To prepare for future uncertainty, we must also consider as many parallel scenarios as possible. Maintaining multiple scenarios will allow us to expand the available options for decision-making in accordance with conditions. In the past, we were able to forecast outcomes based on simple causalities, such as pressing one button to turn on a single light. Today, we face a world that is far more complex, where pressing one button may turn on or off three lights. Regardless of how well we prepare in advance, today is an era in which unexpected phenomena can suddenly manifest. Moreover, there are now very few situations in the realm of management decision-making where we can pass judgment with all the necessary information at hand. In other words, in addition to numerical data and trends, the times demand comprehensive judgments that fully mobilize both creativity and experience.

Which is exactly why the ability to identify the extent and quality of risks has become so important. Likewise, it is vital that we maintain a range of options, including course changes and measures to minimize risks, in the event that matters do not proceed exactly as planned. The key to financial management in an era of change is therefore options that allow us to flexibly handle any situation̶options that emerge from identifying risks to the fullest extent possible and preparing countermeasures before falling into a desperate situation.

Under these circumstances, the answer offered by the management team at that time was to turn full sail toward international markets through M&As. The acquisition of RJR Nabisco Inc.'s non-U.S. tobacco business (RJRI) in 1999 was a historic turning point for the Group. While we faced a wide range of public reactions, including criticism, at the time, at the root of our thinking stood the strong yet healthy sense of urgency that we would fail to survive as a company if we did not make this move. At the same time, under a strong resolve to leverage our own strengths and "take the leap onto the global stage," we believe this led us to decisively shift course toward significant business growth.

That said, the acquisition of RJRI did not instantly transform us into a global company, nor did it immediately enable us to accelerate growth. Instead, we initially faced a series of challenges, causing many of our employees to struggle. Overcoming those challenges and gaining a wide range of accumulated experiences and lessons led to the subsequent acquisition of U.K.-based Gallaher Group Plc, ultimately contributing to our robust management foundation of today. The employees at the time had a shared long-term perspective of creating conditions that would allow us to grow sustainably across future generations, instead of simply chasing current performance. The very source of our strength today stems from this long-term perspective.

We engage in business across diverse markets in countries around the world, including emerging economies, and therefore manage our businesses under vastly different conditions in terms of market environments, regulations, and economics. In order to steadily capture growth opportunities within this environment, we must secure financial freedom to ensure business continuity even in the face of highly uncertain circumstances. On the other hand, large-scale business investments, including M&As, are indispensable to enhancing corporate value over the medium- to long-term. Such investment opportunities do not arrive at all times, making it critically important not to miss the right timing. To ensure that we do not lose valuable growth opportunities due to financial constraints when such opportunities do arise, it is equally essential to maintain financial flexibility during normal times.

We have the capability to generate stable free cash flow in the range of 400–500 billion yen annually. Although this level has not been achieved in recent years due to temporary factors such as M&A, this underlying strength supports our resilience and flexibility. By centrally managing the cash generated by each business entity at the Group level and maintaining a well-balanced approach among agile business investments, the acquisition of external resources, and shareholder returns, we achieve efficient and disciplined financial management across the Group as a whole.

As far as financing is concerned, the key point is much more than funding at hand. It is also about the breadth and depth of options for securing funds from external sources. For this reason, we have sought to diversify our funding tools, for example by issuing corporate bonds on multiple markets and securing credit lines from financial institutions. It is crucial here to maintain close communication with funding sources on a regular basis to deepen our mutual understanding. These daily efforts underpin the ability to undertake agile investments as and when required.

Moreover, as a company that is active globally, we assume a certain degree of exchange rate fluctuation and geopolitical risk. As part of our commitment to risk management, we identify and assess risks both from quantitative and qualitative perspectives, develop strategies tailored to the short, medium, and long term, and take unfailing action.

Along with collecting and monitoring information on each market in which we operate as part of necessary scenario planning, we have committed to several other steps over different time frames in preparation for emergencies, should they arise. For the short term, we have formulated countermeasures to maintain stable supplies of products using a geographically diversified global supply chain. For the medium- to long-term, we are working to strengthen and expand our global business foundation in order to mitigate the impacts of specific markets on the Group's performance, while also expanding accessible markets in which we can generate profits on an ongoing basis.

In risk management, it is essential to continuously improve forecasting accuracy, enhance sensitivity to change, and steadily strengthen our resilience to risks. We will also proactively work to enhance our capabilities in these areas.

Meanwhile, for combustibles, a pillar that generates profits for the Group as well as investment funds for the future, we will improve return on investment (ROI) through various means, including brand portfolio optimization, pricing strategies, and cost optimization. These efforts will help maintain and strengthen our platform for generating cash. Leveraging the cash generation capability of the combustibles segment, we will also strengthen shareholder returns through business growth while making ongoing, medium- to long-term investments in RRP. In addition, we will enhance the competitiveness of the processed food business as an area that complements profit growth for the Group. Similarly, we will maintain our commitment to exploring new business opportunities through D-LAB.

Delivering returns to our shareholders is one of our core responsibilities. We therefore maintain our policy of targeting a dividend payout ratio of 75% +/-5% as the standard for competitiveness on the capital markets. Although we temporarily exceeded this in fiscal 2025, this decision was made based on the strength of our financial standing and our outlook for future profit growth. In short, our basic approach to shareholder returns and allocation of management resources remains unchanged.

See Details Dividends

Trend of dividend per share(JPY)

* Compound annual growth rate from 2017 to 2025

Notes: 

1. 1. The dividend payout ratio for 2025 is 85.0%. This figure is calculated based on the profit for the year of 488.6 billion yen after the Canada Adjustment and deducting the one-time loss from the disposal of goodwill due to the liquidation of the Sudanese subsidiary.
2. 2. In 2021, we revised our shareholder return policy and rebased the dividend per share.

We also understand that investors increasingly view companies from a sustainability perspective, whether in terms of financial and business performance or ESG concerns, and we therefore intend to further enhance our disclosure accordingly.

Because a company is a living, breathing entity, we must continue to secure options even under extremely uncertain circumstances without allowing funding and resources, the lifeblood of business, to run dry regardless of the environment.

We will continue to steadily execute investments aimed at future growth. We will also drive our business forward by firmly reinforcing our financial base, appropriately taking on risks, and cultivating a broad range of business seeds that will blossom in the future. We expect to face a range of environmental changes along the way; however, by turning those changes into our own strengths, we will further enhance our resilience. Moving forward, we will realize greater corporate value for the JT Group in a sustainable manner as we live up to the trust of our stakeholders.