Japan Tobacco International (JTI) enjoyed a solid performance in the first three months of the year, boosted by a successful launch of its Ploom X heat-not-burn (HnB) device in Italy and Lithuania last month.
JTI president and CEO Masamichi Terabatake told investors the launches were “in line with our plan to increase our presence in HTS [heated tobacco sticks] and establish the foundations for JT Group’s future earnings growth”, and followed “an encouraging rollout in the UK”.
The company said during the presentation of its first quarter results for 2023 that it plans further Ploom X rollouts throughout the remainder of the year, beginning with Portugal in mid-May.
JTI posted Q1 revenue up 14.4% to JPY665.3bn ($4.92bn), driven by increased tobacco and pharmaceutical business and favourable currency movements due to a weaker Japanese yen.
It said its revenue from reduced-risk-products (RRPs) grew 6.4% to JPY20.3bn ($151m), fuelled primarily by Ploom X in Japan. This helped RRPs contribute an increase in revenue terms while maintaining similar shipments of 2bn units in comparison to Q1 2022. The 2bn units still represented an increase of 3% in terms of total shipments for the company due to falling conventional tobacco shipments.
RRP in Japan – estimated to make up 37.4% of the total industry on a shipment basis – volume increased by 22.4%, with RRP share increasing by 0.7 percentage points to 12.7%. Within the HTS segment itself, Ploom X increased its volume by 51.8% and grew its share, reaching an HTS segment share of 9.3%, up 2.1 percentage points.
Despite some promising figures the company said it is still only in line with previous full-year expectations. The company expects its revenue for the full year to be down 1.1% to JPY2,629bn ($19.43bn) from JPY2,657.8bn ($19.64) in 2022.
Last October, Altria announced a strategic partnership with JT Group to expand its heated tobacco portfolio. The two tobacco giants will jointly establish Horizon Innovations, responsible for the US marketing of heated tobacco consumables owned and developed by either company.
– Antonia Di Lorenzo TobaccoIntelligence staff