Relations at BAT, and with me this morning are Tadeu Marroco, our Chief Executive, and Soraya Benchikh, our Chief Financial Officer. Welcome to our 2024 Full-Year Pre-Close conference call. I hope that you're all well, and I'd like to thank you for taking the time to join the call this morning. Before we begin, I need to draw your attention to the cautionary statement regarding forward-looking statements, as well as the notes and disclaimers contained in the trading update. Unless stated otherwise, our comments will focus on constant currency adjusted organic measures, and all our share data is year-to-date average to September 2024 versus full-year 2023 average. I will now hand over to Tadeu, with a reminder that, as always, there'll be an opportunity to ask questions later on in the call. Thank you, Victoria. Good morning, everyone, and welcome. It was good to see many of you at our Capital Markets Day in October, where we showcased our significantly improved innovation capabilities and ecosystem, as well as some of our talented people from across the business. I also set out clear and compelling reasons to believe in BAT's future. We are in a growing industry, and we believe we are executing the right multi-category strategy to position us for growth in all attractive value pools. We have the capabilities to execute this strategy, and we have the right people to deliver profitable transformation. Alongside this, our financial discipline will drive quality revenue growth, cost optimization, and smart reinvestment in order to deliver our medium-term outlook and attractive returns for all stakeholders. With that, let me turn to our 2024 performance, which is in line with our expectations, and we are on track to deliver our full-year guidance of low single-digit revenue and adjusted profit from operations growth on an organic, constant currency basis. As previously guided in our half-year results, our second-half performance is accelerating, driven by the phasing of new categories innovation, the benefits of H1 investment in U.S. commercial actions, and unwind of wholesale inventory movements. While we expect to deliver improved new category revenue growth in the second half, we continue to monitor the progress of legislation seeking to ban vapor products in Mexico. We also continue to make good progress in driving new category profitability as we deliver higher returns on more targeted investments, particularly in heated products and modern oral, through our quality growth focus. Now, turning to combustibles, where our group volume share in top markets is up 20 basis points, driven by strong performances in AME and APMEA, value share is down 20 basis points, reflecting an adverse geographical mix and the impact of our commercial actions in the U.S., partially offset by gains in AME and APMEA. The U.S. macro environment remains challenging, with consumers continuing to feel stretched, driven by slower-than-expected growth, persistent inflation, and interest rates remaining high. In addition, the ongoing proliferation of illicit flavored single-use vapors and the lack of effective enforcement is continuing to impact industry volume. As a result, U.S. combustibles industry volume is down around 90% year-to-date and around 11%, excluding the deep discount segments where we are not present. While the broader macro context continues to be mixed, we see some early positive indicators, with modest real wage growth and strengthening aggregate household balance sheets. In addition, interest rates have now started to ease, which we anticipate will begin to feed into improved consumer confidence. While the recovery is slower than we projected, we continue to expect some improvement in the macroeconomic environment, which, combined with the lapping of our investments this year, will benefit our 2025 delivery. As expected, we are seeing an improved financial performance in U.S. combustibles since H1, with the benefit of our commercial actions and the unwind of wholesale inventory movements. Through our previously announced and completed commercial actions, we have invested in our portfolio and improved our executional capabilities. We are encouraged by the continued traction of these investments, and we can now prioritize driving sharper execution and opening incremental white space related to modern oral. Our price investment in laddering strategy, including the introduction of Newport soft pack in target states, together with the continued strong performance of Natural American Spirit, has driven a further sequential improvement in our premium segment volume share, up 50 basis points year-to-date. We also continue to grow volume share in the branded value segment, driven by Lucky Strike, which remains the fastest-growing US combustibles brand. In AME and APMEA, we have continued to deliver robust combustibles pricing, with both regions driving volume and value share gains. Top markets driving our financial performance in these regions include Brazil, Mexico, Pakistan, Sri Lanka, and Turkey. Moving to new categories. In vapor, we maintain global value share leadership at 40.3% in tracked channels in top markets. While we held our U.S. value share leadership at 50.7%, our financial performance has been impacted by continued growth of illicit single-use vapors. In AME, we maintained value share leadership at 31.6%. Strong gains in France, Spain, and Germany drove value share up 90 basis points, excluding Canada. In the province of Quebec, we continue to see the impact of flavor ban, where volume has shifted to the legal market due to lack of enforcement. More broadly, in AME, we are seeing continued new category poly- usage, benefiting the vapor category. In Europe, growth in single-use vapor products is starting to slow to the benefit of closed systems. Our insights show that while single-use vapors continue to reduce barriers to try or former smokers, over time, migrating to rechargeable devices and pods is more economical for consumers overall and does not require any significant compromise on satisfaction. We have seen strong initial results from the rollout of our newest innovations, Vuse Go 2.0 and Vuse Go Reload, which began this spring. At our recent Capital Markets Day, we highlighted the importance of our innovation and differentiation focus with Vuse in order to develop the premium segment of the vapor market. To further this development, we will begin the rollout of our first premium vapor product, Vuse Ultra, in early 2025. In heated products, our newest innovations, glo Hyper Pro and improved consumables, are driving improved volume and revenue growth in the second half. The development of these products was based on our insights and the understanding of consumer pain points. While still early days in our performance turnaround, glo Hyper Pro is attracting more premium adult consumers to our brand family. We are seeing increased consumption in our top markets versus our older devices and better brand retention and strength scores. As a result, glo's volume share of segment in top market has continued to show signs of recovery, with volume share down 30 basis points versus our 110 basis points decline in 2023. Pro is our first device with more premium price positioning, a first step towards moving our brand into the premium segment, which represents around 80% of industry value. In Japan, our volume share is showing signs of improvement, down 40 basis points versus a decline of 170 basis points in 2023, driven by the national rollout of Pro and enhanced consumables. Within the category, our new glo Hyper Pro consumables continue to gain volume share, up 110 basis points, partially offsetting the decline of our legacy consumables range. In AME, we are driving improved performance with category volume share up 10 basis points, driven by Poland and the Czech Republic reaching 34.8% and 18.1%, respectively. Our performance in Italy continues to recover, with volume share up 10 basis points versus a decline of 180 basis points in 2023. Velo was the first non-tobacco heated product in all 19 markets where it has been launched and continues to perform strongly. Through these improvements in the innovations, we are starting to drive a more balanced top- and bottom-line delivery in heated products, supported by the more premium price points achieved by our latest innovations and further scale benefits. As a result, we expect a strong improvement in category contribution for the full year. As highlighted at our CMD, our next innovation, glo Hilo, is a breakthrough new system that we believe will reshape the way glo competes in the category. We launched our new two-piece premium platform in Serbia last month. We are collecting insights and learnings to further refine and improve our marketing mix and consumer activations, and we will continue to roll out this exciting new platform from mid-2025. Moving to modern oral, Velo continues to deliver strong financial performance, driven by continued success in both established oral markets and strong momentum in newer launch markets, including the U.K. and Poland. The category continues to develop quickly, with 45% of the business now outside traditional oral markets. Our volume share of modern oral in top markets is up 110 basis points. The growth of the modern oral category has driven our volume share of total oral in top markets up 180 basis points, reaching 11.2%. Our leadership in AME, with 65% volume share of the modern oral category, reflects the strength of our brand equity and superior portfolio. In the U.S., we are encouraged by the continued momentum of our refreshed Velo brand expression, with volume share of modern oral up 180 basis points year-to-date and our latest monthly share reaching 7.6% in September, driven by 18.7% volume share in New York, where we first introduced this mix. In addition, Grizzly Modern Oral is performing well, building on the growing trend of traditional oral consumers switching to modern oral. We are further expanding our U.S. portfolio with Velo Plus, a more competitive product with a broad range of flavors and nicotine levels, with a national rollout underway. Turning to regulation, we continue to prioritize shaping a sustainable future and to call for more appropriate regulation of new categories and enforcement against illicit products. Regulation matters, and it grants us our license to operate. Because of this, we continue to build the scientific capabilities to substantiate tobacco harm reduction and are taking a more front-footed approach to stakeholder engagement. The recent Omni launch is an example of BAT's continued thought leadership in tobacco harm reduction and our ability to draw a clear pathway to build a smokeless future based on science and sensible regulation. Our focus is on opening new markets to new categories and improving regulatory and enforcement frameworks where new categories are already present. In the U.S., effective regulation enforcement will be pivotal to ensure a level playing field and to encourage smokers to migrate from combustibles to smokeless offerings if they decide to continue using nicotine. We estimate that illicit products are now approaching 70% of the U.S. vapor market, representing approximately GBP 6 billion of manufacturer revenue. While we are optimistic that government engagement actions will drive a more level playing field over time, we do not expect these actions to have any meaningful impact on our near-term performance. In the last two years, 14 states have enacted enforcement legislation, with implementation staggered through 2025. These states make up approximately 30% of the industry volume, and we expect more states will pass similar laws next year. Not all state enforcement actions are the same. Louisiana, the first state to implement both a vapor directory and enforcement legislation in October 2023, shows that well-constructed regulation can work when it is paired with proper enforcement. Since implementation, the legal vapor market in Louisiana has grown volume by 33%, with a 91% reduction of single-use illicit products in tracked channels. Vuse also continues to capture the majority of the volume outflow back into the legal segment. In addition, the FDA continues to step up enforcement actions, including increased collaboration with government agencies, including the Department of Justice and U.S. Customs and Border Protection, as the agency attempts to increase the number of civil monetary penalties and seizures. The U.S. International Trade Commission continues to investigate our complaints to these illegal illicit products, given the vast majority are imported into the country through a handful of ports. Overall, our U.S. teams continue to actively engage with government agencies and federal and state law enforcement authorities to drive a better enforcement. Of course, effective regulation and enforcement is not just a U.S. focus. For example, we launched our commitment to responsible vaping products in October. This sets out our commitments to responsible product standards, meaningfully addressing societal concerns around vaping. We have set clear ambitions for our portfolio, including adult-oriented flavors, age verification technology, and removable batteries. Targets like these demonstrate our commitment to taking product stewardship and safety, underage appeal, and access issues very seriously. In the U.K., vapor regulation enforcement proposals are currently moving through a public consultation. These proposals include the consideration of retail licenses, something we have long called for. Going forward, this means vapor products would only be sold by holders of a license, which could be withdrawn from retailers who are found to have acted irresponsibly, such as those that sell illicit products. Similar regulation is in place with respect to the sale of alcohol, and we believe it will work for vaping too. This is a step in the right direction towards clamping down on underage access while providing consumers of vapor products with the assurance that they are purchasing a legitimate and legal product from a responsible retailer. Overall, we believe a responsible marketplace, which gives smokers access to less risky alternatives, is achievable with proper regulation and enforcement. Turning to cash, BAT is a highly cash-generative business, and we expect to deliver operating cash flow conversion in excess of 90% again in 2024, enabled by our continuous improvement mindset and further optimizing resource allocation. We are making good progress on the leverage and expect to be at the high end of our target range of 2-2.5 times, adjusted net debt to adjusted EBITDA by year-end 2024, also impacted by recent U.S. dollar strengthening on our dollar-denominated debt. To conclude, before we move to Q&A, our year-to-date performance is in line with our expectations, and we are on track to deliver our guidance. Our technical guidance has been updated for FX. We now expect a headwind of around 1.5% for transactional FX and around 4.5% for translational FX on full-year adjusted profit from operations. In addition, we expect lower net finance costs of around GBP 1.5 billion. It's also important to remember that our full-year associate income will reflect the impact of the monetization of a 3.5% portion of our ITC stakes in March, broadly offsetting the benefit of our share buyback this year. As previously highlighted, we do not expect the journey to our midterm guidance to be linear. Building on the strong foundations we have established, I am confident that we will deliver an improved underlying performance as we move from investment to deployment in 2025. In addition, we expect to have more clarity on the financial impacts of CCAA in Canada when we provide our 2025 guidance with our full-year 2024 results in February. We will continue to reward shareholders through our strong cash returns, including our progressive dividend and sustainable share buyback, and we remain committed to returning to our midterm guidance of 3%-5% revenue and mid-single-digit adjusted profit from operations growth on an organic constant currency base by 2026. We are making good progress, and while there is still more to do, I'm certain that the choice we have made and the actions we are taking through this investment year are the right way forward at BAT. Thank you for listening. Soraya and I will now be very happy to take your questions. Thank you. Ladies and gentlemen, if you would like to ask a question on today's call, please signal by pressing star one on your telephone keypad. Again, that is star one for your questions today. And our first question today comes from Rey Wium from Anchor Stockbrokers. Please go ahead. Good day, Tadeu and Soraya. Thank you for the opportunity to speak with you. I just want to come back to the Canada settlement. As far as I have it, I think the plaintiffs have to approve the plan. I think it's in this coming week, if I'm not mistaken. And then I just want to know the uncertainty probably is how, or maybe you can just shed some light, how do you plan, or is there anything in the pipeline how you will split the liability between the existing tobacco companies? Maybe if you can give us an idea whether it will be based on market share currently or past market shares. So that is my first question. And just the other one is an interesting one. I was just curious about Russia. I mean, you have exited Russia. Can you remind us whether you have an option to repurchase the Russian business and if there's a time frame? The reason I'm asking is just I've just noted the Russian business has done actually quite well over the past nine months. Thank you. Okay. Look, on the CCAA, the claimants expect to vote on the proposal tomorrow, actually. So we're going to have a vote tomorrow, and by the end of January, the court should take on board and make a final decision around the conclusion of the process. And as we stand today, we are very supportive of the proposal as it is. Our understanding in terms of allocation is based on future profits, that's the share of the different players in the market. And we have to see how this goes through those different phases that I have just mentioned. By February, we're going to have more clarity in terms of what is finally approved, and then we will try to explain at that moment that because we're going to have more clarity in the way that we are counting Canada and the way that we'll be dealing with that in terms of guidance for 2025, as I mentioned in my opening here. So this is about Canada. On Russia, we did have a closure of a return back in a period of two years' time under certain conditions. This goes all the way to September, I think, 2025. But look, at the end of the day, I just reinforced the point that the decision that we have made around leaving Russia is basically because we have no control in the business, all the sanctions in place, not just the U.S., but Europe and the U.K. We have done, in my view, the right decision. It's very early days to expect any major change from the current situation, at least in our opinion. Okay? Okay. Thank you very much. Thank you. From Barclays, we have Gaurav Jain with our next question. Please go ahead. Hi, morning. Tadeu, morning, Soraya. Morning. I have three questions. One is that I do appreciate that it's difficult to give any indication on 2025 right now due to the Canadian situation, but any thoughts on the revenue side because that will not be impacted? You have mentioned that it is a transition year. Should we expect 2%-3% kind of constant currency revenue growth next year? If you could comment on that. Okay. Look, at the end of the day, our guidance for 2025 will be easier, excluding Canada. That's why we always refer to guidance on an organic basis without major disruptions. You note that Canada, as it stands in terms of proposal, is a big impact on BAT numbers. We have disclosed, we have been disclosing the Canadian business for some time now. As it stands today, for the first five years, what is left is 15%. So you have heard a few. The guidance of 2025 will be probably provided in not considering this impact of Canada. With this in mind, when you look to 2024, we are more in the low end of the low single digit. When you think about 2025, we'll be progressing from that base. I mentioned US specifically will be lapping a year of investment mainly in the US. This will put us in a more favorable position in 2025. But I also said that we are deploying all these exciting innovations that we have in those three categories, which will require extra investments. That's why I always comment in terms of non-linearity. So we will be moving towards our mid-term algorithm in 2026. We are very confident about that. 2025 will be better than 2024, but not in between necessarily. That's what I mean about non-linear because of the deployments that we're making in order to prepare the best way possible BAT to deliver in our guidance for 2026. Okay? And Gaurav, I would just add that in terms of the deployment, because we have quite a lot of innovations which are second-half weighted or coming in at the back end of the year that just supports the non-linear comment that Tadeu. So we expect to see progress, but weighted by the investment and by the fact that the phasing is not necessarily towards the front end of the year, but more to the back end of the year for some of our innovations. Sure. Thank you. A second question is on Canada, and the way you have explained it earlier is that if we exclude all the cash and if we remove the EBITDA, then it is about a 0.3x increase in leverage. Now, there are a lot of investors who do wonder whether you can exceptionalize this Canadian penalty, that 85% penalty for the first five years, which will keep stepping down. This is not as if it is a perpetual penalty, even though it might last for 25 years. And if rating agencies agree to it, then your leverage might not go up by 0.3x. So how should we be thinking about it? No, look, the accounting side of Canada, we have to see exactly what gets approved and the discussions we have with the auditors. And we'll be having more clarity on that in February. And then we explain exactly what we'll be doing on the accounting side. In terms of the leverage, given the fact that we will have impact on the earnings, which is the 85% that you referred to, and the fact that the cash that is trapped will go, which has an implication on debt, this will translate into a pressure around 0.3-0.4 times leverage. So what we have said, and I confirm that, is that we are targeting to be within the range of 2-2.5 by the end of 2026 with the impact of Canada already factoring in. Because what we have today is a consolidation of this cash and the earnings of Canada in our numbers because we couldn't strip out Canada since 2019 when we entered into CCAA because we are under IFRS. Once these impacts materialize, which we expect now to happen in 2025, we will see the leverage going up by these amounts that I was referring to, but we expect to bring it down to the corridor of 2 to 2.5 by the end of 2026. That's very helpful. And my last question is on debt. So I was looking at the pound-dollar rate. It hasn't really moved versus December 31 or June 30th when the last balance sheet debt number was calculated. But you are highlighting that leverage is higher because of dollar appreciation. So I just wanted to understand that dynamic better. Yeah. Look, the dollar has moved around the pound as well. And we have 7% of our debt in dollar-denominated. So it's very sensitive to what happened on 31st of December. We said that the high end of the range is also due to the U.S. strengthening more recently. It's not just because of that. But we would like to give a kind of a better sense where we expect to land by the end of the year. And if anything, the strength of the dollar is just one pressure more that we are facing. Thank you so much. Thank you. And up next, we have Bea from UBS. Please go ahead. Good morning, everyone. Thanks for taking my question. The first one is on the U.S. We've recently seen an improvement in the MSA data over the last couple of months. And you also highlight a better second half performance from yourselves. I guess there are two things. There's the vapor enforcement and the macro impact. You're suggesting no vapor enforcement near term, but the macro could be improving. I guess if we look out to 2025 and the 5%-7% range you've mentioned, if we only have the macro improvement, do you think we can get to that range, or do you also need for the vapor enforcement to have a positive impact on cigarette volumes? And the second question is on Velo, which continues to perform exceptionally well, probably doesn't get sufficient spotlight. What markets and types of consumers are driving Velo's performance? And if you can shed some more light on the U.S., what you expect from the performance and the new innovations going into 2025, that'd be much appreciated. Thanks. Look, the market in the U.S. has been under pressure, as you rightly point out. The two major drivers, other than secular decline, are related to the macroeconomics and the illegal product. We are not an illegal vapor product. We are not really expecting a major meaningful impact in terms of enforcement in 2025 necessarily. The macroeconomics, although we are seeing some green shoots, this will more impact towards the very end of 2025 in our view. This will not because the major implication could come from a more lower interest rate environment, which, if anything, now people are the consensus that we'll carry on reducing, but maybe with the pace, not as fast as first thought. And also the real growth salary increase, which we always know that takes some time to catch up with levels of inflation. So we are not expecting a major change in the circumstance for 2025. We're going to talk more about that. We're going to have more data points in February. But as we stand today, we are not counting on a major U.S. market in FMCG improvement for delivering our numbers in 2025. I was referring to the fact that we will be lapping a year of investment in the U.S. So all these commercial initiatives that we have done in the U.S. that are now concluded and have an impact in terms of financial impact for our U.S. business and BAT overall will be lapped in 2024. So, per se, we are already expecting a better improvement and hence more supportive of the numbers in 2025. That's all I mean. I'm not really counting on a major improvement or meaningful improvement from the overall FMCG industry in the U.S. for 2025. So that's the first one. On Velo, on modern oral, well, first of all, your question is specific on U.S., no? Or it's overall? It's overall. Overall. I think, Yeah, o verall and the US, if you are able to shed more light. Yeah. Look, we are performing extremely well in the U.S. You saw the New York test markets pilot. We are reaching numbers very close to 20% market share. And we are seeing this rollout throughout the country. What we are also doing is trying to recover some of the price. So it's a combination of a share improvement plus supported by pricing that we are taking in Velo in the U.S., which is positive. And outside the U.S., we are seeing strong growth in Sweden. We are seeing strong growth in the U.K., in Norway, and even in markets where the business were really not performing ex.tremely well from the combustible point of view, like Austria, for example. All of a sudden became a strong market for us because of the success of Velo in those markets. The Nordics and, in general, U.K., Canada as well, Austria, these are the markets where we are seeing a lot of improvement in 2024, particularly for Velo and the U.S., obviously. I think the thing that's very encouraging about Velo is the progress. I think Tadeu alluded to it in previous calls, the progress in non-traditional modern oral markets such as U.K. and Poland, where we have seen very, very strong growth, or Switzerland. In AME, generally, modern oral has done exceptionally well. It's also a very high-margin business in AME. So the growth has been stellar this year, and we expect it to continue to grow. And in the US, as Tadeu said, we're seeing excellent results with Velo Plus with the start this year, and we'll start getting some indication as to the performance at the beginning of the year. So we're very, very optimistic about modern oral over the next year. Thanks, Soraya. Thanks, Tadeu. Thank you. And as a brief reminder, that's one for your questions today. And we now move on to a question from Damian McNeela of Deutsche Numis. Please go ahead. Good morning, everybody. Thank you for taking the questions. Two for me, please. Firstly, on the combustible performance, I think you sort of talked about in the first half, the volume is down 2%. Obviously, we know about the U.S., but France and Sudan were called out with sort of improving outlooks for Turkey and Mexico. I was just wondering whether there's any change in the sort of underlying dynamics of key markets through the second half. If you could comment on that, please. And then just a follow-up on the Velo Plus rollout. Would you be able to sort of give an indication of how quickly you expect to get to full national distribution in the U.S., please? Okay. On the combustible business, we are overall apart from the U.S. You understand the U.S., the dynamic in the U.S. is the second half will always be supportive because we are unwinding the inventories, wholesale inventories that impacted our first half. And so this is well briefed and known and expected. Outside the U.S., we still have a very supportive business coming from the likes of Turkey, and we have a lot coming from Brazil and the likes of Nigeria. So we have a number of, and Japan as well, we are doing better. So we have a very solid environment from combustible outside the U.S., and has been the case in the first half, and that's carrying on in the second half of the year, and that's the reason why AME, APMEA, we are quoting value and volume share growth also in the second half of the year. On the Velo Plus, our first launch that is happening now is addressing number. We had in mind something close to 75,000 outlets, and we are reaching now close to 80,000 outlets by the end of the year. And we expect in the second phase that will be in the Q1 of next year to reach 110,000 outlets. So it's a very reasonable presence, and we'll be scaling up from there quickly. Okay? Yeah. Very clear. Thank you. Thank you. Thank you. It appears there are currently no further questions in the queue. So I'd like to hand the call back over to you, Tadeu, for any additional or closing remarks. Okay. Thank you for joining us today and for your questions. I would like to leave you with a few final comments. In combustibles, we have increased the resilience of our portfolio in the U.S., where our commercial plans continue to gain traction. We have also continued to deliver value and volume share gains in AME and APMEA yet. Together with robust pricing across all three regions, this has driven improved combustibles organic volume and financial performance in the second half. Our transformation is well underway. We are making good progress, driving new category profitability through our quality growth focus, delivering high returns on our smart reinvestments, and I'm confident that our actions are working, that by building on our values and strong foundations of integrity, collaboration, and inclusivity, we will drive the culture we need to successfully transform BAT and deliver long-term stakeholder value. I look forward to updating you further at our full year results on February the 13th. Thank you.