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British American Tobacco Russia announced its performance results for Q3 2007

     In Q3 2007, BAT Russia achieved outstanding results in all the four strategic areas: growth, productivity, responsibility and winning organization.


GROWTH

     By the end of Q3 2007, the Company’s market share reached 22.44% by volume and 24.31% by value. Thus, compared to September 2006, the volume share grew by 0.81percentage points and value share by 0.66 pp.
     BAT Russia brands continue to demonstrate successful performance in their respective segments.
     In September 2007, DUNHILL market share in the premium segment was 1.3% which is 0.6 pp up versus SPLY. In August 2007 BAT Russia launched the limited edition series in commemoration of the 100th anniversary of the House of DUNHILL, DUNHILL My Mixture. Three tobacco recipes from the House of DUNHILL Book of Recipes in London were selected to produce the three variants of DUNHILL My Mixture.
     In Q3 2007, Kent kept the number one position in the premium segment, both in volume and value. Share of Kent in this segment in September 2007 was 24.3%, up 1.5 pp versus September 2006. Kent’s value share in the premium segment was 24.3% (up 1.7 pp versus September 2006).
     Another very successful brand is Vogue with a premium segment share of 8% and super slims segment share of 15.8%. At the end of August we upgraded the pack design for Vogue main range making it more contemporary and refined.
     As of September 2007 Pall Mall maintained its strong position in the medium segment. Share of the brand in this segment is 9.4%. Pall Mall is presented in both King Size and the super slims formats. And recently we launched a second aromatic version of this brand – Pall Mall Super Slims Tropic Twist.
     Yava Gold is keeping volume leadership in the VFM segment. Its segment share in September 2007 was 27.3%, having grown versus September 2006 by 1.7 pp.

PRODUCTIVITY

     In Q3 2007, BAT Russia announced the completion of construction works at BAT-SPb in St Petersburg as part of the investments programme to expand production facilities in Russia.
     There is a $110 million programme of investment in the modernisation of the BAT-SPb factory over 2005-2009. This investment will go towards the construction and expansion of the factory’s office and production buildings, the upgrading and purchasing of cigarette and filter equipment as well as equipment for the PMD.
     Towards the end of September 2007 all construction works at BAT-SPb were completed: a new production building was erected to house cigarette and filter lines and the factory’s office building was expanded. Factory space at BAT-SPb increased from 44.3 thousand square meters to 52.5 thousand square meters.
     In 2007 the BAT SPb factory annual capacity will reach 37 billion cigarettes. In 2005, prior to the implementation of the investment programme, the factory was producing 20 billion cigarettes annually.

RESPONSIBILITY

     In early October, BAT Russia published its fourth Social Report - for 2006-2007. The Company had conducted dialogues with stakeholders in Moscow, St Petersburg and Saratov. Representatives of the government, public organisations, health bodies and educational establishments, business partners and residents of apartment building adjacent to the factory as well as consumers of tobacco products from Moscow, Novosibirsk and Perm took part in the dialogues. As a result BAT Russia assumed 27 commitments which were included into the Social Report and which the Company will meet by the end of 2008.
     Also, the results of the Social Projects Initiative were announced, and the winners of the Time to Help! contest initiated by BAT Russia and run with the administrative support of the Centre for Development of NGOs were named. The contest was launched in 2006 and is aimed at finding practical solutions for physically disabled people with the help of local communities and volunteers.
     In September, supported by BAT Russia, the Krasnodar Region Art Museum opened the Seasons exhibition from the collection of the State Russian Museum. The exhibition in Krasnodar is held within a long-term national programme Russia launched by the Russian Museum in 2003. The programme is supported by BAT Russia and includes a number of travelling exhibitions from the State Russian Museum’s collection held across the whole of Russia. As of today, the exhibitions have visited more than 10 Russian cities.

WINNING ORGANISATION


     BAT Russia is fully committed to the professional development of its employees. In Q3 2007, five BAT Russia HR Managers completed the first year of the Human Resources Management programme of the Nottingham Business School.
     In September 2007 BAT Russia participated in the Careers in Russia and CIS summit in London which was an opportunity for BAT Russia to provide information about the Company as potential employer for Russians abroad, planning to return to the country.
     «In the last few years British American Tobacco Russia has been focusing on international premium innovative brand offers. Our efforts in this area are definitely paying off. We were always clear about our intentions and ability to bring new original brands to the Russian market and we have delivered. Our results for Q3 reinforce the success of our activities», comments BAT Russia General Manager Kingsley Wheaton on Q3 performance results.