Skeptics worry that investors may misjudge the balance of risk and reward in the fast-growing private credit sector. Yet there has been a steady drip of negative headlines about the space. Last year’s performance was solid overall, with the Cliffwater Direct Lending Index 2 clocking a total return of 12% in 2023. J.P. Morgan Asset Management’s 2024 Long-Term Capital Market Assumptions (LTCMAs) suggested direct lending would likely deliver annual total returns in excess of 8.5% over the next decade we continue to think performance can be higher in the coming year. We were especially enthusiastic about a subcategory of private credit, direct lending. These are loans extended by an asset manager (rather than a bank) to corporate borrowers. We have unique global marketing and distribution reach, a track record of R&D strength and innovation, as well as decades worth of consumer insights and brand building expertise.In September, we laid out a high conviction view on private credit. We made great progress on our strategic targets in 2023.Īs part of our growth strategy, New Category revenue grew 15% and we now have a total of 23.9 million consumers 1 of our Non-Combustible products. Strong foundations for our evolved strategy

And for our shareholders, we want to deliver superior and sustainable returns.For our employees, we want to create a dynamic, inspiring and purposeful place for them to work.For our suppliers and customers, we want to raise standards, drive sustainable practices, create shared value for everyone across our value chain.For society, we aim to reduce the health impacts of our business by Building a Smokeless World while working to reduce our environmental impacts.For our consumers, we want to actively encourage them to migrate from cigarettes to smokeless alternatives by offering a range of enjoyable and responsibly marketed smokeless products in tobacco, nicotine and beyond.As a result, leading in sustainability and integrity matters. Acting responsiblyĪs a leading multinational business, we understand our global impact, the importance of high standards of integrity and our evolving societal responsibilities. And we are excited about what the future has in store as we continue to transform our business to make Building a Smokeless World a reality.

We are encouraged by and proud of the progress we are making. Our approach will deliver A Better Tomorrow™ for our consumers who will have a range of enjoyable smokeless alternatives for society through Building a Smokeless World and reducing the overall health and environmental impacts of our business for our employees by creating a dynamic and purposeful place to work and for our shareholders by delivering sustainable superior returns.

Our ambition is to continue expanding our portfolio by building on our deep cross category consumer insights and by developing products to satisfy diverse consumer preferences and ultimately distribute them to markets around the world. As preferences and attitudes change in an evolving industry, understanding our consumers is essential to both successful portfolio and business growth. For those that would otherwise continue to smoke, offering them a choice of enjoyable and innovative smokeless products is key. The best choice any adult smoker can make will always be quitting combustible tobacco products completely. These products offer alternatives to smokers who would otherwise continue to smoke and include Vapour products, Heated Products and Modern Oral nicotine pouches. While our heritage is in traditional combustible tobacco products, we have put a sharp focus on our broad portfolio of smokeless products. Our vision is to Build a Smokeless World and our aim is to become a predominantly smokeless business by 2035. Our strategy is about progressively transforming our portfolio and actively migrating smokers from cigarettes to smokeless alternatives.

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