JT Group

2022 Six-month Results

Nobuya Kato

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 term, please refer to annotations on slide 17.

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 and results of operations. In some cases, you can identify forward-looking statements by terms such as "may", "will", "should", "would", "expect", "intend", "project", "plan", "aim", "seek", "target", "anticipate", "believe", "estimate", "predict", "potential" or the negative of these terms or other similar terminology. These statements are not guarantees of future performance and are subject to various risks and uncertainties. Actual results, performance or achievements, or those of the industries in which we operate, may differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. In addition, these forward-looking statements are necessarily dependent upon assumptions, estimates and data that may be incorrect or imprecise and involve known and unknown risks and uncertainties. Forward-looking statements regarding operating results are particularly subject to a variety of assumptions, some or all of which may not be realized.

Risks, uncertainties or other factors that could cause actual results to differ materially from those expressed in any forward-looking statement include, without limitation:

  1. increase in awareness of health concerns related to smoking;
  2. regulatory developments; including, without limitation, tax increases and restrictions on sales, marketing, packaging, labeling and use of tobacco products, privately imposed restrictions and governmental investigations;
  3. litigation around the world alleging adverse health and financial effects resulting from, or relating to, tobacco products;
  4. our ability to further diversify our business beyond the traditional tobacco industry;
  5. our ability to successfully expand internationally and make investments outside Japan;
  6. competition, changing consumer preferences and behavior;
  7. our ability to manage impacts derived from business diversification or business expansion;
  8. economic, regulatory and political changes, such as nationalization, terrorism, wars and civil unrest, in countries in which we operate;
  9. fluctuations in foreign exchange rates and the costs of raw materials; and
  10. catastrophes, including natural disasters.

© Copyright JT 2022

2

2022 Six-Month Results

2022 Six-Month Consolidated Results

(JPY BN)

2022

vs. 2021

Jan-Jun

Reported

Revenue

1,266.8

+10.7

AOP

414.9

+15.8

Operating Profit

383.0

+18.9

Profit

264.1

+17.3

Note: The results for fiscal year 2021 and fiscal year 2022 on a reported basis have been adjusted to include the impact of hyperinflationary accounting in accordance with the requirements stipulated in IAS 29. The results for fiscal year 2021 and fiscal year 2022 on a constant FX basis have been calculated to exclude amounts of revenue and profit that have increased due to hyperinflation in certain markets.

Core revenue at constant FX: +3.7% vs. 2021

Adjusted operating profit (AOP) at constant FX: +8.0% vs. 2021

  • Driven by stronger pricing contributions in our tobacco business

Revenue on a reported basis

  • Increased year-on-year due to top-line growth in all business segments and favorable FX impact from a weaker JPY

AOP on a reported basis and Operating profit

  • Both increased driven by revenue growth and favorable FX impact from a weaker JPY

Profit

  • Increased due to operating profit growth despite higher financing costs

© Copyright JT 2022

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Tobacco Business: Volume Performance

Volume (BnU)

2022

vs. 2021

Jan-Jun

Total volume

262.8

-0.4%

Combustibles

258.7

-0.6%

volume

RRP volume

4.0

+14.5%

Total volume

  1. Volume growth in EMA, driven by strong momentum in Iran and Poland, as well as continued recovery in Global Travel Retail from easing travel restrictions

(-) Industry volume contraction mainly in France, the Philippines, Russia and the UK and continued combustibles industry size decline in Japan

Combustibles

  1. On-goingshare gains across most key markets: Italy, the Philippines, Romania, Spain, Taiwan, Turkey
    (±) Gradual unwind of COVID trends

(-)Out-of-stock due to sourcing changes related to exports from Russia and Ukraine

RRP

  1. on-goingHTS* share gains in Japan stemming from the launch of Ploom X within an increasing segment

*heated tobacco sticks

© Copyright JT 2022

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Japan Tobacco Inc. published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 06:13:13 UTC.