Growing dynamically in Western Europe
Vassilis Vovos

Regional President, Western Europe

Caution on Forward-Looking Statements
Today’s presentations contain forward-looking statements. These statements appear in a number of places in these presentations and include statements regarding the intent, belief, or current andfuture 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 similarterminology. 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) decrease in demand for tobacco products in key markets;(2) restrictions on promoting, marketing, packaging, labeling and usage of tobacco products in markets in which we operate;(3) increases in excise, consumption or other taxes on tobacco products in markets in which we operate;(4) litigation around the world alleging adverse health and financial effects resulting from, or relating to, tobacco products ;(5) our ability to realize anticipated results of our acquisition or other similar investments;(6) competition in markets in which we operate or into which we seek to expand;(7) deterioration in economic conditions in areas that matter to us;(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.

© Copyright JT 2016.

London – September 23, 2016

JT Investor Meeting2This presentation contains images or packages of our brands in some slides.
Those slides have been included exclusively to illustrate JT Group’s strategy orperformance to our investors. They are not intended to be used for any otherpurpose.

© Copyright JT 2016

London – September 23, 2016

JT Investor Meeting

3Mature and profitable region
JTI WE - 16 markets

ITABEL

UKNLD

FRA

LUX

Tobaccoindustry volume

ESPCANCHEANDIRL

MLT

JTI WE - Key facts (1H 2016)

GRC

CYP

~2,000
Employees

4
Factories

24.6%
SoM

26.2%
SoV

44.4 BnU
Volume1,045 $MM
EBITA

22%

40%

PRT

GIB

Tobaccoindustry value~344 BnU~96 $BnFY 2015

FY 2015

as % of Total JTI© Copyright JT 2016
London – September 23, 2016
Source: Internal estimates. Note: SoM & SoV on 6-month rolling average to June. EBITA at constant currency. Employee data excludes factory-related headcountas % of Total JTI
JT Investor Meeting4Resilient industry volume
WE Total industry volume evolution (BnU)
-5.7%
378
FCT

78-2.4%

-1.1%

357

348

81

80

344

•

Improving economy•

Stable illicit trade levels•

Full-year 2016 industry volume

81

anticipated to decrease around 2%
-0.9%

RMC

300

2012

276

2013

268

2014

© Copyright JT 2016
Source: Internal estimates. Note: FCT stands for fine cut263

2015

167

166

40

40

127

126

1H 2015

1H 2016London – September 23, 2016•

Softer second half due to theexpected impact of regulation on
duty-paid volume

JT Investor Meeting5Industry value growing moderately
WE Total industry value evolution ($Bn)
-1.8%
96.3

-0.1%
94.6

•

by improving consumer sentiment

+1.3%
94.5

Positive turnaround underpinned

95.7

•

Retail value growth driven by:• Price increases• Resilient industry volume

+0.4%
46.6

46.7

•

First half 2016 affected by phasingof pricing

20122013© Copyright JT 2016
Source: Internal estimates at constant currency

20142015

1H 2015

1H 2016London – September 23, 2016

JT Investor Meeting

6Market share growth momentum accelerates
JTI Share of market in Western Europe•+1.3pp

SoM growth across all markets• Record share in 12 markets•GFB growth in both cigarettes andfine cut+0.5pp
24.6%
24.1%
23.2%

23.3%

2013

2014

•

Share of value increasing at afaster pace than SoM

22.8%

2012

© Copyright JT 2016
Source: Internal estimates. 1H 2016 SoM on 6-month rolling average to June2015

1H 2016

London – September 23, 2016

JT Investor Meeting7

Robust volume, core revenue and earnings performance
JTI Western Europe Performance – 1H 2016 vs. 1H 2015

Total
Volume

GFB
VolumeCoreRevenue+5.2% +11.1% +7.9%© Copyright JT 2016
Note: Core revenue and EBITA at constant currency

London – September 23, 2016

EBITA

+9.1%
JT Investor Meeting8Strategies for sustainable growth

London – September 23, 2016

JT Investor Meeting9Key strategies supporting JTI’s success in Western Europe

Focus on GFBs

Manage regulation& taxation

Optimize margin

Deliverconsistent andsustainable topand bottom linegrowth

Lead in Emerging
Products© Copyright JT 2016Enhance tradepartnerships

Nurture talents

London – September 23, 2016

JT Investor Meeting

10Strong GFB portfolio driving share gains
GFB SoM & Mix(1) in Western Europe•

Powerful and complementary consumer brands
addressing all segments

80.00%GFB SoM

17.50%

16.9%+2.3pp17.00%

78.00%•
16.1%

76.00%

Clear and focused investment strategy behind

16.50%

74.3%

key GFBs to build scale
16.00%

74.00%

15.50%

72.00%

14.6%

14.8%

•70.5%

Acceleration of migrations to GFBs

15.00%

70.00%

68.00%

66.8%

67.8%

14.50%

GFB
Mix+7.5pp66.00%

14.00%

13.50%

13.00%

64.00%

201320142015

1H 2016© Copyright JT 2016
London – September 23, 2016
Source: Internal estimates. 1H 2016 SoM on 6-month rolling average to June. (1) GFB as % of total shipment volume

JT Investor Meeting11Winston – #2 brand in Western Europe
Winston performance in Western Europe
7.5%
7.1%

• True total tobacco brand with solid growthacross cigarettes and fine cut• Focus on delivering quality and value

13.6

Winston SoM growth - 1H 16 vs. 1H 15 (pp)
1.7

12.6

1.1Volume(BnU)

0.6

1H 2015© Copyright JT 2016
Source: Internal estimates. SoM on 6-month rolling average to June

POR1H 2016
London – September 23, 2016

BEL

FRA

0.6

HOL

0.6

LUX

0.5

ITA

0.4

CHE

JT Investor Meeting

0.3

GRE
12

Camel – #3 brand in Western Europe
Camel performance in Western Europe
7.0%
6.6%

• Iconic brand with strong equity and highawareness across markets• 2nd fastest growing tobacco brand

12.6

Camel SoM growth - 1H 16 vs. 1H 15 (pp)
1.2

11.6

0.7

0.7

0.7

Volume(BnU)

0.6
0.40.2

1H 2015© Copyright JT 2016
Source: Internal estimates. SoM on 6-month rolling average to June

BEL

1H 2016
London – September 23, 2016

ITAHOLLUX

PORCAN

FRA

0.1

0.1

SPA

CHE

JT Investor Meeting

13B&H – The fastest growing cigarette brand
B&H performance in Western Europe
2.4%
2.0%

• Rich brand heritage with a successful Virginia
and value portfolio• UK’s fastest growing tobacco brand, withRMC SoM exceeding 10%

4.5• Increasing RMC position in most markets
B&H RMC SoM growth - 1H 16 vs. 1H 15 (pp)3.62014
10.3
7.1 7.8

Volume(BnU)

2015
8.2
5.5 6.2

1H 2016
2.4 2.9 3.1

1H 2015© Copyright JT 2016
Source: Internal estimates. SoM on 6-month rolling average to JuneUK

1H 2016
London – September 23, 2016

Canary Islands

Italy
JT Investor Meeting

14

Achieving leadership in fine cut, from #3 to #1 in 8 years
JTI Fine cut SoM in WE (%)

JTI

#4

#2

#341

• 24% of tobacco consumption and stable• Winston & Camel fastest growing fine cut
brands in the region

2925
1918262730• Amber Leaf is the #1 fine cut brand acrossWestern Europe with 10% SoM

28• Strong portfolio, further enhanced with theNatural American Spirit acquisition

2015

14161372008

2009

2010

2011

2012

2013

© Copyright JT 2016
Source: Internal estimates. 1H 2016 SoM on 6-month rolling average to June

2014

2015

1H 2016

London – September 23, 2016

JT Investor Meeting15

Establish leadership in Emerging Products

Enhanced
portfolio
covering all
e-vapor segments© Copyright JT 2016
Source: Internal estimates

Maximizing
synergies andincreased
investments#1+17.6pp

in France,strong contenderfor leadership in UK

Share of value
YoY growth inIreland

London – September 23, 2016

Italy launchedin Q2 2016,
further expansion
to follow
JT Investor Meeting16France - #1 E-vapor brand in tobacconist channel
France - Logic Pro Cumulative sales

2500000

4500004000002MM# of devices sold (cumulated)

2000000

350000305M# of cartridges sold (cumulated)

3000001500000

2500002000001000000

150000100000500000Strongbrand equity& consumer
adoption

305M devices &2MM cartridges
packs sold to tradesince Nov. 2015

Leveraging
synergies withtobacco business

Significant distribution
across both tobacco& vape shops

50000

00Nov

DecJan2015© Copyright JT 2016
Source: Internal estimates

FebMarAprMayJunJulAug

2016
London – September 23, 2016

JT Investor Meeting17Overview of key markets

London – September 23, 2016

JT Investor Meeting18

Italy – Strong performance driven by GFBs
Share of market evolution (%)
JTI

Operating environment• #1 volume market in Western Europe

#3

23.5

22.5

22.1

21.9

21.5

22.7

22.4

• Total industry volume stable for thesecond consecutive year
• Current tax system provides theframework for regular pricing evolution

20.9

20.5

19.8

JTI performance

19.5

19.5

18.6

18.5

• Only growing tobacco manufacturer• Record high market share• All GFBs gaining market share© Copyright JT 2016
Source: Nielsen

Jun-16May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15Oct-15

Sep-15Aug-15

Jul-15Jun-15May-15

Apr-15Mar-15

Feb-15Jan-15

17.5

London – September 23, 2016

JT Investor Meeting

19France – Share growth leading to #2 position
Share of market evolution (%)
JTI26

Operating environment• Total industry volume trend broadly inline with prior year

#2

25.1

25

• Regulatory intensification, plainpackaging implementation in Q4 2016

2423
22
21

20.7

20
19

19.2

19.7

19.9

2012

2013

21.9

JTI performance

21.8• Achieved the #2 position in July 201621.2

• #1 fine cut company, driven by
3 brands above 10% SoM (Camel,Winston & Fleur Du Pays)

18
17

2011

© Copyright JT 2016
Source: IRI. July 2016 SoM spot rate

2014

2015

Jul-16

London – September 23, 2016

JT Investor Meeting20

Spain – Achieving record high market share
Share of market evolution (%)
Operating environment

22.4

22.6

21.7

• Ineffective tax structure both forgovernment revenue and pricing

12.9

12.9

12.0

6.4

1H 2014• Improving industry volume trend

JTI performance• All GFBs growing market share

6.7

6.9

1H 2015

1H 2016© Copyright JT 2016
Source: Logista. SoM on 6-month rolling average to June

London – September 23, 2016

• #2 fine cut manufacturer, rapidly
reducing the gap with #1

JT Investor Meeting

21

Growing share across all other markets
JTI Share of market(1)1H 2016
vs. 1H 2015

Growth drivervs. 1H 2015
1H 2016

Canary Islands

33.3%+1.7pp7.2%

2.0pp

Belgium

18.2%+1.6pp

8.4%

1.2pp

Netherlands

12.1%

9.5%

0.7pp

Portugal

18.2%

9.5%

0.6pp

Switzerland

20.1%+0.6pp

9.8%

0.4pp

Luxembourg

24.8%+0.5pp

15.0%

0.6pp

Ireland57.1%+0.5pp

7.4%

0.4pp

Greece22.7%+0.4pp

8.5%

0.3pp

+1.4pp+1.0pp© Copyright JT 2016
London – September 23, 2016
Source: Internal estimates, Nielsen. Note: SoM on 6-month rolling average to June. (1) Excluding the impact of the Natural American Spirit acquisition

JT Investor Meeting

22Well positioned to continue growing in the long-term• A proven track record of strong and consistent#1 Tobacco manufacturer

performance, confirming JTI’s competitiveness#1 Fine cut manufacturer• Fastest growing manufacturer with increasing leadership
positions in cigarettes, fine cut and emerging products• On track to deliver solid growth across all KPIs in FY16

Fastest growing company• Well prepared and positioned for regulatory changes© Copyright JT 2016

London – September 23, 2016

JT Investor Meeting23