Q3 2025 Japan Tobacco Inc Earnings Call Transcript
Key Points
- Japan Tobacco Inc (JAPAF) reported a significant 27.2% year-on-year increase in AOP at constant FX, driven by strong organic performance in the tobacco business and the contribution from the Vector Group acquisition.
- The company's tobacco volume, including both combustibles and RRP, increased by 2.2% year-on-year, with notable growth in the RRP segment, particularly in Japan.
- Ploom AURA and EVO premium sticks have shown strong initial momentum in Japan, contributing to an accelerated increase in the number of Ploom users.
- The company revised its full-year consolidated forecast upward, expecting a 13.2% year-on-year increase in core revenue at constant FX and a 24.3% increase in AOP at constant FX.
- Japan Tobacco Inc (JAPAF) plans to revise the annual dividend guidance upward, reflecting strong business performance and shareholder return policy.
- The foreign exchange impact on AOP remains negative, mainly due to the depreciation of emerging currencies against the Japanese yen.
- Higher amortization costs related to the Vector Group acquisition partially offset the increase in operating profit.
- The processed food business faced challenges, with revenue increases unable to offset higher raw material costs, resulting in a decrease in AOP.
- Concerns were raised about potential risks in Russia and Turkey, including down trading and tax increases that could impact future growth.
- The company anticipates increased marketing investments for Ploom AURA, which may affect cost structures in the upcoming fiscal year.
Good afternoon. I am Furukawa, CFO of the JT Group. Thank you for joining us today for JT Group's Third Quarter 2025 Earnings Briefing. I will begin by explaining our nine months consolidated results for the fiscal year 2025. Please see slide 4.
To begin with, let me clarify how the financial figures are presented. As announced during the second-quarter earnings briefing, starting from the third quarter, we will treat the pharmaceutical business as a discontinued operation in accordance with IFRS. As a result of this reclassification, results and the forecast figures for the pharmaceutical business for the current fiscal year are presented as a single line under profit from discontinued operations. In this presentation, to provide a clearer understanding of our current and future business performance, we will explain each P&L indicator on the continuing operations basis.
Now I will move on to explain the consolidated results. As shown on the slide, all indicators in the nine months consolidated results
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