Slides
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Hiromasa Furukawa JT Group Chief Financial Officer JT Group 2025 Third-Quarter Results *Please be reminded that the figures shown on these slides may differ from those shown in the financial statements as they are intended to facilitate the reader’s understanding of individual businesses. *For details of each term, please refer to annotations on slide 17.
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2© Copyright JT 2025 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief, or current and future expectations of our management with respect to our business, financial condition and results of operations. In some cases, you can identify forward-looking statements by terms such as “may”, “will”, “should”, “would”, “expect”, “intend”, “project”, “plan”, “aim”, “seek”, “target”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or the negative of these terms or other similar terminology. These statements are not guarantees of future performance and are subject to various risks and uncertainties. Actual results, performance or achievements, or those of the industries in which we operate, may differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. In addition, these forward-looking statements are necessarily dependent upon assumptions, estimates and data that may be incorrect or imprecise and involve known and unknown risks and uncertainties. Forward-looking statements regarding operating results are particularly subject to a variety of assumptions, some or all of which may not be realized. Risks, uncertainties or other factors that could cause actual results to differ materially from those expressed in any forward-looking statement include, without limitation: 1. increase in awareness of health concerns related to smoking; 2. regulatory developments; including, without limitation, tax increases and restrictions on sales, marketing, packaging, labeling and use of tobacco products, privately imposed restrictions and governmental investigations; 3. litigation around the world alleging adverse health and financial effects resulting from, or relating to, tobacco products; 4. our ability to further diversify our business beyond the traditional tobacco industry; 5. our ability to successfully expand internationally and make investments outside Japan; 6. competition, changing consumer preferences and behavior; 7. our ability to manage impacts derived from business diversification or business expansion; 8. economic, regulatory and political changes, such as nationalization, terrorism, wars and civil unrest, in countries in which we operate; 9. fluctuations in foreign exchange rates and the costs of raw materials; and 10. catastrophes, including natural disasters.
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2025 Nine-Month Results
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4© Copyright JT 2025 Note: The results for fiscal year 2024 and fiscal year 2025 on a reported basis have been adjusted to include the impact of hyperinflationary accounting in accordance with the requirements stipulated in IAS 29. The results for fiscal year 2024 and fiscal year 2025 on a constant FX basis have been calculated to exclude amounts of revenue and profit that have increased due to hyperinflation in certain markets. 2025 Nine-Month Consolidated Results: Strong growth continued in the tobacco business • Significant growth driven by strong organic performance and the inclusion of VGR 2) in the tobacco business 1) AOP=Adjusted operating profit 2) VGR= Vector Group Ltd. • Increase driven by operating profit growth, partially offset by higher corporate income tax expenses Currencies (Tobacco business) • Unfavorable to AOP, mainly due to the depreciation of emerging currencies vs. JPY • Increase driven by AOP growth, partially offset by adjustment items due to higher intangible assets amortization costs related to the VGR acquisition Revenue and AOP 1) Operating profit Profit (JPY BN) 2025 Jan-Sep vs. 2024 At constant FX Core revenue* 2,580.3 +15.3% AOP* 849.0 +27.2% Reported Revenue* 2,634.0 +13.2% AOP* 814.7 +22.1% Operating profit* 762.9 +20.8% Profit 511.7 +15.7% Continuing operations 511.4 +16.6% Discontinued operations 0.3 - *Revenue/Core revenue, AOP and operating profit are based on continuing operations. 2024 results figure have been restated on a like-for-like basis.
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5© Copyright JT 2025 Tobacco Business Volume Performance: Strong first half momentum continued Combustibles • Inclusion of VGR and strong organic performance • Continued share momentum in many markets • In key markets, combustibles industry volume remained under pressure mainly in Japan and the UK, while it performed better in Russia and Turkey RRP (BnU) 2025 Jan-Sep vs. 2024 Total volume 438.6 +2.2% Combustibles 428.5 +1.7% GFB 314.5 +2.4% RRP 10.1 +27.0% HTS 8.1 +37.8％ • On-going volume and share growth across markets, driven by Ploom • Continued strong performance of Ploom AURA in Japan
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6© Copyright JT 2025 Currencies • Unfavorable to AOP, mainly due to the depreciation of emerging currencies vs. JPY Tobacco Business Financial Performance: Double-digit growth driven by strong top-line performance (JPY BN) 2025 Jan-Sep vs. 2024 Core revenue 2,428.5 +14.4% at constant FX 2,463.1 +16.1% AOP 845.4 +20.8% at constant FX 879.7 +25.7% Volume • Positive volume contribution, mainly driven by the EMA cluster, including the VGR contribution Roadmap of AOP variance (JPY BN) 238.7 2024 Jan-Sep 61.3 Volume Price/Mix -120.0 Others 2025 Jan-Sep At constant FX -34.3 FX 2025 Jan-Sep 699.6 879.7 845.4 Others • Incremental investments towards Ploom • Inflation-led cost increases in the supply chain Price/Mix • Strong pricing contribution in several markets, such as the Philippines, Russia and the UK Note: The results for fiscal year 2024 and fiscal year 2025 on a reported basis have been adjusted to include the impact of hyperinflationary accounting in accordance with the requirements stipulated in IAS 29. The results for fiscal year 2024 and fiscal year 2025 on a constant FX basis have been calculated to exclude amounts of revenue and profit that have increased due to hyperinflation in certain markets.
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7© Copyright JT 2025 Tobacco Business Results by Cluster ASIA WESTERN EUROPE EMA Total Volume • Market share gains, mainly in Taiwan • Ploom volume growth in Japan • Lower combustibles industry volume, mainly in Japan & Taiwan Total Volume • Market share gains, mainly in Italy & the UK • Ploom volume growth in many markets • Lower combustibles industry volume, mainly in the UK • Unfavorable inventory adjustments, mainly in Italy & Spain Total Volume • Inclusion of VGR • Market share gains, notably in Turkey • Higher industry volume in Russia & Turkey *All data on this slide refer to Jan-Sep 2025 vs. PY at constant FX CR/AOP • Pricing contribution, mainly in Italy & the UK, offset the negative volume contribution CR/AOP • Positive volume contribution, mainly in Turkey & the USA • Pricing contribution, mainly in Russia & Turkey CR/AOP • Pricing contribution, mainly in Japan & the Philippines, offset the negative volume contribution • Incremental investments towards Ploom and inflation-led cost increases Total Volume CR AOP -0.2% +6.0% +5.4% Total Volume CR AOP -4.2% +4.6% +10.4% Total Volume CR AOP +5.0% +28.6% +52.1%
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8© Copyright JT 2025 Ploom: Steady share gains continued across the global footprint HTS SoS Japan Poland Slovakia Portugal Czech R. Lithuania Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 7.9% 8.1% 9.3% 9.5% 10.5% 10.7% 10.9% 11.3% 11.6% 12.5% 12.7% 13.6% 15.5% Launched in May ’23 Aug ’24 Aug ’25 0.1% 2.7% 3.2% Italy Japan Poland Slovakia Portugal Czech R. Lithuania Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 7.9% 8.1% 9.3% 9.5% 10.5% 10.7% 10.9% 11.3% 11.6% 12.5% 12.7% 13.6% 15.5% Launched in Apr ’23 Aug ’24 Aug ’25 0.2% 1.5% 1.5% Launched in Apr ’23 Sep ’24 Sep ’25 0.1% 4.0% 4.3% Launched in May ’23 Aug ’24 Aug ’25 0.1% 2.7% 3.2% Launched in Jun ’23 Sep ’24 Sep ’25 0.5% 4.4% 6.6% Launched in Sep ’23 Sep ’24 Sep ’25 0.0% 0.9% 3.0% Launched in Mar ’24 Sep ’24 Sep ’25 0.3% 2.9% 6.0% Italy
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9© Copyright JT 2025 • Ploom AURA continues to perform strongly since its May launch in Japan • Ploom AURA drives faster Ploom user growth with higher new customer acquisition ratio compared to previous models • HTS volume accelerated, with growth of existing brands and EVO • At the end of October, Ploom AURA has been launched in 8 markets, aiming to expand to approximately 15 markets by end of 2025 Ploom in Japan: Ploom AURA boosting our presence in HTS # of Ploom users: JT estimate # of Ploom users HTS volume by Brand (BnU) 2.0 3.0 Q1’25 Q2’25 Q3’25 EVO MEVIUS / CAMEL HTS volume by Brand: Based on shipment data Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Approx. x2
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10© Copyright JT 2025 Processed Food Business Financial Results Processed Food Business (JPY BN) 2025 Jan-Sep vs. 2024 Revenue 115.2 +1.8 AOP 5.5 -0.8 • Increase mainly driven by price revisions in the frozen and ambient foods business Revenue • Decrease as the revenue growth was offset by higher raw material costs AOP
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Full-year Revised Forecasts
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12© Copyright JT 2025 • Upward revision driven by the tobacco business • Easing of unfavorable FX impacts on AOP,mainly due to major currencies expected to be stronger vs. JPY, compared to the previous forecasts • Upward revision, mainly driven by the increase in AOP Operating profit: +94.0 JPY BN 2025 Consolidated Revised Forecasts: Upward revisions driven by robust momentum in tobacco business Note 1: The forecasts for fiscal year 2025 on a reported basis shown above have been adjusted to include the impact of hyperinflationary accounting in accordance with the requirements stipulated in IAS 29. The forecasts on a constant FX basis have been calculated to exclude amounts of revenue and profit that have increased due to hyperinflation in certain markets. Note 2: Excluding a provision of 375.6 BN yen related to a comprehensive settlement of the Canadian litigations, which was recorded as operating expense in the fiscal year ended December 31, 2024, operating profit and profit from the continuing operations are expected to increase by +22.5% and +21.5% YoY, respectively. Core revenue: +109.0 JPY BN AOP: +71.0 JPY BN (at constant FX) / +89.0 JPY BN (reported)(JPY BN) FY2025 Revised forecasts vs. Previous forecasts vs. 2024 At constant FX Core revenue* 3,326.0 +109.0 +13.2% AOP* 923.0 +71.0 +24.3% Reported Revenue* 3,456.0 +181.0 +13.1% AOP* 903.0 +89.0 +21.6% Operating profit* 845.0 +94.0 +168.9% Profit 562.0 +68.0 +213.5% Continuing operations 555.0 +62.0 +221.3% Discontinued operations 7.0 +6.0 - FCF 280.0 +44.0 +109.5Bn *Revenue/Core revenue, AOP and operating profit are based on continuing operations. 2025 previous forecasts and 2024 results figure have been restated on a like-for-like basis. • Upward revision, driven by the increase in operating profit Profit (continuing operations): +62.0 JPY BN FCF: +44.0 JPY BN • Upward revision, driven by the increase in AOP
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13© Copyright JT 2025 • Easing of unfavorable impact to AOP, mainly due to major currencies expected to be stronger vs. JPY, compared to the previous forecasts (previous forecast: -38.0 JPY BN vs. revised forecast: -20.0 JPY BN) Financials (JPY BN) FY2025 Revised forecasts vs. Previous forecasts vs. 2024 Core revenue 3,163.0 +168.0 +13.8% at constant FX 3,162.0 +112.0 +13.8% AOP 950.0 +90.0 +20.0% at constant FX 970.0 +72.0 +22.5% Volume FY2025 Revised forecast Previous forecast Total volume An increase of approx. 2.0% vs. 2024 A decrease of approx. 1.0% vs. 2024 Tobacco Business: Upward revision reflecting strong results Volume assumption Financials Currencies Note: The forecasts for fiscal year 2025 on a reported basis shown above have been adjusted to include the impact of hyperinflationary accounting in accordance with the requirements stipulated in IAS 29. The forecasts on a constant FX basis have been calculated to exclude amounts of revenue and profit that have increased due to hyperinflation in certain markets. • Upward revision driven by improved industry volume in certain markets, strong share momentum in combustibles and continued HTS growth • Upward revision driven by higher total volume and strong pricing momentum
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14© Copyright JT 2025 • Downward revision reflecting sales performance in the frozen and ambient foods business Revenue • Unchanged, as downward revision in revenue is expected to be offset by lower costs AOP Processed Food Business (JPY BN) FY2025 Revised forecasts vs. Previous forecasts vs. 2024 variance Revenue 162.0 -3.0 +4.8 AOP 8.5 - +0.4 Processed Food Business Revised Forecasts
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Closing remarks
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16© Copyright JT 2025 Closing remarks Nine-month results • Upward revision across all indicators, reflecting the strong performance in the tobacco business and the easing of negative FX impact, resulting in record-high figures across all indicators, from revenue to profit Full-year revised forecasts Share holders Employees Society Consumers • In the third quarter, the strong business momentum in the tobacco business continued. As a result, AOP at constant FX increased by 27.2%, driven by robust top-line growth • The newly launched Ploom AURA ecosystem strengthened our presence in the HTS segment, even though competition remained intense Shareholder returns • Annual dividend guidance to be revised upward by JPY 26 to JPY 234* based on the upward revised full-year forecast and our shareholder return policy (interim: JPY 104 / year-end: JPY 130) • The dividend for the current period is determined based on the payout ratio calculated on the continuing operations basis *The dividend payout ratio based on the profit from the continuing operations is 74.9%
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17© Copyright JT 2025 ＜Definitions＞ Adjusted operating profit (AOP) Operating profit + amortization cost of acquired intangibles arising from business acquisitions + adjusted items (income and costs)* * Adjusted items (income and costs) = impairment losses on goodwill ± restructuring income and costs ± others. ~ at constant FX Constant FX is computed using the same foreign exchange rates as in the equivalent period in the previous fiscal year for thetobacco business. Results at constant FX are provided additionally and are not an alternative to financial reporting under International Financial Reporting Standards (IFRS). Core revenue at constant FX (consolidated) The sum of revenues in the pharmaceutical business, processed food business, and others, as well as the core revenue at constant FX in the tobacco business. Core revenue (tobacco business) Core revenue includes all revenue excluding those from distribution, contract manufacturing and other peripheral businesses. Profit Profit attributable to owners of the parent company. Reduced-Risk Products (RRP) Products with the potential to reduce the risks associated with smoking. In JT's portfolio, these products include HTP, E-Vapor and Oral. Heated tobacco sticks (HTS) Heated tobacco products that directly heat tobacco sticks. One stick is equivalent to a stick of cigarettes. Combustibles Combustibles include all tobacco products excluding contract-manufactured products and RRP.
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18© Copyright JT 2025 ＜Definitions＞ Total volume The volume of tobacco-based products which excludes contract-manufactured products, RRP devices and related accessories. Combustibles volume The shipment volume of combustibles which excludes contract-manufactured products and RRP. RRP volume RRP sales volume in cigarette-stick equivalent. This excludes RRP devices, RRP related accessories, etc. HTS volume / Ploom volume Sales volume of HTS (Ploom) in cigarette-stick equivalent. This excludes Ploom devices, Ploom related accessories, etc. Global Flagship Brands (GFB) GFB includes four Brands namely Winston, Camel, MEVIUS and LD.