FUNDING OUR RRP EXPANSION
Vassilis Vovos
Executive Vice-President & Chief Financial Officer
JT InternationalMay 8, 2023
© Copyright JT 2023

Consistently delivering solid performance
2018–2022 average annual growth1)

Volume+1%

CoreRevenue+6%© Copyright JT 2023 Note: FY17-21 equal to the sum of international and domestic tobacco businesses for illustration purposes

1) Tobacco business Core Revenue and AOP variance at constant FX

AOP+10%Tobacco Investor Conference

17Business Plan 2023: building the foundation for growth2023 – 2025

• Ploom X expansion supported by significant
investment over the next three years• Quality topline growth and increasing combustibles
return on investment will provide funding for RRP• Continued efficiency initiatives drive a competitive
cost base while enhancing strategic capabilities• Low-single digit AOP growth over next three years
with upside potential as RRP reaches scale© Copyright JT 2023 Note: Tobacco business Core Revenue and AOP variance at constant FX

VolumeStableCore Revenue

Mid-single digit growthAOP

Low-single digit growth

Tobacco Investor Conference18

Continue to drive quality top-line growth
Price / mix, % of Core Revenue1)2023 - 2025

Average 6.4%
SoMgrowthIndustry
volume-2%
CAGR
2018

2019

© Copyright JT 2023 Note: 1) Price / mix contribution to core revenue growth at constant FX

FY18-21 price/mix equal to the sum of international and domestic price/mix for illustration purposes

2020

2021

2022
Tobacco Investor Conference19Clear market roles to maximize combustibles ROI
Market strategic roles guiding decision-making
towards sustainable growthMarket role

EARNINGSEARNINGS & SoM

SoM

Focus

Prioritize sustainableearnings performance

Balance sustainableearnings and shareperformance

Build consumer base formid- to long-term
profitability growth% of 2022 Volume

43%

47%

10%

© Copyright JT 2023

Tobacco Investor Conference

20Strengthen our competitive cost base…

Next generation
Global Business
Services
Transformation
initiatives
delivering over
¥50Bn by 2023

© Copyright JT 2023

Efficiency focus
through ourkaizen mindset¥20Bn
supply chain
efficiencies by2024

Tobacco Investor Conference

21

…while enhancing strategic capabilities

Product
innovation

Reducedrisk scienceDigital

One Tobacco© Copyright JT 2023

Tobacco Investor Conference22Focused RRP investment…
RRP investment composition
8%• Invest over ¥300 billion in RRP between 2023-2025• Main area of focus is HTS• Support geo-expansion and share gains

24%

67%

• Leverage our commercial organization and traderelationships in HTS launch markets

2023-2025
Capex© Copyright JT 2023

• Investment set aside for exploratory RRP
segments

R&D• Established manufacturing capacity for planned
expansion

Commercialization
Tobacco Investor Conference23

…towards 2028 RRP breakeven
Building scale through geo-expansionEnhancing the positive revenue & margin mix1)

>6x

>1.6x

>1.5x>3x

2022

2025

2028

HTS volume© Copyright JT 2023

Note: 1) Revenue / GM per unit based on the first wave of rollout countries

Cigarette

HTS

Revenue per unit

Cigarette

HTS

Gross margin per unit
Tobacco Investor Conference24Intact growth algorithm

Foundation for future profit generation

Quality topline growth

Focus on return on
investment in
combustibles

Competitive cost baseand continued
capability
enhancement

Focused RRP
investment towards
profitability growth

Mid to high single digit AOP growth1)© Copyright JT 2023 Note: 1) At constant FX

Tobacco Investor Conference25