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Update on the Global Integration Programme

Update on the Global Integration Programme. Unlocking the potential of our global scale July 2009. For internal communication only. Subject to any applicable information & consultation requirements. Background: recap on what the GIP is.

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Update on the Global Integration Programme

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  1. Update on the Global Integration Programme Unlocking the potential of our global scale July 2009 For internal communication only. Subject to any applicable information & consultation requirements.

  2. Background: recap on what the GIP is • We are redesigning BAT for our future to unlock the potential of our global scale (simpler, faster, smarter) • If we get the design right, the costs will follow from economies of scale • Smart design (figuring out what gets done where around the Group) will help us make optimal use of our immense global talent and resources • We will start with the back office (getting the basics right and doing them really well to eliminate duplication of time, money, effort) • What will and wont change? Our Group strategy will not change – the speed and focus of our execution will • Where will the change fall? Global means global. We are changing the way we work – everywhere Global integration is about doing the right work in the right place at the right cost (not low-cost) For internal communication only. Subject to any applicable information & consultation requirements.

  3. Progress since March • Our encouraging half-year results do not change the imperative for the GIP, because our ambition is long term (redesigning BAT for our future) • We have developed our thinking since March and have greater clarity around what it will take to align ourselves globally i.e. what gets done where around the Group to unlock the potential of our global scale • We are accelerating some short-term efficiencies this year and will communicate these end Q3 / early Q4 • Still much more to do to shape our structural design plans for long-term effectiveness (2010 and beyond) For internal communication only. Subject to any applicable information & consultation requirements.

  4. Work in progress • There are huge benefits in simplifying and standardising some of our core common processes. Work is progressing on clarifying ownership and accountability for the 242 or so processes we have identified around the Group. • To help our markets to focus their time and energy on their customers, consumers and stakeholders, global functions are working with the regions to identify what common tasks and activities can be sensibly aggregated above-market (in Shared Service Centres for example). • To ensure our markets have the capabilities they need to win in our national battlefields, global functions are also working with the regions to agree how to optimise global talent, expertise and knowledge. • We now have a much better understanding of what it means to have world class IT systems – a key enabler of full global integration. Aligned execution focused on winning in our national battlefields For internal communication only. Subject to any applicable information & consultation requirements.

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