Japan Tobacco : Quarterly financial report

[This is an English translation prepared for reference purpose only. Should there be any inconsistency between the translation and the original Japanese text, the latter shall prevail.]

February 14, 2023

Consolidated Financial Results

for the Fiscal Year Ended December 31, 2022

Name of the Listed Company:	JAPAN TOBACCO INC. (Stock Code: 2914)
Listed Stock Exchange:	Tokyo Stock Exchange
URL:	https://www.jti.co.jp/
Representative:	Masamichi Terabatake, Representative Director and President,
	Chief Executive Officer
Contact:	Nobuya Kato, Senior Vice President, Chief Financial Officer and Corporate
	Communications
Telephone:	[phone]

Scheduled date of Annual General Meeting of Shareholders: March 24, 2023

Scheduled date to file Securities Report: March 24, 2023

Scheduled starting date of the dividend payments: March 27, 2023

Drawing up supplementary documents on financial results: Yes

Holding investors' meeting: Yes (for analysts and institutional investors)

(Yen amounts are rounded to the nearest million, unless otherwise noted.)

1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2022 (from January 1, 2022 to December 31, 2022)

(1) Consolidated Operating Results			(Percentages indicate year-on-year changes.)
		Revenue		Operating profit	Profit before income taxes	Profit for the year
	Year ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	December 31, 2022	2,657,832	14.3	653,575	31.0	593,450	25.6	444,174	30.6
	December 31, 2021	2,324,838	11.1	499,021	6.4	472,390	12.5	340,181	9.0
		Profit attributable to	Comprehensive income
		owners of the parent	Basic earnings per share	Diluted earnings per share
		for the year
		company
	Year ended	Millions of yen	%	Millions of yen	%		Yen		Yen
	December 31, 2022	442,716	30.8	998,229	84.8		249.45		249.36
	December 31, 2021	338,490	9.1	540,258	306.6		190.76		190.68
		Ratio of profit to equity	Ratio of profit before	Ratio of operating profit
		attributable to owners of	income taxes to total
		to revenue
		the parent company	assets
	Year ended		%		%		%
	December 31, 2022		13.9		9.6		24.6
	December 31, 2021		12.7		8.5		21.5
	Reference: Share of profit	(loss) in investments accounted for using the equity method:
	Fiscal year ended December 31, 2022:	¥8,009 million;	Fiscal year ended December 31, 2021: ¥3,997 million

(2) Consolidated Financial Position

			Equity attributable to	Ratio of equity	Equity attributable to
	Total assets	Total equity	attributable to owners
	owners of the parent	of the parent company	owners of the parent
			company	to total assets	company per share
As of	Millions of yen	Millions of yen	Millions of yen	%	Yen
December 31, 2022	6,548,078	3,616,761	3,540,435	54.1	1,994.78
December 31, 2021	5,774,209	2,886,081	2,809,258	48.7	1,583.10

(3) Consolidated Cash Flows

	Net cash flows	Net cash flows	Net cash flows	Cash and cash
	from (used in)	from (used in)	from (used in)	equivalents at the end of
	operating activities	investing activities	financing activities	the year
Year ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
December 31, 2022	483,799	(101,822)	(306,176)	866,885
December 31, 2021	598,909	(97,499)	(353,138)	721,731

2. Cash Dividends

		Annual dividends per share				Ratio of dividends
					to equity
	First		Third			Total amount of	Payout ratio	attributable to
	Second	Fiscal year-		dividends (total)	(consolidated)	owners of the
	quarter-	quarter-	Total
	quarter-end	end			parent company
	end		end					(consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Year ended	-	65.00	-	75.00	140.00	248,433	73.4	9.3
December
31, 2021
Year ended	-	75.00	-	113.00	188.00	333,672	75.4	10.5
December
31, 2022
Year ending
December	-	94.00	-	94.00	188.00		75.8
31, 2023
(Forecast)

3. Consolidated Earnings Forecasts for the Fiscal Year Ending December 31, 2023 (January 1, 2023 to December 31, 2023)

					(Percentages indicate year-on-year changes.)
					Profit attributable to	Basic earnings
	Revenue		Operating profit	owners of the parent
		per share
					company
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Year ending	2,629,000	(1.1)	612,000	(6.4)	440,000	(0.6)	247.91
December 31, 2023

[Additional Information] Growth rate in adjusted operating profit at constant FX:

The Group has set its group-wide target for annual average growth rate in adjusted operating profit at constant rates FX, at mid to high single-digit over the mid- to long-term and will continue to pursue this goal.

(Percentages indicate year-on-year changes.)

	Adjusted operating profit at constant FX
	Millions of yen		%
Year ended	665,666		9.0
December 31, 2022
Year ending	728,000		0.0
December 31, 2023 (Forecast)

The Group also discloses certain non-GAAP financial measures that are not required or defined under IFRS, which is the accounting standard the Company applies. These non-GAAP financial measures are used internally to manage each of the business operations to understand their underlying performance, in view of the Group's target for mid- to long-term sustainable growth, and the Group believes that these financial measures are useful information for users of the financial statements to assess the Group's performance. For details of these financial measures, please refer to "1. Business Results" in attached materials.

For detailed information on the consolidated financial results, please refer to the materials for investors' meeting that were released on the Company's website (https://www.jt.com/investors/) on February 14, 2023.

Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies due to revisions in accounting standards under IFRS: Yes
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None

For details, please refer to "3. Consolidated Financial Statements and Major Notes (IFRS), (6) Notes to Consolidated Financial Statements (Changes in accounting policies)."

1. Number of shares issued (ordinary shares)
   a. Total number of shares issued at the end of the period (including treasury shares)

As of December 31, 2022	2,000,000,000 shares
As of December 31, 2021	2,000,000,000 shares

1. Number of treasury shares at the end of the period

As of December 31, 2022	225,146,463 shares
As of December 31, 2021	225,475,301 shares

1. Average number of shares during the period

Fiscal year ended December 31, 2022	1,774,749,410 shares
Fiscal year ended December 31, 2021	1,774,419,289 shares

[Reference] Overview of Non-consolidated Financial Results

Non-consolidated Financial Results for the Fiscal Year Ended December 31, 2022 (from January 1, 2022 to December 31, 2022)

(1) Non-consolidated Operating Results			(Percentages indicate year-on-year changes.)
	Net sales		Operating income	Ordinary income	Net income
Year ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
December 31, 2022	542,181	(8.4)	64,574	(31.2)	273,734	(1.8)	283,461	30.7
December 31, 2021	592,220	(0.8)	93,839	(7.0)	278,809	15.9	216,896	(10.3)
	Net income per share	Diluted earnings per share
Year ended		Yen		Yen
December 31, 2022		159.72		159.66
December 31, 2021		122.23		122.18
(2) Non-consolidated Financial Position
	Total assets	Net assets		Equity ratio	Net assets per share
As of	Millions of yen	Millions of yen		%		Yen
December 31, 2022	2,363,267	1,368,643		57.9		770.57
December 31, 2021	2,487,979	1,344,696		54.0		757.10
Reference: Equity:

As of December 31, 2022: ¥1,367,642 million; As of December 31, 2021: ¥1,343,494 million

Reason for difference compared with the previous fiscal year's actual non-consolidatedfinancial results For the current fiscal year, a difference has arisen in net income between the actual results for the current fiscal year and the actual results for the previous fiscal year due to the impact from the recording of extraordinary income, and other factors.

• Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions and suppositions deemed to be reasonable by the Company. Actual business and other results may differ substantially due to various factors. These forward-looking statements are not intended to be construed as our assurance for it to materialize in the future. Please refer to "FORWARD-LOOKING STATEMENTS" for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use of earnings forecasts.

	Attached Materials
	Index
1. Business Results	2
(1)	Consolidated Business Results	2
(2)	Consolidated Financial Position	4
(3)	Outlook for the Next Fiscal Year	5
(4)	Basic policy on Profit Distribution and Dividends for Fiscal Years 2022 and 2023	6
2. Basic Principle on the Choice of Accounting Standards	7
3. Consolidated Financial Statements and Major Notes (IFRS)	8
(1)	Consolidated Statement of Financial Position	8
(2)	Consolidated Statement of Income and Consolidated Statement of Comprehensive Income	10
(3)	Consolidated Statement of Changes in Equity	12
(4)	Consolidated Statement of Cash Flows	14
(5)	Notes on Premise of Going Concern	16
(6)	Notes to Consolidated Financial Statements	16
(Changes in accounting policies)	16
(Segment information)	17
(Per share information)	23
(Significant subsequent events)	24
4. Non-consolidated Financial Statements and Major Notes (Japanese GAAP)	25
(1)	Non-consolidated Balance Sheet	25
(2)	Non-consolidated Statement of Income	28
(3)	Non-consolidated Statement of Changes in Net Assets	29
(4)	Notes on Premise of Going Concern	31

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