On February 13, 2025, Japan Tobacco Inc. (JTI) released its financial report for the fiscal year 2024, showcasing a mix of challenges and triumphs in the company’s global operations. With rising revenue, fluctuating profits, and a strategic pivot toward innovative products, JTI’s latest numbers are a sign of its shifting priorities in an increasingly competitive market. Let’s break down the major highlights of this year’s results and take a closer look at what 2025 could hold.
Revenue Soars, Profits See Volatility
For the year ending 2024, JTI reported a solid revenue boost, reaching 3.1498 trillion yen (around $21.2 billion), marking a healthy 10.9% increase from the previous year. Operating profit also grew, albeit more modestly, climbing 3.7% to 697.2 billion yen (roughly $4.6 billion). However, net profit attributed to the parent company saw a slight dip, decreasing by 3.9% to 463.4 billion yen (around $3 billion).
When adjusted for fixed exchange rates, the core tobacco business (excluding non-tobacco sectors) showed a solid increase, growing 8.4% to reach 2.958 trillion yen. Meanwhile, adjusted operating profit jumped by 9.7%, hitting 782.7 billion yen, underlining the strength of JTI’s tobacco division, even amid global market challenges.
Tobacco Dominates, Non-Tobacco Business Shows Mixed Results
It’s no surprise that the tobacco sector continues to be the powerhouse of JTI, contributing a hefty 87% of the company’s overall revenue. Within this, traditional tobacco products have remained a reliable source of income, seeing sales growth in over 60 global markets. Big-name brands like Winston and Camel performed exceptionally well, with sales volumes holding steady and profits rising in several key regions.
However, it’s in the area of heated tobacco products (HTPs)—or as JTI calls them, “RRP” (reduced-risk products)—where the company has really seen the most dynamic growth. In fact, sales and revenue from these products skyrocketed by more than 20%, with heated tobacco sales alone surging by over 40%.
JTI’s flagship Ploom brand is currently leading the charge in this segment, capturing around 7.8% of the global HTP market, with a presence in 24 core markets around the world. Ploom’s heated tobacco sticks and devices are quickly becoming the go-to choice for consumers seeking a tobacco experience with fewer health risks. The brand is already covering approximately 75% of global HTP sales, a testament to its widespread appeal.
On the flip side, JTI’s non-tobacco businesses have had a bit of a rollercoaster ride. The pharmaceutical division posted a slight decline in sales, down to 94.4 billion yen ($620 million), primarily due to increasing competition and tighter market conditions. However, JTI’s food business showed an uptick, reaching 157.2 billion yen ($1 billion), offering the company a much-needed diversification boost in an otherwise tobacco-heavy portfolio.
Strategic Shifts: Customer Experience & Major Acquisitions
To stay competitive in an increasingly saturated global market, JTI has embraced a more holistic approach to customer engagement and expansion. One of the key strategies for 2024 and beyond is to continually improve the consumer experience.
Take Ploom X ADVANCED, for example. In Japan, JTI has made strides in enhancing the consumer experience with this product, which was marketed through a 360° engagement campaign. As a result, the number of Ploom exclusive users rose by 1 percentage point, and customer satisfaction improved by 2.2 points. The brand also saw an uptick in its Net Promoter Score (NPS), which is a key metric for measuring customer loyalty.
On top of this, membership in the Ploom Club is growing, along with increased visits to the Ploom website and more frequent consumer interaction. These positive trends suggest that JTI is successfully building brand loyalty, especially among younger, tech-savvy consumers who are increasingly attracted to the convenience of vape products.
But JTI isn’t just sitting back and letting consumer loyalty drive their growth—it’s actively expanding its global footprint. A major move in 2024 was the acquisition of U.S.-based Vector Group, making JTI the fourth-largest tobacco company in the United States. This acquisition not only solidifies JTI’s position in the global market but also exposes the company to the high-profit margins of the U.S. market, where the per-stick profit can be up to three times higher than in other regions. This expansion could prove to be a significant driver for JTI’s future profits, particularly as the American market continues to evolve.
What’s Next for 2025: New Challenges and Opportunities
Looking ahead to 2025, JTI is doubling down on its investment in heated tobacco products. The company plans to boost its marketing budget for these products to 4.2% of total revenue, indicating a strong focus on innovation and expansion. One key goal is the launch of the next-generation Ploom X+ device, which promises to offer a more advanced, user-friendly experience for those who want to enjoy a vape with less harm than traditional cigarettes.
JTI is also increasing its production capacity for HTPs in Switzerland, with plans to expand output by 40%. The company is eyeing additional European markets to introduce Ploom products, with the goal of achieving double-digit market share in the heated tobacco category by 2028.
Despite these bold plans, the company’s financial outlook for 2025 suggests some potential bumps along the way. The forecast predicts core revenue growth of 6.6%, with adjusted operating profit climbing by 8.4%. However, there are concerns about currency fluctuations, which could negatively impact earnings. Additionally, JTI is anticipating a slight decline in traditional tobacco sales, with overall cigarette volumes expected to drop by 1% to 2%.
Even with these headwinds, JTI is confident in its ability to navigate the challenges of 2025. As the company continues to evolve its product offerings and expand its global presence, it’s clear that JTI remains committed to securing its spot as a leading player in the global tobacco and reduced-risk product markets.
Pricing Moves and New Product Launches
In a bold move aimed at boosting sales, JTI recently announced a significant price cut on select Ploom X ADVANCED models. The limited-edition color variants, including “Bronze Glaze,” “Lime Halo,” “Rose Shimmer,” “Square Gold,” and “Olite Red,” will now be available for just 980 yen (around $6), down from the previous price of 1,980 yen (around $13). This price reduction is expected to appeal to cost-conscious consumers, particularly younger users who may have been hesitant to invest in higher-priced devices.
Along with the price reduction, JTI has also introduced new vape flavors, including the Mevius Cold Option, which joins the Mevius Ice Cold flavor as part of the company’s growing range of refreshing, menthol-flavored vape pods. This is a continuation of JTI’s strategy to cater to the ever-growing demand for unique and diverse vaping experiences.
The Future of Japan Tobacco
Japan Tobacco’s journey into 2025 is a mixture of optimism and caution. With its strong foothold in the tobacco market and bold moves to expand its portfolio, JTI is well-positioned for continued growth in the evolving landscape of reduced-risk products. But with challenges ranging from currency fluctuations to fierce competition, the company will need to remain agile, innovative, and attuned to the changing preferences of consumers.
As the global market for heated tobacco and vape products continues to grow, JTI’s ability to innovate—through product enhancements, strategic acquisitions, and competitive pricing—will determine whether it can maintain its position as a leader in the tobacco industry. For now, all eyes are on JTI as it prepares to launch new devices, expand its flavor offerings, and pursue its ambitious goals in the years ahead.
