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    British American Tobacco plc (BTI)

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    Business Description

    British American Tobacco p.l.c. (BTI) is a leading global consumer goods company specializing in tobacco and nicotine products. The company operates across multiple regions, offering a diverse portfolio of products that cater to adult consumers' preferences. BTI's offerings include traditional combustible tobacco products, innovative smokeless nicotine products, and oral tobacco products, supported by a globally integrated supply chain.

    1. Combustibles - Produces and sells a wide range of traditional tobacco products, including cigarettes and cigars, catering to various consumer preferences from value-for-money to premium segments.
    2. New Categories - Develops and markets innovative smokeless nicotine products, including:
      • Vapour Products - Offers e-cigarettes and other vaporized nicotine delivery systems.
      • Heated Products (HPs) - Provides devices that heat tobacco instead of burning it.
      • Modern Oral Products - Includes nicotine pouches designed for oral use without combustion.
    3. Traditional Oral - Offers products like snus and snuff, catering to consumers who prefer traditional oral tobacco options.
    4. Other - Includes additional products and services that complement the company's core offerings.

    Questions to Ask Management

    1. Despite the U.S. combustible industry volume declining by around 10% in 2022, your combustible volume declined by 15.5%, significantly underperforming the industry; what specific steps are you taking to address this gap and regain market share?

    2. With the planned exit from approximately 30 smaller markets and the reduction of regions from four to three in your new operating model, can you elaborate on the criteria for these market exits and how this strategic shift will enhance your profitability and growth potential?

    3. Given the intensified price competition and slowing growth in the THP category, particularly in key markets like Japan and Europe, how do you plan to sustain margins and drive growth in this segment amidst these challenges?

    4. Considering the macroeconomic pressures impacting U.S. consumers, such as declining disposable incomes and high inflation, how are you adjusting your strategies in pricing and product offerings to navigate these challenges in 2023, and what are your expectations for market recovery? , ,

    5. The phasing out of your businesses in Russia and Belarus resulted in significant non-cash impairments; how will this impact your financial targets, particularly regarding your leverage goals and investment in New Categories, and what measures are you implementing to mitigate any adverse effects? ,