Japan Tobacco Inc. · TSE:2914
Japan Tobacco — FY2020 Earnings Presentation
13 slides from Japan Tobacco's earnings presentation, Feb 9, 2021
Slide 1: International Tobacco Business 2020 Results & 2021 Outlook
International Tobacco Business 2020 Results & 2021 Outlook Eddy Pirard JTI President & Chief Executive Officer
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: 4S approach enabled business momentum despite COVID
4S approach enabled business momentum despite COVID • People, our number one priority • Consistently followed global best practices with respect to sanitary measures and employee wellbeing Shareholders • Impressive engagement and commitment from employees • Business continuity driven by a highly eff
Slide 4: 2020 | Strong performance driven by share and pricing gains
2020 | Strong performance driven by share and pricing gains 2020 performance • Strong share of market gains continued JTI +1.4pp SoM1) • Total and GFB shipment volume outpaced industry volume trend JTI -2.3% volume • Solid top-line increase driven by robust GFB price/mix variance and improved +1.8%
Slide 5: Volume performance driven by significant market share gains
Volume performance driven by significant market share gains JTI volume (2020 JTI volume vs.vs. (2020 PY, BnU) PY) • Industry volume decline including COVID-19 impact broadly in line -2.3% with historical trend 446 • Negative COVID-19 impact mainly to WWDF and emerging markets +8 436 • Significant sh
Slide 6: Stronger market mix contributes to robust top-line growth
Stronger market mix contributes to robust top-line growth Above-average margin1) market mix in JTI volume • COVID-led travel restrictions drove stronger domestic volumes in +6pp above-average margin markets • UK, France, Ireland, Taiwan 54% 48% • Lockdowns and border closures impacted illicit trade
Slide 7: Pricing contribution boosts share of value growth
Pricing contribution boosts share of value growth JTI price/mix variance1) Combustible retail value and JTI SoV2) +772 2020 vs. PY +729 Combustible industry +6.2% value growth $MM +1.7pp JTI SoV to 27.4% 5-year 2015-2019 2020 average Average © Copyright JT 2021 February 10, 2021 JT Investor Meeting
Slide 8: Europe | Accelerated share gains and solid pricing contribution
Europe | Accelerated share gains and solid pricing contribution Europe Focus on the UK • Stronger industry volume and improved market • Travel restrictions led a Y-o-Y industry mix from COVID disruptions volume increase • Record market share in 26 markets, driven by • Record market share in RMC and
Slide 9: Russia | Robust pricing and strengthened GFB portfolio
Russia | Robust pricing and strengthened GFB portfolio • Industry volume more resilient than expected Industry evolution1) JTI SoM2) 2020 vs. PY Q4 vs. SPLY • Illicit trade impacted by COVID restrictions 39.2% • Strong pricing environment JTI +0.8pp without deteriorating price elasticity Volume -5%
Slide 10: Russia | Successfully launched heated tobacco sticks with Ploom
Russia | Successfully launched heated tobacco sticks with Ploom • Rapid heated tobacco sticks expansion, focusing on key accounts and digitalization • Mid-March – Introduction of Ploom S and 4 SKUs in Moscow • July – Expansion to other large cities and key accounts • Successful ramp-up of digital B2
Slide 11: Russia | Excise challenge manageable
Russia | Excise challenge manageable • Significant excise tax increase (c. +18RUB per pack) fully built in the forecast • Industry volume anticipated to be under pressure • Pass-on in progress • Confidence driven by regulatory changes improving predictability • Introduction of a single minimal retai
Slide 12: 2021 | Solid ongoing business momentum
2021 | Solid ongoing business momentum • Strengthen business fundamentals • Market share gains to continue • Ongoing positive pricing contribution • Accelerated efficiencies driven by the Transformation initiative • Reinforce investment posture behind heated tobacco sticks • Launch of new HTS device
Slide 13: 2021 Guidance | High single-digit AOP growth
2021 Guidance | High single-digit AOP growth 2021 outlook Industry JTI GFB Core AOP volume1) volume volume revenue +8% +1% ~ -1% -4 ~ -6% ~ -3% © Copyright JT 2021 February 10, 2021 JT Investor Meeting 13 Note: 2021 variance vs. PY. Core revenue and AOP (adjusted operating profit) at constant curren