Key Point：
- Overall Performance: Q1 2026 consolidated revenue was KRW 1.70 trillion (approx. USD 1.156 billion), a 14.3% year-over-year (YoY) increase; operating profit was KRW 364.5 billion (approx. USD 248 million), a 27.6% YoY increase.
- Global CC (Combustible Cigarettes): The first quarter saw YoY growth in revenue, sales volume, and operating profit, with operating profit increasing by 56.1%.
- NGP (Next Generation Products / E-Cigarettes): Revenue stood at KRW 241 billion (approx. USD 164 million). Domestic stick market share (SoM) reached 47.4%. KT&G plans to initiate the independent overseas expansion of its international NGP business within the year.
- Shareholder Return: Canceled treasury shares worth approximately KRW 1.8 trillion (approx. USD 1.22 billion), accounting for 9.5% of the total issued shares.
According to the Q1 2026 financial data released by KT&G on May 7, 2026, the group achieved YoY growth in both single-quarter revenue and operating profit. The financial report indicates that the data growth was primarily driven by financial changes in segments such as global combustible cigarettes, next-generation products, and health functional foods.
(Note: USD figures in the text are estimated at an exchange rate of 1 KRW = 0.00068 USD and are for reference only.)
I. Financial Data Overview
- Revenue: 1Q26 consolidated net revenue was KRW 1.70 trillion (approx. USD 1.156 billion), up 14.3% YoY.
- Operating Profit: 1Q26 consolidated operating profit was KRW 364.5 billion (approx. USD 248 million), up 27.6% YoY. EBITDA was KRW 442.7 billion, with a margin of 26.0%, representing a 2.2 percentage point YoY increase.
- Net Income: Q1 net income was KRW 378.2 billion (approx. USD 257 million), an increase of 46.6% YoY; earnings per share (EPS) was KRW 3,666, a 54.7% YoY increase.
II. Business Segment Operational Data
Q1 total tobacco business revenue was KRW 1.16 trillion, up 17.0% YoY; operating profit was KRW 321.6 billion, up 27.2% YoY.
1. NGP (Next Generation Products) Segment and Strategic Adjustments
In Q1, the NGP business (including heat-not-burn products) showed an upward trend, and a new overseas expansion plan was established:
- Revenue Performance: 1Q26 total NGP revenue was KRW 241 billion (approx. USD 164 million), an increase of 51.6% compared to KRW 159 billion in the same period last year. Overseas revenue accounted for KRW 100.6 billion, while domestic revenue was KRW 140.4 billion.
- Volume and Market Share: Total global stick shipment volume was 3.52 billion sticks. In the domestic market, the NGP market penetration rate was 25.0%, and KT&G's domestic stick market share (SoM) reached 47.4%.
- International Business Planning: Financial guidance shows that KT&G plans to utilize its existing combustible cigarette (CC) business structure to initiate the independent expansion of its international NGP business within this year. The initial plan is to start direct business operations in key markets across APAC and Eurasia.
2. Global CC (Combustible Cigarettes)
- Shipment Volume and Revenue: Q1 global CC shipment volume was 18.01 billion sticks, up 15.0% YoY; revenue was KRW 559.6 billion (approx. USD 380 million), up 24.6% YoY.
- Profit Performance: Due to increased sales volume, upward adjustments in average selling price (ASP), and changes in costs and SG&A (Selling, General, and Administrative) efficiency, the segment's Q1 operating profit increased by 56.1% YoY.
3. Domestic CC (Combustible Cigarettes)
- Q1 domestic cigarette total sales volume decreased by 5.2% YoY to 12.11 billion sticks; revenue decreased YoY to KRW 352.9 billion. KT&G's share of the domestic cigarette market (SoM) was recorded at 68.8%, an increase from 68.4% in the same period last year.
4. Other Business Segments
- Health Functional Food (HFF): Q1 total revenue was KRW 332.6 billion, up 5.8% YoY; operating profit was KRW 27.9 billion, up 53.3% YoY.
- Real Estate: Q1 revenue was KRW 116.9 billion, up 16.4% YoY; operating profit was KRW 14.0 billion, up 34.6% YoY. Project revenue primarily originated from development projects in Anyang, Mia, and other locations.
III. Shareholder Return and Future Policies
- Share Cancellation Progress: KT&G has canceled treasury shares worth approximately KRW 1.8 trillion (approx. USD 1.22 billion), representing 9.5% of the total issued share capital prior to the cancellation. To date, the company has cumulatively canceled 22.4% of its shares (based on the end of 2023 baseline), meeting the cancellation expectations of the "2024-2027 Value-up Plan."
- Dividend Policy: The financial documents disclosed that KT&G plans to announce a new shareholder return policy in the second half of 2026, which is expected to focus on stronger dividends.
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