Japan Tobacco Inc. · TSE:2914
Japan Tobacco — FY2024 Earnings Presentation
31 slides from Japan Tobacco's earnings presentation, Feb 13, 2025
Slide 1: Business Plan 2025
JT Group Business Plan 2025 Disclosed: February 13, 2025 Update: March 10, 2025* Masamichi Terabatake JT Group Chief Executive Officer *On March 6 2025, the Ontario Superior Court of Justice took a decision to approve a comprehensive settlement plan covering all pending tobacco-related claims, inclu
Slide 2: Forward-Looking Statements
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
Slide 3: Agenda
Agenda FY2024 Overview Business Plan 2025 Sustainability JT Group - Tobacco Business: Focus on FY 2024 Performance JT Group 2024 Results & 2025 Forecasts Closing Remarks © Copyright JT 2025 3
Slide 4: FY2024 Overview
FY2024 Overview Revenue and AOP* reached record highs • Another year of consolidated AOP growth at constant FX, exceeding initial forecasts and prior year results • Tobacco: Strong growth in revenue & AOP. AOP at constant FX increased 9.7% year-on-year • Combustibles: Continued market share momentum
Slide 5: Business Plan 2025: 4S Model and resource allocation
Business Plan 2025 4S Model and JT Group Purpose guide our resource allocation Resource allocation policy • Prioritize business investments for sustainable profit growth in the mid- to long-term • Strike a balance between profit growth through business investments, and shareholder returns Share hold
Slide 6: Tobacco Business Strategies
Business Plan 2025 Tobacco Business | Strategies Tobacco business : Core profit driver to enable mid- to long-term sustainable profit growth Combustibles RRP Capability Continuously improve ROI Prioritize investments in HTS Strengthen the business and strive to achieve 2028 foundations ambitions* •
Slide 7: Progress towards 2028 RRP ambitions
Business Plan 2025 Tobacco Business | Progress towards 2028 RRP ambitions* Global Ploom SoS in HTS** • Ploom share gains continued, reaching an estimated 7.8% across our measured footprint +3.2ppt (+3.2ppt vs. 2022) • On track with our 2028 ambition to reach 7.8% mid-teens HTS SoS >40 • Improved awa
Slide 8: Pharmaceutical and Processed Food Businesses, D-LAB Strategies
Business Plan 2025 Pharmaceutical and Processed Food Businesses, D-LAB | Strategies Pharmaceutical and Processed food businesses : Complement JT Group’s profit growth D-LAB : Support the realization of JT Group Purpose and identify future growth opportunities Focus on R&D towards next-generation str
Slide 9: High single digit growth
Business Plan 2025 High single digit growth* *consolidated adjusted operating profit at constant FX growth rate over the plan period 2025-27 AOP Outlook for 2025-2027 of the plan period • Consolidated AOP at constant FX expected to grow high single digit, the upper-end of our growth algorithm • Cont
Slide 10: Sustainability
Sustainability • Provide “fulfilling moments” to society by leveraging resources and strengths and taking actions based on the JT Group Materiality • Together with nature and society, the JT Group to achieve sustainable growth by connecting capitals gained from a society to further value creation ©
Slide 11: JT Group - Tobacco Business: Focus on FY 2024 Performance
JT Group - Tobacco Business Focus on FY 2024 Performance Eddy Pirard JTI President & CEO *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.
Slide 12: Combustibles and HTS drive another year of strong growth
Combustibles and HTS drive another year of strong growth Total Volume +2.4% Clear strategic focus delivers record-high volume & high single-digit Core Revenue 1) +9.1% revenue & AOP growth 1) Adjusted OP +9.7% RRP Volume +24% In RRP, investment priority is given to HTS as a future profit growth engi
Slide 13: RRP top-line growth driven by prioritized investment in HTS
RRP top-line growth driven by prioritized investment in HTS HTS KPIs (2024 vs. PY) • Total RRP volume and revenue grew by over 20% versus prior year 1) Volume growth Revenue growth • Fueled by HTS volume & revenue both increasing by 40%+ +44% +40% • Ongoing exploration in other RRP categories • Sele
Slide 14: Ploom geo-expansion on track to reach 80% coverage target
Ploom geo-expansion on track to reach 80% coverage target Ploom geo-expansion • Ploom is available in markets representing # of markets launched c.75% of global HTS volume Global segment volume coverage (%) 1) • On target to reach approx. 80% of global volume coverage by end of 2025 c.75% c.60% • Pl
Slide 15: Ploom continued to gain share across global HTS markets
Ploom continued to gain share across global HTS markets 1) Ploom SoS in HTS Selected markets - Ploom SoS in HTS Czech R. UK Lithuania 5.4% 4.6% 4.2% 12.6% 2.8% 2.5% 2.6% 10.9% Dec’23 Dec’24 Dec’23 Dec’24 Dec’23 Dec’24 Kazakhstan Portugal Italy 3.4% 3.1% 1.4% 8.2% 1.9% 1.6% 1.0% 7.2% 6.6% Dec’23 Dec’
Slide 16: Better consumer experiences – key to the success of Ploom
Better consumer experiences – key to the success of Ploom International Markets Ploom X ADVANCED – Consumer Metrics x 360° Consumer Activations Ploom exclusive users ratio Overall CSAT NPS +1.0 ppt +2.2 ppt +14 points Ploom X Advanced Ploom X Advanced Ploom X Advanced vs. Ploom X * vs. Ploom X vs. P
Slide 17: Combustibles performance underpinned by continued GFB and share growth
Combustibles performance underpinned by continued GFB and share growth Volume variance (2024 vs. PY) • Combustibles volume increased within an industry volume declining by 1.8%1) • 60+ markets grew volume • Vector acquisition +7.9% • GFB volume grew for the 6th consecutive year, reaching 73% of tota
Slide 18: Another record year for pricing fueling improved combustibles profitability
Another record year for pricing fueling improved combustibles profitability Growth driver (2024 vs. PY) Total Tobacco Combustibles 2) • Robust combustibles pricing continued 1) Price/mix, % Profit Margin, ppt • Driving high single-digit revenue growth • Offsetting impacts from ongoing inflationary +
Slide 19: Step-changing our presence in the large US profit pool
Step-changing our presence in the large US profit pool USA cigarettes market trend • Became the 4th largest player in the US by Market Share Super-Value Segment acquiring Vector Group Ltd. (% composition in total industry) 8.2% • USA to be one of our top-10 profit markets 19% 17% & 15% • Gross margi
Slide 20: 2025 Outlook for the Tobacco business
2025 Outlook for the Tobacco business Acceleration of Ploom adoption and consumer acquisition • Winning consumers to drive continuous share gains • Consumer-centric innovations to strengthen Ploom offerings Continuation of momentum in Combustibles, focusing on ROI • Share of market growth driven by
Slide 21: 2024 Results & 2025 Forecasts
JT Group 2024 Results & 2025 Forecasts Hiromasa Furukawa JT Group Chief Financial Officer
Slide 22: 2024 Consolidated Results: Revenue and AOP reached record highs
Update: March 10, 2025 2024 Consolidated Results: Revenue and AOP* reached record highs Excl. Canadian Revenue and AOP (JPY BN） FY2024 vs.2023 (%) settlement** At constant FX • Revenue growth fueled by solid pricing contribution in the tobacco business, and steady sales increase in the processed foo
Slide 23: Tobacco Business Financial Results
Tobacco Business Financial Results: Strong profit growth driven by solid pricing contribution vs.2023 Volume (JPY BN) FY2024 (%) • Positive volume variance fueled by higher total volume, more than offsetting the impact of negative geographical mix. Acquisition of VGR Core revenue 2,778.6 +12.1% supp
Slide 24: Pharmaceutical and Processed Food Businesses
Pharmaceutical and Processed Food Businesses Pharmaceutical Business Revenue vs. 2023 (JPY BN) FY2024 (abs) • Slightly decreased mainly due to the absence of one-time compensation gains from licensed compounds received in 2023, despite sales growth in the area of skin diseases and allergens at our c
Slide 25: 2025 Consolidated Financial Forecasts
Update: March 10, 2025 2025 Consolidated Financial Forecasts vs. 2024 vs. 2024 Excl. Canadian At constant FX, both CR and AOP (JPY BN) FY2025 Revenue and AOP (abs) (%) settlement* expected to increase year-on-year At constant FX • Revenue expected to grow at both constant FX and reported, driven by
Slide 26: Tobacco Business: Volume Outlook and Financial Forecasts
Tobacco Business: Volume Outlook and Financial Forecasts Volume FY2025 Volume assumption (+) Continued ｍarket share gains in Combustibles A decrease of (+) Full year inclusion of VGR Total volume -2.0% to -1.0% (+) RRP volume growth, fueled by Ploom vs. 2024 (-) Combustibles industry volume contract
Slide 27: Pharmaceutical and Processed Food Businesses: Financial Forecasts
Pharmaceutical and Processed Food Businesses: Financial Forecasts Pharmaceutical Business Revenue vs. 2024 (JPY BN) FY2025 (abs) • Increase driven by revenue growth at Torii Pharmaceutical, more than offsetting lower royalty income Revenue 97.0 +2.5 AOP • Decrease mainly due to higher R&D expenses,
Slide 28: Closing Remarks
Closing Remarks Masamichi Terabatake JT Group Chief Executive Officer
Slide 29: Closing Remarks
Closing Remarks FY2024 overview • Steady progress to realize JT Group’s Purpose • Another strong AOP growth at constant FX while maintaining significant investments toward future profit growth • Continued pricing contribution and market share gains in Combustibles along with RRP volume growth offset
Slide 30: Definitions
＜Definitions＞ Operating profit + amortization cost of acquired intangibles arising from business acquisitions + adjusted items (income and costs)* Adjusted operating profit(AOP)： * Adjusted items (income and costs) = impairment losses on goodwill ± restructuring income and costs ± others Constant FX
Slide 31: Definitions
＜Definitions＞ Total volume： The volume of tobacco-based products which excludes contract-manufactured products, waterpipe, RRP devices and related accessories. The shipment volume of combustibles which excludes contract-manufactured products, snus, waterpipe, heated tobacco products and Combustibles