JT Group sees growth in tobacco sales

Tobacco company says its strong revenues and profits came with a focus on heated tobacco device and nicotine pouches.
Tom Venetis head shot
Ploom X from JTI
Photo: Ploom X - JTI

JT Group, which came about in in 1999 when Japan Tobacco Inc purchased the non-U.S. operations of R.J. Reynolds (RJRI) and which handles such tobacco brands as Winston, Camel and Benson & Hedges, has released its 2023 earnings reports to investors.

According to the company, it achieved record highs across all indicators from revenue to profit for the year ending 2023. Revenue increased by 6.9% to JPY 2,841.1 billion and core revenue at constant FX increased by 6.1% to JPY 2,712.5 billion. Operating profit increased by 2.9% to JPY 672.4 billion and profit increased by 8.9% to JPY 482.3 billion.

The company projects that for this year, 2024, revenue increase by 6.2% to JPY 3,016.0 billion and operating profit is forecast to decrease by 3.6% to JPY 648.0 billion.

“I am pleased to report that the 2023 JT Group performance reached record high levels across all financial indicators, despite the challenges across our operating environment,” says Masamichi Terabatake, president and CEO of the JT Group in a release accompanying the release of the financials. “Adjusted operating profit at constant FX, our main indicator, exceeded our guidance and grew by 5.2%, driven by all business segments.”

READ: Convenience industry blindsided as B.C. moves flavoured nicotine pouches behind pharmacy counters

Part of JT Group’s success came from its growing focus on what are often called ‘reduced-risk products’, such as its Ploom heated tobacco device and nicotine pouches. 

“In the tobacco business, JT Group’s profit growth engine, performance was driven by solid pricing and continued share gains in combustibles. We steadily expanded the geographic reach of Ploom X, making it available to adult consumers in 13 markets at the end of 2023. In addition, monthly HTS segment share in Japan, the largest HTS (Heated Tobacco Sticks) market, reached 11.4% in December 2023,” continued Terabatake. “In our Business Plan 2024, covering 2024 to 2026, we will continue to prioritize investments in HTS to fund the expansion of Ploom X, both in terms of share of segment and geographic footprint, in order to make Ploom X available in over 40 markets by the end of 2026. Combustibles will continue to drive profit by growing market share and revenue.”

According to Bloomberg, JT Group’s financial results placed the company ahead of its competitors, such as Philip Morris International, maker of Marlboro and British American Tobacco Plc. According to Bloomberg, Philip Morris shipped 613 billion cigarettes in 2023, which was a decline of 1.3% from the year before. British American Tobacco Plc shipped about 555 billion cigarettes last year, a drop of 8.2% from 2022.

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