International Tobacco Business
Pierre de Labouchere |
Japan Tobacco International (JTI), JT Group´s international tobacco business, has a solid business foundation due to its geographic profile and its competitive edge in both brands and people. In 2009 JTI gained market share in its key markets due to our strong brand equity and portfolio despite an adverse economic environment. |
FY 3/2010 Business Performance Summary
[At constant rates of exchange]
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JTI achieved 15% growth in dollar-based EBITDA at constant rates of exchange.*
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Despite strong business performance, Adjusted net sales and profits declined on a reported basis due to adverse currency impacts.
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International Tobacco Business - Adjusted Net Sales Excluding Tax*
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International Tobacco Business - EBITDA Before Royalty Payments to JT
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Market share gain in key markets
- Our competitiveness has been enhanced through continued investment in brands, including product improvement and effective marketing initiatives.
- Our strength in the sub-premium and mid-price segments drove market share growth.
2008* |
2009* |
ppt change |
|
|---|---|---|---|
Russia |
35.7% |
36.8% |
1.1 |
France |
14.2% |
14.8% |
0.6 |
Italy |
17.1% |
18.5% |
1.4 |
Spain |
20.5% |
20.6% |
0.1 |
UK |
39.1% |
40.4% |
1.3 |
Turkey |
17.0% |
18.8% |
1.8 |
Taiwan |
38.7% |
38.0% |
(0.7) |
| * twelve months moving average |
| Source:AC Nielsen, Core EPOS and JTI Internal Data |
Sales Volume Performance by Cluster |
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South & West Europe
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2009 |
Year-on-year change |
|---|---|---|
Total sales volume |
64.5 |
0.4% |
GFB sales volume |
55.7 |
2.5% |
- JTI increased its total sales volume and GFB sales volume, despite the accelerated industry volume decline.
- Camel achieved 1.6% sales volume growth, driven by strong performance in Italy.
- Winston achieved 6.1% sales volume growth, and continued as the fastest growing cigarette brand in Italy and France.
North & Central Europe
|
2009 |
Year-on-year change |
|---|---|---|
Total sales volume |
47.5 |
7.6% |
GFB sales volume |
20.4 |
9.4% |
- Total sales volume grew due to strong performance in the UK.
- In the UK, while the down-trading trend accelerated, industry volume increased due to reduced overseas travel from the country. As a result, Sterling, our value brand, performed strongly.
- The GFB sales volume grew, driven by LD in Poland and by Benson & Hedges, Winston and Camel in Austria.
CIS+
|
2009 |
Year-on-year change |
|---|---|---|
Total sales volume |
214.6 |
-2.4% |
GFB sales volume |
105.0 |
0.3% |
- The overall CIS+ industry size was reduced, and consumers began downtrading to mid-price and value products.
- The GFB sales volume remained stable as LD captured consumer downtrading from the sub-premium price category.
- In Russia, LD and Glamour contributed to continued sales volume growth, and JTI demonstrated its market leadership with a competitive pricing strategy.
Rest of the World
|
2009 |
Year-on-year change |
|---|---|---|
Total sales volume |
108.4 |
-8.0% |
GFB sales volume |
62.4 |
-8.1% |
- Excluding the impact of specific events in Iran and the Philippines, JTI´s total sales volume and GFB sales volume grew strongly, driven by Turkey and the Middle East.
- In Turkey, Winston, Monte Carlo and LD all increased market share, driving JTI´s volume growth ahead of its competitors.
Strong GFB Portfolio
GFB Sales Volume Comparison between 2009 and 2008 (excl. specific events*)
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GFB achieved 2.4% growth in adjusted total sales volume.
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Security of Quality Leaf Supply
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In 2009, JTI decided to improve its leaf supply and strengthen its capability to procure Brazilian, African and US leaf through two acquisitions in Brazil, one in Africa, and a joint venture in the US.
Key Benefits
- Actively manage the leaf-tobacco supply chain in anticipation of increased regulation in the sector.
- Work directly, and build relationships with farmers and other related parties, leading to further improvements in the quality of leaf tobacco.
- Enhance the JT Group´s talent pool and expertise in the area of leaf tobacco procurement.
Strategies and Specific Measures
Quality top-line growth is JTI’s overriding priority. JTI remains committed to deploying its key strategies under the guiding principle of continuous improvement.
- Build and nurture outstanding brands
- Continue to enhance productivity
- Sharpen focus on responsibility and credibility
- Develop human resources as a cornerstone of growth
JTI´s strong foundation will lead sustained mid- to long-term growth.
In 2009, our commitment to top-line growth enabled JTI to overcome the challenging economic environment and deliver another solid set of results, achieving 15% EBITDA growth at constant rates of exchange.
Our strong brand portfolio will enable us to grow market share, and we will continue to invest in GFB particularly, in order to ensure long-term growth.
Given the current economic uncertainties, we will continue to monitor the economic situation closely in 2010 and are prepared to adapt as we see necessary.
JTI will accelerate its growth by making the most of its strong business foundation supported by its geographic profile and competitive edge in brands and people. We will continue to be the JT Group´s profit growth engine, aiming to achieve the target under the JT-11 medium-term business plan of EBITDA growth of at least 10% CAGR at constant rates of exchange.
EBITDA and EBITDA Margin Growth Rate |
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* Based on the assumption that the exchange rate of the previous year is applied. |
