JT's Volume Sales Increased, Market Share Recovering

Source from:  Tobacco Reporter 07/31/2012

Japan Tobacco Inc's domestic cigarette sales volume during the three months to the end of June, at 29.4 billion, was increased by 59.5 per cent on that of the three months to the end of June 2011, 18.4 billion. The 2011 figures were low because of the massive disruption caused to the company's manufacturing and distribution operations following the earthquake and tsunami of March 11 last year and because of a huge, mainly tax-driven price rise on October 1, 2010. But the company’s market share has been gradually recovering and, whereas it was at 64.1 per cent for the full year to the end of March 2011, it stood at 59.4 per cent during April-June, 2012. The claw-back of market share has been made possible in part by a number of new product and sales promotion initiatives, which are continuing to be rolled out. These include the introduction of 'Mild Seven Impact Menthol Box' in March, which is said to offer an impactful menthol smoking experience; two 'Hi-Lite Inazma Menthol' products that were launched in May and that offer a super strong menthol sensation; 'Pianissimo Precia Dia’s Menthol', which is a super slims product said to be aimed at consumers with sophisticated and mature tastes; and 'Seven Stars Menthol Snap Box'. JT's core revenue during April to June, at ￥165.3 billion, was increased by 59.2 per cent on that of the April-June 2011 period. Adjusted EBITDA was up by 108.5 per cent to ￥76.6 billion. Meanwhile, Japan Tobacco International's first quarter (January-March) shipment volume, at 98.9 billion, was 4.7 per cent up on that of January-March 2011, 94.5 billion. Within that overall figure, the company's global flagship brand (GFB) shipment volume was up by 9.5 per cent to 61.1 billion. Volume growth was driven by a favorable comparison with the previous year in several markets, but mainly Spain and Italy, and the positive impact of the acquisition of Haggar Cigarette & Tobacco Factory in Sudan. Market share was said to have continued to grow in key markets, including Turkey, Spain, Italy, Canada and France. Continued GFB momentum included that in Russia where volume growth of 15.5 per cent was driven by up-trading to Winston and LD. JTI's core revenue was up by 7.6 per cent to ￥216.7 billion and its adjusted EBITDA was up by 7.8 per cent to ￥80.0 billion. JT's consolidated first quarter financial results, which include its domestic and international tobacco businesses, along with its pharmaceutical and foods businesses, were reported earlier today. Revenue for the group during the April-June period, at ￥512.1 billion, was 17.2 per cent up on that of the April-June period 2011. Adjusted EBITDA, at ￥156.0 billion, was up by 37.0 per cent; and operating profit, at ￥128.6 billion, was up by 68.2 per cent. "We have made a solid start to the new fiscal year demonstrated by the strong performance in our tobacco businesses, said Mitsuomi Koizumi, president and CEO of JT. "The domestic tobacco business has come out of the effect of last year’s earthquake with steady market share recovery following a number of sales and marketing initiatives. "The international tobacco business continued its strong growth amid the challenging business environment, driven by pricing and volume increase. "Looking ahead, we will continue to do our utmost to deliver the Business plan 2012 targets by pursuing a consumer-centric '4S' model." JTI reported separately results for April to June and January to June. Cigarette shipment volume during the three months to the end of June, at 113.5 billion, was up by 2.8 per cent on that of the three months to the end of June 2011, while GFB volume was increased by 5.2 per cent to 69.7 billion. Core revenue was up by 2.5 per cent to $2,997 million, while core revenue per thousand cigarettes was down by 0.4 per cent to $26.6. Cigarette volume during the six months to the end of June, at 212.4 billion, was 3.7 per cent up on that of the six months to the end of June 2011, while GFB volume was up by 7.2 per cent to 130.8 billion. Core revenue was up by 6.6 per cent to $5,728 million, while core revenue per thousand cigarettes was up by 2.8 per cent to $27.2. Enditem