Discover JTI

Discover JTIAn induction guide to help you understand how we operate and deliver our business success

Introduction

JTI today

JTI history Brands and products Fundamentals

Leading Functions Going forward

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(1) Numbers correct as of December 2017

Table of contents

Dear Colleague,

Welcome to JTI. I am delighted that you have chosen to join such an exciting and in many ways unique company.

You are now part of an organization of 40,000 employees, from 110 nationalities and working across 77 countries(1). Since our creation in 1999, significant changes have turned us into a genuinely international company. We are extremely proud of our rich heritage and diverse workforce, which is key to ensure long- term success of the Company, driving innovation and creativity. Each country and person in our network has an important part to play in our continued success. It is why we strongly encourage every individual to bring fresh ideas, challenge the status quo and perform at their best.

Employees are our single biggest investors and I am confident that by nurturing

them and re-investing in their development, we can continue to grow and expand our business. With the help of your manager, we will support your aspirations with continuous training and career development opportunities around the world. You will soon discover that we challenge each other in everything we do, every day but that ultimately, your ambition, innovation and your loyalty will be rewarded.

This induction guide will help you to settle into your new role and allow you to discover who we are, what we do and how we do it. As well as giving headline facts and figures about our business, our brands and our structure, you’ll learn more about the principles that steer us. Don’t worry if the guide doesn’t answer all your questions; help is always at hand – so feel free to ask. One thing you’ll discover about JTI is that people enjoy working together and supporting each other. We are one team.

I wish you an enjoyable, rewarding and long-lasting career with JTI.

Howard Parks Senior Vice President, Human Resources

Introduction

JTI today __ JTI milestones __ JTI facts and figures

JTI history

Brands and products __ Our brands are the signatures of success __ Flagship Brands __ Roll Your Own and Make Your Own (RYO/MYO) __ Other Tobacco Products (OTP) __ Reduced-Risk Products __ The story from seed to pack

Fundamentals __ A company with a clear vision __ Our values __ Employee experience at JTI __ Core behaviors __ 4S management principle __ Our strategies __ Our sustainability efforts __ Our core principles

Leading __ Our leadership __ Governing the business

Functions __ A structure that works __ Marketing & Sales __ Global Supply Chain __ Human Resources __ Finance __ Legal & Regulatory Affairs __ Information Technology __ Research & Development __ Corporate Strategy __ Reduced-Risk Products __ Business Development __ Corporate Development

Going forward

JTI today

New JTI headquarters in Geneva, Switzerland

JTI todayThe facts and milestones that make us who we are

JTI today



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Our brand heritage goes back to the 18th century. However, we are a relatively young company in the global tobacco industry, where east meets west and experience supports innovation.

Where we come from

Our company was formed in 1999 when Japan Tobacco Inc. purchased the international tobacco operations of the US multinational R.J. Reynolds for USD 7.8 billion, creating a new company: JTI – Japan Tobacco International.

A major acquisition

In 2007, Gallaher, a FTSE 100 business, was acquired by Japan Tobacco Inc. for GBP 9.4 billion, doubling our combined employee population. At the time, this was the largest foreign acquisition by a Japanese company.

Flagship Brands

In 2007, JTI launched its new Flagship Brand portfolio, with a key focus on investment in brand equity, product quality and geographical coverage.

Closer to industry roots

In 2009, the JT Group acquired part of the worldwide business of Tribac Leaf Limited (a company that trades tobacco in Africa) as well as the two Brazilian companies active in the tobacco business, Kannenberg (a tobacco producer) and KBH&C (a company that processes and sells Kannenberg products); it also set up a joint venture with two leaf suppliers in the US (Hail & Cotton Inc and JEB International). These acquisitions reflected the strategic importance of ensuring adequate supplies of high quality leaf products to support the Company’s business growth ambitions.

Broadening our earnings base

Since 2009, we have regularly broadened our earnings base to ensure future sustainable growth through organic expansion and acquisitions. These acquisitions were performed both in the traditional combustible area and Reduced-Risk Products category. And we will continue to do so to reach our ambition to be the #1 international tobacco company.

JTI milestones

Japan Tobacco International (JTI) is a member of the Japan Tobacco Group of Companies (JT), a leading international tobacco manufacturer. JTI’s headquarters are located in Geneva, Switzerland.

Our numbers at the end of 2017

• JTI employs approximately 40,000 people in 77 countries.

• JTI has 400 offices, 27 factories, 5 R&D centers and 5 tobacco processing facilities around the world.

• Our products are distributed in 130 countries.

• JTI is a true multinational company, with more than 110 nationalities globally, 69 nationalities in the Geneva headquarters, and 12 nationalities among our 16 Executive Committee members.

• JTI sold 398.5 billion cigarette equivalent units(1) and generated USD 10,498 million in core revenue(2) on a reported basis or USD 10,457 million at constant currency.

• Adjusted operating profit(3) at constant currency reached USD 3,219 million, growing by 4% vs the previous year. On a reported basis, adjusted operating profit grew 1.4% to USD 3,138 million due to currency fluctuations.

• Since 2009, we have reduced our environmental impact by cutting emissions of CO2 by 15%(4), reducing energy consumption by 8%(5), reducing water consumption by 6% and reducing waste by 24%.

• We have reduced injury rates across JTI manufacturing and market operations by 24%(6) and are committed to providing a safe workplace for our employees.

• We are the profit growth engine of the Japan Tobacco Group, and generated 81% of the Group’s volume and 60% of its adjusted operating profit in 2017.

JTI facts and figures

(1) Including fine cut, cigars, pipe tobacco and snus but excluding waterpipe tobacco and Reduced-Risk Products as well as contract manufactured products (2) Including revenue from waterpipe tobacco and Reduced-Risk Products, but excluding revenues from distribution, contract manufacturing and other peripheral businesses (3) Adjusted operating profit = operating profit + amortization cost of acquired intangibles + adjustment items (income and costs)* (4) Emissions of CO2 associated with our operations– for example, resulting from the use of electricity or fuels in our offices, factories and vehicles (5) Includes energy from renewable and non-renewable sources, for example, electricity, gas, fuel, heat and steam (6) Lost Time Injury Rate versus 2014

* Adjustment items (income and costs) = impairment losses on goodwill ± restructuring income and costs ± others.

JTI history

Tobacco plants, Zambia

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2017 Additional share purchase from the Ethiopian government of approximately 30% of the total shares in National Tobacco Enterprises, bringing our overall ownership to over 70%

A kretek cigarette company, PT. Karyadibya Mahardhika and its distributor, PT. Surya Mustika Nusantara in Indonesia are acquired

The assets related to the tobacco business of Mighty in the Philippines are acquired

2016 Acquisition of BIS Overseas Bolivia S.R.L., the second largest tobacco-specific distributor in the market

Acquisition of 40% shares of National Tobacco Enterprise Ethiopia S.C, the Ethiopian state tobacco company

Purchase of a 50% stake in La Tabacalera in the Dominican Republic

The international business of Natural American Spirit, leading premium additive-free, whole leaf and organic brand, is acquired

2015 Brazilian distributor Fluxo is acquired

Arian Tobacco Industries in Iran is acquired

Logic, the leading independent US e-cigarette company, is acquired

Worldwide rights to commercialize Ploom-branded tobacco pods and vaporization devices are acquired

2014 E-Lites, the UK’s most popular e-cigarette brand, is acquired

2013 Renaming of Mild Seven to Mevius

The JT Group acquires a 20% stake in Megapolis, Russia’s leading tobacco distributor

Ploom, a heated tobacco product based on vaporization technology, is launched

Acquisition of Al Nakhla, an Egypt-based waterpipe tobacco manufacturer

2012 Acquisition of Gryson NV (a leading roll your own, make your own European tobacco company)

2011 Acquisition of Haggar Cigarette & Tobacco Factory Ltd in Sudan

JTI enters into a strategic partnership with Ploom to develop an innovative new tobacco product

2009 Acquisition of Tribac, Kannenberg and KBH&C leaf sourcing businesses and set up of joint venture with Hail & Cotton and JEB International

2007 Acquisition of Gallaher, a FTSE 100 business

2006 Acquisition of AD Duvanska Industrija Senta in Serbia

2005 Acquisition of CRES Neva Ltd. (Russia)

Glamour launched (Russia, Ukraine, Kazakhstan)

2001 Gallaher acquires Austria Tabak

2000 Gallaher acquires Liggett-Ducat factory (Russia)

1999 JT acquires non-U.S. operations of R.J. Reynolds

LD launched (Russia)

1996 Acquisition of Tanzanian tobacco production facility

1995 Peter I launched (Russia)

1994 JT is listed on the Tokyo, Osaka and Nagoya stock exchanges

Acquisition of Yelets (Russia)

1993 Acquisition of Kremenchuk (Ukraine)

1992 Acquisition of Manchester Tobacco Company Ltd. in the UK

Acquisition of “AS-Petro” (Russia)

1985 Japan Tobacco Inc is established. The government monopoly is abolished

1981 Mild Seven launched internationally

1977 Mild Seven launched (Japan)

1964 Silk Cut launched

1956 Salem launched

1955 Benson & Hedges is acquired by Gallaher

1954 Winston launched

1949 The Monopoly Bureau is incorporated as the Japan Tobacco and Salt Public Corporation

1913 Camel launched

1898 The Japanese Monopoly Bureau is established for the sale of domestic leaf tobacco

1891 The Moscow-based Ducat factory is founded

1879 Sobranie is registered in London, to become one of the oldest cigarette brands in the world

1874 RJR is founded by Richard Joshua Reynolds in Winston, North Carolina

1858 Sir William Macdonald established ‘McDonald Brothers & Co.’ in Montreal, Canada

1852 Uritsky factory founded (future “Petro” factory)

1857 Tom Gallaher sets up his business (Londonderry, Northern Ireland)

1842 Kremenchuk factory is founded

1784 Austria Tabak is founded by Emperor Joseph II

Timeline

JTI history

JTI was formed in 1999 but our tobacco experience and rich heritage dates back to the 18th century.

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Brands and products

It is our brands that drive the success of JTI and they are the cornerstone of our business. We are proud to have given the world so many leading and recognizable brands which meet our markets’ wide and varied needs. Here we take a look at just some of the quality brands upon which our reputation has been built.

When consumers buy our products, they are likely not to give too much thought about the many different processes, skills and efforts that combine to deliver the quality finished product. Included in this section, ‘The story from seed to pack’ gives you a brief introduction to how we make cigarettes.

JTI has nine Flagship Brands (FBs), which represent universal values, historical appeal and potential growth.

Brands and productsOur brands are the signatures of success

Brands and productsFlagship Brands

Benson & Hedges Established in 1873 by Richard Benson and William Hedges, in Old Bond Street, London, the company was dedicated to the craft of manufacturing high quality cigarettes, and was awarded a royal warrant as supplier to the Prince of Wales, who later became King Edward VII. Today, it remains a mark of distinction as an original, yet timeless, symbol of quality, and continues to be a major brand in Europe.

Silk Cut Silk Cut is a true icon. An icon that stands for originality. This strong image has been built since its launch in 1964, thanks to a pioneering spirit, legendary advertising and first-to-market innovations.

Glamour Since 2005, Glamour brings high quality smoking in a fashionable style for women smokers. This is where femininity meets attitude. With its unique fashion positioning and product offer, Glamour successfully strengthens JTI’s portfolio as the leading offer for female smokers.

Sobranie Registered in London in 1879 by Albert Weinberg, Sobranie is one of the oldest cigarette brands in the world. Today, Sobranie continues to redefine the luxurious smoking experience and is JTI’s most important Prestige brand.

Natural American SpiritThe Natural American Spirit brand was born in Santa Fe, New Mexico in the United States in 1982, with the idea to provide the most premium additive-free tobacco products, grown, crafted and manufactured responsibly.

Specialist Flagship Brands

Benson & Hedges, Glamour, Sobranie, Silk Cut and Natural American Spirit, continue to play a critical role within their regional and market strongholds addressing specific, multi-market opportunities.

Brands and productsRoll Your Own and Make Your Own (RYO/MYO)

In addition to manufacturing and selling Ready Made Cigarettes (RMC), JTI holds a very strong portfolio in the RYO/MYO arena with brands such as Winston, Camel, LD, Natural American Spirit or Amber Leaf, Old Holborn, Fleur de Pays and Domingo.

Roll Your Own (RYO) RYO refers to a rolled cigarette made from fine-cut tobacco and rolling paper. The cigarette can be hand or machine rolled and with or without filters, depending on the consumer’s taste. Usually sold in pouches, it is also available in tins in some markets.

Make Your Own (MYO) MYO refers to cigarettes made by filling a filter tube with cut tobacco designed specifically for that purpose. Making the cigarette requires cigarette filter tubes and a tubing machine. Usually sold in tins or bags, it is also available in buckets in some markets.

JTI’s cigar business is driven by Hamlet. Launched in the UK in 1964, Hamlet remained the UK’s best selling cigar for more than 40 years.

Snus is a Swedish oral smokeless product that dates back to the 1600´s and which is placed under the upper lip. It’s made from finely selected ground tobacco together with water, salt and flavor. Snus is sold in cans and in various different formats; pre-packed portions that come in cellulose bags that vary in size and type, or in loose format where you form the tobacco between your fingers.

SnusCigars

Brands and productsOther Tobacco Products (OTP)

Through the acquisition of Nakhla in 2013, JTI has added a new category to its products: the water pipe tobacco, typically a blend made of the finest Virginia leaf and a sugar/glycerine mix, which when smoked through a waterpipe device creates a sweet smoking taste experience.

Nakhla, which was founded in 1913, is currently one of the leading flavored water pipe tobacco brands with a rich heritage and history spanning over 100 years.

Its immensely popular Two Apples flavor and wide variety of other flavors are preferred choices by adult consumers across the world, with exports to over 60 countries worldwide. Its rich flavor, long lasting taste and smoother experience has ensured that it remains the global market leader in the Two Apples segment.

Water Pipe Tobacco

Brands and productsReduced-Risk Products

Brands and productsThe story from seed to pack

Creating distinctive brands of cigarettes is a complex and skilled practice.

Every brand of cigarettes is composed of different grades, variants and qualities of tobacco and maintaining that consistency of product – from raw materials that vary from season to season – is a considerable achievement.

This is what we do with great expertise, thanks to our well-defined processes and our refusal to compromise on any aspect of providing our markets the products that adult consumers demand.

There are essentially six stages to producing our finished products:

Tobacco is grown in more than 120 countries around the world in most climates. The three types of tobacco typically grown are: Virginia, Oriental and Burley.

Immediately after harvesting, tobacco is cured so that it can be further processed. There are three main methods of curing tobacco but all curing focuses on regulating the rate at which moisture is removed from the tobacco.

• Air curing (Burley) requires an open framework where sticks of leaves or whole tobacco plants are hung.

• Flue curing (Virginia) takes place in closed structures with ventilation and artificial heating.

• Sun curing (Oriental) is when leaves are strung together and left to dry in the sun.

1. Tobacco growing 2. Tobacco curing

The quality of tobacco depends not only on how it is grown, but also the curing, aging, and fermentation that take place after harvest, which bring out the natural flavors of the leaf. It’s a complex process, which is why expert graders and buyers are an essential part of our supply chain. Before tobacco is sent to the factories to be made into cigarettes, it is processed to remove unwanted parts, such as the central stems from the leaves, then packed into cases.

After the tobacco is stored and aged, it is shipped to the cigarette factories where it goes though the primary processing according to the blend formulas used for making various types of cigarettes. This process includes blending, conditioning, casing, cutting, drying and top flavoring. During the cutting phase, the tobacco is cut into thin strands called ‘cut filler’ and placed in silos or bins, where it is then ready to be made into cigarettes.

3. Grading, buying and processing 4. Primary processing

Most cigarettes are produced by highly complex machines, the most advanced of which can produce up to 20,000 cigarettes per minute. The cut and conditioned tobacco, known as cut filler, is wrapped in cigarette paper by machine to produce a ‘continuous cigarette’. This is then cut to the appropriate length and the filter is added and wrapped to the cigarette rod with tipping paper.

Cigarettes are transported to the packing machine where they are channeled in the correct arrangement, or ‘collation’, e.g. 7–6–7. For their protection, this block of cigarettes is wrapped in an innerliner – usually aluminum or aluminum-coated paper. In parallel, stacks of unfolded and ready cut cigarette packs, or ‘blanks’, are fed to the packer. Glue is applied to the appropriate surfaces of these blanks before folding and pack-forming begins. When folded, the pack is sealed in polypropylene film which keeps the product fresh by providing a moisture barrier. Then, packs of cigarettes are inserted into cartons, usually by groups of 10 packs, and cartons are packed into shipping cases, usually by groups of 50 cartons. These cases are piled up by automatic robots on pallets and stored into the finished goods warehouse from where they are dispatched to our markets.

5. Making the cigarette 6. Packing the cigarette

Global Flagship Brands

We must focus our efforts to build bigger, stronger global brands. This means increasing our focus on the four brands that can be truly global in scope. These Global Flagship Brands must be the source of our future success: Winston, Camel, LD and Mevius.

WinstonFirst introduced in the United States in 1954 by R.J. Reynolds who named it after its hometown, Winston became the country’s best selling filter cigarette within 2 years. Today, Winston is one of our key growth drivers. It is the number two international cigarette brand in the world since 2007, available in more than 130 markets and contributing over 35% of total JTI volume. In 2017 Winston sold over 1Bn cigarettes in 27 markets.

LD LD was launched in Russia in 1999 as a value brand, offering reliable quality at an affordable price. Today, LD is one of the leading international value cigarette brands in the world and is sold in more than 50 countries. LD offers the best international value at the lowest possible price for modern value smokers who are not into overt style and know what really matters.

CamelLaunched in the United States in 1913 by R.J. Reynolds, Camel is the #10 tobacco brand in the world. A global creative icon with over 100 years of tobacco experience, Camel engages smokers with rewarding moments and shareable experiences. In 2017, Camel sold over 1Bn cigarettes in 13 of the 112 markets where it is available today.

Mevius Launched as MILD SEVEN in 1977, it became the #1 cigarette brand in Japan only a year after the launch. Rebranded in 2013, MEVIUS is now present in 22 markets. It remains the most popular cigarette brand in Japan and is growing in popularity across Asia and selected markets beyond. Today, MEVIUS is the #5 cigarette in the world and the #1 Charcoal Filter Brand. MEVIUS is constantly exploring new taste segments and other smoking product innovations.

Reduced-Risk Products (RRPs) are those we believe have the potential to reduce the risks associated with smoking. Using the prevalent definition, RRPs are products that do not involve combustion of tobacco and do not produce smoke.

The global popularity of e-cigarettes and tobacco vapor products has risen significantly in the last few years. JTI plays a major role in this exciting, new field.

JTI has two main brands in this sector: Logic in the E-vapor (electronic cigarette) segment and Ploom in the T-vapor (tobacco vapor) segment.

Electronic cigarettes create an inhalable aerosol (sometimes referred to as vapor) created by electrical heating of a nicotine-containing liquid within a cartridge of the device.

In 2014, we acquired Zandera Ltd, an electronic cigarette company operating the E-Lites brand in the UK & Ireland (and subsequently launched by JTI in Germany). Then, in 2015, we acquired Logic, the largest independent e-cigarette company in the USA.

In 2016, we migrated all E-Lites products to the Logic brand name in order to create a single, global E-vapor brand. Logic products are currently available for sale in the USA, UK, Ireland, France, Italy, Germany, South Korea, Greece, Russia, Belgium and Cyprus.

Our product portfolio consists of:

• Logic Power & Logic Curv: Two modern ‘cigalike’ ranges.

• Logic Pro: A ‘closed tank’ system with e-liquid capsules in different flavors and nicotine strengths.

• Logic LQD: An ‘open tank’ system with a range of e-liquids in precision fill bottles, also available in different flavors and nicotine strengths.

Introduction to E -Vapor

Introduction to Heated Tobacco Products

Sometimes referred to as T-Vapor, these are inhalable heated non-combusted tobacco products.

We entered the T-Vapor category in partnership with Ploom Inc. in 2011 and then acquired the rights for the Ploom brand in 2015. We are excited about our new generation of tobacco vapor product: PLOOM TECH.

PLOOM TECH uses our unique vapor technology to deliver tobacco taste without directly combusting the tobacco. This allows consumers to enjoy tobacco taste and aroma without the attributes that come from burning tobacco, including smoke smell.

PLOOM TECH heats nicotine-free liquid to create a vapor that, as inhaled, passes through the tobacco capsule to pick up tobacco flavor and nicotine. These capsules contain tobacco from our Global Flagship Brands – either Winston and Mevius, to deliver a range of flavors and quality in a new, enjoyable T-Vapor form.

PLOOM TECH was launched in Japan (Fukuoka) in March 2016. The product is currently available in Switzerland, Japan, and online. It is also sold in Canada and the USA – in the USA, PLOOM TECH is sold by Logic Technology Development LLC, a member of the JT Group, under the name “Logic Vapeleaf”.

RRPs are part of the tobacco industry’s continuing evolution and represent an important next step for the JT Group. By constantly refining our business model and evolving our strategies, we are laying the foundations for continued growth of the Group.

Fundamentals

Employees in JTI headquarters in Geneva, Switzerland

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FundamentalsWhere we are going and how we plan to get there

Every day, every employee at JTI makes a choice about their level of passion and dedication. We want to give all our employees the strongest reasons to be connected to JTI, and we want to be clear about why we do what we do.

This is why JTI has established a clear vision, a forward-thinking look at what we want to achieve, our reason for being and the path forward.

Our vision includes our ambition and our purpose.

Our ambition is to be the #1 international tobacco company by 2030, by volume.

Our purpose is to passionately provide moments of pleasure, to support consumers’ freedom of choice and to make a positive difference in all we do.

Knowing where we want to go is a key motivating driver to fulfill our vision and ambition.

Our ambition is time-bound, specific and achievable. To get there, we will apply the following strategic ingredients:

• Pursue an even more aggressive growth agenda within the organic business in which we currently operate

• Accelerate the growth and raise the bar for our Reduced-Risk Products category

• Prioritize our investments

• Improve the way we work, which includes excellence in talent management

We know that we work for a controversial industry and that our products raise concerns for some, yet our products are legal and we are committed to providing consumers freedom of choice. Part of our responsibility in satisfying consumers is responding to the growing demand for Reduced-Risk Products that may provide less harmful health effects.

After all, integrity matters a great deal to JTI. This is why “to make a positive difference in all we do” remains at the heart of our purpose. We will never seek to become #1 at any cost, and we remain committed to becoming the most successful and the most responsible tobacco company in the world.

In all that we do, we take into account the needs of our consumers, shareholders, employees and wider society so we can fulfill our responsibilities and exceed their expectations.

In this section of the guide, we clearly set out the ways in which we operate daily.

A company with a clear vision

Core values are the essential and enduring tenets of our organization, and they speak to who we truly are – our “DNA.” In addition to defining us as an organization, our values guide the way we behave every day and are fundamental to deliver on our ambition to become #1.

Our values inspire and motivate people to join our Company and remain committed to it. Our global outlook makes us dynamic and creative as we live out our values, while our Asian heritage means we are precise, quality-driven and always thinking about the long-term.

Here are the values that reflect who we are and what we stand for as a Company:

Our values

Winning attitude

• We are driven by success

• We are passionate, committed, dedicated

Better together

• We work as “One Team”

• We are harmonious, respectful, humble, collaborative, consensus-driven and embrace diversity

Committed to quality

• We put the consumer at the heart of what we do

• We seek operational excellence and simplicity – quality fit for purpose

We do the right thing

• We act responsibly to drive sustainable success

• We are responsible, ethical and trustworthy

At JTI, we have worked hard over the years to define and articulate who we are.

We want to enhance your understanding of us as an employer and give you a fulfilling experience. We will take every opportunity to listen to what you have to say, not least through our regular Employee Engagement Surveys, and act on your feedback.

Our promise to you is expressed in our employer value proposition (EVP). It tells our existing employees and external talent we are looking for, what’s different, special and motivating about working at JTI.

Our employer value proposition represents an “employment deal” via three distinctive themes.

Our focus on the long term, the care and respect we demonstrate for our colleagues and the value we place on investing in our people adds up to a strong sense of family and team: one that we hope you will quickly feel as you begin your journey at JTI.

Employee experience at JTI

Long-term success – At JTI we embrace a long-term horizon: we act today with tomorrow in mind. JTI’s long-term commitment means that we consistently invest in our future always balancing responsibilities towards consumers, employees, communities, and other stakeholders. Stability and financial strength are the cornerstones of our success.

Care and respect – JTI is a workplace with true commitment towards its employees, where our employees show the same dedication in return. Each individual is treated fairly and with respect. We are team players rather than solo artists and we listen to and look out for each other. You can be yourself with us.

Investing in our people – We provide our people with constant opportunities to gain their own experience, improve their skills and develop their careers. Our business environment constantly evolves as new products and markets emerge. This is your opportunity to make a real difference. Investment in people, global outreach and international mindset are part of our DNA.

The core behaviors support our ambition and purpose and define how we should work on a daily basis.

They clarify how we should achieve our business goals.

Our core behaviors

Get things done

• Take ownership

• Be accountable

• Make decisions

• Drive results

Empower people

• Develop people

• Provide feedback

• Communicate openly

• Respect others

Challenge status quo

• Innovate

• Be creative & agile

• Find solutions

• Make it simple

Act responsibly

• Think long-term

• Impact positively

• Act with integrity

You will find out more about these core behaviors and how they are applied in JTI from your line manager during the performance discussion.

The 4S management principle

Shareholders

Consumers

Employees Society

Our strategy is underpinned by the 4S management principle: a corporate philosophy that has guided the JT Group’s approach to managing its business since 1995.

‘4S’ best translates into four ‘satisfactions’.

The 4S model helps us to achieve sustainable growth by carefully balancing the needs and interests of our shareholders, consumers, employees and wider society.

It is a principle which remains at the heart of our parent company’s approach to business and without it, JTI might not exist.

It was 4S thinking that informed JT’s decision in the late-1990s to expand its tobacco business beyond the Japanese domestic market, resulting in the acquisitions of RJ Reynolds International and Gallaher. It is this same approach that ensures we focus on long-term growth, not short-term profit opportunities, and informs many of the strategies that have enabled JTI to become a leading international tobacco company.

JTI aims to be the most successful and responsible tobacco company of the world. As a result, JTI remains fully committed to generate sustainable long-term growth, both in conventional and Reduced-Risk Products.

In traditional tobacco products, we will seize market share opportunities through continued investments behind our people, brands and capabilities. We have made decisive acquisitions in Asia and more recently in Ethiopia that will support our footprint expansion and complement the GFB efforts in markets that matter. We will keep pursuing relevant business development opportunities going forward.

In Reduced-Risk Products, we will enhance our consumer offering and presence in this rapidly evolving category, both in terms of geographies and products, focusing on informed choice and by anticipating consumer needs.

In the area of talent management, we will continue to deploy a series of programs to enhance our people empowerment and accountability, which are key to boost our business agility, innovation and speed-to-market.

We believe that by focusing and prioritizing our combustible investments in markets that matter, accelerating our efforts in Reduced-Risk Products and empowering our talented employees, JTI will continue to achieve sustainable growth over the long-term period.

Our strategies

As we pursue our growth strategy, we will maintain our integrity and never seek to become #1 at any cost.

To us, responsibility and long-term sustainability mean that we achieve our goals while also making a positive difference in all that we do for the greater benefit of our investors, our people, customers and society as a whole – in line with our 4S business model.

Building a sustainable business means that we have the right mindset and act in an appropriate way every day.

Our sustainability strategy is centered around three enablers for business sustainability:

1. Respect human rights

2. Enhance our social and environmental impact

3. Exercise good governance and business standards

To achieve this, we have four areas of focus for enhancing our sustainability work:

1. Exceed expectations with products and services: offer consumers in all our markets an informed choice that includes Reduced-Risk Products, and access to products in a modern and easy way

2. Invest in our people: become the employer of choice within our industry, and empower our people to reach their full potential

3. Build sustainable supply chains: work with our suppliers and contract manufacturers to ensure transparent and responsible practices

4. Optimize the regulatory environment and combat illegal trade

Our sustainability efforts

JTI recognizes the risks of smoking. JTI does not market its products to minors, and does not market its products in order to encourage anyone to take up smoking or to discourage anyone from quitting. JTI is committed to developing Reduced-Risk Products, and to fostering accommodation between smokers and non-smokers.

Our six core principles define our attitude to smoking:

1. Openness about the risks of smoking Smoking is a cause of serious diseases including lung cancer, coronary heart disease, emphysema and chronic bronchitis. JTI supports efforts to advise smokers accordingly. Everyone should be appropriately informed about the health risks of smoking.

2. Transparency about our products Smokers want to know what it is they are smoking. JTI provides information about the ingredients it uses in its products on the jti.com website. JTI also provides ingredient information when requested by governments, but asks that its trade secrets are respected and protected.

3. Reduced-Risk Products We believe products that do not involve combustion and do not produce tobacco smoke are products with the potential to reduce the risks associated with smoking. We are committed to developing and bringing to market Reduced-Risk Products (*) that meet consumer expectations. We will help adult consumers to make informed choices by providing factual information acquired through scientific assessment about the products they may wish to use.

4. Youth smoking prevention Minors should not smoke and should not have access to tobacco products. This belief is central to JTI’s Code of Conduct and marketing practices, operational policies and the way JTI does business. JTI is committed to playing a full role in youth smoking prevention, but ultimate success depends on all elements of society working together.

5. Accommodation between smokers and non-smokers Many people have concerns about exposure to environmental tobacco smoke. All smokers should show consideration for those around them, and should not smoke when children are present. JTI advocates tailored, practical and effective solutions that separate smokers and non-smokers while accommodating the legitimate interests of both. Further to this, we are committed to developing and bringing to market Reduced-Risk Products (*) that also have the potential to reduce the impact of smoking to others.

6. Respect for local norms and cultures JTI is respectful of each country’s culture, norms, legislation and decision-making process. However, JTI has a right – and an obligation – to express its point of view regarding regulation that affects JTI’s products and the tobacco industry. JTI actively seeks open and transparent dialogue with governmental authorities around the world, and where possible, offers alternative solutions if issue is taken with a government’s proposed course of action.

Our core principles

( * ) Reduced-Risk Products (RRP) are products with the potential to reduce the risks associated with smoking.

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Our Executive Committee (Excom) is made up of 16 members, aligned in two different areas of activity, namely: Operations and Functions.

Their shared objectives are to provide strategic leadership and direction to the business and to ensure decision-making which supports long-term profitable topline growth. They achieve these objectives by working with speed, visibility, transparency and governance.

LeadingGovernance and management

Our leadership

CEO

COO

Governing the business

Code of Conduct

Sets out the high ethical standards we are all expected to meet when dealing with each other, our customers, our suppliers and society at large.

Operating Guidelines

Specify authority levels applicable to all transactions. The Business Approval Proposal (BAP) is the enabling tool of the Operating Guidelines.

JTI is committed to strong governance in the way we do business, how we manage our people, protect our assets, and report on performance to our shareholders.

To ensure this governance is clear we have policies and processes in place, which are available for reference and should be clearly understood and adhered to by all employees.

Global Environment, Health and Safety policy and standards The Company’s environmental impact and occupational health & safety is managed according to our own exacting EHS standards. These standards set out employee behavior and performance expectations that apply to all JTI operations.

J-SOX

Japanese legislation designed to improve governance and financial reporting standards.

Human Resources (HR)• Corporate Compliance• Corporate Security

Corporate Development• Public Affairs• Corporate Communications• Fiscal Affairs & Anti-Illicit Trade • Corporate Social Responsibility

Reduced-Risk Products (RRP)

Business Development (BD) & Corporate Strategy (CS)

Finance, IT & Digital Strategy

Legal & Regulatory Affairs (LRA)

Marketing & Sales (M&S) Operating to strengthen JTI competitive advantage through integrated sales and marketing capabilities

Research & Development (R&D) Innovation for conventional and emerging products; product and packaging development; quality assurance and product maintenance

Markets grouped in 5 regions

• Americas• Asia Pacific• Eastern Europe (EE)• Western Europe (WE)• Middle East /Near East /Africa Turkey/ Worldwide Duty Free (MENEAT & WWDF)

Transformation

Global Supply Chain grouped in 10 global functions, 3 Leaf Sourcing regions and 5 manufacturing areas:

Global functions• Reduced-Risk Products• Engineering• Finance• Planning and Services• Procurement• Quality• JT/JTI Partnership• Leaf• Manufacturing• Strategy & New Business

Leaf Origins/processing locations• Africa (Malawi, Tanzania, Zambia)• Americas (Brazil, USA)• Europe (Turkey, Serbia)

Manufacturing regions• Asia• Eastern Europe• Gostkow• Middle East / Near East / Africa / Turkey• Western Europe / Americas

Functions


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• Marketing & Sales• Global Supply Chain• Human Resources• Finance• Legal & Regulatory Affairs• Information Technology• Research & Development• Corporate Strategy• Reduced-Risk Products• Business Development• Corporate Development

This section of the guide gives you an introduction to each Function, outlining their mission and giving a brief overview of what they do.

FunctionsWorking together to ensure global success

A structure that works

With 12,000+ employees across the globe, Global Supply Chain is JTI’s largest function by headcount. As a globally managed organization, Global Supply Chain aims to create a seamless supply chain from the farmer to the consumer, and one that is geared to succeed in the future. In our 27 factories, 5 tobacco processing facilities and offices across the world, we are able to maintain our high quality standards in sustainable tobacco farming, leaf processing and cigarette production. Furthermore, our strategic roadmap sets us apart from our competitors and ensures we always deliver quality products to our customers.

Global Supply Chain focuses on five shared strategic pillars:

• Service – deliver the right quality products, on time, at a better cost base

• Agility – outperform the competition by being faster and more efficient

• Investment – fuel JTI growth ambitions by being bold and innovative

• People – attract, develop and retain first-class talent

• Responsible business – commit to the highest safety, environmental and social standards across our operations

Purchase materialsGlobal Supply Chain procures all tobacco and non-tobacco materials (NTM) that are needed to make our products.

NTM include, for example, cigarette paper, tipping paper, alu-foil or pack materials, and are manufactured into finished goods in one of the factories, ensuring the right quality and cost.

When it comes to tobacco leaf, Global Supply Chain ensures a reliable, long-term supply of high quality tobacco leaf at best cost. Stability of this key ingredient in our products is achieved through close collaboration with partnering functions, optimal management of our tobacco leaf buying and processing operations, as well as effective partnerships and strong relationships with leaf sourcing communities.

We source and process green leaf tobaccos from more than 36 countries across four major geographic regions: Africa, Asia, Europe and the Americas. Around 50% of our tobacco requirements are purchased directly through our own leaf operations, while the rest is bought through third-party tobacco leaf merchants. At the center of our leaf business model is an emphasis on working closely with tobacco growers. We do this by managing our relationships with tobacco farmers, grower associations, and representative groups, while our dedicated field technicians provide support and advice on raising the best crop. Long lead times, seasonality, and the inherent instability of farming require a continuous

process of analysis, review and revision to help ensure that JTI’s range of products can respond to the ever-changing demands of our consumers.

We support the long-term security of our leaf supply by working towards tobacco production that is economically and environmentally sustainable and by ensuring that we maintain a responsible, credible and sustainable presence in the countries and communities we work with. We continuously develop and implement a holistic, long-term and actionable corporate responsibility approach, with projects that address the social and economic challenges in the communities where we operate. As a result, we are guided by our Agricultural Labor Practices Program that identifies areas for improvement on social, labor and environmental matters in our value chain.

Manufacture and distribute our products Global Supply Chain is responsible for producing all JTI ready-made cigarettes, Reduced-Risk Products (RRP) and Other Tobacco Products (OTP), according to product specifications developed and provided by Research & Development (R&D). The main task is to deliver quality finished goods to the sales organizations across JTI, on time, and in line with demands and consumer expectations.

Following production, the Customer Service and Global Logistics teams are responsible for distributing the finished goods to both our sales forces and our customers.

Global Supply Chain

What we do

Human Resources

The role of the Finance function is to contribute to the success and reputation of the Company. We do this by supporting the business in achieving financial results in a quality and sustainable manner whilst strengthening the financial position and cash flow of the Company within a well-controlled financial environment. The finance function aims to be a valued business partner and make significant contribution to the business by (1) supporting and influencing commercial decisions with solid, reliable and timely financial insight and reporting, (2) providing financial oversight and stewardship that safeguards assets and instills trust, and (3) operating strong, controlled, effective and efficient processes. The finance function leads change and continuous improvement that aims to simplify, standardize and automate financial business processes of the Company in order to help drive competitive advantage and outstanding results.

Finance

Performance Management We collaborate with our business partners to compile, assess and report on the planned and actual performance of JTI. Through this process we also support local, regional, functional and executive management who review expected and actual performance, resource allocation, and support and fuel decisions that drive the achievement of JTI’s performance targets.

Decision Support We provide quality financial analysis and fact-based advice to our business partners with the goal of ensuring the Company’s resources are appropriately allocated, generate an optimal return on investment and ultimately create incremental corporate value.

Accounting & Reporting We deliver reliable financial reporting within a framework of strong financial controls, governance and cost-effective processes. As part of this responsibility, we ensure that the transactions are recorded and financial statements prepared in accordance with International Financial Reporting Standards (IFRS). Additionally, we ensure statutory financial and tax reports are prepared and filed in compliance with applicable standards and regulations.

Transaction Processing We process in excess of 5 million transactions per year through Business Service Centers located in Manchester, St. Petersburg and Kuala Lumpur. We continuously improve the efficiency and effectiveness of end-to-end transactional processes and act as the talent pipeline for the broader finance organization.

Financial Risk ManagementWe are responsible for the development of key programs that are designed to mitigate JTI’s financial risk exposure. Such programs address areas which include the management of foreign exchange, funding and liquidity and tax compliance as well as insuring business operations against unforeseen losses.

Corporate Financial GovernanceWe retain a custodianship role centered on maintaining robust financial governance principles. These principles include finance and accounting related processes, J-SOX and internal controls and financial policies and procedures. Additionally, we are the custodians of the Operating Guidelines and related Business Approval Process (BAPs & MEMOs), which are key elements of our Corporate Governance framework.

What we do

Marketing & Sales (M&S) supports JTI’s growth ambition by boosting and prolonging the equity of our brands, delivering powerful and structured insights as well as securing the most efficient and competitive route to consumer.

Deliver powerful insightsWe support JTI’s strategic growth agenda through fact-based consumer, customer, category and competitive insights with clear implications for JTI.

Boost & prolong the equity of our brandsBeing the brands’ custodians, we define the strategies and develop initiatives and programs aiming at strengthening the equity of our 9 Flagship Brands to ensure that they remain differentiated and relevant in the face of new regulations and changing consumer needs.

Secure the most efficient and competitive Route to ConsumerWe ensure that we deliver the most competitive and efficient Route to Consumer in any type of environment from the time our products leave the factory till they are in the hands of our consumers.

Marketing & Sales

What we do

The mission of the Human Resources (HR) function is to drive business results through an organization where people are the difference.

One of our Company’s key strategic drivers is to “strengthen human resources as a cornerstone of growth”. To help realize this, HR strives to create an environment where employees have the opportunity to pursue their goals, develop their skills and improve their performance, increasing their contribution to the overall growth and success of our business.

We also ensure that all employees comply with the highest standards of behavior and operate in a safe and secure environment.

Talent Management We maximize the potential of our people through excellent Talent Management.

We:

• coordinate the recruitment of internal and external candidates to find people with the necessary skills, knowledge and attitude to deliver the Company’s objectives, whilst also selecting employees who will make a positive contribution to promoting JTI’s values, both now and in the future;

• coordinate the performance appraisal process that represents a key tool to drive and measure performance and is applied consistently at a global level;

• provide and coordinate training and development solutions to improve the performance of our employees in their current position as well as prepare them for future challenges;

• conduct regular talent reviews to identify potential internal candidates to fulfill key positions and future vacancies;

• provide a standard set of assessment tools across the Company to ensure equal treatment and the comparability of results across all employees;

• provide employees with growth opportunities.

Talent Attraction and Employer Brand We leverage the value of the JTI Brand to engage current and future employees.

We:

• provide the necessary tools to position and differentiate JTI as an employer, and to increase the attractiveness of JTI as a place to work;

• conduct regular global surveys across JTI to measure the engagement of our employees and take the necessary actions to continuously improve our Company;

• compare ourselves to other employers by participating in HR benchmarking and certification schemes all around the world;

• develop a long-term attraction strategy that understands and addresses the requirements of future employees.

Rewards We develop Rewards to shape talent and performance.

We:

• design, communicate, and implement Rewards solutions that enhance employee performance and, therefore, the performance of the Company overall;

• ensure competitiveness through systemic external benchmarking, taking into consideration the industry specific needs of a global tobacco company;

• make sure we are perceived internally as fair and equitable, and we strive for maximum clarity and transparency.

Organization Design (OD) We drive OD to ensure it is fit for the current and future business environment. We strive to ensure that our OD solutions enable JTI strategy and facilitate talent development while ensuring organizational efficiencies.

We:

• perform organizational diagnostics and validate it vs. company strategies and external benchmarks;

• take inventory of all the tasks, functions, skill sets and goals of the Company, and develop recommendations regarding organizational structure, internal/external people resources and skills utilization, as well as planning for and nurturing JTI internal resources to enable JTI strategies.

Diversity & Inclusion (D&I)D&I is a new key strategic priority on our HR agenda. It reflects the Company’s commitment to provide fair treatment, access, opportunity, and advancement for all regardless of gender, age, ethnic background, sexual orientation or religious beliefs. We are currently designing a comprehensive program and building the infrastructure in order to embed D&I in all formal and informal business processes.

Corporate ComplianceWe help employees at JTI to make the right decisions about how we do business, ultimately protecting their and JTI’s reputation, company profitability and shareholder value.

To achieve this, we:

• Implement and monitor Compliance programs to ensure we meet our legal obligations and manage Compliance risks effectively. These programs include; Know Your Customer/Supplier, Anti-Bribery and Corruption, Anti-Money Laundering, Gifts, Hospitality and Entertainment, Sanctioned Party Lists and Conflicts of Interest

• Maintain and make regular updates to our Code of Conduct and related Compliance policies

• Provide ongoing communication and training activities so that employees are aware of their Compliance responsibilities and how to act responsibly and with integrity in all that they do

• Conduct a Compliance Survey periodically to gain feedback on the level of embeddedness of standards of ethical behavior throughout JTI and identify areas for improvement

• Manage an independent and confidential reporting channel called “Your Voice” for employees and business partners to report concerns, without fear of retaliation. Conduct investigations into reported allegations and make recommendations to local management for appropriate follow up actions, as needed.

Corporate Security We identify and mitigate threats to our employees, facilities, products and reputation by developing, implementing and reinforcing security policies, standards and processes which add value to JTI’s business, across the whole of the current and planned business operating environment.

What we do

The LRA function’s role is to address legal and scientific challenges and opportunities with a solution-oriented mindset focused on business growth.

LegalLegal provides guidance to the Company in navigating through a complex environment of laws and regulations that govern how we do business around the world. We work closely with our business colleagues to understand their goals and agree on ways to reach them based on shared risk-benefit assessments. We also identify growth opportunities and ways to secure them, such as by utilizing our expertise in trademarks, patents and other forms of intellectual property.

Scientific & Regulatory Affairs (SRA) SRA ensures that JTI sells quality products that comply with all relevant laws governing the use of ingredients and materials. All ingredients and materials used in our products are thoroughly evaluated by SRA using a variety of means, including a comprehensive toxicological assessment. SRA is responsible for filing ingredient submissions, product registrations, and other information with government regulators as required by law.

These mission-critical responsibilities also apply to the development and commercialization of new tobacco and e-vapor products. SRA is directly involved in the planning, development and production of new devices and their constituent parts to ensure they comply with regulatory requirements before they are marketed. SRA also formulates and implements testing strategies, including toxicological testing and clinical trials, to ensure that new products do not increase health risks for consumers who choose to use them.

SRA further contributes to the Company’s growth by working with markets, regions and other functions to shape the operating environment. We proactively monitor and report on regulatory developments affecting our products. We also lead the creation of company positions and supporting documentation on product-related topics and issues, engaging directly with regulators and policy makers to ensure our views are heard and considered before new regulations are adopted.

Legal & Regulatory Affairs (LRA)

What we do

The role of the Information Technology (IT) function is to provide JTI employees with the IT tools, corporate systems, services and support to enable them to achieve their business goals. More than 400 individuals, based in about 20 different sites, perform a corporate role in IT and are part of our core global functions: the Business Technology Services, the Global Development Center, the Global Technical Center and the Information Security and Risk Management team. In addition, another 300+ IT professionals are spread across the globe and provide IT services and support at market, factory and leaf level.

Information Technology

What we do

The Business Technology Services (BTS)BTS is IT’s business-facing organization. Its role is to partner with respective business counterparts, understand the objectives of the various functions and regions, and to define together with them the systems, processes and technical solutions needed to support them to achieve these objectives.

The Global Development Center (GDC)The GDC’s role is to establish JTI’s strategic direction on business applications development, project management, and training for all global business applications. The team is also responsible for improving JTI decision making capabilities through analytics and Business Intelligence and for managing all accounts and roles of global applications (SAP, Siebel, etc.) to ensure access to information and in compliance with internal controls as defined by J-SOX.

The Global Technical Center (GTC)The GTC provides every employee with a Digital Workplace environment including personal computers, mobile devices and collaboration tools as well as 24x7 technical

and applications support through the Global Service Desk. The team also provides Infrastructure and Operations Services including Networks, Data Centers and Cloud platforms integration to all Markets, Factories and Corporate Business Functions.

Information Security Information Security is concerned with ensuring that the people who use Company information understand the value it has to JTI’s business. Information can only be effectively protected through a combination of technical measures, responsible behavior and appropriate practices. Information Security is therefore everyone’s responsibility.

Our aim is to ensure:

• Confidentiality: information is accessible only by authorized people who need the information

• Integrity: information can be modified only by people who are authorized to do so as part of their job responsibilities

• Availability: information is accessible by those who need it when they need it

The Research & Development (R&D) function creates business value through innovation, quality and service. This is realized by over 500 professionals worldwide bringing together their scientific expertise and technical know-how to help JT Group produce innovative and competitive products. Compliance with regulations and corporate policies is also a critical element of R&D activity.

Product developmentTo secure long-term competitiveness, we ensure our products are of the best possible quality, innovative, fully compliant, and at optimum cost. To meet JTI commercial requirements, we closely collaborate with Marketing, Global Supply Chain, Global Reduced-Risk Products and other relevant functions to develop new products and improve existing ones, covering Ready Made Cigarettes, Reduced-Risk Products and Other Tobacco Products categories.

Our R&D Product Technology Center in Trier has full technical capabilities to enable development of our entire tobacco product portfolios and testing of innovative solutions prior to commercial launch. Similarly, the Reduced-Risk Products Technology Center in Weybridge enables this for non-combustible, novel products such as e-cigarettes and heated tobacco products.

Packaging development Based on designs developed by Marketing, we create graphics for all our packaging. We ensure design consistency throughout the world, by building in all regulatory and commercial requirements on to a tiny surface of the package. We strive to maintain our

competitiveness via enhancing expertise in state-of-the-art printing techniques and new materials, while optimizing costs.

Quality assurance and product maintenance Quality assurance for traditional and Reduced-Risk products is another critical element of R&D activity. Maintaining product quality in a changing environment (e.g. crop-by-crop quality change of tobacco) requires very careful attention to all elements of our product. To guarantee consistent product quality, the team of highly skilled scientists and engineers performs evaluations, analyses and certification of all materials and finished goods in our in-house laboratories. In addition, they do in-market product monitoring to ensure competitiveness of JTI brands.

Innovation for the future To satisfy JTI’s commercial requirements and deliver on long-term strategies, we actively explore and develop new technologies applied to both traditional and Reduced-Risk Products that answer our consumers’ wide range of needs. We work seamlessly as one team with JT R&D to fully optimize internal knowledge and expertise, to secure best in class know-how and enhance innovation capabilities.

Research & Development

What we do

Corporate Strategy takes advantage of its holistic understanding of the Company to develop long-term perspectives on the industry and the potential impacts on JTI’s corporate objectives. Our goal is to try to answer the question “where is the industry headed in 10 –20 years?” by developing strategies while keeping in mind JTI’s role as the profit growth engine of the JT Group.

Our mission is to:

• provide regular and ad-hoc analyses and perspectives to the Excom to support decision-making,

• challenge key business assumptions set through our planning process,

• prioritize and allocate resources to remain competitive and fulfill long-term corporate objectives,

• explore new business opportunities inside and outside conventional tobacco.

Support in defining JTI’s strategic directionWe identify and anticipate future trends, challenges and opportunities in existing core businesses as well as in new business opportunities (e.g. emerging markets and Reduced-Risk Products). We provide internal consultations and lead strategic projects such as forecasting models and scenario planning.

Strategic planning processesWe are responsible for designing, coordinating and improving strategic planning processes – e.g. Annual & Strategic Plan (A&SP) and Top Down Target (TDT) – in addition to leading the development of strategic plan presentations to JT senior management.

Provide relevant fact-based business intelligenceWe benchmark competitors’ results and strategies to challenge our business performance, as well as follow and report

competitors’ results, major industry events, industry analysts’ perspectives and insights from other relevant industries and key macro-economic developments.

Represent JTI in investor relations activitiesWe represent JTI in front of investors and financial analysts in close collaboration with JT investor relations. In addition, we coordinate, develop and further enhance JTI’s contribution to the JT Group’s investor relations activities. This includes quarterly results announcements, semi-annual investor events and annual report development.

Facilitate certain global activities/ liaison with JTWe facilitate global activities not falling into specific functions and /or operations. We also act as a liaison office with JT’s strategic functions such as Tobacco Business Planning, Corporate Strategy and Investor Relations.

Corporate Strategy

What we do

Reduced-Risk Products (RRP) is a JT Group function based in Geneva Headquarters.

The RRP function’s objective is to drive future growth in order to meet the Company’s vision to become a global leader in this product category by identifying and developing reduced-risk alternatives that deliver consumer satisfaction.

New product developmentWe focus on the mid- to long-term development of our RRP business by preparing a strong pipeline of new products. To achieve this, we focus our strategic efforts in two main directions.

• Internally: we work closely with our R&D experts and other functions to drive the timely development of new products.

• Externally: we work with leading technology companies to develop next generation products and continuously scout for new partnerships and acquisitions of innovative products that we believe adult consumers will enjoy.

Product assessment We work closely with colleagues in SRA and R&D to ensure that all products are thoroughly assessed from a safety, regulatory and performance perspective.

We also assess the product’s commercial potential and we evaluate the relevance of its technology.

Additionally we are developing a framework and process for Reduced Risk Assessment which could enable us to benefit in the future from Reduced Risk claims associated with our products as approved by Regulators.

Product commercializationWe develop appropriate marketing and commercial strategies to ensure our products are ready to be deployed in a market.

We coordinate a cross-functional effort in order to develop the brand, undertake product design and packaging development, create marketing campaigns, implement an optimal manufacturing infrastructure, prepare detailed commercial plans and assess regulatory and taxation regimes.

In short, once a new product has been developed and assessed, we make it ready for a JTI market to sell it.

Reduced-Risk Products

What we do

The Business Development department supports JT Group management’s decision-making to drive sustainable external growth and achieve the number one position by 2030.

Identify opportunitiesExternal growth opportunities can take a variety of forms. For example, entering into a contract manufacturing arrangement, whereby a third party will manufacture for JTI or vice versa. Alternately, it could include acquisitions of other companies or more complex projects such as licensing arrangements or joint ventures, where two parties join resources in order to share the business and financial benefits of such cooperation.

Oversee mergers & acquisitionsBusiness Development is responsible for merger and acquisition activities, including participating as a buyer in privatizations of state tobacco companies. The most significant illustration of an acquisition project is undoubtedly the successful acquisition of Gallaher in April 2007, for GBP 9.4 billion.

As part of our commitment to deliver long-term growth, in 2009 JTI acquired leaf operations in Africa, Brazil and the US,

ensuring sustainability of supply of quality tobacco. In more recent years, the JT Group reached agreements to acquire numerous Ready Made Cigarette (RMC) businesses including Haggar Cigarette & Tobacco Factory Ltd, with operations in the Republics of Sudan and South Sudan; Natural American Spirit from Reynolds, ATI in Iran, a majority share in the Ethiopian manufacturer NTE, the assets of Mighty Corporation in the Philippines, and KDM a kretek cigarette producer in Indonesia. Additions to the non-core business have included the Belgium company Gryson, which strengthened JTI’s European portfolio of Roll Your Own and Make Your Own tobacco products; the Egyptian Al Nahkla Tobacco Company, adding shisha to the portfolio. JTI has also made important acquisitions to strengthen the Reduced-Risk Products (RRP) portfolio including E-Lites in the UK and Logic in the US, as well as other smaller companies, and intellectual property (IP).

Business Development

What we do

What we do

Our Corporate Development teams anticipate and assess opportunities and risks stemming from the social, economic, political, tax, regulatory and competitive environment, and develop strategies to engage with decision-makers and regulators on these issues. They also protect our brands and trademarks from criminals, and embed sustainability in our business decisions. In addition, Corporate Development builds and protects the Company’s reputation by increasing awareness of our business philosophy, practice, performance and values.

Public AffairsPublic Affairs is how we describe our approach to engaging with external stakeholders, primarily regulators, decision-makers, academia, Non-Government Organizations (NGOs). In Public Affairs, JTI is focused on providing workable solutions that address the needs of society, government and the business. We are responsible for protecting JTI’s profitability, volumes, ability to compete and innovate, our intellectual property and brands. We do this through government relations and advocacy efforts.

Corporate Communications Corporate Communications is responsible for ensuring JTI speaks with a unified voice to our internal and external audiences, ensuring consistency across the business and alignment with JT, our parent company. Within Corporate Communications, there is Internal Communications and External Communications.

Internal Communications guides employee behavior in line with JTI’s business priorities. In addition to communicating top-down messages from our leaders, the team partners closely with functions and markets to develop and implement communication plans and campaigns. Internal Communications bring JTI’s stories to life through the INSIDE family of channels: INSIDE Magazines, INSIDE Online (our intranet), INSIDE TV (our internal business television channel) and INSIDE Engage (our on-line community-based collaboration tool).

External Communications is responsible for communicating with our external audiences, and ensuring that the Company is presented in a relevant and consistent manner outside the business. This includes developing the messages, strategies and tools to support markets, regions and functions when they communicate on the issues affecting our Company. External Communications communicates with our external audiences through a range of channels, including the Company’s website (www.jti.com) and through traditional and social media channels.

Corporate SustainabilityJTI is committed to making a positive difference in all that we do. This means doing the right thing and acting responsibly and with integrity for the greater benefit of society. We aim to make sustainable business practices an everyday part of how we all think and do business at JTI.

The mission of the Corporate Sustainability department is to drive the sustainability agenda to secure responsible long-term success. We engage with all relevant parts of the business to ensure we set and meet challenging and meaningful sustainability targets and report on progress. We support the sustainability agenda overall in the areas of human rights; environment, health and safety; as well as community investment.

Fiscal Affairs & AIT (Anti-Illicit Trade) Tobacco products are taxed differently in many countries throughout the world. The Fiscal Affairs team’s mission is to support JTI’s markets in defining and achieving the most favorable tax environment to ensure sustainable profit generation. While defining the most favorable tax environment differs from market to market, some core principles on tobacco taxation include ensuring that taxation is predictable, reasonable, and allows the Company to compete in the marketplace and educate decision makers on the consequences of ineffective or inefficient taxation policies.

Illegal trade hurts our business, undermines our brands and jeopardizes our ability to plan for the long term. Our focus is to ensure that our products do not end up in the hands of criminals, and that we protect some of our most valuable assets: our brands and trademarks. AIT’s vision is to reduce the amount of illegal tobacco across the globe and support JTI’s goal to be the #1 international tobacco company by 2030 – helping JTI meet its legal obligations while protecting JTI’s reputation, personnel and financial interests. The AIT team works closely with law enforcement authorities across the world, conducts research to quantify the impact of illegal trade and helps JTI’s markets better secure our supply chain.

Corporate Development

Going forward


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We hope that this guide to the Company has aided you in gaining a better understanding of how we operate and deliver our business success.

You have made the right choice in joining the JTI team. Now we hope that you will take every opportunity to enjoy your time with us, while helping us to go forward and meet both JTI’s and your future ambitions.

Visit our intranet “INSIDE” regularly. You will find it a great source of information, providing you with tools to support your daily work. You will have access to:

• global and local news, including job vacancies

• policies and procedures

• global documents such as the Code of Conduct and JT Annual Report

• corporate magazines and publications, such as INSIDE Magazine or JTI At a glance

• corporate identity guidelines (the JTI Brand), including templates

Going forward

Learn more

Stay updated

Like all JTI employees with a JTI network account, you have access to our business networking platform, called INSIDE Engage. The platform is designed to help JTI employees communicate openly with one another, collaborate and share.

Engage allows you to create a profile, add colleagues to your network and join communities, just like external networking websites.

It is easy to get started on Engage – just click on the link on the INSIDE Online homepage. Take a few moments to explore the platform and find out what Engage has to offer you.

How can INSIDE Engage help you in your daily work?

Networking: By updating your profile you have the opportunity to introduce yourself and talk about your work experience, expertize and skills, so that colleagues can find you and ask for your support or advice in the area of your expertize. In return, you can also search for specialized skills or knowledge.

Feedback: You can ask colleagues to give you feedback on a product, an idea, a presentation, an event, etc. Engage helps you to reach a large number of colleagues in a short time.

Collaboration: Are you managing a project where colleagues from all around the world are involved? Create a community for your project and ask your colleagues to join.

Connect, share, collaborate.

Follow us

We use various social media platforms to share news, business updates and careers information with the world. We encourage employees to:

1. follow and interact with us on

• Twitter – @JTI_global• LinkedIn – search for “JTI (Japan Tobacco International)”• Facebook – @JTIcareers

2. and leave a review on Glassdoor – search for “Japan Tobacco International” under Companies.

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