MATERIALITY andSUSTAINABILITYIDENTITY

BUSINESS andSTRATEGIESFINANCIAL INFORMATION /OTHERSGOVERNANCE

Key performance indicators
Financial performance review

Revenue

Profit2,657.8(JPY BN)

2,216.0

2,324.8
2,175.6(JPY BN)JPY
BN
14.3% YoY increase

2,657.8

2,092.6

Free cash flow
(JPY BN)

442.7
385.7

6000
503.9

348.2
310.3

338.5

4500

Since 2021 our consolidated revenue has been growing, mainly due
to positive foreign exchange effects in addition to market-share

482.0

404.2

382.9

3000

growth and positive pricing effects. In 2022 revenue grew by 14.3%year on year to 2,657.8 billion yen. Until 2020, revenue decreased

1500

105.6

for two consecutive years, mainly as a result of negative foreignexchange effects, growth in the Japanese RRP (Reduced-Risk Products) market, and a continuing downward trend in the Japanese

2018

2019

2020

2021

2022

02018

2019

2020

2021

2022

domestic market as a whole.

442.7

2018

2019

2020

2022

2021

382.9

JPY
BN
30.8% YoY increase

JPYBN
JPY99.1BN YoY decrease

Profit grew 30.8% year on year to 442.7 billion yen, driven largely

In terms of free cash flow, the cash-generating capacity of ourby operating profit growth far greater than the increase in financial

businesses is stable. Free cash flow for 2022, however, decreased

costs.

by 99.1 billion yen year on year to 382.9 billion yen despite AOP
growth, due to a deterioration in working capital as well as increasing corporate taxes and one time costs for measures to enhance
tobacco-business systems operations in Japan.

Adjusted operating profit

30(JPY BN)

27.4+62.1 727.8+55.3 665.7

26.9

25610.4595.5
515.9

23.7

487.0

Dividend per share（%）

23.300.020

9.0% YoY increase inconstant currency

JPY727.8BN (reported basis)

19.2% YoY increase(JPY)

200
150

188
150154154

We paid total dividends of 188 yen per share for 2022. In 2021 we
140changed our policy on shareholder returns, and to increase those
returns by realizing medium and long term profit growth for the100

Group while maintaining a strong financial base*1, we benchmarked our payout ratio at 75%*2, a competitive level in the capital

Adjusted operating profit on a reported basis grew by 19.2% year
on year to 727.8 billion yen, mainly due to growth in the tobacco

188JPYmarkets*3.

50

and pharmaceutical businesses and positive exchange effects. AOP
15in constant currency grew by 9.0% year on year to 665.7 billion yen.

0
20182018 2019 2020 2021 Business 2022 atmomentum constantcurrency
調整後営業利益率012

Japan Tobacco Inc. Integrated Report 2022

FX

2022

102019202020212022*1 The Group will maintain a strong financial base that secures stability in caseof changes in business environment such as economic crises and flexibility
enabling expeditious responses to business investment opportunities*2 To be in the range of approximately ±5%*3 We monitor the shareholder return trends of Fast-Moving Consumer Goods
companies which have a stakeholder model similar to our 4S model andhave realized strong business growth

Japan Tobacco Inc. Integrated Report 2022013

MATERIALITY andSUSTAINABILITYIDENTITY

BUSINESS andSTRATEGIESFINANCIAL INFORMATION /OTHERSGOVERNANCE

Key performance indicators

Non-financial performance review

2022 sustainability highlights
Summarized here are some of our sustainability achievements and the progress we have made. It is of paramountimportance that we continue to monitor and report on ourstrategy, initiatives, goals, and progress. By assessing theThe JT Group’s materiality has been
updated in this report. The new JT
Group Materiality reflects key issues

JT Group environmental performance data
impact not only on our Group but on our value chain as awhole, we seek to create shared value for our planet and forthe communities in which we operate.

The JT Group is committed to achieve
Net-Zero Greenhouse Gas (GHG)
emissions by 2050. We are taking proactivethat are currently important to our stakehold-initiatives to reduce our GHG emissions for theers, our society and the JT Group. In updating

entire value chain. We aim to be Carbon

our materiality, the changes in the business

Neutral by 2030 through initiatives including

environment and social conditions surround-increasing the proportion of renewable elec-

ing our Group were taken into account, while

tricity that we use. GHG reduction targets forpaying attention to our relationship with soci-2030 from our operations have been validated

ety and by listening even more closely to theby the Science Based Targets initiative (SBTi) as

opinions of our stakeholders.

being in line with the 1.5°C global warming

4Read more on P. 38.

scenario.

As a global organization, we recognize that we have a keyrole to play in reducing our environmental impact – not only
in our own business operations, but across our value chain.

We will continue to measure performance across a range
of environmental topics and set ourselves targets along theway.

Greenhouse Gas emissions Scope 1 and 2Greenhouse Gas emissions Scope 3 Category 1(CO2e thousand tons)(CO2e thousand tons)

1,000

8,000

6,960
6,298
750

6,000

3675002019

one of the key programs for our to-gender equality in the workplace.

bacco business’s leaf supply chain manage-

representation in leadership is set to reach

Chain Due Diligence process. Our target is to25% by 2030. We find it desirable that thisimplement ALP in all sourcing countries byshould be more than 40% over time. In 2022,2025. In 2022, ALP was fully implemented inwomen’s representation in leadership reached

Bangladesh and Ethiopia, and this contributed

16.9%, as we continue with our efforts to meetsignificantly toward meeting our ALP target.

the Group-wide target.

4Read more on P. 69. Read more about the progress of ALP in 2022 on

4Read more on P. 83.

JT.com.

014

Japan Tobacco Inc. Integrated Report 2022

339

351

277

4,000

2020

Scope 1



2021

340

2022

02019

Waste generated(Thousand m3)(Thousand tons)

12,000

10,297 10,485 10,206 10,019

9,705

9,289

131
120

6,000

80

3,000

400

2021

2022

160

10,567 10,5769,000

2020

Scope 2

Water withdrawal

Our Group-wide target for women’s

ment and an integral part of the Leaf Supply

296

5,958

2,000368

0

We are committed to promoting

318

250

4Read more on P. 78.

Agricultural Labor Practices (ALP) is

7,793

2015 2016 2017 2018 2019 2020 2021 2022

01321311331311261231162015 2016 2017 2018 2019 2020 2021 2022

Japan Tobacco Inc. Integrated Report 2022015