[This is an English translation prepared for reference purpose only. Should there be any inconsistency between the translation and the original Japanese text, the latter shall prevail.]

May 9, 2024

Consolidated Financial Results

for the Three Months Ended March 31, 2024

Name of the Listed Company: JAPAN TOBACCO INC.(Stock Code: 2914)

Listed Stock Exchange:

Tokyo Stock Exchange

URL:

https://www.jt.com/

Representative:

Masamichi Terabatake, Representative Director and President,

Chief Executive Officer

Contact:

Hiromasa Furukawa, Senior Vice President, Chief Financial Officer and Corporate

Communications

Telephone:

+81-3-6636-2914

Scheduled date to file Quarterly Securities Report: May 9, 2024

Scheduled starting date of the dividend payments: -

Drawing up supplementary documents on quarterly financial results: Yes

Holding quarterly investors' meeting: Yes (for analysts and institutional investors)

(Yen amounts are rounded to the nearest million, unless otherwise noted.)

1. Consolidated Financial Results for the Three Months of the Fiscal Year Ending

December 31, 2024 (from January 1, 2024 to March 31, 2024)

(1) Consolidated Operating Results (Cumulative)

(Percentages indicate year-on-year changes.)

Revenue

Operating profit

Profit before income taxes

Profit for the period

Three months ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

March 31, 2024

740,333

11.3

215,818

4.6

201,266

9.9

157,766

8.6

March 31, 2023

665,278

14.4

206,404

15.7

183,146

4.8

145,226

16.6

Profit attributable to

Comprehensive income

owners of the parent

Basic earnings per share

Diluted earnings per share

for the period

company

Three months ended

Millions of yen

%

Millions of yen

%

Yen

Yen

March 31, 2024

157,266

8.7

339,015

99.1

88.58

88.57

March 31, 2023

144,684

16.6

170,311

(26.1)

81.52

81.49

(2) Consolidated Financial Position

Equity attributable to

Ratio of equity

Equity attributable to

Total assets

Total equity

attributable to owners

owners of the parent

of the parent company

owners of the parent

company

to total assets

company per share

As of

Millions of yen

Millions of yen

Millions of yen

%

Yen

March 31, 2024

7,159,003

4,072,470

3,989,504

55.7

2,247.18

December 31, 2023

7,282,097

3,912,491

3,830,156

52.6

2,157.46

2. Cash Dividends

Annual dividends per share

First quarter-end

Second quarter-end

Third quarter-end

Fiscal year-end

Total

Year ended December 31,

Yen

Yen

Yen

Yen

Yen

-

94.00

-

100.00

194.00

2023

Year ending December 31,

-

2024

Year ending December 31,

97.00

-

97.00

194.00

2024 (Forecast)

Note:

Revisions to the cash dividends forecasts most recently announced: None

3. Consolidated Earnings Forecasts for the Fiscal Year Ending December 31, 2024 (January 1, 2024 to December 31, 2024)

(Percentages indicate year-on-year changes.)

Profit attributable to

Basic earnings

Revenue

Operating profit

owners of the parent

per share

company

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Year ending

3,016,000

6.2

648,000

(3.6)

455,000

(5.7)

256.29

December 31, 2024

Note:

Revisions to the consolidated earnings forecasts most recently announced: None

[Additional Information] Growth rate in adjusted operating profit at constant FX:

The Group has set its group-wide target for annual average growth rate in adjusted operating profit at constant FX, at mid to high single-digit over the mid- to long-term, and will continue to pursue this goal. The Group expects an annual average of mid-single digit growth during the period of the "Business Plan 2024" (fiscal year ending December 31, 2024 to fiscal year ending December 31, 2026), which was announced on February 13, 2024.

(Percentages indicate year-on-year changes.)

Adjusted operating profit at constant FX

Three months ended

Millions of yen

%

230,992

3.4

March 31, 2024 (Cumulative)

Year ending

728,000

(0.0)

December 31, 2024 (Forecast)

Note:

Revisions to the consolidated

earnings forecasts most recently announced:

None

The Group also discloses certain non-GAAP financial measures that are not required or defined under IFRS, which is the accounting standard the Company applies. These non-GAAP financial measures are used internally to manage each of the business operations to understand their underlying performance, in view of the Group's target for mid- to long-term sustainable growth, and the Group believes that these financial measures are useful information for users of the financial statements to assess the Group's performance. For details of these financial measures, please refer to "Proper use of earnings forecasts, and other special matters, (2)."

For detailed information on the consolidated financial results, please refer to the materials for investors' meeting that were released on the Company's website on May 9, 2024.

  • The Company's website:https://www.jt.com/investors/

Notes

  1. Changes in significant subsidiaries during the current period (changes in specified subsidiaries resulting in change in scope of consolidation): None
  2. Changes in accounting policies and changes in accounting estimates
    1. Changes in accounting policies due to revisions in accounting standards under IFRS:Yes
    2. Changes in accounting policies due to other reasons: None
    3. Changes in accounting estimates: None

For details, please refer to "1. Matters Regarding Summary Information, (1) Changes in Accounting Policies and Changes in Accounting Estimates."

  1. Number of shares issued (ordinary shares)
    a. Total number of shares issued at the end of the period (including treasury shares)

As of March 31, 2024

2,000,000,000 shares

As of December 31, 2023

2,000,000,000 shares

  1. Number of treasury shares at the end of the period

As of March 31, 2024

224,658,364

shares

As of December 31, 2023

224,692,028

shares

  1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

Three months ended March 31, 2024

1,775,336,403 shares

Three months ended March 31, 2023

1,774,914,730 shares

  • Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
  • Proper use of earnings forecasts, and other special matters
    1. Theforward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions and suppositions deemed to be reasonable by the Company. Actual business and other results may differ substantially due to various factors. These forward-looking statements are not intended to be construed as our assurance for it to materialize in the future. Please refer to "FORWARD-LOOKING STATEMENTS" for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use of earnings forecasts.
    2. The Group also discloses certainnon-GAAP financial measures that are not required or defined under IFRS, which is the accounting standard the Company applies. These non-GAAP financial measures are used internally to manage each of the business operations to understand their underlying performance, in view of the Group's target for mid- to long-term sustainable growth, and the Group believes that these financial measures are useful information for users of the financial statements to assess the Group's performance.
      Adjusted operating profit
      Adjusted operating profit presented is operating profit (loss) less amortization cost of acquired intangibles arising from business acquisitions and adjustment items (income and costs). Adjustment items (income and costs) are impairment losses on goodwill, restructuring income and costs, and other items. Furthermore, adjusted operating profit at constant FX is also presented as additional information. The Group has set its group-wide target for annual average growth rate in adjusted operating profit at constant FX, at mid to high single-digit over the mid- to long-term, and will continue to pursue this goal. Adjusted operating profit at constant FX is a financial measurement that excludes foreign exchange effects calculated and translated using the foreign exchange rates of the same period of the previous year from core revenue from tobacco business or from adjusted operating profit for the current period in the Tobacco Business. The results for the three months ended March 31, 2024 on a constant FX basis exclude the increase in profit due to inflation in some markets calculated using certain methods.
      The Group makes accounting adjustments to the financial statements of subsidiaries that operate in hyperinflationary economies according to the requirements stipulated in IAS 29 "Financial Reporting in Hyperinflationary Economies."

Attached Materials

Index

1.

Matters Regarding Summary Information

2

(1)

Changes in Accounting Policies and Changes in Accounting Estimates

2

(2)

Revisions to the consolidated earnings forecasts most recently announced

2

2.

Condensed Interim Consolidated Financial Statements

4

(1)

Condensed Interim Consolidated Statement of Financial Position

4

(2)

Condensed Interim Consolidated Statement of Income and Consolidated Statement of

Comprehensive Income

6

(3)

Condensed Interim Consolidated Statement of Changes in Equity

8

(4)

Condensed Interim Consolidated Statement of Cash Flows

10

(5)

Segment Information

12

(6) Note on Premise of Going Concern

16

(7)

Subsequent Events

17

- 1-

1. Matters Regarding Summary Information

  1. Changes in Accounting Policies and Changes in Accounting Estimates

The material accounting policies adopted for the condensed interim consolidated financial statements are the same as those for the consolidated financial statements for the year ended December 31, 2023 except for the following item. The Group computes income taxes for the interim period based on the estimated average annual effective tax rate.

(Changes in Accounting Policies)

The Group has adopted the following new accounting standards, amended standards and new interpretations from the year ending December 31, 2024.

IFRS Accounting Standards

IFRS 7 Financial Instruments: Disclosures

IAS 7 Statement of Cash Flows

Description of new standards and amendments

Providing requirements for disclosure relating to supplier finance arrangements

The adoption of the above standards and interpretations does not have a material impact on the condensed interim consolidated financial statements.

Part of the consolidated financial statements for the year ended December 31, 2023 have been reclassified to conform with the presentation for the beginning of first quarter ended March 31, 2024.

(2) Revisions to the consolidated earnings forecasts most recently announced

No items to report.

- 2 -

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief, or current and future expectations of our management with respect to our business, financial condition and results of operations. In some cases, you can identify forward- looking statements by terms such as "may", "will", "should", "would", "expect", "intend", "project", "plan", "aim", "seek", "target", "anticipate", "believe", "estimate", "predict", "potential" or the negative of these terms or other similar terminology. These statements are not guarantees of future performance and are subject to various risks and uncertainties. Actual results, performance or achievements, or those of the industries in which we operate, may differ materially from any future results, performance or achievements expressed or implied by these forward- looking statements. In addition, these forward-looking statements are necessarily dependent upon assumptions, estimates and data that may be incorrect or imprecise and involve known and unknown risks and uncertainties.

Forward-looking statements regarding operating results are particularly subject to a variety of assumptions, some or all of which may not be realized.

Risks, uncertainties or other factors that could cause actual results to differ materially from those expressed in any forward-looking statement include, without limitation:

  1. increase in awareness of health concerns related to smoking;
  2. regulatory developments; including, without limitation, tax increases and restrictions on sales, marketing, packaging, labeling and use of tobacco products, privately imposed restrictions and governmental investigations;
  3. litigation around the world alleging adverse health and financial effects resulting from, or relating to, tobacco products;
  4. our ability to further diversify our business beyond the traditional tobacco industry;
  5. our ability to successfully expand internationally and make investments outside Japan;
  6. competition, changing consumer preferences and behavior;
  7. our ability to manage impacts derived from business diversification or business expansion;
  8. economic, regulatory and political changes, such as nationalization, terrorism, wars and civil unrest, in countries in which we operate;
  9. fluctuations in foreign exchange rates and the costs of raw materials; and
  10. catastrophes, including natural disasters.

Notes on the Russia-Ukraine War

The Group is fully committed to complying with applicable regulations and international sanctions while continuing business operations. In parallel, given the continued challenging and complex environment, we continue to evaluate various options, including the potential transfer of ownership of our Russian tobacco business. As this moment, the Company is unable to reasonably estimate the outlook and the impact on its financial results. The Company will promptly make announcements regarding this matter if anything occurs that should be disclosed.

- 3 -

2. Condensed Interim Consolidated Financial Statements

  1. Condensed Interim Consolidated Statement of Financial Position

As of December 31,

(Millions of yen)

As of March 31, 2024

2023

Assets

Current assets

Cash and cash equivalents

1,040,206

766,948

Trade and other receivables

535,302

571,262

Inventories

832,611

875,469

Other financial assets

58,633

50,459

Other current assets

789,888

717,788

Subtotal

3,256,639

2,981,925

Assets held for sale

2,921

2,887

Total current assets

3,259,561

2,984,811

Non-current assets

Property, plant and equipment

821,499

846,256

Goodwill

2,616,440

2,731,698

Intangible assets

200,819

193,655

Investment property

9,338

9,370

Retirement benefit assets

65,856

70,084

Investments accounted for using the equity

56,726

60,134

method

Other financial assets

155,267

160,113

Other non-current assets

7,212

6,928

Deferred tax assets

89,379

95,954

Total non-current assets

4,022,536

4,174,191

Total assets

7,282,097

7,159,003

- 4 -

As of December 31,

(Millions of yen)

As of March 31, 2024

2023

Liabilities and equity

Liabilities

Current liabilities

Trade and other payables

592,802

523,215

Bonds and borrowings

233,333

80,321

Income tax payables

29,647

37,456

Other financial liabilities

44,470

44,996

Provisions

18,634

17,384

Other current liabilities

1,008,390

926,436

Total current liabilities

1,927,276

1,629,808

Non-current liabilities

Bonds and borrowings

908,926

939,268

Other financial liabilities

40,678

39,282

Retirement benefit liabilities

279,443

279,153

Provisions

45,527

45,790

Other non-current liabilities

127,170

113,845

Deferred tax liabilities

40,586

39,388

Total non-current liabilities

1,442,329

1,456,725

Total liabilities

3,369,605

3,086,533

Equity

Share capital

100,000

100,000

Capital surplus

736,478

736,444

Treasury shares

(489,194)

(489,122)

Other components of equity

290,550

470,118

Retained earnings

3,192,323

3,172,063

Equity attributable to owners of the parent

3,830,156

3,989,504

company

Non-controlling interests

82,336

82,966

Total equity

3,912,491

4,072,470

Total liabilities and equity

7,282,097

7,159,003

- 5 -

  1. Condensed Interim Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
    Condensed Interim Consolidated Statement of Income Three months ended March 31, 2023 and 2024

(Millions of yen)

2023

2024

Revenue

665,278

740,333

Cost of sales

(262,332)

(320,101)

Gross profit

402,946

420,232

Other operating income

3,439

6,377

Share of profit in investments accounted

1,299

2,073

for using the equity method

Selling, general and administrative expenses

(201,280)

(212,863)

Operating profit

206,404

215,818

Financial income

7,483

14,877

Financial costs

(30,741)

(29,429)

Profit before income taxes

183,146

201,266

Income taxes

(37,920)

(43,499)

Profit for the period

145,226

157,766

Attributable to:

Owners of the parent company

144,684

157,266

Non-controlling interests

542

501

Profit for the period

145,226

157,766

Interim earnings per share

Basic (Yen)

81.52

88.58

Diluted (Yen)

81.49

88.57

Reconciliation from "Operating profit" to "Adjusted operating profit"

(Millions of yen)

Operating profit

Amortization cost of acquired intangibles arising from business acquisitions

20232024

206,404215,818

15,06812,952

Adjustment items (income)

(6)

(1,963)

Adjustment items (costs)

1,901

(112)

Adjusted operating profit

223,367

226,695

- 6 -

Condensed Interim Consolidated Statement of Comprehensive Income

Three months ended March 31, 2023 and 2024

Profit for the period

Other comprehensive income

Items that will not be reclassified to profit or loss

Net gain (loss) on revaluation of financial assets measured at fair value through other comprehensive income

Total of items that will not be reclassified to profit or loss

Items that may be reclassified subsequently to profit

or loss

Exchange differences on translation of foreign operations

Net gain (loss) on derivatives designated as cash flow hedges

Hedge costs

Total of items that may be reclassified subsequently to profit or loss

Other comprehensive income (loss), net of taxes

Comprehensive income (loss) for the period

(Millions of yen)

20232024

145,226157,766

1,1321,220

1,1321,220

26,518

183,361

(2,564)

(3,104)

-

(229)

23,954

180,028

25,086

181,248

170,311

339,015

Attributable to:

Owners of the parent company

166,722

337,642

Non-controlling interests

3,589

1,373

Comprehensive income (loss) for the period

170,311

339,015

- 7 -

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Disclaimer

Japan Tobacco Inc. published this content on 09 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 07:54:07 UTC.