The JT Group tobacco business:
Strategic focus and investment
for sustainable growth
Akira Saeki

Executive Deputy President,President of Tobacco Business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-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 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This presentation contains images or packages of our brands
in some slides. Those slides have been included exclusively
to illustrate JT Group’s strategy or performance to ourinvestors. They are not to be used for any other purpose.

© Copyright JT 2015

London – September 18, 2015

JT Investor Meeting3The 4S Model and Strategic Framework guides us towards Our Vision
Management Principles

Our Vision
To be the No.1 global tobacco company

Shareholders

Strategic Framework

Consumers

Employees© Copyright JT 2015

SocietyQuality
top-line growth

Broadening
the earnings base

Robustbusinessfoundations

Brand equity
enhancement

Geographic /Product expansion

Costoptimization

Resource allocation
Prioritize business investment for sustainable future profit growth

London – September 18, 2015

JT Investor Meeting4Investment in brands is the cornerstone of quality top-line growth
Revenue per thousand, 2014 vs. 2010

Share of market, 2014 vs. 2010 (ppt)

+0.7

Japan
Domestic+23%

International

+25%

-0.1

+0.3

+0.3

© Copyright JT 2015

London – September 18, 2015

Source: Euromonitor (China excluded). Core revenue per thousand cigarette equivalent units

JT Investor Meeting5Industry contraction continues, while fine cut volume grows
RMC industry volume (BnU)

Fine cut industry volume (BnU)

-2.4%
+2.5%

2,824101

Europe-6.0%
CIS+-4.0%

Others2010© Copyright JT 2015

2011

2012

2013

2014London – September 18, 2015

Source: Euromonitor (China excluded). Note: Fine cut conversion rate: 1gr = 1 stick

2010

2011

2012

2013

2014

JT Investor Meeting6Adapting to tighter regulations
Plain packaging•

Filed the legal challenge to the legislation in Ireland and the UK•

Marketing efforts ahead of May 2016 implementation in Ireland and the UK• Accelerate product launches• Strengthen relationship with trade partners

EU TPD2•

Adjustment of the supply chain•

Relocation of manufacturing facilities in Europe by 2019

© Copyright JT 2015

London – September 18, 2015

JT Investor Meeting7Accelerating investment

London – September 18, 2015

JT Investor Meeting8Initiatives for broadening the business baseEmerging
Products

E-Vapor, Tobacco-Vapor

Seedingmarkets

Bangladesh, Brazil, Bulgaria, Egypt,Myanmar, Thailand, Uzbekistan

GFB
Introduction/enhancement© Copyright JT 2015

Winston Bangladesh, Japan, Myanmar
Camel
Cambodia, Lebanon, Taiwan
MEVIUS Georgia, Kazakhstan, Poland
LDAustria, Romania, Saudi Arabia
London – September 18, 2015

JT Investor Meeting9Development of Emerging Products in 3 platforms
Vision: Become the leader in Emerging Products

Productplatforms

E-VAPORTOBACCOVAPOR

Strategicobjective

LEAD

BUILD

© Copyright JT 2015

London – September 18, 2015

NEXT
GENERATIONPRODUCTS

DEVELOPJT Investor Meeting10E-Lites: Continue the growth momentum
in key European markets• Upgrades to E-Lites portfolio• Launch of CURV• Advanced product with Swiss made e-liquid• Product launch pipeline• Investments in brand equity• Including TV Advertising, Digital Media & Sponsorship© Copyright JT 2015

London – September 18, 2015

JT Investor Meeting11

Logic: A major milestone on our growth path
• Strengthen and grow position in USA• Enhance product portfolio and build pipeline of future JT
proprietary innovation• Plan for global expansion• Comprehensive brand building program

POWER SERIES: Electronic Cigarette

PRO SERIES: Closed Tank E-Liquid Vaporizer© Copyright JT 2015

London – September 18, 2015

JT Investor Meeting12Tobacco-vapor: Developing consumer-oriented offerings• Pioneer in tobacco vaporizers with Ploom• Learning from consumers to adapt our product offering• New product development ongoing• Working on a unique and innovative tobacco-vapor proposition• Pilot launches planned in 2016
• Accelerating investment in innovation infrastructure and organizational capabilities© Copyright JT 2015

London – September 18, 2015

JT Investor Meeting13Confident in delivering profit growth

JT tobacco business

Mid to high single digit
profit growth in the mid- to long-term© Copyright JT 2015

London – September 18, 2015

JT Investor Meeting14

Closing Remarks
Akira Saeki

Executive Deputy President,
President of Tobacco BusinessIn closing• Confidence in achieving sustainable profit growth in the mid to long term
• Prioritize investment to pursue quality top-line growth• CIS+ continues to be the key profit generator with a strong leading position• Fulfill our responsibility toward our stakeholders as core business and profit growth engineof the JT Group© Copyright JT 2015

London – September 18, 2015

JT Investor Meeting16