Supplementary Document
Tokyo, August 1, 2016
Japan Tobacco Inc.
Japan Tobacco International (JTI)
Results for the 3-month period ended June 30, 2016

Strong business momentum and pricing drive solid
financials

2016

2015

Changevs. prioryear

2016

2015

Changevs. prioryear

Total shipment volume1

105.3

103.1

2.2%

199.7

191.2

4.4%

GFB shipment volume1

74.4

71.9

3.4%

140.7

131.9

6.7%

Core revenue2

2,771

2,693

2.9%

5,239

5,061

3.5%

Core revenue at constant FX

3,004

2,693

11.6%

5,700

5,061

12.6%

866

889-2.6%

1,729

1,770-2.3%

1,016889

14.3%

2,083

1,770

17.7%

(billions of units, millions of US$)

Adjusted operating profit
Adjusted operating profit at constant FX

Apr-JunJan-JunHighlights
3 months quarter-to-date 2016 (April-June)

Adjusted operating profit at constant FX grew 14.3%, driven by robust price/mix and shipment
volume growth, offsetting the cost increase due to ongoing investments. On a reported basis,
adjusted operating profit declined 2.6%, due to currency fluctuations.

Core revenue increased 11.6% at constant FX and 2.9% on a reported basis driven by strong
business momentum and pricing.

Total and GFB shipment volumes grew 2.2% and 3.4%, respectively, reflecting continued
market share momentum and contributions from recent acquisitions. In fine cut, GFB
shipment volume increased 22.0% resulting in total fine cut shipment volume growing 9.6%.

Year-on-year market share3 increased in the key markets of France, Italy, Spain, Taiwan andthe UK. In Russia, GFB market share continued to grow driven by LD and solid Winston
performance.

6 months year-to-date 2016 (January-June)
Core revenue and adjusted operating profit grew 12.6% and 17.7% at constant FX,
respectively, led by strong price/mix and positive GFB performance. Investments accelerated,particularly in seeding markets and emerging products.

Reported core revenue increased 3.5% driven by strong business momentum offsetting
currency fluctuations. Reported adjusted operating profit declined 2.3% due to currency
fluctuations.

Total and GFB shipment volumes increased 4.4% and 6.7%, respectively, driven by market
share gains, contributions from acquisitions and favorable trade inventory adjustments in thefirst quarter. In fine cut, total and GFB shipment volumes grew 13.3% and 27.1%, respectively.
1Performance review
Core revenue and adjusted operating profit
3 months quarter-to-date 2016 (April-June)
Core revenue at constant FX grew 11.6% or US$312 million to US$3,004 million, driven by
US$214 million in price/mix contribution and positive volume.
Adjusted operating profit at constant FX increased 14.3% or US$127 million to US$1,016 million,
reflecting a positive price/mix of US$213 million and ongoing investments.
On a reported basis, total core revenue was up 2.9% as strong business momentum offset
currency fluctuations, while adjusted operating profit declined 2.6% due to currency fluctuations.

6 months year-to-date 2016 (January-June)
Core revenue at constant FX grew 12.6% or US$639 million to US$5,700 million, driven by
price/mix contribution of US$403 million and positive volume.
Adjusted operating profit at constant FX increased 17.7% or US$313 million to US$2,083 million,driven by robust price/mix of US$390 million and volume growth. Investments also increased,particularly in seeding markets and emerging products.
On a reported basis, core revenue grew 3.5%, while adjusted operating profit declined 2.3% due tocurrency fluctuations.

Total shipment volume(billions of units)

Apr-JunCluster

2016

2015

Changevs. prioryear

South & West Europe
North & Central Europe
CIS+
Rest-of-the-World
Total JTI

17.5
13.8
39.2
34.7
105.3

16.9
13.2
42.2
30.8
103.1

4.0%
4.5%
-7.2%
13.0%
2.2%

Jan-Jun2016

2015

Changevs. prior
year

34.5
27.0
70.3
67.9
199.7

32.0
25.873.559.9
191.2

7.9%
4.5%
-4.4%
13.4%
4.4%

3 months quarter-to-date 2016 (April-June)
Total shipment volume increased 2.2% to 105.3 billion cigarette equivalent units. Acquisitions andpositive volume performance in the Caucasus markets, Germany, Iran, Italy, Korea, the Philippines,
South East Asia markets, Taiwan and Turkey offset declines mainly caused by industry contractionin Russia. In fine cut, shipment volume also grew 9.6%, led by France, Germany, Hungary, Italy
and the UK.

6 months year-to-date 2016 (January-June)
Total shipment volume grew 4.4% mainly driven by the Caucasus markets, France, Germany, Iran,Italy, Kazakhstan, Korea, the Philippines, Romania, South East Asia markets and Turkey, as wellas inventory adjustments and acquisitions. In fine cut, shipment volume increased 13.3%, led by
the growth momentum in the European clusters.

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GFB shipment volume(billions of units)

Apr-JunCluster

2016

2015

Changevs. prioryear

South & West Europe
North & Central Europe
CIS+
Rest-of-the-World
Total JTI

15.8
8.7
29.1
20.8
74.4

14.8
7.6
30.9
18.5
71.9

6.6%
14.0%
-6.0%
12.3%
3.4%

Jan-Jun2016

2015

Changevs. prioryear

31.0
16.7
52.8
40.2
140.7

28.2
14.6
54.0
35.2
131.9

10.2%
14.8%
-2.1%
14.2%
6.7%

3 months quarter-to-date 2016 (April-June)
GFB shipment volume grew 3.4% to 74.4 billion cigarette equivalent units, mainly driven by Brazil,
Canada, Germany, Iran, Italy, the Philippines, Romania, South East Asia markets, Taiwan, Turkey,
the UK and the inclusion of Natural American Spirit. Over the quarter, GFB fine cut shipment
volume increased 22.0%, primarily led by growth in the Benelux, France, Germany, Hungary, Italy
and the UK.
Winston: Shipment volume grew 2.8% to 35.8 billion cigarette equivalent units, primarily driven by
Brazil, Germany, Iran, Italy, the Philippines, South East Asia markets, Taiwan and Turkey. The
Benelux, Germany and Portugal drove a 13.0% increase in fine cut shipment volume.
Camel: Shipment volume grew 3.7% to 13.7 billion cigarette equivalent units, reflecting growth inBrazil, Czech Republic, France, Italy, the Philippines, South Africa and Spain. Fine cut shipment
volume increased 11.9%, led by the Benelux, France and Italy.
Mevius: Shipment volume increased 8.3% to 4.7 billion cigarette equivalent units driven by growthin South East Asia markets, and in Korea following the significant excise tax increase in 2015.
LD: Despite strong growth in Canada, Kazakhstan, Romania and Turkey, shipment volume
declined 2.1% to 13.1 billion cigarette equivalent units, primarily due to the Caucasus markets,Russia and Ukraine. Fine cut shipment volume grew 7.8%, mainly led by Hungary.

6 months year-to-date 2016 (January-June)
GFB shipment volume grew 6.7%, mainly driven by the Benelux, France, Germany, Iran, Italy,Korea, the Philippines, Romania, South East Asia markets, Turkey and the UK, as well as
inventory adjustments and acquisitions. In fine cut, GFB shipment volume increased 27.1%
primarily driven by the Benelux, France, Germany, Hungary, Italy and Spain
GFBs represented 70.5% of total shipment volume, up 1.5ppt from the same period last year.

3Cluster review
3 months quarter-to-date 2016 (April-June)
South and West Europe(billions of units, millions of US$)

Apr-Jun2016
2015Total shipment volume
GFB shipment volumeCore revenue at constant FX

17.5
15.853116.9
14.8503

Changevs. prior year
4.0%
6.6%
5.6%

Core revenue at constant FX increased 5.6%, driven by positive volume and price/mix of US$6million.
Total and GFB shipment volumes grew 4.0% and 6.6%, respectively, primarily driven by positive
performance in France, Italy and Switzerland, as well as trade inventory adjustments. Market
share increased in the Benelux, France, Greece, Italy, Spain and Switzerland.
In France, total shipment volume grew 0.7% and GFB shipment volume grew 3.0% driven byWinston, Camel and Natural American Spirit. Fine cut shipment volume increased 3.7% led by
Winston and Camel. Market share grew 0.5ppt to 21.6%, driven by Winston, Camel and Fleur duPays.
In Italy, Winston, Camel, Benson & Hedges and Natural American Spirit, as well as inventory
adjustments, drove strong total and GFB shipment volumes growth of 14.4% and 14.6%,
respectively. Fine cut shipment volume grew 60.4% mainly driven by Camel and Natural American
Spirit. Market share increased 2.0ppt to 22.0%, driven by Winston, Camel and Benson & Hedges.
In Spain, GFB shipment volume grew 0.6%, mainly driven by Camel and Natural American Spirit
while total shipment volume declined 0.7%. Fine cut shipment volume was down 2.4%. Market
share grew 0.4ppt to 22.5%, primarily led by Winston and Camel.
North and Central Europe(billions of units, millions of US$)

Apr-Jun2016
2015

Total shipment volume
GFB shipment volumeCore revenue at constant FX

13.8
8.7601

13.2
7.6553

Changevs. prior year
4.5%
14.0%
8.7%

Core revenue at constant FX increased 8.7%, driven by strong volume performance and price/mixof US$23 million.
Total and GFB shipment volumes increased 4.5% and 14.0%, respectively, mainly driven byAustria, Czech Republic, Germany, Hungary and Sweden, as well as the inclusion of NaturalAmerican Spirit. Market share grew in Austria, Czech Republic, Germany, Hungary, Ireland,
Sweden and the UK.

4In Austria, total and GFB shipment volumes grew 5.8% and 19.0%, respectively, driven by Winston
and Benson & Hedges. Market share increased 0.7ppt to 31.7%, led by Winston, Camel andBenson & Hedges.
In Poland, total and GFB shipment volumes declined 4.3% and 3.6%, respectively, due to Winstonand LD. Market share decreased 0.2ppt to 16.2% due to LD.
In the UK, GFB shipment volume grew 36.4%, driven by Benson & Hedges. Total shipment volumeslightly declined 0.6%, mainly due to industry contraction and downtrading. Fine cut shipment
volume increased 6.5% driven by Amber Leaf, Sterling and Natural American Spirit. Market share
grew 0.6 ppt to 42.1%, with Amber Leaf and Sterling strengthening their number one position intotal tobacco and cigarettes, respectively.
CIS+(billions of units, millions of US$)

Apr-Jun2016
2015

Total shipment volume
GFB shipment volume
Core revenue at constant FX

39.2
29.1
859

Changevs. prior year

42.2
30.9
811

-7.2%
-6.0%
5.9%

Core revenue at constant FX grew 5.9% as a result of US$101 million of price/mix.
Total and GFB shipment volumes declined 7.2% and 6.0%, respectively, mainly due to industry
contraction in Russia. GFB market share increased in Romania and Russia.
In Romania, total and GFB shipment volumes increased 3.5% and 26.3%, respectively, driven byWinston, LD and Sobranie. GFB shipment volume growth was supported by the successful
migration of More to LD. Market share increased 0.5ppt to 25.9%.
In Russia, total and GFB shipment volumes declined 8.6% and 3.2%, respectively. This was
mainly due to quarterly industry contraction4 estimated at 5.4%, as well as competitive pressure at
the low-end of the market. Share of value and share of market declined 0.7ppt to 34.4% and0.8ppt to 33.4%, respectively, on a 12-month rolling average basis. Over the last 9 months,quarterly market share stabilized. GFB market share grew 0.3ppt to 24.4%, led by LD andsupported by Winston gaining market share consistently since January.
Rest-of-the-World(billions of units, millions of US$)

Apr-Jun2016
2015

Total shipment volume
GFB shipment volume
Core revenue at constant FX

34.7
20.8
1,013

30.8
18.5
825

Changevs. prior year
13.0%
12.3%
22.8%

Core revenue at constant FX increased 22.8%, led by positive volume and price/mix of US$84
million.

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Total and GFB shipment volumes increased 13.0% and 12.3%, respectively, mainly driven by
Brazil, Canada, Iran (including the acquisition of Arian Tobacco Industry), Korea, Myanmar, thePhilippines, South Africa, South East Asia markets, Taiwan and Turkey. Market share grew inCanada, Korea and Taiwan.
In Taiwan, total and GFB shipment volumes grew 2.7% and 4.7%, respectively, and share ofmarket increased 0.4ppt to 39.3% driven by Winston and LD. Share of value grew 0.9ppt to 45.7%.
In Turkey, total and GFB shipment volumes increased 2.7% and 2.1%, respectively, primarily
driven by Winston and LD. Market share declined 0.9ppt to 29.9% on a 12-month basis. Quarterlyshare of market remained flat for the last 9 months.

###Notes:
1

Including fine cut, cigars, pipe tobacco and snus, but excluding contract manufactured products, waterpipe tobacco andemerging products.
2
Revenue including waterpipe tobacco and emerging products, but excluding revenue from distribution, contract
manufacturing and other peripheral businesses.
3
Source: IRI, Logista, Nielsen and JTI estimates on a 12-month rolling average, unless otherwise specified, forcigarettes and fine cut at the end of June 2016. The Benelux, Germany, Russia, Spain, Switzerland and Turkey are on
a 12-month rolling average at the end of May 2016. 12-month share of market growth for May 2016 markets is
calculated against a 12-month share of market at the end of June 2015.
4Source: JTI estimates based on April-June 2016 data versus the same period last year.

Additional definitions are provided at https://www.jt.com/media/definitions/index.html.

Contacts:

Ryohei Sugata, General Manager
Masahito Shirasu, Associate General Manager
Media and Investor Relations Division
Japan Tobacco Inc. Tokyo: +81-3-5572-4292
E-mail: jt.media.relations@jt.com

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