FOR IMMEDIATE RELEASETokyo, May 2, 2016

JT’s Consolidated Financial Results for FY2016 First Quarter

First quarter demonstrated solid progress toward full year target
Results for FY2016 First Quarter

Revenue and adjusted operating profit increased, supported by top line growth in all businesses
and a number of favorable one off factors.



Revenue increased 3.4% supported by top line growth in all businesses namely theinternational and Japanese domestic tobacco businesses, the pharmaceutical business and theprocessed food business, despite the negative impact of exchange rates.

Adjusted operating profit at constant currency grew 20.6% driven by the strong performance ofeach business and favorable one off factors in the tobacco businesses and the pharmaceuticalbusiness. On a reported basis, the growth rate in adjusted operating profit was 3.2% due tounfavorable currency movements against the US Dollar in the international tobacco business.

Operating profit grew 41.3% as a result of higher gains from the sale of real estate assets.
Profit attributable to owners of the parent increased 38.4%.

International Tobacco Business: Total and GFB shipment volumes increased 7.1% and 10.7%
respectively driven by continued market share momentum contributions from recent acquisitions
and favorable one off factors. With volume growth and robust pricing, US dollars adjusted
operating profit at constant currency grew 21.1%. Reported adjusted operating profit inJapanese Yen decreased 5.2%.

Japanese Domestic Tobacco Business: Adjusted operating profit grew 15.4% due to a one off
increase in demand ahead of retail price amendment of certain products and a recent
acquisition of Natural American Spirit as well as the effects of the measures to strengthen thecompetitiveness of the Japanese domestic tobacco business.

Forecast for FY2016
The Company maintains the current forecast for the fiscal year 2016.
Mitsuomi Koizumi, President and Chief Executive Officer of JT, commented:“Although the significant volume growth reported by the international tobacco business in thisquarter is favorably impacted by recent acquisitions, our business momentum remains solid and weare making steady progress towards our year-end target. Domestically, sales volume and market
share have increased in line with our expectations, supported by the acquisition of Natural American
Spirit as well as a one off increase in demand ahead of the retail price amendment in April 2016. I’m
pleased to confirm that we are on track to realize our full year target.”1Consolidated Financial Results for FY2016 First Quarter(billions of Yen)

January – March2015
2016

Revenue

516.7

Adjusted operating profit

Difference

Net Change

534.1

17.4

3.4%

159.2

164.4

5.1

3.2%

Operating profit

144.1

203.7

59.6

41.3%

Profit attributable to owners of theparent1

105.1

145.4

40.4

38.4%

159.2

192.0

32.7

20.6%

At constant currency:
Adjusted operating profit

Revenue
Revenue increased 3.4% due to a one off increase in demand ahead of the retail priceamendment of certain products in April 2016 and the impact of the Natural American Spirit
acquisition in the Japanese domestic tobacco business. The Group also benefitted from a one
off milestone revenue relating to the R&D progress of JT’s original compound that has been outlicenced in the pharmaceutical business.

Adjusted Operating Profit
Adjusted operating profit at constant currency increased 20.6% mainly driven by higher revenue
in all businesses and the effects of the measures to strengthen the competitiveness of theJapanese domestic tobacco business. On a reported basis, adjusted operating profit grew 3.2%,affected by unfavorable currency movements in the international tobacco business.

Operating Profit
Operating profit increased 41.3% as a result of higher gains from the sale of real estate assets.

Profit attributable to owners of the parent
Profit attributable to owners of the parent grew 38.4% due to higher operating profit.

2

Results by Business Segment
International Tobacco Business
January - March(billions of units, billions of Yen)

Net Change20152016Total shipment volume2

88.1

94.4

7.1％

GFB shipment volume

60.0

66.4

10.7％

Core revenue3

282.3

284.7

0.9％

Adjusted operating profit

105.0

99.5

-5.2%

Total shipment volume increased 7.1% driven by organic volume growth notably in the Benelux,
Canada, France, Germany, Iran, Italy, Kazakhstan, Middle East and Africa, the Philippines andSpain. The positive performance was also due to favorable comparisons to prior year, including
trade inventory adjustments, and contributions from recent acquisitions. Even excluding thosefavorable one off factors, shipment volume showed solid growth. GFB shipment volume grewstrongly by 10.7%, driving continued market share gains4 in the key markets of France, Italy, Spain,Taiwan and the UK. In Russia, GFB market share gains continued.
In US Dollars, core revenue and adjusted operating profit at constant currency increased 13.8% and21.1% respectively, driven by volume growth and robust price/mix. On a reported basis, due tounfavorable local currency movements against the US Dollar, core revenue increased 4.2% while
adjusted operating profit declined 2.1%. In Japanese Yen, core revenue increased 0.9% andadjusted operating profit decreased 5.2% due to the appreciation of the Japanese Yen.

Japanese Domestic Tobacco Business
January - March(billions of units, billions of Yen)

Net Change2015

2016

Total sales volume

25.5

27.2

6.7%

Core revenue

149.6

160.6

7.4%

Adjusted operating profit

57.0

65.7

15.4%

Total sales volume showed a solid performance in line with our expectations mainly supported by aone off increase in demand ahead of retail price amendment of certain products including Mevius inApril 2016, and the acquisition of Natural American Spirit, while excluding one off factors, our sales
volumes has been continuing to perform well. The growth of total sales volume positively affected
core revenue and adjusted operating profit, which grew 7.4% and 15.4% respectively. The adjusted
operating profit growth was additionally supported by the effects of the measures to strengthen thecompetitiveness of the Japanese domestic tobacco business.
Amid intensified competition, the Company continued to undertake marketing and sales initiatives
and brand equity investment. The acquisition of Natural American Spirit has strengthened our brandportfolio and it has been enhancing our competitiveness in the domestic market. JT’s overall market
share reached 62.4% in January – March 2016.

3

Pharmaceutical Business
January – March(billions of Yen)

Difference

2015

2016

Revenue

16.6

21.5

4.9

Adjusted operating profit

-0.8

3.2

4.0

Revenue increased ¥4.9 billion to ¥21.5 billion due to a one off milestone revenue related to R&D
progress of an original JT compound that has been out-licensed, and higher royalty revenue.
Adjusted operating profit grew ¥4.0 billion to 3.2 billion as a result of the revenue increase.

Processed Food Business
January – March(billions of Yen)

Difference

2015

2016

Revenue

38.9

39.4

0.5

Adjusted operating profit

0.9

1.2

0.3

The processed food business has continued to focus on staple food products such as frozen
noodles, frozen rice, packed cooked rice and frozen baked bread. Revenue increased ¥0.5 billion to¥39.4 billion, driven by the improved sales of frozen and ambient processed food products as well
as seasoning products. Adjusted operating profit increased ¥0.3 billion to ¥1.2 billion as a result ofhigher revenue, partly offset by higher expenses.

4Consolidated Forecast for FY2016
The Company maintains the current forecast for the fiscal year 2016.
(billions of Yen)

Jan-Dec 2015
Actual(A)Jan-Dec 2016
Forecast(B)Change from 2015
Actual(B)-(A)

Revenue

2252.92,200.0-52.9(-2.3%)

Adjusted operating profit

626.7

562.0

Operating profit

565.2

566.0

Profit attributable to ownersof the parent1

398.5

399.0

626.7

673.0

-64.7
(-10.3%)0.8(0.1%)
0.5(0.1%)

Forecast at constant currency
Adjusted operating profit

46.3(7.4%)###Japan Tobacco Inc. is a leading international tobacco company. Its products are sold in over 120 countries and its globally
recognized brands include Winston, Camel, Mevius, LD and Natural American Spirit. With diversified operations, JT is also
actively present in pharmaceuticals and processed foods. The company’s revenue was ¥2.253 trillion (US$18,679
million(*)) in the fiscal year ended December 31, 2015.
*Translated at the rate of ¥120.61 per $1, as of December 31, 2015Notes:1Profit in 2015 is from continuing operations.
Including fine cut, cigars, pipe tobacco and snus, but excluding contract manufactured products, waterpipe tobacco andemerging products.
3
Revenue including waterpipe tobacco and emerging products, but excluding revenue from distribution, contract
manufacturing and other peripheral businesses.
4
Source: IRI, Logista, Nielsen and JTI estimates on a 12-month rolling average, unless otherwise specified, for cigarettes
and fine cut at the end of March 2016. France, Russia and Spain on a 12-month rolling average at the end of February
2016. 12-month share of market growth for February 2016 markets is calculated against a 12-month share of market atthe end of March 2015.
2

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

Contact:

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

5