Japan Tobacco Inc. (JAPAY) Full Year 2024 Earnings Call Transcript

2025-02-14 11:56:04 ET

Japan Tobacco Inc. (JAPAY)

Q4 2024 Earnings Conference Call

February 14 2025 3:00 AM ET

Company Participants

Masamichi Terabatake - Group President and Chief Executive Officer

Eddy Pirard - President and Chief Executive Officer of JTI

Hiromasa Furukawa - Group Chief Financial Officer

Vassilis Vovos - Chief Financial Officer of JTI

Stefan Fitz - Chief Commercial Officer of JTI

Conference Call Participants

Hiroshi Saji - Mizuho Securities

Satoshi Fujiwara - JP Morgan Securities

Presentation

Operator

Thank you for participating in the Investor Meeting for 2024 Full Year Results at Japan Tobacco Inc. today despite of your busy schedule. Since it is the scheduled time, allow us to get started. Before we start the meeting, I'd like to ask you to make sure that your display name on the Zoom is accurate. Thank you for your cooperation.

In today’s meeting, Masamichi Terabatake, Chief Executive Officer of the JT Group will introduce you with the Business Plan 2025; and Eddy Pirard, CEO of JT International will follow with Tobacco business 2024 result and 2025 forecast. Lastly, Hiromasa Furukawa, Chief Financial Officer of the JT Group will explain JT Group 2024 results and 2025 forecast. Then we move on to Q&A session, and this meeting is scheduled to end at 6.15 p.m.

Now I would like to introduce you the first presenter, Mr. Terabatake, please.

Masamichi Terabatake

I am Masamichi Terabatake, President and CEO of Japan Tobacco Inc. Thank you for joining our conference call today. I would also like to thank you for your continued support and understanding of our commitment to growth.

Today, I will provide an overview of the fiscal year 2024, our medium to long term business strategies, and the profit growth prospects we expect to achieve during Business Plan 2025, as well as an update on our sustainability efforts. Eddy Pirard, CEO of JTI will highlight the solid performance of JT Group’s profit growth engine, and Hiromasa Furukawa, CFO of JT Group will explain our consolidated results for 2024 and the forecast for 2025.

Let me begin with an overview of fiscal year 2024. Our consolidated adjusted operating profit, AOP at constant FX significantly exceeded both the initial plan and the previous year's results, achieving continuous growth. We also achieved record high revenue and AOP on a reported basis.

At the same time, we have continued to make strategic and significant business investments to build the foundations for future profit growth. All this within a challenging business environment made of increased geopolitical risks, rising supply chain costs, and exchange rate fluctuations.

Eddy will provide more details on the performance of the Tobacco business data. But I would like to emphasize our impressive performance in both Combustibles and RRP.

In Combustibles, market share expanded across many markets, and pricing contributions continue to drive profit growth. In RRP, we have steadily invested to expand Ploom’s presence, bringing the number of markets where consumers can now enjoy Ploom to ’24, at the end of 2024. As a result, both RRP volume and RRP-related revenue grew 20% plus year-on-year. ...

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