Tag: Japan Tobacco

Japan Tobacco Reports Third-Quarter Results

Masamichi Terabatake (Photo: JT Group)
Japan Tobacco reported revenue of ¥2.21 trillion and adjusted operating profit of ¥681.7 billion at constant currency exchange rates for the third quarter of fiscal 2024, up 6.8 percent and 2.6 percent, respectively, from the comparable 2023 quarter. On a reported basis, core revenue increased 11 percent to ¥2.39 trillion and adjusted operating profit increased 1.2 percent to ¥672.5 billion. Operating profit increased 0.8 percent to ¥636.6 billion, and profit rose 0.1 percent to ¥442.4 billion.
“The JT Group posted another set of strong results for the third quarter, mainly driven by solid pricing in the tobacco business,” said JT Group President and CEO Masamichi Terabatake in a statement.
“Our solid market share momentum, combined with better-than-expected overall demand in a number of markets and the significant Ploom volume growth of 40 percent, resulted in total volume increasing by 2.2 percent year-on-year.
“The geo-expansion of Ploom, our investment priority, has now reached 23 markets, and in Japan, the largest Ploom market, we continued to gain share in the HTS segment, reaching 11.8 percent quarter-to-date. Overall, RRP-related revenue increased by approximately 22 percent year-on-year.
“Following the successful acquisition of Vector Group, I am very pleased to welcome the employees of VGR to the JT Group. I am confident that our expanded presence in the highly profitable U.S. market will improve the JT Group’s returns in combustibles and strengthen our mid[term] to long-term financial position through sustainable hard currency profit and cash flows.”
October 31, 2024
JT Completes Vector Acquisition

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The JT Group completed the acquisition of Vector Group (VGR) on Oct. 7, following a tender offer, initially announced on Aug. 21.
The tender offer period, initiated on Sept. 4, 2024, expired at one minute after 23:59 Eastern Daylight Time, on Oct. 4, 2024. The conditions of the tender offer having been satisfied, the JT Group has accepted all such tendered shares, and, following a statutory merger on Oct. 7, 2024, VGR became a wholly owned subsidiary of the JT Group and was delisted from the New York Stock Exchange on Oct. 7, 2024.
In a statement, the JT Group said it expects the acquisition to improve the company’s return-on-investment in combustibles by significantly increasing the group’s presence and distribution network in the U.S, the second largest tobacco market in net sales and one of the most profitable.
October 8, 2024
JT Launches Mayfair Gold RYO

Image: JTI UK
Japan Tobacco International U.K. has launched Mayfair Gold Rolling Tobacco 30g in England, Scotland and Wales.
“Ultra value” remains the fastest-growing segment in the British tobacco category, and Mayfair Gold Rolling Tobacco offers a premium quality Virginia tobacco at a recommended retail price of £18.50 ($24.22) per 30g pouch.
The launch builds on the success of Mayfair Gold factory-made cigarettes, which have achieved a retail sales value of £46.7 million since debuting in September 2023 and is the fastest growing factory-made cigarette brand in Independent & Symbol Groups in the last 12 months.
The continued demand for lower-priced options has led to an increase in growth of ultra value tobacco products. According to JTI, Mayfair Gold Rolling Tobacco 30g represents a great opportunity for retailers to capitalize on an established heritage brand at an ultra-value price point.
“We find new product launches are helpful for our business across all categories, even in tobacco where customers are more brand loyal,” said Aruna Patel of Rons News in Worcestershire. “Mayfair is a popular brand, and we’d recommend Mayfair Gold to other retailers, as price is the main factor for our customers.”
“The ultra-value price point remains the key focus for us, with 60 percent of all sales volumes coming from this sector,” said Mark McGuiness, marketing director at JTI U.K. “We are continuing to innovate our offering in this area with the launch of a heritage brand, Mayfair Gold, into the RYO [roll-your-own] category.”
September 9, 2024
Japan Tobacco Acquires Vector Group

The JT Group will acquire Vector Group (VGR), the fourth largest tobacco company in the United States.
Based on the purchase agreement, the JT Group will conduct a tender offer for all outstanding shares of VGR through Vapor Merger Sub, an entity established specifically for this acquisition.
The JT Group intends to acquire 100 percent of VGR’s outstanding fully diluted share capital for a per share price of $15, representing a total equity value transaction estimated at around $2.4 billion. The transaction, which is unanimously supported by the board of directors of VGR, is expected to be completed by Dec. 31, 2024, subject to receipt of antitrust approvals and satisfaction of customary closing conditions. Following closing, VGR will be a wholly owned consolidated subsidiary of JT and be delisted from the New York Stock Exchange.
“Vector Group and JT Group share a commitment to quality and excellence and providing consumers an outstanding value proposition in the U.S. cigarette market,” said Howard M. Lorber, president and CEO of Vector Group, in a statement.
“This transaction delivers significant value to Vector Group stockholders and creates opportunities for our employees, who will become part of a leading global organization. Vector Group has an incredibly talented team who have been completely dedicated to building a strong business. JT Group has deep respect for Liggett Vector Brands’ legacy of value-focused, quality products and looks forward to continuing to meet customers’ evolving needs.”
“We are excited by this acquisition which, in line with our tobacco business strategy, will contribute to the acceleration of the ROI [return on investment] in our combustible business and expand JT Group’s global footprint,” said Masamichi Terabatake, JT Group CEO and president of the company’s tobacco business, in a statement.
“By adding this sizeable and historically profitable business to our company, we are confident the transaction will contribute to sustainable growth and increase JT Group’s corporate value.”
“This transaction will significantly increase our U.S. presence, boosting our market share from 2.3 percent to approximately 8 percent and giving us full ownership of two of the top-10 U.S. cigarette brands,” said Eddy Pirard, president and CEO of JT International.
“The transaction will enable us to also strengthen our distribution network and create mid- to long-term strategic opportunities to boost our competitiveness in this major tobacco market.”
August 21, 2024
JT Group Profit Up

Masamichi Terabatake
The JT Group reported revenue of ¥1.6 trillion ($10.63 billion) for the second quarter of 2024, up 12.7 percent over the comparable 2023 period. Profit increased by 6.3 percent to ¥305.2 billion.
“The JT Group posted another strong set of results for the first half, driven by continued market share gains and solid pricing in the tobacco business,” said President and CEO Masamichi Terabatake in a statement.
“Total volume increased by 2 percent year-on-year, with combustibles growing 1.7 percent and RRP [reduced risk products] up by a strong 25.5 percent. RRP volume was mainly driven by Ploom in the HTS segment, our investment priority, resulting in RRP-related revenue increasing by approximately 29 percent year-on-year.
“In the Japanese market, Ploom volume increased approximately 36 percent year-on-year, growing at a faster pace than total HTS demand in the market. Additionally, the geo-expansion of Ploom has now reached 21 markets, with sales volumes in markets outside Japan also steadily increasing.
“For the full-year performance forecast, we have revised our adjusted operating profit at constant FX [foreign exchange rates] upward, reflecting the positive momentum in the first half. On a reported basis, we have also revised our forecast upward, considering the continued impact of the current positive foreign exchange trend.”
August 2, 2024
JTI Launches Ploom X Advanced in Italy

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Japan Tobacco International launched its Ploom X Advanced in Italy’s travel retail market at Milan Malpensa Airport.
Already available in duty-free stores in Japan and Switzerland, the product comes in a variety of device colors, sticks and accessories.
“I was excited to see JTI’s premium offer in the RRP [reduced-risk product] category taking off in Milan,” said JTI Global Travel Retail Sales Director Simone Mammi in a statement. “Our Ploom X Advanced device has been launched in Italy travel retail, alongside Camel heated-tobacco sticks, available in four flavors and tobacco intensities (gold, bronze, burgundy and teal).”
JTI noted that with Avolta as one of its longstanding retail partners at Milan Malpensa Airport, it optimized the premium front-of-category space to provide impactful showcasing that, when coupled with ongoing consumer engagement, “should deliver promising results.”
The Ploom X Advanced device was named the best product available in the heated-tobacco category at the U.K. Product of The Year Awards 2024.
May 22, 2024
Revenue and Profits up at Japan Tobacco

Photo: JTI
Japan Tobacco’s revenue increased by 11.3 percent to ¥740.3 billion ($4.75 billion), year-on-year, in the first quarter of 2024. Core revenue at constant currency exchange rates rose by 5.7 percent to ¥676.7 billion while adjusted operating profit at constant exchange rates increased by 3.4 percent to ¥231 billion.
On a reported basis, adjusted operating profit increased by 1.5 percent to ¥226.7 billion. Operating profit increased by 4.6 percent to ¥215.8 billion, and profit increased by 8.7 percent to ¥157.3 billion.
“The JT Group delivered robust results in the first quarter,” said President and CEO Masamichi Terabatake in a statement. “GFB [global flagship brands] volume growth and solid pricing, as well as RRP [reduced-risk product]-related revenue increasing by double-digits in the tobacco business, continued to drive the strong performance of the group.”
“RRP volume increased by 25.2 percent year-on-year, mainly driven by the HTS [heated-tobacco sticks] segment, which is our investment priority. Geo-expansion of Ploom X is on track; we have completed launches in four additional markets year-to-date. With plans to launch in four more markets by June, we are making good progress to deliver our ambitions set for 2028.”
May 9, 2024
JT Reports ‘Record’ Performance

Masamichi Terabatake (Photo: JT Group)
The JT Group reported a profit of ¥482.3 billion ($3.2 billion) for 2023, up nearly 9 percent over the previous fiscal year. Revenue increased 6.9 percent year-on-year, to ¥2.84 trillion. For the fourth quarter, the company posted a profit of ¥40.3 billion and revenue of ¥684.1 billion, up 3.5 percent and 5.4 percent, respectively, over the comparable 2022 periods.
“I am pleased to report that the 2023 JT Group performance reached record high levels across all financial indicators, despite the challenges across our operating environment. Adjusted operating profit at constant FX [foreign currency exchange rates], our main indicator, exceeded our guidance and grew by 5.2 percent, driven by all business segments,” said JT Group President and CEO Masamichi Terabatake in a statement.
In the tobacco business, JT Group’s profit growth engine, performance was driven by solid pricing and continued share gains in combustibles. “We steadily expanded the geographic reach of Ploom X, making it available to adult consumers in 13 markets at the end of 2023,” said Terabatake. In Japan, the JT Group’s share of the heated tobacco sticks market reached 11.4 percent in December 2023.
Terabatake said the JT Group would continue to prioritize investments in heated tobacco sticks to fund the expansion of Ploom X, both in terms of share of segment and geographic footprint. The company aims to make Ploom X available in over 40 markets by the end of 2026. Combustibles, said Terabatake, will continue to drive profit by growing market share and revenue.
February 13, 2024
Nicotine Market Shares Flat in December

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Consumer demand for nicotine products has fluctuated due to inflation and rising cigarette prices over the past 13-19 months. However, the Neilsen report covering the four-week period ending Dec. 30 shows that market shares are holding steady for both next-generation and traditional tobacco brands.
The market share of R.J. Reynolds’ top-selling Vuse e-cigarette remained flat at 42 percent in December at convenience stores, according to the report. While Vuse’s market share was unchanged, No. 2 Juul dropped from 24.3 percent to 24.2 percent for the report covering the four-week period ending Dec. 30.
As recently as May 2019, Juul held a 74.6 percent share in the U.S. electronic cigarette market. That’s when a series of regulatory actions led to product-reduction concessions, according to media reports.
Meanwhile, Altria Group’s ownership of No. 3 NJoy hasn’t resulted in a meaningful market-share increase so far. Nielsen cited a research error by why it did not include an update for NJoy in the latest report. It was at 2.6 percent in the previous report.
Fontem Ventures’ blu eCigs, an affiliate of Imperial Brands Plc, was unchanged at 1.2 percent.
The overall e-cigarette category was down 9.9 percent.
In traditional cigarettes, Philip Morris’ top market share was at 50.6 percent in the latest Nielsen report with top-selling Marlboro representing 45.6 percent of overall market share.
Meanwhile, Reynolds was at 33.2 percent with Newport at 12.9 percent and followed by Camel (7.8 percent), Natural American Tobacco (3.7 percent) and Pall Mall (3.7 percent).
ITG was at 8.5 percent overall, although ITG has said its market share is closer to 10 percent. Its No. 7 Winston brand remained at 2 percent, while Kool and Maverick remained tied for No. 8 at 1.8 percent.
Goldman Sachs analyst Bonnie Herzog said that “in terms of specific company trends, total nicotine sales declines improved across the board for Altria, BAT, Imperial and Juul, while decelerating for all other manufacturers broadly in the latest period.”
The decline in cigarette sales continues at a strong pace, said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.
“Yet, as Altria results showed and Barclays recently highlighted, much of this is due to cross-category migration,” Sweanor said.
“People are switching to far lower-risk options. But disposable vaping products appear to currently be the greatest factor in this migration.”
TD Cowen analyst Vivian Azer said consumers’ cigarette “downtrading to discount and deep discount continues to benefit Imperial’s share trends.”
January 11, 2024
Firms Recognized for Sustainability

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Philip Morris International and Japan Tobacco and British American Tobacco have been recognized for their sustainability efforts.
Philip Morris International has been included in the Dow Jones Sustainability World Index for the first time and for the fourth consecutive year in the Dow Jones Sustainability North America Composite Index.
The Dow Jones Sustainability World Index measures the sustainability performance of companies as identified by S&P Global through the annual Corporate Sustainability Assessment. The World Index includes the top 10 percent of the largest 2,500 companies in the S&P Global Broad Market Index based on long-term economic, environmental and social criteria.
“Investors and other financial stakeholders place increasing value on reliable, robust and timely measures of sustainability performance,” said Emmanuel Babeau, chief financial officer at PMI, in a statement.
“ESG ratings are one part of the input dataset for many institutional investors. Through our annual integrated report, and the ever-strengthening processes and initiatives that underpin it, we aim to provide a holistic and extensive view of our performance across the most material sustainability issues for our business.”
PMI scored 85 out of 100 in the 2023 S&P Global CSA, reflecting a significant increase of 21 points since it first began engaging with the ranking in 2018. This is the first year PMI has recorded the highest CSA score out of 13 companies assessed in the tobacco industry by S&P.
Earlier this month, ISS ESG Corporate Rating qualified PMI as “Prime” status according to their rating methodology. Prime status is awarded to companies with an ESG performance above a sector-specific threshold, which means that they fulfill ambitious absolute performance requirements. According to ISS, the Prime rating classification qualifies companies for responsible investment. To date, PMI is the only tobacco company to have received Prime status qualification.
Japan Tobacco has been included in the Dow Jones Sustainability Asia Pacific Index (DJSI Asia Pacific) for the 10th consecutive year.
“We are honored that the JT Group has been selected in the DJSI Asia Pacific for the 10^th consecutive year,” said Hisato Imokawa, senior vice president and chief sustainability officer, in a statement.
“We are very pleased that our sincere and continuous efforts to address social and environmental issues throughout the entire value chain continue to be recognized at the highest level. We remain dedicated to fostering transparent and precise communication of nonfinancial information, a key focus in our recent agenda. We acknowledge the significance of this initiative in promoting engagement and dialogue with stakeholders, recognizing it as a crucial endeavor.”
The JT Group scored 79/100 in the 2023 S&P Global Corporate Sustainability Assessment (based on the score data as of Dec. 9, 2023).
that BAT was included in 2023 DJSI for the 22nd consecutive year, specifically listed in the Dow Jones Sustainability Europe Index, with a S&P Global CSA score of 80/100 (as of Dec. 8, 2023).
December 12, 2023