Revenue

JPY2,841.1BN

6.9% YoY increase

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

In 2023, revenue grew by 6.9% year on year to 2,841.1 billion yen.

In 2019 and 2020, despite continuing growth of market share and positive pricing effects in the tobacco business, revenue decreased for two consecutive years, as a result of negative foreign exchange effects, growth of the Japanese RRP (Reduced-Risk Products) market, and a continuing downward trend in the Japanese market as a whole.

Adjusted operating profit

5.2% YoY increase on a constant FX basis

JPY728.0BN (reported basis) stable as previous year

Adjusted operating profit on a reported basis was stable at 728.0 billion yen, due to negative foreign exchange effects despite increases across all businesses on a constant FX basis.

On a constant FX basis, adjusted operating profit grew by 5.2% year on year to 765.7 billion yen.

Profit

JPY482.3BN

8.9% YoY increase

Profit grew by 8.9% year on year to 482.3 billion yen, driven by operating profit growth, as well as lower financial costs and corporate income tax.

Free cash flow

JPY443.7BN

JPY60.8BN YoY increase

In terms of free cash flow, the cash-generating capacity of our businesses is stable.

Free cash flow for 2023 increased by 60.8 billion yen to 443.7 billion yen, driven by a favorable comparison to 2022 due to the absence of costs related to initiatives to strengthen competitiveness in the tobacco business in Japan and lower corporate income tax, partially offset by an increase in capital expenditures.

Dividend per share

JPY194

We paid total dividends of 194 yen per share for 2023.

In 2021, we changed our policy on shareholder returns, and to increase those returns by realizing medium- and long-term profit growth for the JT Group while maintaining a strong financial base^*1, we benchmarked our payout ratio at 75%^*2, a competitive level in the capital markets^*3.

*1

The Group will maintain a strong financial base that secures stability in case of 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 and have realized strong business growth

2023 sustainability highlights

Summarized here are some of our sustainability achievements and the progress we have made in 2023. Materiality is the foundation for managing our business. By setting targets and initiatives based on materiality, the JT Group will strive for a sustainable growth for nature, society and our business within.

The Group’s management principle is the 4S model. We believe that as nature, society and people’s lives are intertwined, sustaining our ways of living, and the activities of entities, will depend on the sustainability of the environment and society in which we exist. In pursuing this principle and by realizing the JT Group Purpose, we will contribute to the sustainability of our environment and our society. With the revision of the JT Group Materiality, the foundation of our sustainability management, we identified five material topics. Based on the revised materiality, the JT Group Sustainability Targets have been set consisting of a total of 25 items. We will pursue initiatives as set in the JT Group Sustainability Targets based on materiality, to realize our Purpose and to contribute towards a sustainable environment and society.

• For details, see JT Group sustainability strategy

“Investing in our people and supporting their growth” is one of the five topics of the JT Group Materiality. In 2023, we set new target items such as “Talent attraction” or “Attractive working conditions” in addition to “Diversity, equity & inclusion.” For the PRIDE Index, which recognizes the most LGBTQ+ friendly companies, JT achieved Gold status, the highest ranking in 2023 for the eighth consecutive year. JTI was certified as a Global Top Employer for the tenth consecutive year by 2023. This award recognizes employers that globally create the ideal conditions for their employees to develop, both professionally and personally. The Group works to create environments that are open to diversity, where all employees are treated equally regardless of different backgrounds and values and continue to perform at their best.

• For details, please see JTI website.

“Living with the planet” is one of the five topics of the JT Group Materiality. Target items include “Emissions reduction” and “Protecting water.” JT achieved a place on CDP’s prestigious “A List” for both tackling climate change and water security, recognized for its leadership in corporate sustainability. This is the sixth recognition (for five consecutive years) for climate change, and fourth recognition for water security. JT was also recognized as Supplier Engagement Leader 2023 in addressing climate change for the fifth consecutive year. Through dialogue with our stakeholders, we will be sure to follow through on our initiatives to support sustainable growth for both the Group and society.

• For details, please see our press release.

“Responsible supply chain management” is one of the five material issues of the Group. Launched in 2012, Agricultural Labor Practices (ALP) is the key program for the Group’s leaf supply chain management. ALP today is a part of the broader Leaf Supply Chain Due Diligence process. We continue to deliver against our target to implement ALP in all sourcing countries by 2025, making significant progress in 2023. Working with over 65,000 directly contracted leaf growers across various leaf sourcing countries, 100% of our directly contracted growers are now covered by ALP. We are dedicating efforts to enhance the livelihoods of growers in countries facing challenges, and we have established new targets to achieve this goal.

JT Group environmental performance data

As a global organization, we recognize that we have a key role 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 the way.

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

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

Note:

The increase was mainly due to temporary procurement increases from Tanzania and other nations that will require more time to shift to renewable energy sources in the leaf-drying process, as a result of business scale expansion and climatic influences

Water withdrawal
(Thousand m³)

Waste generated
(Thousand tons)