British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Jefferies Virtual Reduced Risk Seminar 2024
32 slides from British American Tobacco P.l.c's conference presentation, May 7, 2024
Slide 1: Tobacco Harm Reduction in Action
Tobacco Harm Reduction in Action Dr. Elaine Round, Group Head of Life Sciences Jefferies Virtual Reduced Risk Seminar 7th May 2024
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains certain forward-looking statements, including “forward-looking” statements made within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such a
Slide 3: We are BAT…
We are BAT… 3
Slide 4: Our global science and innovation ecosystem
Our global science and Innovation and innovation ecosystem R&D Centre Southampton Innovation Centre Trieste PDC CoE* Innovation and Moncton, NB R&D Centre Shenzhen R&D Centre Product Centre Owensboro Kuala Lumpur R&D Centre R&D Centre Product Centre BAT Centres Winston-Salem Porto Alegre Malang BAT
Slide 5: Expertise: a quantum leap in our capabilities
A quantum leap in our capabilities driven by New Category Product transformation Expertise Pre-New Category Products Time 5
Slide 6: Tobacco Harm Reduction (THR) in Action: Overview
1 2 3 4 5 Tobacco Harm Reduction (THR) in Action: Overview 1 2 3 4 5 BAT’s Sweden: Delivering Challenging Accelerating vision for The THR THR globally misbeliefs towards A Better vanguard Building a TomorrowTM Smokeless World 6
Slide 7: BAT's vision for A Better Tomorrow
1 2 3 4 5 BAT’s vision for A Better TomorrowTM Our Purpose A Better Tomorrow™ A Better Our Vision Tomorrow™ Building a Smokeless World Our Mission Building a Switch Smokeless World to Better To encourage smokers to Switch to Better Committed to 50% Smokeless^ revenue ambition by 2035 ^ Smokeless - r
Slide 8: Imagine a world with consumer inspired and profitable alternative products
1 2 3 4 5 Imagine a world with consumer inspired and profitable alternative tobacco and nicotine products… that had substantially reduced Public Health impact… and delivered value for all stakeholders… it’s closer than you think 8
Slide 9: Yes…it's called the Swedish Experience
1 2 3 4 5 Yes…it’s called the Swedish Experience Consumer Commercial THR Evidence BAT 5.6% smoking rate 70% smokeless revenue [EU 2040 Cancer plan: 5% = No smoking] Revenue / mille* 1.5x Prevalence of nicotine use: Sweden = EU average GM / mille* 1.3x Consumers Shareholders Tobacco Control C
Slide 10: If the mortality rates of Sweden were applied across the EU
1 2 3 4 5 If the mortality rates of Sweden could be applied across the EU, 3.4m lives would be saved over the next 10 years* * www.smokefreesweden.org (Report: SAVING LIVES LIKE SWEDEN 02082023 WEB & Report: The Swedish Experience EN) 10
Slide 11: THR journey is already underway
1 2 3 4 5 THR journey is already underway 01 Concept 02 Process 03 Outcome M&M Time THR allows for the continued use Desired Outcome: of tobacco (but in lower risk form Smokers switch fully to Reduction in national / to cigarettes) that results in scientifically substantiated global levels of Morbid
Slide 12: There are two parts to the THR equation
1 2 3 4 5 There are two parts to the THR equation = x Scientifically substantiated Smokers completely THR RRPs*† Switching M&M Time 01 02 * Reduced Risk Products. Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive
Slide 13: THR Equation Part 1: Our multi-category portfolio of RRPs
1 2 3 4 5 THR Equation Part 1: Our multi-category portfolio of RRPs *† HEATED ORAL VAPOUR PRODUCTS NICOTINE Heats rather than Aerosolises Pouches containing burns substrate an e-liquid nicotine and flavour 2023 Revenue** £1.0bn 2023 Revenue** £1.8bn 2023 Revenue** £0.5bn * Based on the weight of evi
Slide 14: Responsibly stewarding our products to market
1 2 3 4 5 Responsibly stewarding our products to market Duty of Care Risks Identified Reduced Impacts Device Material Reviews Organ Toxicity Consumer Health Risks Liquid Ingredient Reviews Carcinogens Non-Compliant Products Device/Liquid Compatibility Respiratory Sensitisers Product Recalls & Fines
Slide 15: Scientific Assessment of our New Category Products
1 2 3 4 5 Scientific Assessment of our New Category Products Tobacco Harm Reduction Less exposure via RRPs *† leads to less Weight of importance in demonstrating RRP status* disease/events in the population Reduced Risk Exposure Reducing the Emissions health impact of our business Time Our New Categ
Slide 16: THR endorsed by U.S. NASEM
1 2 3 4 5 THR endorsed by U.S. NASEM* NASEM propose that in scientific assessment, RRPs should have the same biological outcomes as quitting 2001 2007 2012 16 * National Academies of Sciences, Engineering and Medicine
Slide 17: BAT Scientific Assessment Example
1 2 3 4 5 BAT Scientific Assessment Example: Emissions Exposure Risk Toxicants Toxicity Av. % Change vs. Smokers Growing Evidence to support Vapour as a Reduced Risk Product 0 % change: vs. Smokers -20 Favourable changes in biomarkers -40 relevant to disease -60 -80 UK OHID* deem Vapour 95% less at
Slide 18: Our extensive scientific substantiation supports our products as reduced risk
1 2 3 4 5 Our extensive scientific substantiation supports our products as reduced risk*† Heated Products Vapour Oral Nicotine HPHCs -90 to -95% HPHCs -99% HPHCs > -99% Vs. FMC Vs. FMC Vs. FMC Emissions Toxicity -94% Toxicity > -97 % Toxicity > -99% Vs. FMC Vs. FMC Vs. FMC vs. cigarettes vs. cigaret
Slide 19: THR Equation Part 2: Smoker migration
1 2 3 4 5 THR Equation Part 2: Smoker migration 24 markets where smokeless products >30% of BAT revenue NOR D REP AUS ITA ICE SLO KAZ CZE CI UK LIT GRE SLK UAE LAT DEN FRA GUA POR POL JAP EST SWE FIN >30% >40% >50% >70% * Revenue from smokeless products as a % of total revenue in each respective mar
Slide 20: Translating scientific data for stakeholder engagement
1 2 3 4 5 Translating scientific data for stakeholder engagement Conference 248 Participation Regulatory Publications on New compliance Category products to date first publication Multi-channel in 1989 stakeholder engagement Science facilitates multi-disciplinary stakeholder engagement 20
Slide 21: Commonly held misbeliefs on nicotine and THR
1 2 3 4 5 Commonly held misbeliefs on nicotine and THR 1 2 3 4 Nicotine There is no THR cannot All industry causes stakeholder be part of the participants are smoking recognition global public intentionally related for THR health strategy creating youth disease on tobacco appealing products 21
Slide 22: Misbelief 1: Nicotine causes smoking related disease
1 2 3 4 5 Misbelief 1: Nicotine causes smoking related disease Fact 1: It’s the harmful chemicals created from combustion of tobacco that is the primary cause of smoking related disease, NOT nicotine “While nicotine is the addictive substance in cigarettes, most of the harm from smoking comes from t
Slide 23: Misbelief 2: There is no stakeholder recognition for THR
1 2 3 4 5 Misbelief 2: There is no stakeholder recognition for THR Fact 2: Numerous scientific and public health authorities agree that non- combustible products are lower risk than smoking…. but are not risk free “Vaping is not completely harmless. We only recommend it for adult smokers, to support
Slide 24: Misbelief 3: Tobacco Control and THR cannot be part of public health strategy
1 2 3 4 5 Misbelief 3: Tobacco Control and THR cannot be part of the global public health strategy on tobacco Fact 3: Tobacco Control and THR both have a role to play in the global public health strategy on tobacco 5.9 Since the evolution and adoption of THR by smokers, cigarette 4.7 volumes have de
Slide 25: Misbelief 4: All industry participants create youth appealing products
1 2 3 4 5 Misbelief 4: All industry participants are intentionally creating youth appealing products Fact 4: “Industry” comprises both responsible and irresponsible participants, where responsible companies focus on switching current adult smokers* Corporate Naming Retail Flavours Packaging Product
Slide 26: Accelerating towards a Smokeless World
1 2 3 4 5 Accelerating towards a Smokeless World 1 2 3 4 Adult smokers Level the Include Scientific should have regulatory THR & TC as assessment access to RRPs playing field part of the moves from globally public health individual risk strategy on to public tobacco health outcomes 26
Slide 27: Adult smokers around the globe should have access to RRPs
1 2 3 4 5 1 Adult smokers around the globe should have access to RRPs*† Of the 10 most populous countries where BAT trades, only 60% can access RRPs** Population Country HP Vapour MO (Billions) Proposed Action: India 1.43 X X X Regulators to consider opening US 0.34 ✔ ✔ ✔ access to the 3 non-combust
Slide 28: Level the regulatory playing field
1 2 3 4 5 2 Level the regulatory playing field The regulatory playing field should enable a competitive marketplace where safety standards are enforced through enforced regulation Product Manufacturing Post-market Enforcement safety standards and surveillance standards quality 28
Slide 29: Include Tobacco Control & THR as part of public health strategy
1 2 3 4 5 3 Include Tobacco Control & Tobacco Harm Reduction as part of the public health strategy on tobacco Dialogue on 5 key focus areas that can help THR move forward 1. How much more evidence do we need on THR above Swedish mortality and morbidity rates? 2. How do we minimise underage access an
Slide 30: Scientific assessment moves from individual risk to public health outcomes
1 2 3 4 5 4 Scientific assessment moves from individual risk to public health outcomes In the second decade of our transformation (2024-2034) we expect to see beneficial impacts of smokeless products at a population level in countries where THR has been embraced Individual Risk Public Health Outcome
Slide 31: Tobacco Harm Reduction: Our Key Messages
Tobacco Harm Reduction: Our Key Messages 1 2 3 4 5 Accelerating BAT’s vision for Sweden: Delivering Challenging towards Building a A Better TomorrowTM The THR vanguard THR globally misbeliefs Smokeless World KEY MESSAGE: KEY MESSAGE: KEY MESSAGE: KEY MESSAGE: KEY MESSAGE: Our core purpose We aspire
Slide 32: BAT's vision for A Better Tomorrow
BAT’s vision for A Better TomorrowTM Our Purpose A Better Tomorrow™ A Better Our Vision Tomorrow™ Building a Smokeless World Our Mission Building a Switch Smokeless World to Better To encourage smokers to Switch to Better Committed to 50% Smokeless^ revenue ambition by 2035 ^ Smokeless - refers to n
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