an innovation pipeline that is strong, not only in 2023, but also in 2024. We have more launches that are coming, and we're doing the rollout of X2 that is very well accepted by the consumers. It's smaller, it's lighter, delivers more flavor, and we've done a lot of improvement also in terms of the consumer migration. I'm confident. Just to complement that. In Japan, and it's not different in Europe, every single product we sell in THP has higher margins than our combustible products. Even the newly launched, the Lucky Strike that we did to complement our range in the market, has higher margins than the combustible ones. We are very pleased with the, to be honest with you, the progress that we have made in all categories throughout 2022 margin-wise. We have already in THP, on the consumable side, a margin that is higher than combustible. The same is happening in modern oral. In vapor, we have reached worldwide, a 50% gross margin compared with the cigarettes, which is around 68%. In the U.S. alone, it's even higher than that. It's a big improvement. That's what is really driving the reduction in loss as well, and we are really heading towards a very sustainable business where we're being different between you selling cigarettes or selling one of these products. You know, I mean, we took the view three years ago to do multi-category, and that's starting to pay off because you have more interaction between the different categories. Tadeu was speaking about the fact that there is now relations between THP users and modern oral, for instance. Or in other markets, THP with vapor. Just remember that the number of consumers in vapor is close to the double of the ones in THP. And this is interesting to see that increased interaction between the categories. So being truly multi-category as well now, and having done that for three years, gives us a head start in terms of being able to serve better the consumers. We have now a profitability that is coming through in vapor. All this put together gives us a very strong position where, again, I insist, we said we will invest in 2023 and in 2024, and we prioritize that because, as we saw, we can grow our volume and our revenue faster and reduce our losses by GBP 600 million. Guys, it's not a small thing, you know. When we said a few years ago that we will be profitable in 2025, people said, "Ha-ha." We're saying we're going to be profitable in 2024, and we're going to continue to invest more because we have the brands, we have the capabilities, we have reorganized the company three times in a row, not redoing everything every time. No, it's blocks of transformation that we did, Quantum one, Quantum two, and Quantum three to be able to do what we're doing as a transformation today in order to accelerate the delivery. We're on big, guys. I mean, we really believe that the strategy not only is paying off but is putting really the company forward in terms of delivery of our transformation and accelerating the delivery. Of course, at the same time, you have the net debt to EBITDA. You have to take care of that, your balance sheet and everything. We continue to invest hard and continue to plow through. I'm on the mid to long term. Tadeu and myself, we see, you know, these numbers all the time. Of course, we want to do the best for the business. You will see us for some time. Very clear. Thank you. Next up we have Gaurav Jain from Barclays. Your line is open. Please go ahead. Hi, good morning. Thank you. I have three questions. First, Tadeu, for you on the restructuring charge in the comment you said. Mm-hmm. Last year, BAT had restructuring of GBP 770 million, and over the last 12 years it is GBP 400 million on average. Now you are saying going forward it will be zero. If I had assumed a GBP 400 million restructuring charge for next year, your adjusted EPS growth will be high single digits. Is that the right way to think about it? Well, look- Good one. Yeah. First of all, just to some call on this GBP 707 that you are referring to, as we highlight in the announcement, we, within that we have a factory closure in very costly locations. You You know, that's there. We have a pull out of, or we are closing operations some markets, as you saw, in the place like Egypt, Yemen, and they come also with some tax liabilities that needs to be settled. This is in there as well. We have, like Jack said, with all the archetypes of markets and the closure of factories, we have almost 2,000 employees leaving the next coming years and most of it in 2023. It's also provide there. What we are referring, you're absolutely right in the sense that we believe that with the conclusion of Quantum now, we are not incurring in the restructuring adjusted items anymore. This will be a positive for the cash, to be honest, because when you see adjusted numbers, we are taking this out, but on the cash is still cash outflow, some of that, you know? There are some other elements that are non-cash items. This will be helping us more, I would say, in 2024 because a lot of this provision will result in some cash outflow happening in 2023. From 2024 is where we expect the major benefits coming from the cash side. Sure. My second question is on the NGP breakeven guidance for FY 2024. You know, a lot of people are concerned about your U.S. e-cigarette business because, see, 30% of your NGP is U.S. e-cigarettes, where FDA has given two of Vuse menthol variants an MDO. They also commented that Vuse was second rank in the FY 2022 youth prevalence survey. Mm. Most likely, Vuse Alto menthol will also get an MDO and maybe a tobacco product also gets an MDO. With all this regulatory uncertainty, how certain are you that you will hit NGP breakeven in FY 2024? I mean, to be blunt, you know, we would not say that we accelerate the profitability of NGP to 2024 if we would not have looked at all these things. It's a very valid question. I think what you have to see is the consumers are increasingly coming to our portfolio and to our brands. We have now 22.5 million consumers that are there, which only represents, you know, a small portion of the 80 million that are existing at the moment. We have a lot of space to grow and to grow against competitors. The second thing is, the FDA is of course doing all the regulatory work, but it has slowed down dramatically, because they have a lot of things to do, which I understand. I think that, the speed at which, regulation and new regulation will come in and regimentation related to all this is going to be slow. I think that, we have adapted very well in the past to all the regulators, and we know that we have very strong brands, so we have space to grow, and we know that we have very strong brands. I'm confident in the way forward. These things are multi-years, things with a lot of litigation, regulation, discussions, and all this will, all this will take time. We have this kind of debate since now, five years, and it's only starting to move slowly. There is not even a definitive view in terms of what is going to happen. You know, we'll take the time and we'll make sure that we do the right thing for the business. We reiterate, I reiterate the fact that we'll be profitable in new categories by 2024. I could even be profitable sooner, but I want to invest the money in order to make sure that we grow the base of the business. Mm-hmm. That's what we're doing in the right way. Already last year, we reduced the losses by GBP 100 million. This year it's another GBP 600 million. It's all about continuing to grow. We have 40, sorry, we have 80 million consumers that are there already. I said that that's going to grow to 130 million consumers with a lot of available income. We have 22.5 at the moment. I have still a lot of space to grow. Yes, it's always a complex market. If it was not a complex market, we would not be so, you know, so much benefiting because we have wired the organization to be not only much better in terms of combustible, and we've done a great job in combustible in the last three years. We have appointed now a board member in terms of combustible in order to make sure that we extract the value, and we're going even to take out around 30 markets, yeah? Which we're the first ones to do, seriously. So reducing the number of cigarette users. At the same time, we're going to have another GBP 1 billion of reduction of cost in terms of our structure. We're reorganizing our structure in a way that is geared towards category management, and we are making sure that our financials are sound in order to make sure that we continue to invest. We're making money, and we're investing that money. That's what we do. The only add to what I would say to your question is that, the FDA has embraced the risk continuum. Mm. You would believe that all the decisions they will take is actually aligned with that and not incentivize consumers to go back to cigarettes. You know, I think it's a very important point of Tadeu. The fact that they give PMTAs to e-cigarette means that it's a less risky product, recognized. Yeah? It starts there. That gives a lot of traction also in the rest of the world. Okay? Sure. My last question. Yeah. is on, you know, you will have a new competitor next year entering the market in the U.S. with heated tobacco product. You know, you have filed for the glo Hyper PMTA in December 2021, if I remember correctly. When can we expect that PMTA to come, and would you launch soon after in the U.S. market? Yeah. First of all, you have to take it, piece by piece, you know? First, combustible business is extremely important in the U.S., yeah? Even if you don't like cigarettes, it pays your bills every day. That gives you the resources to be able to invest. That's number one. The second thing is there is already 20% of the market that is in new categories, mostly e-cigarettes. Yeah? That's already there. That's getting very, very interesting in terms of margins per thousand, okay? The third thing is there is a lot of things that have been said in terms of, in terms of THP in the U.S. It has been on the market for two years. It has not worked. The high tar levels and everything. At the end of the day, what is important is what position you have in new categories in the U.S. We have presence in the three categories. We have PMTAs that are in progress, and this is going to be more in two years from now or at least. You have to take your time and look at what is there, what is growing, and then that's for the mid to long term. I am confident that when you see what has happened in Europe between THP and e-cigarettes, there has always been a very strong space for e-cigarettes in high-tar markets. In Japan, it is different because there is very low tar and nic consumers that are already there. The satisfaction gaps are lower. You have always, in the process of PMTAs, you have to have the science that goes with it. You don't have the latest product that comes to the U.S. You have the products that were there three, four years ago, where you have the science that you have to take the time for making the science, and then you can come with the, to the market with a product that has been there long time ago in other markets. That's an iteration process where new categories, I'm very pleased to say, is growing in the U.S., and where there will be more opportunities in the three to five years to come. Mm-hmm. Okay? As you see in our results in the U.S., now the new categories, the e-cigarette, is having a major part in terms of our profitability and our financial numbers, which we are very pleased with. Okay? Okay. Sure. Thank you so much. Thank you very much. Thank you. It appears that there are no further question at this time. I would like to turn the conference back to Mr. Jack Bowles for closing remarks. Thank you very much for joining us today. You know, I'm very proud of our performance in 2022. Our results show that we are transforming the business at speed and delivering strong results in a challenging macro environment. We expect 2023 to be a stronger year with organic revenue of between 3% and 5%, led by new categories and stronger combustibles. While higher interest costs and our exit from Russia and Belarus means that we are guiding mid single figure EPS for this year, we are also making active choices as our new category growth model continues to accelerate and deliver. This means that we will invest more and achieve new category profitability in 2024, one year early. We have made choices, and this is the right thing for us to do. I'm excited that building on the strong progress that we have made today will continue to transform, driven by our brands, our capabilities, and determination to drive long-term value creation for all our stakeholders. Thank you very much for listening, and have a very good day.