Japan Tobacco Inc. · TSE:2914
Japan Tobacco — Q3 2024 Earnings Presentation
21 slides from Japan Tobacco's earnings presentation, Oct 31, 2024
Slide 1: 2024 Third-Quarter Results
JT Group 2024 Third-Quarter Results Hiromasa Furukawa JT Group Chief Financial Officer *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 detai
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: 2024 Nine-Month Results
2024 Nine-Month Results
Slide 4: 2024 Third-Quarter Consolidated Results: Solid top-line growth continued driven by tobacco
2024 Third-Quarter Consolidated Results: Solid top-line growth continued driven by the tobacco business 2024 Revenue and AOP 1) (JPY BN) vs. 2023 Jan-Sep • Revenue grew, mainly driven by solid pricing contributions in the tobacco At constant FX business, more than offsetting declines in the pharmace
Slide 5: Tobacco Business Volume Performance: Strong first half momentum continued
Tobacco Business Volume Performance: Strong first half momentum continued 2024 Combustibles （BnU） vs. 2023 Jan-Sep • On-going market share momentum across the footprint Total volume 419.5 +2.2% • GFB volume grew by 4.0%, fueled by Winston and Camel • Strong volume growth in the EMA cluster - Strong
Slide 6: Tobacco Business Financial Performance: Pricing drove quality top line growth
Tobacco Business Financial Performance: Pricing drove quality top line growth 2024 （JPY BN） vs. 2023 Volume Jan-Sep • Geographic mix resulted in a negative financial contribution Core revenue 2,122.4 +12.2% Price/Mix at constant FX 2,032.5 +7.5% • Robust on-going positive variance driven by pricing
Slide 7: Tobacco Business Results by Cluster
Tobacco Business Results by Cluster ASIA WESTERN EUROPE EMA +3.5％ +20.4％ -0.6% -0.8% +15.8％ +5.0% -6.7％ -2.7% -2.6％ Total CR AOP Total CR AOP Total CR AOP Volume Volume Volume Total Volume Total Volume Total Volume • Market share gains in the Philippines and • Market share gains in several markets,
Slide 8: Tobacco Business Ploom Volume: Continued growth in Japan
Tobacco Business Ploom Volume: Continued growth in Japan accelerated by volume in overseas markets Ploom volume, BnU, 9-month total Outside Japan Japan +40.0% 5.9 4.2 2023 Q3 2024 Q3 • Ploom is available in 23 markets as of Oct’24, including the launches in Jordan and the Philippines in October. Sou
Slide 9: Ploom Global Overview: Steady HTS segment share gains
Ploom Global Overview: Steady HTS segment share gains in markets where launched Ploom SoS in HTS1) 2) Japan Portugal Czech R. 11.8% Ploom Volume 11.0% 11.4% 4.4% 10.7% 10.9% Ploom SoS 9.6% 3.0% 9.4% 8.0% 8.2% 7.7% 7.3% 6.6% 1.2% 4.0% 4.2% 1.6% 3.5% 0.5% 0.1% '21Q1 '21Q2 '21Q3 '21Q4 '22Q1 '22Q2 '22Q3
Slide 10: Acquisition of Vector Group Ltd. (VGR)
Acquisition of Vector Group Ltd. (“VGR”) Strategic rationale • Improve Return-On-Investment (ROI) in combustibles Increasing volume by approx. 9 BnU in one of the largest* and most profitable tobacco markets in the world • Expand JT Group’s presence in the US Increasing the US market share from 2.4%
Slide 11: Acquisition of Vector Group Ltd. (VGR)
Acquisition of Vector Group Ltd. (“VGR”) • Now the 4th largest tobacco player in the US JTI+VGR combined SOM by states market • Significant strengthening of the commercial span and geographic footprint • From 34 states to national coverage • Doubling the number of outlets covered • Better representa
Slide 12: Pharmaceutical and Processed Food Businesses Financial Results
Pharmaceutical and Processed Food Businesses Financial Results Pharmaceutical Business Revenue 2024 vs. 2023 （JPY BN） Jan-Sep variance • Decrease mainly due to absence of one-time compensation gains from licensed compounds received in 2023 and lower overseas royalty income, despite sales growth in t
Slide 13: Full-year Revised Forecasts
Full-year Revised Forecasts
Slide 14: JTI-Macdonald Corp. Update on the litigation in Canada
JTI-Macdonald Corp. (JTI-MC) | Update on the litigation in Canada • In an effort to bring a comprehensive resolution of smoking and health related class actions and health-care cost recovery litigation in Canada, JTI-MC has been actively engaged in a confidential mediation process with plaintiffs an
Slide 15: 2024 Consolidated Forecasts Revised Upwards
2024 Consolidated Forecasts Revised Upwards FY2024 vs. Upward revision for AOP, both at constant FX (JPY BN) Revised Previous vs. 2023 Revenue and AOP forecasts forecasts and reported At constant FX • Revenue: • Upward revision driven by the tobacco and pharmaceutical businesses Core revenue 2,953.5
Slide 16: Tobacco Business: Strong momentum and VGR inclusion drive upward revision
Tobacco Business: Strong momentum and VGR inclusion drive upward revision of forecast Volume FY2024 Volume Revised upward to approx. +1.0% vs. 2023 Previous forecast assumption Revised forecast (+) Better-than-expected industry volume and on-going market share gains An increase of A decrease of Tota
Slide 17: Pharmaceutical and Processed Food Businesses Revised Forecasts
Pharmaceutical and Processed Food Businesses Revised Forecasts Pharmaceutical Business FY2024 vs. Revenue +1.0 BN vs. previous forecast vs. 2023 (JPY BN) Revised Previous variance forecasts forecasts • Upward revision incorporating higher revenue at Torii Pharmaceutical Revenue 94.0 +1.0 -0.9 AOP +1
Slide 18: Closing remarks
Closing remarks
Slide 19: Closing remarks
Closing remarks 2024 Jan-Sep results • Strong top-line growth driven by solid pricing contributions in the tobacco business. AOP at constant FX grew 2.6% year-on-year, driven by the strong performance of the tobacco and processed food businesses. 2024 full-year revised forecasts Share holders • Upwa
Slide 20: 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 21: 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