Japan Tobacco International - Business Results for January – June 2009..

July 30, 2009 - Tokyo, July 30, 2009 -- Japan Tobacco Inc. (JT) (TSE: 2914) today announced its international tobacco business results for the six-month period from January 1, 2009 to June 30, 2009.

International Tobacco Business - Net sales excluding tax and EBITDA (earnings before interest, taxes, depreeciation and amortization) declined 21.0 percent and 28.3 percent, respectively in comparison to the same period last year, primarily because of the currency impacts. Net sales excluding tax and EBITDA each grew 7.9 percent and 7.1 percent, respectively, at constant rates of exchange. Although the total sales volume decreased 1.4 percent, GFB sales volume increased 2.6 percent. Sales volume growth was largely attributed to the continued momentum in Russia, the United Kingdom and lead European markets, which were offset by a planned change in the business model in the Philippines and shipment issues in the Near East. While the company will continue to closely monitor currency fluctuations and economic downturns, it remains committed to achieving the forecasted EBITDA for the fiscal year ending March 31, 2010, through a combination of price increases and cost optimization.

In the first half that ended June 30, 2009, the sales volume of JTI's business operations, decreased by 0.9 percent to 216.1 billion cigarettes1 compared to the same period last year. Meanwhile, Global Flagship Brands (GFB2) continued to act as the key contributor to JTI’s performance.

Global Flagship Brands - sales volume increased 1.8 percent to 121.3 billion cigarettes in relation to the same period last year. Total sales volume for Winston went down slightly by 0.5 percent, with growth in Turkey, Italy and France, which was offset by declines in the Philippines due to a planned change in business model, substantial rises in excise tax in Ukraine which triggered price increases, and an unstable business environment in the Near East.

Mild Seven’s sales volume went up 3.2 percent with growth mainly in Korea. Camel sales volume decreased by 2.0 percent with a good performance in Italy being offset by decreases in Latin America and the Philippines. Total sales volume for LD grew by 22.1 percent, reflecting the state of the current economy, mainly due to solid performances in Russia, Ukraine, Poland and Turkey.
1 Total sales volume includes cigars, pipe tobacco and snus, but does not include private label and contract manufacturing products.
2 Global Flagship Brands consist of eight brands: Winston, Camel, Mild Seven, Benson & Hedges, Silk Cut, LD, Sobranie and Glamour.

Domestic Tobacco Business Sales volume decreased 7.2 percent in comparison to the same period last year to 39.0 billion cigarettes, largely due to the last year’s trade inventory adjustments related to the introduction of the “taspo” age verification vending machines, which took place between March and July 2008.
Excluding this effect, our volume decline of 4.2 percent was in line with our plan assumptions. In the meantime, JT’s share of market has been performing robustly at 65.1 percent, thanks to sales promotions aimed at securing product visibility and new product launches around its key brands

JT Reports International Tobacco Business Results for January – June 2009; JT has Embarked on a Solid Start to Achieving its Fiscal Year Outlook Ending March 31, 2010, Japan Tonacco Inc., 6/30/2009.