Key Points
- Ploom Growth: JT’s Ploom heated-tobacco volumes rose 43.5% in the first half, making it the main driver of the company’s newer-product growth.
- Cigarettes Remain Central: Combustibles represented about 97% of JT’s tobacco volume, with pricing, product mix and market-share gains continuing to support earnings.
- Japan Enters Share Competition: RRP accounted for 48.7% of Japanese industry shipments, shifting competition from category adoption towards brand share, pricing tiers and consumer retention.
- Markets Are Diverging: Cigarettes continued to grow in Turkey, JT gained share in a declining U.S. market, while the UK faced tax-led contraction and illicit-trade pressure.
- A Dual-Track Transition: JT illustrates how a traditional tobacco company can maintain cigarettes as its earnings base while building heated tobacco as a second growth platform.
2Firsts
July 30, 2026
Japan Tobacco released its second-quarter results in Tokyo on July 30, reporting a 43.5% increase in Ploom volume for the first half of 2026, while shipments of cigarettes and other combustible products edged up 0.2%.
The results underline the two-track structure of JT’s tobacco business. Cigarettes remain its main source of volume, pricing and earnings, while Ploom is expanding from a smaller base as the company seeks to establish heated tobacco as a second profit-growth engine.
JT reported first-half revenue of ¥1.986 trillion ($12.13 billion), up 17.7% from a year earlier. Core revenue at constant exchange rates increased 10.2%, while adjusted operating profit rose 26.2% to ¥661.7 billion ($4.04 billion), or 19.4% at constant rates.
The gap between reported and constant-currency growth reflected the weakness of the yen against several currencies. The tobacco business generated core revenue of ¥1.828 trillion ($11.17 billion), up 19.1%, while adjusted operating profit increased 25.3% to ¥682.9 billion ($4.17 billion). At constant exchange rates, the increases were 10.6% and 18.8%, respectively.
Dollar figures are approximate and converted at ¥163.68 per U.S. dollar, based on the Bank of Japan’s central rate on July 29.
First-Half Results
Key figures for the six months ended June 30 included:
- Group revenue: ¥1.986 trillion ($12.13 billion), up 17.7%
- Adjusted operating profit: ¥661.7 billion ($4.04 billion), up 26.2%
- Tobacco core revenue: ¥1.828 trillion ($11.17 billion), up 19.1%
- Total tobacco volume: 286 billion units, up 1.0%
- Combustible volume: 277.6 billion units, up 0.2%
- Reduced-risk product volume: 8.4 billion units, up 33.8%
- Heated-product volume: 7.1 billion units, up 43.5%
- RRP-related revenue: ¥78.6 billion ($480 million), up 40.7%
JT uses the term reduced-risk products, or RRP, for a portfolio it defines as having the potential to reduce risks associated with smoking. The category includes heated products, infused products, e-vapor, nicotine pouches and tobacco-containing oral products. JT reports RRP volume in cigarette-stick equivalents and excludes devices and accessories from the volume calculation.
Most of JT’s first-half RRP volume came from Ploom heated products. The broader definition is important when comparing companies, as international tobacco groups use different terms and include different categories in their smoke-free or new-product reporting.
JT also raised its full-year revenue forecast by ¥188 billion ($1.15 billion) to ¥3.885 trillion ($23.74 billion). Its adjusted operating profit forecast was increased by ¥80 billion ($489 million) to ¥1.035 trillion ($6.32 billion).
Cigarettes Remain the Earnings Base
JT’s combustible business delivered little overall volume growth, but continued to benefit from pricing, brand mix and market-share gains.
Price and product mix added ¥154.2 billion ($942 million) to first-half tobacco adjusted operating profit, according to the company’s presentation. Volume made a negative contribution of ¥8 billion ($49 million), despite higher total shipments, because growth was concentrated in a less favourable mix of markets and products.
Additional investment in Ploom and inflation-related supply-chain costs offset part of the pricing benefit. JT identified the Philippines, Russia, Turkey and the United States as major pricing contributors.
Its global flagship brands also expanded. Winston volume rose 1.7% and Camel increased 2.8%, while JT said its total tobacco market share grew in more than 30 markets, including Japan, the Philippines, Turkey and the United States.
Combustibles represented roughly 97% of JT’s first-half tobacco volume. At the same time, RRP-related revenue grew 40.7%, faster than the 33.8% increase in total RRP volume. The comparison captures the current structure of JT’s transition: cigarettes still provide almost all of its operating scale, while newer products are growing much more quickly.
JT’s 2026-2028 business plan continues to prioritise investment in both combustibles and heated products. The company expects cigarette growth to come from pricing, market-share gains and higher returns on investment, while heated tobacco is intended to become a second profit-growth engine.
Ploom Builds Scale
Ploom was the main driver of JT’s RRP performance.
RRP volume increased to 8.4 billion units from 6.3 billion a year earlier, while RRP-related revenue rose to ¥78.6 billion ($480 million) from ¥55.8 billion ($341 million). Heated products accounted for 7.1 billion units, leaving JT’s other RRP categories relatively small within the current portfolio.
Growth slowed during the second quarter. Ploom volume increased 31.5% year on year, compared with 43.5% over the full first half, after demand in Japan normalised following excise-related price changes in April. JT said Ploom nevertheless continued to gain share across all three of its geographic clusters.
The company plans to invest about ¥800 billion ($4.89 billion) in its tobacco business between 2026 and 2028. Its objectives include building Ploom’s presence across markets representing around 80% of global heated-product demand and achieving break-even across the RRP business at the brand-contribution level by the end of 2028.
Ploom remains far smaller than JT’s combustible business and has yet to become a comparable source of profit. Its next test is whether rapid volume and share gains can be converted into an international business with sustainable margins.
Outside Japan, Ploom’s position remains uneven. Its second-quarter share of the heated-products segment reached 1.9% in Italy, 3.6% in Poland, 7.1% in the Czech Republic, 5.2% in Lithuania and 8.1% in Slovakia.
Japan Enters a New Competitive Phase
Japan remains the clearest test of JT’s heated-tobacco strategy and one of the most developed markets for the category globally.
According to JT estimates, total Japanese tobacco industry volume declined 0.2% in the first half. Combustible volume fell an estimated 5.4%, while RRP volume grew 5.8%.
RRP represented 48.7% of total industry volume on a shipment basis, bringing Japan close to an even split between combustible and newer products.
JT substantially outpaced the wider category:
- JT’s Japanese RRP volume: up 29.1%
- Ploom volume: up 35.9%
- Ploom’s average heated-product share: 16.8%, up 3.7 percentage points
- JT’s total Japanese tobacco share: 41.1%, up 0.8 percentage points
JT’s presentation showed Ploom’s heated-product share reaching 18.3% in June, compared with 10.9% in January 2024.
Ploom’s growth far exceeded the 5.8% expansion of Japan’s overall RRP market, indicating that its performance was increasingly supported by share gains, rather than only by consumers moving into heated tobacco.
PMI’s comments during its own second-quarter earnings call provided further context. As 2Firsts reported on July 24 after listening to the full call, PMI said IQOS held about 68% of Japan’s heated-tobacco category at the end of the quarter, compared with 69% in the previous quarter, and acknowledged that JT had been gaining share before the latest excise adjustment.
PMI also said the April price increase had prompted some price-sensitive IQOS consumers to move from the higher-priced TEREA range to SENTIA.
The disclosures from both companies point to a market moving beyond category adoption alone. With heated tobacco approaching half of Japanese tobacco volume, competition is increasingly centred on brand share, price tiers and consumer retention.
Japan may also offer an early indication of how competition will develop as heated tobacco matures in other markets. Category growth remains positive, but established brands are increasingly competing for consumers already familiar with heated products.
International Markets Move in Different Directions
JT’s wider portfolio shows that global tobacco markets are not following a uniform transition path.
Turkey remained a market for combustible growth. JT’s total volume increased 10.7% in what the company described as a growing industry. Winston rose 17.1% and LD increased 15.9%, helping lift JT’s market share by 1.2 percentage points to 31.6%. Both volume and price mix supported revenue growth.
In the United States, JT’s volume increased 0.7% despite a continued decline in the wider cigarette industry. LD volume rose 32.6%, helping the company increase its cigarette market share by 0.2 percentage points to 8.6%. JT’s growth came from taking share within a contracting category.
The United Kingdom presented the opposite picture. JT’s total volume fell 12.4%, which the company attributed to industry contraction following excise-led price increases and high illicit-trade volumes. Its market share remained stable at 43.7%, but pricing was not sufficient to offset the decline in legal-market volume.
Across Western Europe, combustible volume declined 2.8%, while RRP volume increased 27.4%. JT reported RRP growth in Germany, Greece, Italy, Portugal, Spain and Switzerland, supported by both heated-product category expansion and Ploom share gains.
The regional contrast is central to JT’s strategy. Some markets still provide cigarette volume growth, others offer share gains within declining categories, and mature markets such as Japan are moving rapidly towards heated tobacco.
JT as a Traditional Tobacco Transition Case
JT offers a clear view of how a traditional tobacco company is adapting without stepping away from cigarettes.
Combustibles remain its main source of volume, pricing and earnings, while heated tobacco is its leading RRP investment priority. Ploom is gaining share but is still building international scale, and Japan shows how competition changes once a new category approaches mass-market penetration.
JT’s development points to a prolonged transition rather than the rapid replacement of cigarettes. The traditional business remains commercially central while heated tobacco is built as a second growth platform.
Higher Forecasts Still Depend on Pricing
JT raised its full-year tobacco core-revenue forecast by ¥184 billion ($1.12 billion) to ¥3.555 trillion ($21.72 billion), representing expected reported growth of 12.8% and constant-currency growth of 6%.
Its tobacco adjusted operating profit forecast was increased by ¥81 billion ($495 million) to ¥1.087 trillion ($6.64 billion), with constant-currency growth expected at 11.2%.
The company left its full-year volume assumption unchanged, forecasting total tobacco volume between flat and a decline of around 1%. The upward revision was driven primarily by stronger combustible pricing rather than a higher shipment outlook.
JT expects slower growth in the second half, citing lower industry volume and less favourable year-on-year comparisons. Foreign-exchange movements are also expected to remain supportive of reported earnings.
The first-half results leave JT with three central tests: how long cigarette pricing can continue to offset pressure on volumes, whether Ploom can establish meaningful scale outside Japan, and whether the RRP business can reach its 2028 profitability target.
For further coverage of international tobacco companies and developments across the global tobacco and nicotine industry, continue to follow 2Firsts.
Cover image: JT, 02_2026 Second Quarter Results (CFO Presentation).
Disclaimer
This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.
Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.
The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.
This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.
Copyright Notice
This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.
No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.
For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.
AI-Assisted Translation and Editing Notice
Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.
Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.
