JT Group’s Ploom X device plays an important role in the company’s future earnings growth. Photo credit: JTI
JT Group had a good start to the year, reporting double-digit growth in revenue and profit.
Revenue increased by 14.4% to ¥665.3 billion (US$4.89 billion), driven by an increase in the tobacco and pharmaceutical businesses as well as positive currency movements due to a weaker Japanese yen. Core revenue at constant FX increased by 6.2% to ¥594.6 billion (US$4.37 billion). Adjusted operating profit at constant FX increased by 5.1% to ¥204.7 billion (US$1.5 billion). On a reported basis, adjusted operating profit increased by 14.6 % to ¥223.4 billion (US$1.64 billion). Operating profit increased by 15.7% to ¥206.4 billion (US$1.52 billion). Profit increased by 16.6% to ¥144.7 billion (US$1.06 billion).
For the company’s tobacco business alone, core revenue was ¥579.1 billion (US$4.26 billion), a 15.3% increase YoY, driven by continued market share gains, strong pricing contribution in combustibles, reduced risk products-related revenue growth, and favorable currency movements due to the weak Japanese yen. Adjusted operating profit increased by 14.1%.
Continued market share gains and sustained reduced risk product (RRP) volume growth resulted in total volume increasing by 1.3%. RRP volume grew by 3%, driven by continued heated tobacco sticks (HTS) growth in Japan, and combustibles volume was up 1.2%, driven by the Asia and EMA clusters. Global flagship brands (GFB) grew volume by 4.2%, fueled by Winston (+3.2%) and Camel (+15.1%), while MEVIUS was almost flat (-0.4%). Total tobacco market share grew in many markets, including the key markets of Italy, Japan, the Philippines, Russia, and Taiwan.
Masamichi Terabatake, president and c.e.o. of JT Group, said, “JT Group delivered solid results in the first quarter, building on the positive momentum across its businesses. Robust pricing in the tobacco business continued to drive the strong performance of the group.”
"In line with our plan to increase our presence in HTS and establish the foundations for JT Group’s future earnings growth, we successfully launched Ploom X in Italy and Lithuania in April, after an encouraging rollout in the UK. We are making good progress for additional international launches, with a rollout in Portugal planned for mid-May.”
Terabatake expects the company to meet its full year forecast.