Japan Tobacco Inc. · TSE:2914
Japan Tobacco — JT Investor Conference 2018
18 slides from Japan Tobacco's conference presentation, Jun 5, 2018
Slide 1: Reduced-Risk Products Strategy
Reduced-Risk Products Strategy Daniel Torras JTI Senior VP, Reduced-Risk Products 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 futur
Slide 2: Broadening spectrum of consumer needs
This presentation contains images of our products in some slides. Those slides have been included exclusively to illustrate JT Group’s strategy or performance to our investors. They are not to be used for any other purpose. © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 3 Broadenin
Slide 3: RRP growth is expected to continue
RRP growth is expected to continue RRP Global Category Value (Net of taxes, $Bn) 45+ 20+ 15 6 10 2016 2017 2018e 2020e 2025e RRP Consumer Base (MM consumers) 110+ 55+ 29 40+ 24 2016 2017 2018e 2020e 2025e © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 5 Source: Internal estimates.
Slide 4: JTG's global footprint focuses on markets that matter
JTG’s global footprint focuses on markets that matter Present in… … accounting for 14 85% Markets Global RRP value © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 7 Source: Internal estimates. Note: Including World Wide Duty Free as one market. Portfolio centered on 2 brands: Ploom
Slide 5: T-Vapor: Strong growth led by Japan
T-Vapor │ Strong growth led by Japan Consumer Base Category Value Geographic Mix (MM consumers) (Net of taxes, $Bn) (% of global volume, 2017) 3.2 91% Japan 4 0.8 2 0.1 0 9% ROW 2015 2016 2017 2015 2016 2017 T-Vapor © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 9 Source: Internal
Slide 6: Our ambition is to achieve 40% share of RRP in Japan by year-end 2020
Our 2020 ambition in Japan Our ambition is to achieve 40% 40% share of RRP in Japan by year-end 2020 © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 11 Roadmap to 40%│ 1 Better understanding of Japanese consumers Japanese consumers are seeking an experience that … … reduces social p
Slide 7: Ploom TECH better addressing key consumer needs
Roadmap to 40%│ 2 Ploom TECH better addressing key consumer needs Leading Competitor Product Attribute No smell Social Consideration 2020 Ambition Continuous use 40% Share of RRP Minimal maintenance Convenience Easy to use © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 13 Source: J
Slide 8: Ploom TECH capacity now in place, ramping up through 2020
Roadmap to 40%│ 3 Ploom TECH capacity now in place, ramping up through 2020 Ploom TECH Capsule Manufacturing Capacity1 (Stick equivalents2, Bn) 2X 20+ 2020 Ambition: 2020 Ambition: 4X 40% Share 40% Share 10 of of RRP Segment 2.4 2017 2018 2020 © Copyright JT 2018 London – June 5, 2018 JT Investor Co
Slide 9: Accelerated national expansion of Ploom TECH
Roadmap to 40%│ 5 Accelerated national expansion of Ploom TECH All Prefectures Sapporo 2020 Ambition: 2020 Ambition: 40% Share 40% Share Saitama (pref.) Sendai of of RRP Tokyo (pref.) Segment Osaka (pref.) Chiba (pref.) Fukuoka (pref.) ef.) Nagoya Kanagawa (pref.) June/July 2018 Hiroshima (city) Fuk
Slide 10: Complementing our RRP offering
Roadmap to 40%│ 6 Complementing our RRP offering Launch period* Launch period* 2017 2018 2019-2020 © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 19 * Ploom S and Ploom TECH+ will be launched in Japan late this year or early 2019 at earliest. Achieving our 2020 ambition in Japan 1•
Slide 11: E-Vapor: Today the largest RRP category
E-Vapor│Today the largest RRP category Consumer Base Category Value Geographic Mix (MM consumers) (Net of taxes, $Bn) (% of global value, 2017) 33% 6.3 W. Europe 5.2 4.8 25 22 20 40% % USA ROW 27% 2015 2016 2017 2015 2016 2017 E-Vapor © Copyright JT 2018 London – June 5, 2018 JT Investor Conference
Slide 12: Logic: Our current product portfolio
Logic│Our current product portfolio © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 23 Logic│Wide and compelling range of liquid options 15+ E-liquid flavors Made in Europe © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 24
Slide 13: Logic: Building a global brand
Logic│Building a global brand © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 25 Logic│Building a global brand © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 26
Slide 14: E-Vapor: Exponential volume growth, fueling our share in Europe
Logic│Building a global brand © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 27 E-Vapor│Exponential volume growth, fueling our share in Europe JTG E-Vapor Refills Sold (Volume) #1 x10 Acquisitions E-Vapor brand overall in Ireland #1 in closed tank systems in France, Italy, and the
Slide 15: Introducing Logic Compact, the next step in our journey
E-Vapor│Introducing Logic Compact, the next step in our journey © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 29 Logic Compact│Our new premium closed tank system © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 30
Slide 16: E-Vapor: Building a competitive and sustainable position
Logic Compact│Our new premium closed tank system ©C Copyright Copy opyrig ht JT 201 right 2018 8 don – June London Lond June 5, 5, 2018 2018 JT Inv Invest Investor estor or Con Confer Conference ferenc encee 31 E-Vapor│Building a competitive and sustainable position 1 Logic - our global brand 2 Dive
Slide 17: Our enhanced RRP portfolio
Our enhanced RRP portfolio HEATED TED TOBACCO TOBACCO OB INFUSED E-VAPOR COMPACT © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 33 Our RRP journey continues… Advanced e-vapor Wireless connectivity technology Diagnostics & usage New heat-not-burn app functionality developments Expan
Slide 18: Committed to RRP success
… supported by robust investments Research & Development New Consumer Touchpoints c.$2 Bn Supply pp y Chain & Manufacturing New Channels investment © Copyright JT 2018 London – June 5, 2018 JT Investor Conference 35 Note: Investments (M&A + R&D + CAPEX) for the 2015-2020 period. Committed to RRP suc