KT&G said its heated tobacco brand lil has emerged as a major next-generation product (NGP) player within a decade of launch, driven by rapid device innovation and an aggressive patent strategy. Introduced in 2017 with initial sales of KRW 7.8 billion ($5.3 million), lil has now recorded cumulative sales of about KRW 4.3 trillion ($2.9 billion) as of the third quarter of 2025 and is on track to reach KRW 5 trillion ($3.4 billion), with average annual sales topping KRW 800 billion ($544 million) over the past three years. The brand holds more than 60% share of South Korea’s e-cigarette market and now operates three device platforms with frequent upgrades, supported by a sharp rise in NGP-related patent filings. Overseas momentum is also building, with international NGP sales up about 35% year over year to KRW 110.8 billion ($75.3 million) and products now sold in more than 30 markets, including through partnerships with Philip Morris International.
Tag: NGP
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Vietnam Looking to Tighten Tobacco Control, Include Vape and HTP
A draft revision released today (January 13) to Vietnam’s Law on Prevention and Control of Tobacco Harms signals a tougher regulatory stance on cigarettes and next-generation products, with measures aimed at strengthening public-health protections and limiting industry and special-interest influence. The proposal would require health warnings to cover at least 85% of cigarette packaging and expand smoking-cessation and detoxification provisions to include e-cigarettes and heated tobacco products, reflecting reported rising nicotine dependence from alternative products. The amended law is scheduled to take effect January 1, 2027, providing a transition period for regulators, local governments, and consumers, and marks a shift toward more proactive risk control—particularly for youth—by tightening definitions, advertising rules, retail practices, and cessation requirements across the tobacco and NGP categories.
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Imperial Revenue Dips, But Delivers Strong NGP Growth
Imperial Brands announced its full-year results for the year ended September 20, highlighting continued operational momentum and robust shareholder returns, even as reported earnings faced pressure. The company posted 4.1% growth in tobacco and Next Generation Products (NGP) net revenue, driven by double-digit NGP gains, strong tobacco pricing, and stable market share across its five priority markets. Since FY20, Imperial has added 48 basis points of market share. However, reported revenue slipped 0.7%.
“We will continue to invest in consumer insights, innovation, and marketing capabilities,” said Imperial CEO Lukas Paravicini. “We will also continue to make deliberate, focused choices about which opportunities we pursue, and develop a simpler, more efficient, and more agile organization.”
NGP performance remained a standout, with net revenue climbing 13.7% and reported NGP revenue up 14.9%, fueled by oral nicotine growth in the U.S. and Europe and share gains across all smoke-free categories. Adjusted operating profit rose 4.6%, though reported operating profit fell 1.8%. Adjusted earnings per share increased 9.1%, supported by profit growth and share count reduction, while reported EPS dropped 16.5%.
Cash generation remained strong, with free cash flow of £2.7 billion, largely driven by the combustibles business. Shareholder returns were a key focus: the FY25 dividend rose 4.5%, and a £1.25 billion buyback was completed. Over FY21–FY25, Imperial returned £10 billion to shareholders, and a new £1.45 billion buyback for FY26 has already commenced.