Key Figures: Adjusted net sales excluding tax was ¥474.1 billion (FY2009: ¥474.8 billion), as growth in the international tobacco business offset lower net sales in the Japanese domestic tobacco business. EBITDA declined 6.9% to ¥132.6 billion (FY2009: ¥142.5 billion). Whilst net income3 decreased 46.7% to ¥22.8 billion (FY2009: ¥42.8 billion) primarily due to a downturn in this quarter’s extraordinary profits and losses, the company has implemented a number of initiatives which are aimed at achieving this fiscal year’s forecast.
Japanese Domestic Tobacco Business: The all brands’ market share was 64.5% (FY2009: 64.9%). Despite challenging local market conditions, the key brands’ market share was stable at 45.1%. Sales volumes, adjusted net sales excluding tax and EBITDA declined.
International Tobacco Business: Market share continued to increase year on year in most key markets. Strong pricing and favourable currency drove core net sales excluding tax to increase by 10.4% and EBITDA by 1.8% in US dollars. As a result of industry volume contraction in a number of markets, total sales volume was 6.8% lower.
Forecast: The company maintains its forecast for the fiscal year ending March 31, 2011.
Hiroshi Kimura, President and Chief Executive Officer of JT, commented:
“Our international tobacco business once again demonstrated its underlying resilience, delivering increased net sales and share growth in most key markets despite the difficult operating environment. Our key brands’ share in our Japanese domestic tobacco business continued to perform steadily notwithstanding market volume was down and the forthcoming unprecedented tobacco excise increase. Across our businesses, we will continue to enhance our brand equity through focus on quality, innovations and improvements.”
Japanese Domestic Tobacco Business
Sales volume decreased 7.9% to 35.9 billion cigarettes. This volume decline was primarily due to the on-going declining trend in consumption and was further depressed by the announcement of a forthcoming price increase to take account of the unprecedented tobacco excise hike.
Adjusted net sales excluding tax and EBITDA declined by 7.7% to ¥146.1 billion and 12.9% to ¥58.3 billion, respectively, due mainly to the declining sales volume.
Market share of all brands was 64.5% (FY2009: 64.9%). Market share of key brands, which consist of Mild Seven, Pianissimo and Seven Stars, remained stable at 45.1%. In order to address diversified consumer needs, the company launched an innovative smokeless tobacco Zerostyle Mint in Tokyo.