Interim report
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[This is an English translation prepared for reference purposes only. Should there be any inconsistency between the translation and the original Japanese text, the latter shall prevail.] October 29, 2026 Consolidated Financial Results for the Nine Months Ended September 30, 2026 <under IFRS> Name of the Listed Company: JAPAN TOBACCO INC. (Stock Code: 2914) Listed Stock Exchange: Tokyo Stock Exchange URL: https://www.jt.com/ Representative: Takehiko Tsutsui, Representative Director and President, Chief Executive Officer Contact: Hiromasa Furukawa, Senior Vice President, Chief Financial Officer and Corporate Communications Telephone: +81-3-6636-2914 Scheduled starting date of the dividend payments: – Drawing up supplementary documents on financial results: Yes Holding investors’ meeting: Yes (for analysts and institutional investors) (Yen amounts are rounded to the nearest million, unless otherwise noted.) 1. Consolidated Financial Results for the Nine Months of the Fiscal Year Ending December 31, 2026 (from January 1, 2026 to September 30, 2026) (1) Consolidated Operating Results (Cumulative) (Percentages indicate year-on-year changes.) Revenue Operating profit Profit before income taxes Profit for the period Nine months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % September 30, 2026 2,991,382 13.6 947,710 24.2 877,095 24.0 621,481 20.9 September 30, 2025 2,634,028 – 762,935 – 707,162 – 514,239 15.7 Profit attributable to owners of the parent company Comprehensive income for the period Basic earnings per share Diluted earnings per share Nine months ended Millions of yen % Millions of yen % Yen Yen September 30, 2026 618,892 20.9 511,760 (30.6) 348.60 348.57 September 30, 2025 511,749 15.7 737,512 78.6 288.24 288.21 Due to the transfer of the Company’s Pharmaceutical Business to Shionogi & Co., Ltd. and the sale of shares in Torii Pharmaceutical Co., Ltd. held by the Company in the fiscal year ended December 31, 2025, the Group classified the Pharmaceutical Business as discontinued operations. As a result, profits or losses from discontinued operations are presented separately from continuing operations in the Condensed Quarterly Consolidated Statement of Income. Therefore, revenue, operating profit, and profit before income taxes for the nine months ended September 30, 2025 in the table represent the amounts for continuing operations, and percentages indicating year-on-year changes are not presented. (2) Consolidated Financial Position Total assets Total equity Equity attributable to owners of the parent company Ratio of equity attributable to owners of the parent company to total assets Equity attributable to owners of the parent company per share As of Millions of yen Millions of yen Millions of yen % Yen September 30, 2026 8,437,531 4,150,130 4,120,946 48.8 2,321.10 December 31, 2025 8,419,240 4,115,389 4,086,933 48.5 2,301.99
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2. Cash Dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Year ended December 31, 2025 – 104.00 – 130.00 234.00 Year ending December 31, 2026 – 136.00 – Year ending December 31, 2026 (Forecast) – 136.00 272.00 Note: Revisions to the cash dividends forecasts most recently announced: None The dividends for the fiscal year ending December 31, 2026 are calculated using a payout ratio of 73.2%, based on profit for the year of ¥660.0 billion. The profit for the year used in this calculation excludes the impact of the settlement payments and other related effects arising from the settlement of litigation concerning smoking and health against tobacco companies, including the Company’s Canadian subsidiary JTI-Macdonald Corp., as a defendant. 3. Consolidated Earnings Forecasts for the Fiscal Year Ending December 31, 2026 (January 1, 2026 to December 31, 2026) (Percentages indicate year-on-year changes.) Revenue Operating profit Profit attributable to owners of the parent company Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Yen Year ending December 31, 2026 3,903,000 12.6 1,041,000 20.1 662,000 29.8 372.88 Note: Revisions to the consolidated earnings forecasts most recently announced: Yes Due to the transfer of the Company’s Pharmaceutical Business to Shionogi & Co., Ltd. and the sale of shares in Torii Pharmaceutical Co., Ltd. held by the Company in the fiscal year ended December 31, 2025, the Group classified the Pharmaceutical Business as discontinued operations. As a result, only profit and loss from continuing operations will be recorded for the fiscal year ending December 31, 2026. Accordingly, the year-on-year changes in revenue and operating profit are displayed based on the figures from only profit and loss from continuing operations. However, for forecasted profit attributable to owners of the parent company, the percentage in the table indicating year-on-year change is a comparison against the profit attributable to owners of the parent company including discontinued operations for the fiscal year ended December 31, 2025, and includes profit and loss related to the transfer of the Pharmaceutical Business and the sale of shares in Torii Pharmaceutical Co., Ltd. The year-on-year change percentage when comparing the profit attributable to owners of the parent company from continuing operations for the fiscal year ended December 31, 2025, with the forecasted profit attributable to owners of the parent company for the fiscal year ending December 31, 2026, is as follows: Profit attributable to owners of the parent company from continuing operations for the fiscal year ended December 31, 2025: ¥499,081 million Year-on-year change percentage: 32.6%
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[Additional Information] Growth rate in adjusted operating profit at constant FX: The Group has set its group-wide target for annual average growth rate in adjusted operating profit at constant FX, at mid to high single digits over the mid- to long-term, and will continue to pursue this goal. The Group expects an annual average of high single-digit growth during the period of the “Business Plan 2026” (fiscal year ending December 31, 2026 to fiscal year ending December 31, 2028), which was announced on February 12, 2026. (Percentages indicate year-on-year changes.) Adjusted operating profit at constant FX Nine months ended September 30, 2026 (Cumulative) Millions of yen 934,710 % 16.9 Year ending December 31, 2026 (Forecast) Millions of yen 1,028,000 % 16.1 Note: Revisions to the consolidated earnings forecasts most recently announced: Yes The year-on-year changes in the above table are displayed based on the figures from only profit and loss from continuing operations. Starting from the first quarter of the current fiscal year, the definition of adjusted operating profit has been revised as operating profit (loss) less the amortization cost of acquired intangibles arising from business acquisitions and adjustment items (income and costs), with the additional deduction of profits corresponding to each annual payment related to settlement of the litigation concerning smoking and health against tobacco companies, including the Company’s Canadian subsidiary JTI-Macdonald Corp., as a defendant. The same adjustments have been applied to the previous fiscal year, and percentages indicating year-on-year changes in the tables are calculated based on the adjusted figures. The Group also discloses certain non-GAAP financial measures that are not required or defined under IFRS Accounting Standards, which is the accounting standard the Company applies. These non-GAAP financial measures are used internally to manage each of the business operations to understand their underlying performance, in view of the Group’s target for mid- to long-term sustainable growth, and the Group believes that these financial measures are useful information for users of the financial statements to assess the Group’s performance. For details of these financial measures, please refer to “Proper use of earnings forecasts, and other special matters, (2).” For detailed information on the consolidated financial results, please refer to the materials for investors’ meeting that were released on the Company’s website on October 29, 2026. The Company’s website: https://www.jt.com/investors/
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Notes (1) Significant changes in the scope of consolidation during the period: None (2) Changes in accounting policies and changes in accounting estimates a. Changes in accounting policies due to revisions in accounting standards under IFRS Accounting Standards: Yes b. Changes in accounting policies due to other reasons: None c. Changes in accounting estimates: None Note: For details, please refer to “3. Condensed Quarterly Consolidated Financial Statements, (5) Changes in Accounting Policies and Changes in Accounting Estimates.” (3) Number of shares issued (ordinary shares) a. Total number of shares issued at the end of the period (including treasury shares) As of September 30, 2026 2,000,000,000 shares As of December 31, 2025 2,000,000,000 shares b. Number of treasury shares at the end of the period As of September 30, 2026 224,570,251 shares As of December 31, 2025 224,611,666 shares c. Average number of shares during the period (cumulative from the beginning of the fiscal year) Nine months ended September 30, 2026 1,775,376,392 shares Nine months ended September 30, 2025 1,775,408,742 shares Note: The Company has adopted a restricted stock unit system whereby shares of the Company acquired by a share delivery trust are transferred to Executive Officers at certain subsidiaries of the Company, and the number of treasury shares held by the trust is included in the number of treasury shares held at the end of the periods listed above. * Review of the attached quarterly consolidated financial statements by certified public accountants or an audit corporation: Yes (voluntary) * Proper use of earnings forecasts, and other special matters (1) The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions and suppositions deemed to be reasonable by the Company. Actual business and other results may differ substantially due to various factors. These forward-looking statements are not intended to be construed as our assurance for it to materialize in the future. Please refer to “FORWARD-LOOKING STATEMENTS” for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use of earnings forecasts. (2) The Group also discloses certain non-GAAP financial measures that are not required or defined under IFRS Accounting Standards, which is the accounting standard the Company applies. These non-GAAP financial measures are used internally to manage each of the business operations to understand their underlying performance, in view of the Group’s target for mid- to long-term sustainable growth, and the Group believes that these financial measures are useful information for users of the financial statements to assess the Group’s performance. Adjusted operating profit Adjusted operating profit presented is operating profit (loss) excluding amortization cost of acquired intangibles arising from business acquisitions and adjustment items (income and costs), and profits corresponding to each annual payment related to the settlement of litigation concerning smoking and health against tobacco companies, including the Company’s Canadian subsidiary JTI-Macdonald Corp., as a defendant (hereinafter called “Canada adjustment (Annual contribution)”). Adjustment items (income and costs) are impairment losses on goodwill, restructuring income and costs, and other items. Furthermore, adjusted operating profit at constant FX is also presented as additional information. The Group has set its group-wide target for annual average growth rate in adjusted operating profit at constant FX, at mid to high single digits over the mid- to long-term, and will continue to pursue this goal. Adjusted operating profit at constant FX is a financial measurement that excludes foreign exchange effects calculated and translated using the foreign exchange rates of the same period of the previous year from core revenue from tobacco business or from adjusted operating profit for the current period in the Tobacco Business. Results at constant FX exclude the increase in profit caused by inflation in some markets calculated using certain methods. The Group makes accounting adjustments to the financial statements of subsidiaries that operate in hyperinflationary economies according to the requirements stipulated in IAS 29 “Financial Reporting in Hyperinflationary Economies.”
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Attached Materials Index 1. Overview of Business Results ........................................................................................................... 2 2. Matters Regarding Summary Information ......................................................................................... 3 3. Condensed Quarterly Consolidated Financial Statements ................................................................. 5 (1) Condensed Quarterly Consolidated Statement of Financial Position ................................................ 5 (2) Condensed Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ..................................................................................................................... 7 (3) Condensed Quarterly Consolidated Statement of Changes in Equity .............................................. 10 (4) Condensed Quarterly Consolidated Statement of Cash Flows ......................................................... 12 (5) Changes in Accounting Policies and Changes in Accounting Estimates ......................................... 14 (6) Segment Information ........................................................................................................................ 15 (7) Note on Premise of Going Concern .................................................................................................. 19 [INDEPENDENT ACCOUNTANT'S REVIEW REPORT] - 1 -
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1. Overview of Business Results The results are presented in “JT Group 2026 Third-Quarter (CFO Presentation),” which was disclosed on TDnet and the Company’s website on October 29, 2026. Please refer to the following. JT Group 2026 Third-Quarter (CFO Presentation): https://www.jt.com/investors/results/forecast/pdf/2026/Third_Quarter/20261029_05.pdf The details of financial position and cash flow position are as follows. a. Financial position [Assets] Total assets as of September 30, 2026 increased by ¥18.3 billion from the end of the previous fiscal year to ¥8,437.5 billion. This was mainly due to increases in trade and other receivables and cash and cash equivalents, despite decreases in prepaid tobacco excise taxes and goodwill. [Liabilities] Total liabilities as of September 30, 2026 decreased by ¥16.4 billion from the end of the previous fiscal year to ¥4,287.4 billion. This was mainly due to a decrease in corporate bonds, despite the issuance of commercial paper and an increase in income taxes payable. [Equity] Total equity as of September 30, 2026 increased by ¥34.7 billion from the end of the previous fiscal year to ¥4,150.1 billion. This was mainly due to an increase in retained earnings due to the recording of profit for the period attributable to owners of the parent company, despite a decrease in exchange differences on translation of foreign operations. b. Cash flow position Cash and cash equivalents as of September 30, 2026 increased by ¥56.2 billion from the end of the previous fiscal year to ¥887.3 billion. Cash and cash equivalents at the end of the same period of the previous fiscal year were ¥729.5 billion. [Net cash flows from operating activities] Net cash flows provided by operating activities during the nine months ended September 30, 2026 were ¥731.2 billion, compared with ¥287.0 billion provided in the same period of the previous year. This was mainly due to the generation of a stable cash inflow from the tobacco business, despite the payment of income taxes. [Net cash flows from investing activities] Net cash flows used in investing activities during the nine months ended September 30, 2026 were ¥94.9 billion, compared with ¥171.3 billion used in the same period of the previous year. This was mainly due to purchases of property, plant and equipment. [Net cash flows from financing activities] Net cash flows used in financing activities during the nine months ended September 30, 2026 were ¥491.3 billion, compared with ¥473.9 billion used in the same period of the previous year. This was mainly due to the payment of cash dividends and the redemption of corporate bonds. - 2 -
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2. Matters Regarding Summary Information Revisions to the Consolidated Earnings Forecasts Most Recently Announced The Group has revised the earnings forecasts to reflect recent developments and current business conditions. (Billions of yen) Earnings forecasts Changes from the consolidated earnings forecasts most recently announced Year-on-year changes [%]Amount % Revenue 3,903.0 18.0 0.5 12.6 Adjusted operating profit 1,079.0 44.0 4.3 21.9 Operating profit 1,041.0 33.0 3.3 20.1 Profit attributable to owners of the parent company 662.0 18.0 2.8 29.8 Adjusted operating profit at constant FX 1,028.0 40.0 4.0 16.1 The percentages indicating year-on-year changes in the above table are calculated based on profit or loss from continuing operations only. However, the year-on-year change in forecasted profit attributable to owners of the parent company is calculated by comparison with profit attributable to owners of the parent company for the fiscal year ended December 31, 2025, including discontinued operations, and that profit includes profit and loss related to the transfer of the Pharmaceutical Business and the sale of shares in Torii Pharmaceutical Co., Ltd. In addition, following the revision of the definition of adjusted operating profit from the first quarter of the current fiscal year, the year-on-year changes in adjusted operating profit and adjusted operating profit at constant FX are also displayed based on amounts reclassified on a comparable basis. FORWARD-LOOKING STATEMENTS This document 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; - 3 -
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(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. Notes on the Russia-Ukraine War The Group is fully committed to complying with applicable regulations and international sanctions while continuing business operations. In parallel, given the continued challenging and complex environment, we continue to evaluate various options, including the potential transfer of ownership of our Russian tobacco business. At this moment, the Company is unable to reasonably estimate the outlook and the impact on its financial results. The Company will promptly make announcements regarding this matter if anything occurs that should be disclosed. Notes on the Situation in the Middle East The Group has business locations and customers in the Middle East, and will continue to monitor the situation in the region. However, at present, it does not recognize a major impact on its business or financial results. The Company will promptly make announcements regarding this matter if anything occurs that should be disclosed. - 4 -
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(Millions of yen) As of December 31, 2025 As of September 30, 2026 Assets Current assets Cash and cash equivalents 831,135 887,302 Trade and other receivables 640,681 753,214 Inventories 1,060,136 1,076,692 Other financial assets 195,816 194,558 Other current assets 977,640 865,938 Subtotal 3,705,408 3,777,705 Assets held for sale 5,689 2,368 Total current assets 3,711,097 3,780,073 Non-current assets Property, plant and equipment 979,800 980,811 Goodwill 2,923,096 2,870,525 Intangible assets 395,658 364,676 Investment property 3,068 2,974 Retirement benefit assets 29,946 30,807 Investments accounted for using the equity method 82,205 82,179 Other financial assets 131,600 162,302 Other non-current assets 4,240 3,638 Deferred tax assets 158,528 159,546 Total non-current assets 4,708,143 4,657,458 Total assets 8,419,240 8,437,531 3. Condensed Interim Consolidated Financial Statements (1) Condensed Interim Consolidated Statement of Financial Position - 5 -
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(Millions of yen) As of December 31, 2025 As of September 30, 2026 Liabilities and equity Liabilities Current liabilities Trade and other payables 711,721 710,427 Bonds and borrowings 79,627 147,813 Income tax payables 36,546 102,625 Other financial liabilities 62,068 51,780 Provisions 32,783 26,235 Other current liabilities 1,004,331 942,398 Subtotal 1,927,076 1,981,278 Liabilities directly associated with assets held for sale 177 - Total current liabilities 1,927,252 1,981,278 Non-current liabilities Bonds and borrowings 1,599,061 1,525,624 Other financial liabilities 205,628 201,404 Retirement benefit liabilities 253,225 247,502 Provisions 54,355 56,649 Other non-current liabilities 134,724 135,438 Deferred tax liabilities 129,606 139,507 Total non-current liabilities 2,376,599 2,306,124 Total liabilities 4,303,851 4,287,401 Equity Share capital 100,000 100,000 Capital surplus 737,064 737,471 Treasury shares (489,744) (490,239) Other components of equity 526,058 413,684 Retained earnings 3,213,555 3,360,029 Equity attributable to owners of the parent company 4,086,933 4,120,946 Non-controlling interests 28,456 29,184 Total equity 4,115,389 4,150,130 Total liabilities and equity 8,419,240 8,437,531 - 6 -
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(Millions of yen) 2025 2026 Continuing operations Revenue 2,634,028 2,991,382 Cost of sales (1,126,032) (1,230,774) Gross profit 1,507,996 1,760,608 Other operating income 13,914 12,483 Share of profit in investments accounted for using the equity method 10,224 8,274 Selling, general and administrative expenses (769,199) (833,655) Operating profit 762,935 947,710 Financial income 57,800 52,508 Financial costs (113,574) (123,122) Profit before income taxes 707,162 877,095 Income taxes (194,289) (255,614) Profit for the period from continuing operations 512,872 621,481 Discontinued operations Profit for the period from discontinued operations 1,367 - Profit for the period 514,239 621,481 Attributable to: Owners of the parent company 511,749 618,892 Non-controlling interests 2,490 2,590 Profit for the period 514,239 621,481 Interim earnings per share Basic (Yen) Continuing operations 288.06 348.60 Discontinued operations 0.18 - Total basic earnings per share for the interim period 288.24 348.60 Diluted (Yen) Continuing operations 288.03 348.57 Discontinued operations 0.18 - Total diluted earnings per share for the interim period 288.21 348.57 (2) Condensed Interim Consolidated Statement of Income and Consolidated Statement of Comprehensive Income Condensed Interim Consolidated Statement of Income Nine months ended September 30, 2025 and 2026 - 7 -
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(Millions of yen) 2025 2026 Continuing operations Operating profit 762,935 947,710 Amortization cost of acquired intangibles arising from business acquisitions 52,797 36,544 Canada adjustment (Annual contribution) (15,172) (11,928) Adjustment items (income) (3,128) (2,920) Adjustment items (costs) 2,100 2,978 Adjusted operating profit 799,532 972,383 Reconciliation from “Operating profit” to “Adjusted operating profit” - 8 -
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(Millions of yen) 2025 2026 Profit for the period 514,239 621,481 Other comprehensive income Items that will not be reclassified to profit or loss Net gain (loss) on revaluation of financial assets measured at fair value through other comprehensive income 406 1,437 Remeasurements of defined benefit plans 185 - Total of items that will not be reclassified to profit or loss 590 1,437 Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations 223,191 (115,211) Net gain (loss) on derivatives designated as cash flow hedges (495) 4,757 Hedge costs (14) (703) Total of items that may be reclassified subsequently to profit or loss 222,682 (111,157) Other comprehensive income (loss), net of taxes 223,273 (109,721) Comprehensive income (loss) for the period 737,512 511,760 Attributable to: Owners of the parent company 734,967 509,743 Non-controlling interests 2,544 2,018 Comprehensive income (loss) for the period 737,512 511,760 Condensed Interim Consolidated Statement of Comprehensive Income Nine months ended September 30, 2025 and 2026 - 9 -
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(Millions of yen) Equity attributable to owners of the parent company Share Capital Capital surplus Treasury shares Other components of equity Subscription rights to shares Exchange differences on translation of foreign operations Net gain (loss) on derivatives designated as cash flow hedges Hedge costs As of January 1, 2025 100,000 736,697 (488,579) 364 364,809 4,026 12 Profit for the period - - - - - - - Other comprehensive income (loss) - - - - 223,126 (495) (14) Comprehensive income (loss) for the period - - - - 223,126 (495) (14) Acquisition of treasury shares - - (1,622) - - - - Disposal of treasury shares - 367 456 (73) - - - Share-based payments - - - - - - - Dividends - - - - - - - Changes in the scope of consolidation - - - - - - - Changes in the ownership interest in a subsidiary without a loss of control - - - - - - - Transfer from other components of equity to retained earnings - - - - - - - Other increase (decrease) - - - - - (1,468) - Total transactions with the owners - 367 (1,166) (73) - (1,468) - As of September 30, 2025 100,000 737,064 (489,745) 292 587,934 2,063 (2) As of January 1, 2026 100,000 737,064 (489,744) 291 514,095 715 17 Profit for the period - - - - - - - Other comprehensive income (loss) - - - - (114,636) 4,757 (703) Comprehensive income (loss) for the period - - - - (114,636) 4,757 (703) Acquisition of treasury shares - - (934) - - - - Disposal of treasury shares - 407 440 (148) - - - Share-based payments - - - - - - - Dividends - - - - - - - Changes in the scope of consolidation - - - - - - - Changes in the ownership interest in a subsidiary without a loss of control - - - - - - - Transfer from other components of equity to retained earnings - - - - - - - Other increase (decrease) - - - - - (2,635) - Total transactions with the owners - 407 (495) (148) - (2,635) - As of September 30, 2026 100,000 737,471 (490,239) 143 399,459 2,837 (686) (3) Condensed Interim Consolidated Statement of Changes in Equity - 10 -
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(Millions of yen) Equity attributable to owners of the parent company Non-controlling interests Total equity Other components of equity Retained earnings Total Net gain (loss) on revaluation of financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Total As of January 1, 2025 12,388 - 381,599 3,036,905 3,766,623 82,104 3,848,727 Profit for the period - - - 511,749 511,749 2,490 514,239 Other comprehensive income (loss) 406 196 223,219 - 223,219 54 223,273 Comprehensive income (loss) for the period 406 196 223,219 511,749 734,967 2,544 737,512 Acquisition of treasury shares - - - - (1,622) - (1,622) Disposal of treasury shares - - (73) (616) 134 - 134 Share-based payments - - - 796 796 22 819 Dividends - - - (356,873) (356,873) (2,273) (359,147) Changes in the scope of consolidation - - - - - (56,129) (56,129) Changes in the ownership interest in a subsidiary without a loss of control - - - (20) (20) 8 (12) Transfer from other components of equity to retained earnings (2,553) (196) (2,749) 2,749 - - - Other increase (decrease) - - (1,468) (49) (1,518) - (1,518) Total transactions with the owners (2,553) (196) (4,290) (354,014) (359,103) (58,371) (417,474) As of September 30, 2025 10,241 - 600,528 3,194,640 4,142,487 26,277 4,168,764 As of January 1, 2026 10,940 - 526,058 3,213,555 4,086,933 28,456 4,115,389 Profit for the period - - - 618,892 618,892 2,590 621,481 Other comprehensive income (loss) 1,433 - (109,149) - (109,149) (572) (109,721) Comprehensive income (loss) for the period 1,433 - (109,149) 618,892 509,743 2,018 511,760 Acquisition of treasury shares - - - - (934) - (934) Disposal of treasury shares - - (148) (584) 115 - 115 Share-based payments - - - 973 973 - 973 Dividends - - - (472,260) (472,260) (1,832) (474,093) Changes in the scope of consolidation - - - - - (452) (452) Changes in the ownership interest in a subsidiary without a loss of control - - - (988) (988) 994 6 Transfer from other components of equity to retained earnings (442) - (442) 442 - - - Other increase (decrease) - - (2,635) - (2,635) - (2,635) Total transactions with the owners (442) - (3,224) (472,418) (475,730) (1,290) (477,020) As of September 30, 2026 11,931 - 413,684 3,360,029 4,120,946 29,184 4,150,130 - 11 -
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(Millions of yen) 2025 2026 Cash flows from operating activities Profit before income taxes 707,162 877,095 Profit (loss) before income taxes from discontinued operations (14,668) - Depreciation and amortization 146,280 135,909 Impairment losses 27,069 1,180 Interest and dividend income (57,208) (52,473) Interest expense 55,798 59,372 Share of profit in investments accounted for using the equity method (10,224) (8,274) (Gains) losses on sale and disposal of property, plant and equipment, intangible assets and investment property (2,468) (365) (Gains) losses on sale of investments in subsidiaries - (2,290) (Increase) decrease in trade and other receivables (85,511) (101,698) (Increase) decrease in inventories (79,717) (45,958) Increase (decrease) in trade and other payables (34,515) 24,877 Increase (decrease) in retirement benefit liabilities (7,991) (1,555) (Increase) decrease in prepaid tobacco excise taxes 22,559 49,964 Increase (decrease) in tobacco excise tax payables (129,194) (55,576) Increase (decrease) in consumption tax payables 20,928 23,411 Increase (decrease) in provisions (184,762) (6,078) Other 12,624 8,771 Subtotal 386,160 906,312 Interest and dividends received 99,874 62,324 Interest paid (43,535) (48,860) Income taxes paid (155,502) (188,544) Net cash flows from operating activities 286,997 731,231 Cash flows from investing activities Purchase of securities (10,104) (3,136) Proceeds from sale and redemption of securities 51,780 845 Purchase of property, plant and equipment (94,438) (88,510) Proceeds from sale of investment property 3,650 3,069 Purchase of intangible assets (12,214) (11,891) Payments into time deposits (234,400) (396,173) Proceeds from withdrawal of time deposits 174,332 400,516 Subsequent payments for past fiscal years' business combinations (68,271) - Proceeds from transfer of business 36,064 - Proceeds from sale of investments in subsidiaries - 2,704 Purchase of investments in associates (23,091) (2,000) Other 5,416 (344) Net cash flows from investing activities (171,277) (94,919) (4) Condensed Interim Consolidated Statement of Cash Flows Nine months ended September 30, 2025 and 2026 - 12 -
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(Millions of yen) 2025 2026 Cash flows from financing activities Dividends paid to owners of the parent company (356,455) (471,615) Dividends paid to non-controlling interests (2,064) (1,444) Capital contribution from non-controlling interests - 6 Increase (decrease) in short-term borrowings and commercial paper 14,832 71,210 Proceeds from long-term borrowings 99,437 - Repayments of long-term borrowings (666,609) (315) Proceeds from issuance of bonds 577,483 - Redemption of bonds (120,165) (67,532) Repayments of lease liabilities (18,767) (20,664) Acquisition of treasury shares (1,622) (934) Payments for acquisition of interests in subsidiaries from non-controlling interests (12) - Other 0 0 Net cash flows from financing activities (473,942) (491,288) Net increase (decrease) in cash and cash equivalents (358,221) 145,024 Cash and cash equivalents at the beginning of the period 1,084,567 831,135 Effect of exchange rate changes on cash and cash equivalents 5,330 (88,874) Changes in cash and cash equivalents resulting from transfer to assets held for sale (2,212) 17 Cash and cash equivalents at the end of the period 729,463 887,302 - 13 -
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IFRS Accounting Standards Description of new standards and amendments IFRS 9 IFRS 7 Amendments to the Classification and Measurement of Financial Instruments Clarifying classification of the financial instruments with ESG-linked features Clarifying derecognition of a financial liability settled through electronic transfer IFRS 9 IFRS 7 Amendments regarding the Contracts for Renewable Electricity Providing requirements for accounting treatment and disclosure relating to power purchase agreements (5) Changes in Accounting Policies and Changes in Accounting Estimates The material accounting policies adopted for the condensed interim consolidated financial statements are the same as those for the consolidated financial statements for the year ended December 31, 2025 except for the following item. The Group computes income taxes for the interim period based on the estimated average annual effective tax rate. (Changes in Accounting Policies) The Group has adopted the following new accounting standards, amended standards and new interpretations from the year ending December 31, 2026. The adoption of the above standards and interpretations does not have a material impact on the condensed interim consolidated financial statements. - 14 -
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(6) Segment Information A. Outline of Reportable Segments The reportable segments of the Group are determined based on the operating segments that are components of the Group for which separate financial information is available and are evaluated regularly by the Board of Directors in deciding how to allocate resources and in assessing performance. The Group is mainly engaged in the manufacture and sale of tobacco products and processed foods. The reportable segments of the Group are composed of two segments: “Tobacco Business” and “Processed Food Business.” The “Tobacco Business” consists of the manufacture and sale of tobacco products in domestic areas and overseas. The “Processed Food Business” consists of the manufacture and sale of frozen and ambient processed foods and seasonings. - 15 -
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(Millions of yen) Reportable Segments Other (Note 2) Elimination Consolidated Tobacco Processed Food Total Revenue External revenue 2,516,859 115,247 2,632,106 1,922 - 2,634,028 Intersegment revenue 1 23 23 1,958 (1,981) - Total revenue 2,516,859 115,270 2,632,129 3,880 (1,981) 2,634,028 Segment profit (loss) Adjusted operating profit (Note 1) 830,214 5,548 835,761 (36,236) 7 799,532 (Millions of yen) Clusters Asia Western Europe EMA Total Core revenue (Note 3) 639,070 565,252 1,198,101 2,402,423 Adjusted operating profit (Note 1) 195,256 251,588 383,370 830,214 B. Revenues and Performances of Reportable Segments Revenues and performances of reportable segments from continuing operations are as follows. The Board of Directors assesses segment performance and determines resource allocation after reviewing revenues and adjusted operating profit. Since financial income, financial costs and income taxes are managed by the Group head office, these income and expense categories are excluded from segmental performance. Transactions within segments are primarily based upon prevailing market prices. Nine months ended September 30, 2025 ¥2,402,423 million of the external revenue from the tobacco business is core revenue. Breakdown of core revenue from tobacco business and adjusted operating profit by cluster is as follows. Asia: All over Asia including Japan Western Europe: Western Europe region EMA: Africa, Middle East, Eastern Europe, Turkey, Americas and all duty-free markets Asia includes Taiwan, Japan, the Philippines, etc. Western Europe includes Italy, the United Kingdom, Spain, etc. EMA includes Turkey, the United States of America, Romania, Russia, etc. - 16 -
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(Millions of yen) Reportable Segments Other (Note 2) Elimination Consolidated Tobacco Processed Food Total Revenue External revenue 2,870,358 119,378 2,989,735 1,647 - 2,991,382 Intersegment revenue 1 27 28 2,216 (2,244) - Total revenue 2,870,358 119,405 2,989,763 3,863 (2,244) 2,991,382 Segment profit (loss) Adjusted operating profit (Note 1) 1,005,408 5,983 1,011,391 (39,012) 5 972,383 (Millions of yen) Clusters Asia Western Europe EMA Total Core revenue (Note 3) 695,739 641,568 1,413,203 2,750,510 Adjusted operating profit (Note 1) 253,142 275,951 476,314 1,005,408 Nine months ended September 30, 2026 ¥2,750,510 million of the external revenue from the tobacco business is core revenue. Breakdown of core revenue from tobacco business and adjusted operating profit by cluster is as follows. Asia: All over Asia including Japan Western Europe: Western Europe region EMA: Africa, Middle East, Eastern Europe, Turkey, Americas and all duty-free markets Asia includes Taiwan, Japan, the Philippines, etc. Western Europe includes Italy, the United Kingdom, Spain, etc. EMA includes Turkey, the United States of America, Romania, Russia, etc. - 17 -
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(Millions of yen) Reportable Segments Other (Note 2) Elimination Consolidated Tobacco Processed Food Total Adjusted operating profit (Note 1) 830,214 5,548 835,761 (36,236) 7 799,532 Amortization cost of acquired intangibles arising from business acquisitions (52,797) - (52,797) - - (52,797) Canada adjustment (Annual contribution) (Note 4) 15,172 - 15,172 - - 15,172 Adjustment items (income) (Note 5) 349 901 1,250 1,878 - 3,128 Adjustment items (costs) (Note 6) (659) (23) (682) (1,418) - (2,100) Operating profit (loss) 792,279 6,425 798,704 (35,776) 7 762,935 Financial income 57,800 Financial costs (113,574) Profit before income taxes 707,162 (Millions of yen) Reportable Segments Other (Note 2) Elimination Consolidated Tobacco Processed Food Total Adjusted operating profit (Note 1) 1,005,408 5,983 1,011,391 (39,012) 5 972,383 Amortization cost of acquired intangibles arising from business acquisitions (36,544) - (36,544) - - (36,544) Canada adjustment (Annual contribution) (Note 4) 11,928 - 11,928 - - 11,928 Adjustment items (income) (Note 5) 318 2,290 2,608 312 - 2,920 Adjustment items (costs) (Note 6) (874) (2,007) (2,882) (96) - (2,978) Operating profit (loss) 980,235 6,266 986,501 (38,796) 5 947,710 Financial income 52,508 Financial costs (123,122) Profit before income taxes 877,095 Reconciliation from “Adjusted operating profit” to “Profit before income taxes” Nine months ended September 30, 2025 Nine months ended September 30, 2026 - 18 -
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(Millions of yen) 2025 2026 Restructuring incomes 1,878 2,909 Other 1,250 11 Adjustment items (income) 3,128 2,920 (Millions of yen) 2025 2026 Restructuring costs 1,442 2,824 Other 658 154 Adjustment items (costs) 2,100 2,978 (Note 1) For adjusted operating profit, amortization cost of acquired intangibles arising from business acquisitions, and adjustment items (income and costs) are excluded from operating profit (loss). The Canada adjustment (Annual contribution) is also excluded, effective from the three months ended March 31, 2026. In addition, the figure for the nine months ended September 30, 2025, has been retrospectively adjusted to reflect the change. (Note 2) “Other” includes business activities relating to real estate rental associated with the utilization of idle properties and corporate expenditure relating to corporate communication and operation of the head office. (Note 3) Core revenue from tobacco business does not include revenue related to the distribution business and contract manufacturing. The Canada adjustment (Annual contribution) is also excluded, effective from the three months ended March 31, 2026. In addition, the figure for the nine months ended September 30, 2025, has been retrospectively adjusted to reflect the change. (Note 4) The Canada adjustment (Annual contribution) is revenue and profit corresponding to each annual payment related to the settlement of the litigation concerning smoking and health against tobacco companies, including the Company’s Canadian subsidiary, JTI-Macdonald Corp., as a defendant. (Note 5) The breakdown of “Adjustment items (income)” is as follows: Nine months ended September 30, 2025 and 2026 Restructuring incomes for the nine months ended September 30, 2025 mainly related to gains on sale of real estate. Restructuring incomes for the nine months ended September 30, 2026 mainly related to gains on sale of investments in subsidiaries. (Note 6) The breakdown of “Adjustment items (costs)” is as follows: Nine months ended September 30, 2025 and 2026 (7) Note on Premise of Going Concern No items to report - 19 -
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(TRANSLATION) INDEPENDENT ACCOUNTANT'S REVIEW REPORT October 29, 2026 To the Board of Directors of Japan Tobacco Inc.: Deloitte Touche Tohmatsu LLC Tokyo office Designated Engagement Partner, Certified Public Accountant: Koji Ishikawa Designated Engagement Partner, Certified Public Accountant: Takeshi Io Designated Engagement Partner, Certified Public Accountant: Akifumi Horie Accountant's Conclusion We have reviewed the condensed interim consolidated financial statements of Japan Tobacco Inc. and its consolidated subsidiaries (the "Group") included in the Appendix to Consolidated Financial Results, namely, the condensed interim consolidated statement of financial position as of September 30, 2026, and the condensed interim consolidated statement of income, condensed interim consolidated statement of comprehensive income, condensed interim consolidated statement of changes in equity and condensed interim consolidated statement of cash flows for the nine-month period then ended, and the related notes. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements are not prepared, in all material respects, in accordance with the Article 5-2 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements, omitting certain disclosures under the Article 5-5 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements. Basis for Accountant's Conclusion We conducted our review in accordance with interim review standards generally accepted in Japan. Our responsibility under those standards is further described in the Accountant's Responsibility for the Review of the Condensed Interim Consolidated Financial Statements section of our report. We are independe nt of the Group in accordance with the provisions of the Code of Professional Ethics in Japan, including the ethical requirements that are relevant to audits of the financial statements of public interest entities, and we have fulfilled our other ethical responsibilities as accountants. We believe that we have obtained the evidence to provide a basis for our review conclusion. Responsibilities of Management and Audit & Supervisory Board Members and the Audit & Supervisory Board for the Condensed Interim Consolidated Financial Statements Management is responsible for the preparation of the condensed interim consolidated financial statements in accordance with the Article 5-2 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements, omitting certain disclosures under the Article 5-5 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements, and for such internal control as management determines is necessary to enable the preparation of condensed interim consolidated financial statements that are free from material misstatement, whether due to fraud or error. - 20 -
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In preparing the condensed interim consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with the Article 5-2 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements, omitting certain disclosures under the Article 5-5 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements. Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the design and operating effectiveness of the controls over the Group's financial reporting process. Accountant's Responsibility for the Review of the Condensed Interim Consolidated Financial Statements Our objective is to issue an accountant's report that includes our conclusion. As part of a review in accordance with interim review standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the review. We also: • Make inquiries, primarily of management and persons responsible for financial and accounting matters, and apply analytical and other interim review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in Japan. • Conclude whether nothing has come to our attention, based on the evidence obtained, related to going concern that causes us to believe that the condensed interim consolidated financial statements are not prepared, in all material respects, in accordance with the Article 5-2 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements, omitting certain disclosures under the Article 5-5 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements , if we conclude that a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our accountant's report to the related disclosures in the condensed interim consolidated financial statements or, if such disclosures are inadequate, to modify our conclusion. Our conclusions are based on the evidence obtained up to the date of our accountant's report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate whether nothing has come to our attention that causes us to believe that the overall presentation and disclosures of the condensed interim consolidated financial statements are not prepared in accordance with the Article 5-2 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements, omitting certain disclosures under the Article 5-5 of the Tokyo Stock Exchange's standard for preparation of quarterly financial statements. • Obtain evidence regarding the financial information of the entities or business units within the Group as a basis for forming a conclusion on the condensed interim consolidated financial statements. We are responsible for the direction, supervision and review of the interim review of the condensed interim consolidated financial statements. We remain solely responsible for our conclusion. We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding the planned scope and timing of the review and significant findings that we identify during our review. We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. - 21 -
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Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan. Notes to the Readers of Independent Accountant's Review Report This is an English translation of the independent accountant's review report as originally issued in Japanese for the conveniences of the reader. - 22 -