Japanese Domestic Tobacco Business: Total sales volume decreased following the October 2010 tax and price increase and the Great East Japan Earthquake. The volume decline was within the range of forecasts previously provided.
International Tobacco Business: The profit growth engine of the JT Group continued to deliver strong results driven by favourable pricing and increased GFB shipment volume. Market share continued to increase in most key markets.
Adjusted net sales excluding tax and EBITDA declined by 13.1% and 8.4% respectively, due to the negative impact of the October 2010 tax and price increase and the earthquake on the Japanese domestic tobacco business. Net income increased by 2.4%.
Japanese Domestic Tobacco Business: Total sales volume decreased by 48.8% due to the October 2010 tax and price increase and the earthquake. This decline was within the range of forecasts previously provided. Adjusted net sales excluding tax and EBITDA declined by 31.4% and 20.9% respectively. During the quarter, the business’ performance has improved progressively.
International Tobacco Business: Core net sales excluding tax and EBITDA increased by 4.4% and 10.3% respectively in US dollars, driven by strong pricing and a 2.1% increase in GFB shipment volume. Core net sales excluding tax and EBITDA in US dollars grew 6.5% and 16.7% respectively at constant rates of exchange. Market share increased in most key markets, including Turkey, Taiwan, Italy, France and Russia.
While adjusted net sales excluding tax is forecast to decline by 1.6%, EBITDA and net income are forecast to increase by 1.4% and 10.8% respectively. The net sales decline is due to the temporary impact of the earthquake on the domestic tobacco business and an expected stronger appreciation of the Japanese yen against the US dollar in the international tobacco business. Earnings increases will be driven by favorable pricing in both the Japanese and the international tobacco businesses.