2914.T

• CEO Takehiko Tsutsui introduced the Business Plan 2026, emphasizing building on growth strategies, using the 4S model, and investing in future growth. - Eddy Pirard, CEO of JT International, detailed Tobacco business performance in 2025, noting growth in total volume, strong performance in Combustibles with market share gains and pricing resilience, and RRP growth with Ploom AURA's success. - CFO Hiromasa Furukawa explained 2025 group financial results and 2026 forecast, including revenue, AOP, operating profit, and shareholder returns, and discussed business segment forecasts.

• Aim to grow consolidated AOP at constant currency at a high single-digit CAGR from 2026 to 2028. - In Tobacco business, Combustibles will improve profitability and RRP will focus on heated products as the second profit growth engine. - Processed food business will face challenges but continue to contribute to profit growth through price revisions and productivity improvements. - Dividend per share for 2025 planned at JPY 234 per share, and forecast for 2026 is JPY 242 per share with a payout ratio of around 75%.

In 2025, despite an unstable global environment, Japan Tobacco Inc. achieved record-high revenue and profit. The Tobacco business was the largest contributor. In Combustibles, solid organic momentum continued with pricing contribution and market share gains, and the Vector Group integration boosted growth. In RRP, the new heated products device Ploom AURA was launched in 17 markets in 2025 and expanded to 19, well-received by customers. The processed food business achieved profit growth through price revisions and improved productivity, while the pharmaceutical business was transferred to Shionogi in December. Revenue contribution: Tobacco business was the largest, with Combustibles and RRP driving growth; processed food and pharmaceutical had smaller contributions.

• Unstable global geopolitical and economic environment, including geopolitical instabilities, foreign exchange volatility, interest rate trends, hyperinflation in certain markets. - In RRP, intensified competition, especially in heated products. - Processed food business facing challenges like continued increases in labor and logistic costs, and fluctuations in raw material prices affecting demand.

• Q: Share strengths and weaknesses of JT Group vis-a-vis global competitors, and leadership improvement areas.

A: Strengths include growth investment in Combustibles and clear strategy in RRP. Weaknesses in RRP new business launch still at early stage. Leadership focus on cherishing strengths, challenging new businesses in RRP and D-LAB. - Q: Profitability and target share of RRP.

A: Directionally moving towards profitability by 2028, with investments in marketing and customer acquisition, Japan as a good example of successful innovation. - Q: Ploom AURA performance in different markets and EVO potential.

A: Ploom AURA well-received globally, feedback similar in Japan and overseas, EVO has potential to drive profitability overseas. - Q: Fiscal '26 factors in Tobacco business.

A: Anticipate AOP growth of about 8.5%, pricing to continue as driver, slight volume decline mitigated by market share gains, focus on efficiencies to improve profit margin. - Q: M&A target.

A: Consider M&A for growth, in Combustibles for ROI improvement like Vector Group, in RRP for intellectual property or new business models. - Q: Balance between investment and shareholders' return.

A: Prioritize gross investment as it brought current state, 75% dividend payout ratio considered globally competitive, aim to balance investment and return. - Q: Innovation in RRP business.

A: Have a pipeline for RRP innovation, working on creating better products to meet customer expectations, but specific details not shared