AGM Statement

British American Tobacco PLC
30 April 2008

                       Speech by Jan du Plessis, Chairman
         at the British American Tobacco p.l.c. Annual General Meeting
                             held on 30 April 2008

I am delighted to report that, in 2007, your company delivered another
impressive set of results.  Revenue and profit were up, our global drive brands
again achieved strong growth, we have made excellent savings from our initial
five-year productivity drive and we have delivered earnings per share growth
above our medium to long term target.

I will today outline why I believe that our latest performance is not just a run
of good fortune.  I believe it demonstrates the strength of a consistent and
responsibly implemented strategy that should reassure shareholders in these
turbulent times.

First, however, it has been a year of changes to your Board, and I would like to
pay tribute to three outstanding Directors who have reached retirement.

Ken Clarke is your longest serving Director, who has been with us since we
listed on the London Stock Exchange as a free-standing tobacco company 10 years
ago.  I am sure Ken is as well known to you as our Deputy Chairman and Senior
Independent Director as he is to millions of people as the popular, jazz-loving
former Government Minister.  He is also widely respected by his colleagues
across all parties in the House of Commons.  I would particularly like to thank
Ken for his work as the first Chairman of our CSR Committee and as a consistent
champion of our commitment to corporate responsibility.

Going forward, his role will be split three ways.  Thony Ruys will be Chairman
of the Remuneration Committee, Karen de Segundo will chair the CSR Committee and
the role of Senior Independent Director will pass to Sir Nick Scheele.

Paul Rayner has made an exceptional contribution as Finance Director since 2002.
  He joined Rothmans in 1991 as Finance Director of the Australian group and,
after our merger with Rothmans in 1999, became Chief Operating Officer of the
merged business across Australasia.  Paul's contribution to financial discipline
in the Group - driving operating efficiencies and improved cash flows - has made
a huge contribution to the high regard in which we are held today within the
investment community.  He will leave a considerable gap by returning to
Australia for family reasons and our sincere good wishes go with him.  His
successor, Ben Stevens, brings in-depth knowledge of our business to the role,
following seven years on the Management Board, most recently as Regional
Director Europe.

Antonio Monteiro De Castro, who stood down in December, has given us four
outstandingly successful years as Chief Operating Officer.  He joined your Board
six years ago, initially as Regional Director, Latin America and the Caribbean.
 His 18-year career with the Group also included being President of Souza Cruz,
our large Brazilian subsidiary.  Antonio leaves many friends in the business
worldwide and has made a tremendous contribution through his wide business
knowledge and experience.  He is quite an act to follow, but I am confident that
he is ably succeeded by Nicandro Durante, whose 27-year career with us has also
included being President of Souza Cruz and serving on the Management Board as
Regional Director, Africa and the Middle East.

On your behalf, I would like to thank Ken, Paul and - in his absence - Antonio,
for their tremendous service over so many years.

We also welcome two Non-Executive Directors who joined your Board in October.
Christine Morin-Postel has held several senior executive positions, including
Chief Executive of Societe Generale de Belgique, and has served on the Executive
Committee of the Suez Group in France.  She is also a Non-Executive Director of
3i Group and Royal Dutch Shell.

Karen de Segundo joined us after a long career at Shell, which included being
the first woman to run a Shell country business, in Uruguay, and she was,
amongst other roles, Chief Executive, Renewables and President, Hydrogen, of
Shell International.  Her Non-Executive Directorships include Lonmin and Ahold
and she is a member of General Electric's Eco Advisory Board.

I appreciate the insights that these two highly experienced Directors are
already bringing to your Board's deliberations.

2007 performance

Your company's performance in 2007 again demonstrates consistent application of
our strategy - based on growth, productivity, responsibility and developing the
business as a winning organisation.

Revenue was up 3 per cent and each region delivered profit growth, raising
overall operating profit, before exceptionals, by 11 per cent to £2.9 billion
and adjusted diluted earnings per share by 11 per cent to 108.5 pence.  Although
overall volumes were down slightly, volume of our premium brands grew, with our
global drive brands, Dunhill, Kent, Lucky Strike and Pall Mall, collectively
growing by 10 per cent.

Both Kent and Pall Mall broke through the 50 billion volume mark.  Kent again
raced ahead, growing by 19 per cent to become our best-seller at 54 billion,
while Pall Mall rose 10 per cent to 51 billion.  Dunhill was up 6 per cent at 35
billion and Lucky Strike achieved a second year of growth to reach 23 billion.
Our global drive brands have doubled their volume since 1999 and now account for
24 per cent of our volume worldwide.

While organic growth is a key part of our growth strategy, inorganic growth
through mergers and acquisitions also plays a part.  However, we have often
stressed that we will not buy just anything at any price simply to boost volume.
  We are willing to wait patiently for opportunities that are financially
intelligent and strategically attractive, with the right fit to our strategy,
geography and portfolio.

Our last major acquisition was in 2003, when we won the bidding for ETI, the
Italian state-owned tobacco business, giving us number two position in the
European Union's second largest tobacco market.  A five year wait for similar
opportunities finally bore fruit in February, when we announced two significant
transactions at sensible prices that offer prospects for attractive financial
returns.

We have agreed to acquire the cigarette and certain snus and roll-your-own
businesses of Skandinavisk Tobakskompagni, in exchange for our current 32 per
cent stake in the company and £1.1 billion in cash.  By turning our shareholding
in a diversified group into full control of a very profitable tobacco business,
we believe we will greatly strengthen our position in the Nordic countries.
Subject, of course, to regulatory approvals, the deal brings us cigarette
volumes of 30 billion across Poland, Denmark, Norway and Sweden, the premium
brand Prince and roll-your-own tobacco sales across Europe.  It also brings into
the Group the smokeless snus business, Fiedler & Lundgren, who already
manufacture snus for us and have an annual volume of 16 million tins.

We also made the winning bid of £860 million when the Turkish Government
auctioned the cigarette assets of Tekel, its state tobacco business.  This will
transform our position in the world's eighth largest cigarette market, boosting
our market share in Turkey five-fold to 36 per cent and giving us a stronger
platform to grow our international brands.

I am confident that both transactions represent well-placed investment of
shareholders' funds and are an excellent fit to our goal of creating long term
shareholder value.

Speaking of patience and long term goals, you may like to know that our archives
record a Board discussion in 1932 about a proposal for the British-American
Tobacco Company Limited - and I quote from the Minutes - to 'undertake the
management of the Turkish Tobacco Monopoly... at an estimated annual expense of
£10,000'.  It was thought this might be 'a satisfactory arrangement'.  I think
the modern arrangement is better - and well worth a wait of 76 years - albeit
that things have become rather more expensive.

Productivity

Last year we completed our initial five-year productivity programme, focused on
reducing costs and complexity and making savings in the supply chain, which
includes streamlining our manufacturing footprint.  During the five years, we
have removed or relocated over 400 billion sticks of manufacturing capacity,
equivalent to over half our annual production volume.  For overheads and
indirects, our initial target was to save £200 million, but as we continued to
make inroads we doubled this target to £400 million.  We have actually saved
£455 million in overheads and indirects and over £550 million in supply chain
costs.

To have saved over a billion pounds from the annual costs of running your
business, compared to five years ago, is a major achievement that shows how well
the Group has driven the productivity element of our strategy.  But we are not
ticking the box and saying 'job done'.  We have now set a new target to save a
further £800 million over the next five years.

Productivity savings of course contribute to growth in profit, offering
immediate benefit to shareholders.  But an important point is that these savings
also reflect our focus on the long term.  They release funds to reinvest in the
business for the future.  This enables us to drive the performance of our brands
through innovations that our consumers value, to continue investing in research
towards reduced harm products, to streamline our distribution as a world-class
supplier to the trade, to run programmes to reduce our environmental impacts and
to invest in developing our people.

I believe that our most recent performance is not only good news for
shareholders today, but is the result of consistent application of strategies
aimed at shaping our business for the long term.

Sustainability

Let me offer some examples that I believe illustrate the actions of a business
that focuses on the quality of its operations and takes a long term view of
sustainability.

Last year we recruited some 350 graduates globally as management trainees and
over a thousand managers attended our international management development
programmes.  There is, of course, no immediately measurable return from
investing in our people.  But I think you see something of the outcome in our
most recent employee opinion survey, where 90 per cent of our people say they
are proud to be associated with British American Tobacco and 92 per cent say
they understand how their individual roles contribute to achievement of their
company's strategy.

It is notable that we have grown our global drive brands by 62 per cent over the
last five years, while of course observing not only the laws on tobacco
marketing, but also our own strict International Marketing Standards, which go
beyond the law in several countries.  Looking to the future, we updated our
Standards last year to include, for example, more procedures for adult
verification and responsible use of newer channels of consumer communication.
Our companies have until the end of June this year to be applying the updated
Standards in full.

Reducing our environmental impacts is by definition a long term task, requiring
steady commitment to continuous improvement.  I am proud to say that we have
worked for many years to monitor and control our use of energy and water, our
carbon dioxide and our waste.  We are one of the few companies to have been
included in Business in the Community's Environment Index since it began, and
our most recent ranking places us in the highest performance band with several
scores of 100 per cent, including for environmental audit and stewardship.  As
you will see on our website, www.bat.com, we continue to set clear targets for
reducing our impacts over time, including halving our carbon dioxide equivalent
by 2030.

A feature of these uncertain economic times is the rising cost of raw materials
and commodities, including agricultural commodities, with food prices, for
example, rising steeply around the world.  With tobacco leaf as our major raw
material, you may wonder how we are coping with these pressures.  Leaf prices
are certainly rising on the world market, not least as the dollar falls against
the currencies of several leaf-growing countries, pushing up the dollar price of
leaf that's traded internationally.

We are of course not immune from this.  However, our direct relationships with
some 200,000 farmers in 19 countries give us a distinct competitive advantage.
Two thirds of our leaf is bought through these direct local contracts, making
our purchasing very well-balanced between leaf bought in local currencies and
leaf bought for dollars on the world market.  We achieve security of supply and
predictability, while the farmers benefit from fair and guaranteed local prices
and the full agricultural support service that we provide.  We have also moved
to managing our leaf inventory on a fully integrated, global basis, further
improving our ability to forecast our needs, to be nimble in matching demand and
supply, and to manage costs by freeing up large sums of working capital.

We also continue with our work towards products that may help to reduce
tobacco-related harm to health - a major part of our responsibility strategy.
Last year, we extended to Canada our test marketing of the smokeless tobacco
product snus.  A growing number of health experts, such as the UK's Royal
College of Physicians, recognise certain smokeless tobacco products as much less
harmful than cigarettes.  We continue our efforts to gain wider regulatory and
consumer acceptance of snus.

We are also working towards reduced harm products that are smoked, although this
poses vast scientific challenges.  Of course, we cannot do this on our own and
constructive co-operation with other scientists is important.  To help us build
stronger links with the scientific community and to increase transparency about
our own work, we have this week launched a new website, www.bat-science.com,
offering an open door to our scientific papers and research programmes.  It is
another step on a journey that may be long, but to which we are committed.

Last year we were again selected, for the sixth year running, as the only
tobacco business in the Dow Jones Sustainability Indexes, increasing our overall
score to 83 per cent.  It is worth noting that the rigorous annual assessment
for these indices does not only focus on social and environmental performance,
but on how well a business is integrating strategies for sustainability overall.
  It includes important areas such as corporate governance and risk management,
where our scores are high.

Managing our balance sheet

Last but certainly not least, we are committed to careful management of our
balance sheet.  This has enabled us to serve our shareholders well with cash
returns.  Over the last five years, we have returned £7.6 billion in cash to
shareholders, £4.7 billion of this in dividends and the rest through the share
buy-back programme - a tribute to the strength of your business.

In line with our determination to maintain our credit rating in tight credit
markets, and in recognition of the financing requirements arising from the
Skandinavisk Tobakskompagni and Tekel acquisitions, we have reduced the share
buy-back programme for the time being from £750 million to £400 million a year.
 Since we announced these acquisitions, we have successfully completed two new
bond issues, raising almost £1.5 billion, an excellent outcome given current
market conditions.

As you know, we are phasing in an increase in the proportion of sustainable net
earnings paid out in dividends, from at least 50 per cent to 65 per cent for
2008.  You will be asked to vote today on a final dividend of 47.6 pence,
raising this year's total dividend by 18 per cent to 66.2 pence per share.

You have seen an excellent total shareholder return over recent years.  If you
had put £100 into British American Tobacco over the five years to the end of
2007, and had held it through all the stock market ups and downs, the
combination of share price growth and steadily rising dividends would have
increased the value of your £100 investment by £294, compared to growth of £89
for the same sum invested in a FTSE 100 index tracker.

Steady course

In stormy times, there is no room for complacency on the part of any company.
However, we have been in business for 106 years and have learned a great deal
about withstanding rough conditions.  While we cannot do much to influence the
weather, you can be confident that we will continue to place a sustained focus
on steering a steady course for many years to come.

Let me end by extending my sincere thanks to all our employees worldwide, and
particularly to the executive management team, who are vital to helping us steer
our future course and whose loyalty, commitment and energy have put your
business in such good shape today.



Enquiries

British American Tobacco Press Office
David Betteridge / Kate Matrunola / Cat Armstrong
+ (44) 0 20 7845 2888 (24 hours)


Investor Relations
Ralph Edmondson / Sharon Woodcock
[phone] / 1519




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