Japan Tobacco Inc. · TSE:2914
Japan Tobacco — Q3 2020 Earnings Presentation
19 slides from Japan Tobacco's earnings presentation, Oct 30, 2020
Slide 1: 2020 Third-Quarter Results
2020 Third-Quarter Results Naohiro Minami 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 details of each t
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: 2020 Third-Quarter Results
2020 Third-Quarter Results
Slide 4: 2020 Year-to-Date Consolidated Results
2020 Year-to-Date Consolidated Results Consolidated Revenue • Declined due to the Japanese domestic tobacco, pharmaceutical and processed food businesses 2020 • In the international tobacco business, robust business momentum (JPY BN) Year-on-year Jan-Sep exceeded the unfavorable currency impact • CO
Slide 5: Japanese domestic tobacco business: Volume Performance
Japanese domestic tobacco business: Volume Performance Industry Volume Variance 2020 • Total tobacco industry: impact of COVID-19 disruptions, revised RMC RRP regulations, price revision in Oct’19 and natural decline; partially Jan-Sep offset by one-time demand surge ahead of price revision in Oct’2
Slide 6: Japanese domestic tobacco business: Financial Results
Japanese domestic tobacco business: Financial Results Topline Performance 2020 （－） Negative volume contribution from RMC Financial (JPY (JPY BN) BN) Year-on-year Jan-Sep （－） Negative RMC pricing variance following tax hike absorption on selected products in Oct’19 Core revenue 394.8 -9.4% （－） Lower
Slide 7: International tobacco business: Volume Performance
International tobacco business: Volume Performance Resilient Volume Performance （＋）Robust share growth, notably in Europe （＋）Increased volume in high-margin markets (UK, France, Taiwan) driven by reduced cross-border travel (BN stick equivalents) 2020 Year-on-year Jan-Sep （－） Lower industry volume a
Slide 8: International tobacco business: Financial Results
International tobacco business: Financial Results 2020 Year-on-year Jan-Sep Topline performance Core revenue 956.5 JPY BN +1.6% • Pricing gains, notably in Russia, the UK and the Philippines • Volume increases, driven by continued market share gains and, in at constant currency 9,370 USD MM +8.5% so
Slide 9: Pharmaceutical and Processed food businesses
Pharmaceutical and Processed food businesses Pharmaceutical Business Highlights • Revenue decreased mainly due to lower overseas royalty income 2020 (JPY BN) Year-on-year • AOP growth driven by lower R&D expenses following completion of clinical trials and Jan-Sep profit increase at Torii Pharmaceut
Slide 10: Full-year forecast
Full-year forecast
Slide 11: Consolidated Revised Forecast
Consolidated Revised Forecast Revised Currency-Neutral AOP Growth Rate and Net Profit Expected to Exceed Initial Outlook Revenue Revised Upward Mainly Driven by FY2020 vs. - Better-than-expected volume outlook in the international tobacco (BN JPY) Revised Previous vs. PY business despite COVID-19 fo
Slide 12: Japanese-domestic tobacco business: revised volume outlook
Japanese-domestic tobacco business: revised volume* outlook *Considers only domestic tax-paid market • Total Tobacco Industry Volume: Revised upward to approx. 4.5% decline • JT RMC Sales Volume: Revised downward to approx.9% decline • RMC Industry Volume: Revised upward to over 8% decline Intensi
Slide 13: Japanese-domestic tobacco business: Financial forecast
Japanese-domestic tobacco business: Financial forecast • Core Revenue Forecast Remains Unchanged Downside of the domestic duty-free and China businesses due to FY2020 vs. protracted COVID-19 disruptions and downward revision of RMC (JPY BN) Revised Previous vs. PY volume outlook were offset mainly
Slide 14: International tobacco business: Volume Outlook and Financial Forecasts
International tobacco business: Volume Outlook and Financial Forecasts • Volume: Revised Upward Driven by Robust YTD Performance Solid volume and market share gains, stronger consumer demand in several markets vs. FY2020 Total shipment volume revised upward to approx. -4% Previous vs. PY Revised
Slide 15: Pharmaceutical and Processed food businesses
Pharmaceutical and Processed food businesses Pharmaceutical Business Revenue and AOP revised upward FY2020 vs. (JPY BN) Revised Previous vs. PY • Revenue revised upward by JPY 2.0 BN, driven by royalty income exceeding expectations forecast forecast • AOP revised upward by JPY 3.0 BN driven by the i
Slide 16: Closing remarks
Closing remarks
Slide 17: Closing remarks
Closing remarks • Confidence in achieving the revised forecast for this year • Necessary to consider the following potential risks for future business plans Shareholders Ongoing debates on excise tax increases in various countries aiming at securing financial resources Slow recovery of the duty-
Slide 18: Definitions
<Definitions> Adjusted operating profit (AOP): Adjusted operating profit = 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 a
Slide 19: Definitions
<Definitions> Total tobacco industry volume: Industry volume in Japan market by number of sticks based on the internal (Japanese domestic tobacco business) estimate. This includes cigarettes, little cigars, RRP and others RMC: Ready made cigarettes (Japanese domestic tobacco business) RMC industry v