JTI 1H 2015 Financial Results

Roland Kostantos

Senior Vice President,Finance and IT, Chief Financial Officer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, orcurrent 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 theseterms or other similar terminology. These statements are not guarantees of future performance and are subject to various risks and uncertainties. Actual results, performance orachievements, 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-lookingstatements. In addition, these forward-looking statements are necessarily dependent upon assumptions, estimates and data that may be incorrect or imprecise and involve known andunknown 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 2015

London – September 18, 2015

JT Investor Meeting2

Agenda•First Half 2015 Results• First Half 2015 Performance by Cluster•

Summary and FY 2015 Outlook© Copyright JT 2015

London – September 18, 2015

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First Half Results

London – September 18, 2015

JT Investor Meeting4Strong 1H 2015 performance(BnU, $MM)

1H 2015

Total volume

191.2

GFB volume

131.9

+7.2%

Core revenue

6,272

+6.7%

Adjusted operating profit

2,461© Copyright JT 2015

Note: Core revenue and Adjusted operating profit at constant rates of exchange

London – September 18, 2015

vs. 1H 2014

+0.3%

+14.6%JT Investor Meeting5Improved industry size dynamic in 1H 2015
Industry size change (%)
1H 15 vs. 1H 14
Total

-5.0%

-2.4%
-5.0%

Russia-6.0%© Copyright JT 2015

+1.1%

-1.2%

UKTurkey

-5.9%

+2.0%

Italy

Taiwan-6.1%-2.1%

FranceSpainIndustry size change (%)
1H 14 vs. 1H 13-5.2%-10.6%
-1.2%

+0.8%
+8.3%
London – September 18, 2015

Source: JTI estimates, Nielsen, Logista, Tobacco Board. Note: Industry size based on JTI key markets, including cigarettes and fine cut+1.1%
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GFBs drive share of market increase
GFB SoM change (ppt)
1H 15 vs. 1H 14

GFB SoV change (ppt)
1H 15 vs. 1H 14

JTI SoM change (ppt)
1H 15 vs. 1H 14Total+1.5+1.0+0.7France+1.1+0.6+0.7+0.1+0.3

Italy+0.3

SpainUK
RussiaTaiwanTurkey+1.3+0.8+0.8-0.2-0.3+0.4+0.7-1.3+0.0+1.0+1.0+3.7+2.4+1.2+3.6© Copyright JT 2015
JT Investor MeetingLondon – September 18, 2015
Source: JTI estimates, Nielsen, Logista, IRI, Tobacco Board. Note: SoM and SoV on a 6-month rolling average to June, including cigarettes and fine cut. GFB SoM and SoV based on top 40 markets. Total SoM based on 56 markets

7Price/Mix drives profit growth at constant FX
Adjusted operating profit ($MM)+14.6%

-60

2,461

Other

1H 2015+429
2,147-54

1H 2014

Volume© Copyright JT 2015

Note: Adjusted operating profit at constant rates of exchange

Price/Mix
London – September 18, 2015

JT Investor Meeting8First Half Performance by Cluster

London – September 18, 2015

JT Investor Meeting9Strong revenue and earnings growth across all clusters
Total volume
1H 2015 vs. 1H 2014

Core revenue
1H 2015 vs. 1H 2014

Adjusted operating profit
1H 2015 vs. 1H 2014

+6.5%

+9.8%

+15.6%+9.2%+16.3%

S&WE

+2.0%

N&CE
CIS+

+4.5%

-7.4%
+7.2%

R-o-W
JTI

+5.7%

+0.3%

© Copyright JT 2015

Note: Core revenue and Adjusted operating profit at constant rates of exchange+6.7%
London – September 18, 2015+12.3%+17.0%+14.6%JT Investor Meeting10South & West Europe: Volume and SoM gains drive return to profit
growthKey Performance Indicators
1H 2015 vs. 1H 2014
Total volume

GFB volumeCore revenue
Adjustedoperating profit+6.5%+10.0%+9.8%•JTI grew share of market by 0.7ppt acrossthe cluster•

Record high market share achieved in 10markets, including Benelux, France,Greece, Spain and Switzerland•Italy share of market returned to growth•

Pricing in Benelux, Greece, Spain andSwitzerland also contributed to strong
financial performance+15.6%© Copyright JT 2015
London – September 18, 2015
Source: JTI estimates, Nielsen, IRI. Note: Core revenue and Adjusted operating profit at constant rates of exchange. SoM on a 6-month rolling average to June, including cigarettes and fine cut

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Italy: GFB equity leads share of market recovery
JTI Share of market+1.6ppt

19.6%

21.0%

Total

•

JTI consolidated #2 position in the market•Tax-led price increase in Jan 2015 of0.20 EUR/pack•

JTI share of market grew 1.6ppt vs. Q4
2014 driven by GFB

19.9%
19.4%
10.0%
Camel

9.2%

9.4%

6.9%

6.9%

7.1%

7.4%

2.5%

2.3%

2.3%

2.6%

Q3 14

Q4 14

Q1 15

Q2 15

9.2%

© Copyright JT 2015

Winston• Camel reached record-high market
share of 10%• Winston improved 0.5ppt to reach 7.4%B&H

London – September 18, 2015

Source: Nielsen. Note: SoM on a 3-month rolling average, including cigarettes and fine cut

JT Investor Meeting12North & Central Europe: Growth momentum continues•Key Performance Indicators
1H 2015 vs. 1H 2014
Total volume

GFB volume

Core revenue

+2.0%

+6.9%

+9.2%

•Adjustedoperating profit+16.3%

Total and GFB volume growth driven bysignificant share of market gains:• Czech+2.7ppt• Germany+0.6ppt• Hungary+0.6ppt• Ireland+1.9ppt• Poland+0.8ppt• UK+0.7ppt

Pricing in Germany, Poland and the UK
drove strong financial performance© Copyright JT 2015
London – September 18, 2015
Source: JTI estimates, Nielsen. Note: Core revenue and Adjusted operating profit at constant rates of exchange. SoM on a 6-month rolling average to June, including cigarettes and fine cut

JT Investor Meeting13UK: Continued JTI share of market and share of value growth
JTI Share of market
42.0%
41.2%
40.6%

41.8%

SoVSoM•

SoM and SoV reached record highs of
41.8% and 42.0% respectively•Amber Leaf enhanced its market
leadership position•

Sterling strengthened its #1 cigarettebrand position, reaching a new market
share high of 9.8%

•Pricing announced in September 2015

•Successful launch of E-Lites CURV inJuly 2015

41.0%
40.5%

11.2%

12.0% Amber
Leaf

10.5%
9.8%
9.5%

9.4%

1H 13

1H 14

© Copyright JT 2015

Sterling

1H 15
London – September 18, 2015

Source: Nielsen. Note: SoM and SoV on a 6-month rolling average to June, including cigarettes and fine cut

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CIS+: GFB share and pricing drive profit growth
Key Performance Indicators
1H 2015 vs. 1H 2014

Total volume

GFB volume

Core revenue•

Industry size decline drives total volume
reduction•

Resilient GFB shipment performancereflects GFB share growth:

-7.4%

-1.0%

+4.5%

•Adjustedoperating profit© Copyright JT 2015+12.3%• Belarus+2.5ppt• Kazakhstan+4.2ppt• Russia+0.4ppt• Ukraine+3.5ppt

Robust pricing environment ensures core
revenue and earnings growth

London – September 18, 2015

Source: JTI estimates, Nielsen, DCS. Note: Core revenue and Adjusted operating profit at constant rates of exchange. SoM on a 6-month rolling average to June

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Rest-of-the-World: Strong top and bottom-line performance•Key Performance Indicators
1H 2015 vs. 1H 2014
Total volume+7.2%

GFB volume

Core revenue
Adjusted
operating profit© Copyright JT 2015

+20.4%+5.7%•GFB drove share growth across key
markets:• Canada+0.7ppt• Taiwan+1.2ppt• Turkey+3.6ppt

Pricing in Canada, Malaysia and Sudan,
together with positive volume
performance, drove core revenue andearnings growth+17.0%

London – September 18, 2015

Source: JTI estimates, Nielsen. Note: Core revenue and Adjusted operating profit at constant rates of exchange. SoM on a 6-month rolling average to June

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Taiwan: Strengthening our leading position
JTI Share of market and share of value•

A Top-5 JTI profit market

45.4%•Robust pricing and share growth drive
share of value to record high of 45.4%•Strong GFB portfolio and equity leadvolume and share gains:

44.3%

44.6%

45.1%

JTI SoV
JTI SoM

GFB SoM

38.4%

28.4%

38.7%

28.8%

39.2%

29.2%

39.5%

• Mevius consolidates its brandleadership position

29.5%• Winston exceeds 5% market shareMeviusSoM•

JTI increased prices in August 2015

London – September 18, 2015

JT Investor Meeting

22.2%

22.3%

22.7%

22.7%

Q3 14

Q4 14

Q1 15

Q2 15

© Copyright JT 2015

Source: Nielsen. Note: SoV and SoM on a 3-month rolling average

17Summary and FY 2015 Outlook

London – September 18, 2015

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Strong business fundamentals will secure full year earnings targets•

JTI’s business fundamentals strengthened in 1H 2015
• Share of market growth across the majority of key markets• GFB share of market growth in Russia•

Improved industry size dynamics•

Top-line business momentum expected to continue into the 2H with GFB performanceensuring total volume and core revenue targets are achieved•

Investment in emerging products and seeding markets skewed to 2H•

Full year earnings growth at constant currency in line with prior guidance© Copyright JT 2015

London – September 18, 2015

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