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

Introduction

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 Dear Colleague, into your new role and allow you to discover who we are, what we do and how we do it. Welcome to JTI. I am delighted that you As well as giving headline facts and figures have chosen to join such an exciting and in about our business, our brands and our many ways unique company. structure, you’ll learn about the principles that steer us. Don’t worry if the You are now part of an organization of guide doesn’t answer all your questions; 40,000 employees, from 110 nationalities help is always at hand – so feel to ask. and working across 77 countries(1). One thing you’ll discover about JTI is Since our creation in 1999, significant that people enjoy working together and changes have turned us into a genuinely supporting each other. We are one team. international company. We are extremely proud of our rich heritage and diverse I wish you an enjoyable, rewarding and workforce, which is key to ensure long- long-lasting career with JTI. 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. Howard Parks Senior Vice President, Human Resources Employees are our single biggest investors and I am confident that by nurturing (1) Numbers correct as of December 2017

Table of contents

Introduction Leading __ Our leadership JTI today __ Governing the business __ JTI milestones __ JTI facts and figures Functions __ A structure that works JTI history __ Marketing & Sales __ Global Supply Chain Brands and products __ Human Resources __ Our brands are the signatures of success __ Finance __ Flagship Brands __ Legal & Regulatory Affairs __ Roll Your Own and Make Your Own __ Information Technology (RYO/MYO) __ Research & Development __ Other Products (OTP) __ Corporate Strategy __ Reduced-Risk Products __ Reduced-Risk Products __ The story from seed to pack __ Business Development __ Corporate Development Fundamentals __ A company with a clear vision Going forward __ Our values __ Employee experience at JTI __ Core behaviors __ 4S management principle __ Our strategies __ Our sustainability efforts __ Our core principles

Home JTI today

JTI history Brands and products Fundamentals

Leading Functions Going forward

JTI today

New JTI headquarters in Geneva,

JTI today The facts and milestones that make us who we are

JTI milestones Closer to industry roots

Our brand heritage goes back to the 18th In 2009, the JT Group acquired part of the century. However, we are a relatively young worldwide business of Tribac Leaf Limited company in the global , (a company that trades tobacco in Africa) as where east meets and experience well as the two Brazilian companies active in supports innovation. the tobacco business, Kannenberg (a tobacco producer) and KBH&C (a company that Where we come from processes and sells Kannenberg products); it also set up a venture with two leaf Our company was formed in 1999 when suppliers in the US (Hail & Cotton Inc and JEB Tobacco Inc. purchased the International). These acquisitions reflected the international tobacco operations of the strategic importance of ensuring adequate US multinational R.J. Reynolds for supplies of high quality leaf products to support USD 7.8 billion, creating a new company: the Company’s business growth ambitions. JTI – International. Broadening our earnings base A major acquisition Since 2009, we have regularly broadened In 2007, Gallaher, a FTSE 100 business, was our earnings base to ensure future sustainable acquired by Japan Tobacco Inc. for GBP growth through organic expansion and 9.4 billion, doubling our combined employee acquisitions. These acquisitions were population. At the time, this was the largest performed both in the traditional combustible foreign acquisition by a Japanese company. area and Reduced-Risk Products category. And we will continue to do so to reach our Flagship Brands ambition to be the #1 international tobacco company. In 2007, JTI launched its new Flagship Brand portfolio, with a key focus on investment in brand equity, product quality and geographical coverage.

JTI facts and figures

Japan Tobacco International (JTI) is a • Adjusted operating profit(3) at constant member of the Japan Tobacco Group of currency reached USD 3,219 million, Companies (JT), a leading international growing by 4% vs the previous year. tobacco manufacturer. JTI’s headquarters On a reported basis, adjusted operating are located in Geneva, Switzerland. profit grew 1.4% to USD 3,138 million due to currency fluctuations. Our numbers at the end of 2017 • Since 2009, we have reduced our • JTI employs approximately 40,000 environmental impact by cutting (4) people in 77 countries. emissions of CO2 by 15% , reducing energy consumption by 8%(5), reducing • JTI has 400 offices, 27 factories, 5 R&D water consumption by 6% and centers and 5 tobacco processing facilities reducing by 24%. around the world. • We have reduced injury rates across • Our products are distributed in JTI manufacturing and market operations 130 countries. by 24%(6) and are committed to providing a safe workplace for our employees. • JTI is a multinational company, with more than 110 nationalities globally, • We are the profit growth engine of the 69 nationalities in the Geneva Japan Tobacco Group, and generated headquarters, and 12 nationalities among 81% of the Group’s volume and 60% our 16 Executive Committee members. of its adjusted operating profit in 2017.

• 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.

(1) Including fine cut, , pipe tobacco and 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 (4) profit + amortization cost of acquired intangibles + adjustment items (income and costs)* 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. Home JTI today

JTI history Brands and products Fundamentals

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JTI history

Tobacco plants, Zambia

JTI history

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

Timeline

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

The assets related to the tobacco business of Mighty in the 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 S.C, the Ethiopian state tobacco company

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

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

2015 Brazilian distributor Fluxo is acquired

Arian Tobacco Industries in 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

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

Ploom, a based on vaporization technology, is launched

Acquisition of Al Nakhla, an -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

2005 Acquisition of CRES Neva Ltd. (Russia)

Glamour launched (Russia, , )

2001 Gallaher acquires 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 , 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 launched

1956 launched

1955 Benson & Hedges is acquired by Gallaher

1954 launched

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

1913 launched

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

1891 The Moscow-based Ducat factory is founded

1879 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,

1852 Uritsky factory founded (future “Petro” factory)

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

1842 Kremenchuk factory is founded

1784 Austria Tabak is founded by Emperor Joseph II Home JTI today

JTI history Brands and products Fundamentals

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Brands and products

Brands and products Our brands are the signatures of success

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 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 .

Brands and products Flagship Brands

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

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.

Winston First introduced in the 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.

Camel Launched 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.

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.

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 and selected markets beyond. Today, MEVIUS is the #5 cigarette in the world and the #1 Filter Brand. MEVIUS is constantly exploring new taste segments and other product innovations.

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.

Benson & Hedges Established in 1873 by Richard Benson and William Hedges, in Old , London, the company was dedicated to the craft of manufacturing high quality cigarettes, and was awarded a royal warrant as supplier to the of , 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 .

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.

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.

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

Brands and products Roll 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 , , Fleur de Pays and Domingo.

Roll Your Own (RYO) Make Your Own (MYO) RYO refers to a rolled cigarette made from MYO refers to cigarettes made by filling a filter fine-cut tobacco and . tube with cut tobacco designed specifically The cigarette can be hand or machine rolled for that purpose. Making the cigarette requires and with or without filters, depending on tubes and a tubing machine. the consumer’s taste. Usually sold in pouches, Usually sold in tins or bags, it is also available it is also available in tins in some markets. in buckets in some markets.

Brands and products Other Tobacco Products (OTP)

Cigars Snus

JTI’s business is driven by Hamlet. Snus is a Swedish oral smokeless product Launched in the UK in 1964, Hamlet remained that dates back to the 1600´s and which is the UK’s best selling cigar for more than placed under the upper lip. It’s made from 40 years. finely selected ground tobacco together with water, salt and . Snus is sold in cans and in various different formats; pre-packed portions that come in bags that vary in size and type, or in loose format where you the tobacco between your fingers.

Water Pipe Tobacco

Through the acquisition of Nakhla in 2013, Its immensely popular Two Apples flavor and JTI has added a new category to its products: wide variety of other are preferred the water pipe tobacco, typically a made choices by adult consumers across the world, of the finest Virginia leaf and a sugar/glycerine with exports to over 60 countries worldwide. mix, which when smoked through a waterpipe Its rich flavor, long lasting taste and smoother device creates a sweet smoking taste experience has ensured that it remains experience. the global market leader in the Two Apples segment. 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.

Brands and products Reduced-Risk Products

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 of tobacco and do not produce .

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

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

Introduction to E -Vapor

Electronic cigarettes create an inhalable Our product portfolio consists of: (sometimes referred to as vapor) created by electrical heating of a - • Logic Power & Logic Curv: containing liquid within a cartridge of Two modern ‘cigalike’ ranges. the device. • Logic Pro: In 2014, we acquired Zandera Ltd, an A ‘closed tank’ system with e-liquid electronic cigarette company operating the capsules in different flavors E-Lites brand in the UK & Ireland (and and nicotine strengths. subsequently launched by JTI in ). Then, in 2015, we acquired Logic, the • Logic LQD: largest independent e-cigarette company An ‘open tank’ system with in the USA. a range of e-liquids in precision fill bottles, also available in different flavors and In 2016, we migrated all E-Lites products to nicotine strengths. 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, , , Germany, , , Russia, and .

Introduction to Heated Tobacco Products

Sometimes referred to as T-Vapor, these are PLOOM TECH was launched in Japan inhalable heated non-combusted tobacco (Fukuoka) in March 2016. The product is products. currently available in Switzerland, Japan, and online. It is also sold in Canada and the We entered the T-Vapor category in USA – in the USA, PLOOM TECH is sold partnership with Ploom Inc. in 2011 and by Logic Technology Development LLC, then acquired the rights for the Ploom brand a member of the JT Group, under the name in 2015. We are excited about our new “Logic Vapeleaf”. generation of tobacco vapor product: PLOOM TECH. RRPs are part of the tobacco industry’s continuing evolution and represent PLOOM TECH uses our unique vapor an important step for the JT Group. technology to deliver tobacco taste without By constantly refining our business model directly combusting the tobacco. This allows and evolving our strategies, we are laying consumers to enjoy tobacco taste and the foundations for continued growth aroma without the attributes that come from of the Group. 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.

Brands and products The story from seed to pack

Creating distinctive brands of cigarettes is This is what we do with great expertise, a complex and skilled practice. thanks to our well-defined processes and our refusal to compromise on any aspect of Every brand of cigarettes is composed of providing our markets the products that adult different grades, variants and qualities consumers demand. of tobacco and maintaining that consistency of product – from raw materials that vary There are essentially six stages to producing from season to season – is a considerable our finished products: achievement.

1. Tobacco growing 2. Tobacco curing

Tobacco is grown in more than 120 countries Immediately after harvesting, tobacco is cured around the world in most climates. The three so that it can be further processed. There are typically grown are: Virginia, three main methods of curing tobacco but all Oriental and Burley. 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.

3. Grading, buying and processing 4. Primary processing

The quality of tobacco depends not only on After the tobacco is stored and aged, it is how it is grown, but also the curing, aging, shipped to the cigarette factories where it and fermentation that take place after harvest, goes though the primary processing according which bring out the natural flavors of the leaf. to the blend formulas used for making various It’s a complex process, which is why expert types of cigarettes. This process includes graders and buyers are an essential part of our blending, conditioning, casing, cutting, drying supply chain. Before tobacco is sent to the and top flavoring. During the cutting phase, factories to be made into cigarettes, it is the tobacco is cut into thin strands called processed to remove unwanted parts, ‘cut filler’ and placed in silos or bins, where it such as the central stems from the leaves, is then ready to be made into cigarettes. then packed into cases.

5. Making the cigarette 6. Packing the cigarette

Most cigarettes are produced by highly Cigarettes are transported to the packing complex machines, the most advanced of machine where they are channeled in the which can produce up to 20,000 cigarettes correct arrangement, or ‘collation’, e.g. 7–6–7. per minute. The cut and conditioned tobacco, For their protection, this block of cigarettes is known as cut filler, is wrapped in cigarette wrapped in an innerliner – usually aluminum paper by machine to produce a ‘continuous or aluminum-coated paper. In parallel, stacks cigarette’. This is then cut to the appropriate of unfolded and ready cut cigarette packs, or length and the filter is added and wrapped ‘blanks’, are fed to the packer. Glue is applied to the cigarette rod with tipping paper. 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. Home JTI today

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Fundamentals

Employees in JTI headquarters in Geneva, Switzerland

Fundamentals Where we are going and how we plan to get there

A company with a clear vision

Every day, every employee at JTI makes a • Accelerate the growth and raise the bar choice about their level of passion and for our Reduced-Risk Products category dedication. We want to give all our employees the strongest reasons to be connected to JTI, • Prioritize our investments and we want to be clear about why we do what we do. • Improve the way we work, which includes excellence in talent management This is why JTI has established a clear vision, a forward-thinking look at what we want to We know that we work for a controversial achieve, our reason for being and the path industry and that our products raise concerns forward. for some, yet our products are legal and we are committed to providing consumers Our vision includes our ambition and our freedom of choice. Part of our responsibility purpose. in satisfying consumers is responding to the growing demand for Reduced-Risk Our ambition is to be the #1 international Products that may provide less harmful tobacco company by 2030, by volume. health effects.

Our purpose is to passionately provide After all, integrity matters a great deal to JTI. moments of pleasure, to support consumers’ This is why “to make a positive difference freedom of choice and to make a positive in all we do” remains at the heart of our difference in all we do. purpose. We will never seek to become #1 at any cost, and we remain committed to Knowing where we want to go is a key becoming the most successful and the most motivating driver to fulfill our vision and responsible tobacco company in the world. ambition. In all that we do, we take into account Our ambition is time-bound, specific and the needs of our consumers, shareholders, achievable. To get there, we will apply the employees and wider society so we can following strategic ingredients: fulfill our responsibilities and exceed their expectations. • Pursue an even more aggressive growth agenda within the organic business in In this section of the guide, we clearly set out which we currently operate the ways in which we operate daily.

Our values

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:

Winning attitude Better together • We are driven by success • We work as “One Team” • We are passionate, committed, • We are harmonious, respectful, dedicated humble, collaborative, consensus- driven and embrace diversity

Committed to quality We do the right thing • We put the consumer at the • We act responsibly to drive heart of what we do sustainable success • We seek operational excellence and • We are responsible, ethical and simplicity – quality fit for purpose trustworthy

Employee experience at JTI

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.

Long-term success – At JTI we Care and respect – JTI is a workplace with embrace a long-term horizon: true commitment towards its employees, where we act today with tomorrow in our employees show the same dedication in mind. JTI’s long-term commitment return. Each individual is treated fairly and with means that we consistently invest respect. We are team players rather than solo in our future always balancing artists and we listen to and look out for each responsibilities towards consumers, other. You can be yourself with us. employees, communities, and other stakeholders. Stability and financial strength are the cornerstones of our success. 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.

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 you will quickly feel as you begin your journey at JTI.

Our core behaviors

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.

Get things done Empower people • Take ownership • Develop people • Be accountable • Provide feedback • Make decisions • Communicate openly • Drive results • Respect others

Challenge status quo Act responsibly • Innovate • Think long-term • Be creative & agile • Impact positively • Find solutions • Act with integrity • Make it simple

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

Our strategy is underpinned by the 4S It was 4S thinking that informed JT’s decision management principle: a corporate philosophy in the late-1990s to expand its tobacco that has guided the JT Group’s approach to business beyond the Japanese domestic managing its business since 1995. market, resulting in the acquisitions of RJ Reynolds International and Gallaher. It is ‘4S’ best translates into four ‘satisfactions’. this same approach that ensures we focus The 4S model helps us to achieve sustainable on long-term growth, not short-term profit growth by carefully balancing the needs and opportunities, and informs many of the interests of our shareholders, consumers, strategies that have enabled JTI to become a employees and wider society. leading international tobacco company. It is a principle which remains at the heart of our parent company’s approach to business and without it, JTI might not exist.

Shareholders

Consumers

Employees Society

Our strategies

JTI aims to be the most successful and In Reduced-Risk Products, we will enhance responsible tobacco company of the world. our consumer offering and presence in As a result, JTI remains fully committed to this rapidly evolving category, both in terms generate sustainable long-term growth, both of geographies and products, focusing in conventional and Reduced-Risk Products. on informed choice and by anticipating consumer needs. In traditional tobacco products, we will seize market share opportunities through continued In the area of talent management, we will investments behind our people, brands and continue to deploy a series of programs capabilities. We have made decisive acquisitions to enhance our people empowerment in Asia and more recently in Ethiopia that and accountability, which are key to boost will support our footprint expansion and our business agility, innovation and complement the GFB efforts in markets that speed-to-market. matter. We will keep pursuing relevant business development opportunities going We believe that by focusing and prioritizing forward. 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 sustainability efforts

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

1. Respect human rights 1. Exceed expectations with products and services: offer consumers in all our 2. Enhance our social and environmental markets an informed choice that includes impact Reduced-Risk Products, and access to products in a modern and easy way 3. Exercise good governance and business standards 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 core principles

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 5. Accommodation between smokers Smoking is a cause of serious diseases and non-smokers including lung , coronary heart Many people have concerns about disease, emphysema and chronic exposure to environmental tobacco bronchitis. JTI supports efforts to advise smoke. All smokers should show smokers accordingly. Everyone should consideration for those around them, and be appropriately informed about the should not smoke when children are health risks of smoking. present. JTI advocates tailored, practical and effective solutions that separate 2. Transparency about our products smokers and non-smokers while Smokers want to know what it is they are accommodating the legitimate interests smoking. JTI provides information about of both. Further to this, we are committed the ingredients it uses in its products to developing and bringing to market on the jti.com website. JTI also provides Reduced-Risk Products (*) that also have ingredient information when requested the potential to reduce the impact of by governments, but asks that its trade smoking to others. secrets are respected and protected. 6. Respect for local norms and cultures 3. Reduced-Risk Products JTI is respectful of each country’s culture, We believe products that do not involve norms, legislation and decision-making combustion and do not produce tobacco process. However, JTI has a right – and smoke are products with the potential to an obligation – to express its point of view reduce the risks associated with smoking. regarding regulation that affects JTI’s We are committed to developing and products and the tobacco industry. bringing to market Reduced-Risk Products JTI actively seeks open and transparent (*) that meet consumer expectations. dialogue with governmental authorities We will help adult consumers to make around the world, and where possible, informed choices by providing factual offers alternative solutions if issue is taken information acquired through scientific with a government’s proposed course assessment about the products they of action. may wish to use.

4. 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.

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

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Leading

Employees in JTI headquarters in Geneva, Switzerland

Leading Governance and management

Our leadership

Our Executive Committee (Excom) is made Their shared objectives are to provide up of 16 members, aligned in two different strategic leadership and direction to the areas of activity, namely: Operations and business and to ensure decision-making Functions. which supports long-term profitable topline growth. They achieve these objectives by working with speed, visibility, transparency and governance.

CEO

Business Development (BD) & COO Corporate Strategy (CS)

Marketing & Sales (M&S) Operating to strengthen JTI competitive Corporate Development advantage through integrated sales and • Public Affairs marketing capabilities • Corporate Communications • Fiscal Affairs & Anti-Illicit Trade • Corporate Social Responsibility Research & Development (R&D) Innovation for conventional and emerging products; product and Human Resources (HR) packaging development; quality assurance and product maintenance • Corporate Compliance • Corporate Security Markets grouped in 5 regions

• Americas Legal & Regulatory Affairs • Asia Pacific (LRA) • (EE) • Western Europe (WE) • Middle East /Near East /Africa / Worldwide Duty Free (MENEAT & WWDF) Reduced-Risk Products (RRP)

Transformation

Finance, IT & Digital Strategy

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 (, USA) • Europe (Turkey, Serbia) Manufacturing regions • Asia • Eastern Europe • Gostkow

• Middle East / Near East / Africa / Turkey • Western Europe / Americas

Governing the business

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.

Code of Conduct J-SOX

Sets out the high ethical standards we are all Japanese legislation designed to improve expected to meet when dealing with each governance and financial reporting standards. other, our customers, our suppliers and society at large. Global Environment, Health and Safety policy and standards Operating Guidelines The Company’s environmental impact and Specify authority levels applicable to occupational health & safety is managed all transactions. The Business Approval according to our own exacting EHS standards. Proposal (BAP) is the enabling tool of These standards set out employee behavior the Operating Guidelines. and performance expectations that apply to all JTI operations. Home JTI today

JTI history Brands and products Fundamentals

Leading Functions Going forward

Functions

Employees in JTI headquarters in Geneva, Switzerland

Functions Working together to ensure global success

A structure that works

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

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

Marketing & Sales

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.

What we do

Deliver powerful insights Secure the most efficient and competitive We support JTI’s strategic growth agenda Route to Consumer through fact-based consumer, customer, We ensure that we deliver the most category and competitive insights with clear competitive and efficient Route to Consumer implications for JTI. in any type of environment from the time our products leave the factory till they are in Boost & prolong the equity of our brands the hands of our consumers. Being 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.

Global Supply Chain

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

What we do

Purchase materials process of analysis, review and revision Global Supply Chain procures all tobacco to help ensure that JTI’s range of products and non-tobacco materials (NTM) that are can respond to the ever-changing demands needed to make our products. of our consumers.

NTM include, for example, cigarette paper, We support the long-term security of our tipping paper, alu-foil or pack materials, and leaf supply by working towards tobacco are manufactured into finished goods in one production that is economically and of the factories, ensuring the right quality environmentally sustainable and by ensuring and cost. that we maintain a responsible, credible and sustainable presence in the countries When it comes to tobacco leaf, Global and communities we work with. Supply Chain ensures a reliable, long-term We continuously develop and implement supply of high quality tobacco leaf at a holistic, long-term and actionable best cost. Stability of this key ingredient in corporate responsibility approach, with our products is achieved through close projects that address the social and collaboration with partnering functions, economic challenges in the communities optimal management of our tobacco leaf where we operate. As a result, we are buying and processing operations, guided by our Agricultural Labor Practices as well as effective partnerships and Program that identifies areas for strong relationships with leaf sourcing improvement on social, labor and communities. environmental matters in our value chain.

We source and process green leaf Manufacture and distribute our products from more than 36 countries across four Global Supply Chain is responsible for major geographic regions: Africa, Asia, producing all JTI ready-made cigarettes, Europe and the Americas. Around 50% of Reduced-Risk Products (RRP) and our tobacco requirements are purchased Other Tobacco Products (OTP), according directly through our own leaf operations, to product specifications developed and while the rest is bought through third-party provided by Research & Development (R&D). tobacco leaf merchants. At the center of The main task is to deliver quality finished our leaf business model is an emphasis on goods to the sales organizations across JTI, working closely with tobacco growers. on time, and in line with demands and We do this by managing our relationships consumer expectations. with tobacco farmers, grower associations, and representative groups, while our Following production, the Customer Service dedicated field technicians provide support and Global Logistics teams are responsible and advice on raising the best crop. Long for distributing the finished goods to both lead times, seasonality, and the inherent our sales forces and our customers. instability of farming require a continuous

Human Resources

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.

What we do

Talent Management Organization Design (OD) We maximize the potential of our people We drive OD to ensure it is fit for the current through excellent Talent Management. and future business environment. We strive to ensure that our OD solutions We: enable JTI strategy and facilitate talent development while ensuring organizational • coordinate the recruitment of internal and efficiencies. external candidates to find people with the necessary skills, knowledge and attitude We: to deliver the Company’s objectives, whilst also selecting employees who will make • perform organizational diagnostics a positive contribution to promoting JTI’s and validate it vs. company strategies values, both now and in the future; and external benchmarks;

• coordinate the performance appraisal • take inventory of all the tasks, functions, process that represents a key tool to drive skill sets and goals of the Company, and measure performance and is applied and develop recommendations regarding consistently at a global level; organizational structure, internal/external people resources and skills utilization, • provide and coordinate training and as well as planning for and nurturing JTI development solutions to improve the internal resources to enable JTI strategies. performance of our employees in their current position as well as prepare Diversity & Inclusion (D&I) them for future challenges; D&I is a new key strategic priority on our HR agenda. It reflects the Company’s • conduct regular talent reviews to identify commitment to provide fair treatment, potential internal candidates to fulfill key access, opportunity, and advancement for positions and future vacancies; all regardless of gender, age, ethnic background, sexual orientation or religious • provide a standard set of assessment tools beliefs. We are currently designing a across the Company to ensure equal comprehensive program and building the treatment and the comparability of results infrastructure in order to embed D&I in across all employees; all formal and informal business processes.

• provide employees with growth Corporate Compliance opportunities. We help employees at JTI to make the right decisions about how we do business, Talent Attraction and Employer Brand ultimately protecting their and JTI’s We leverage the value of the JTI Brand reputation, company profitability and to engage current and future employees. shareholder value.

We: To achieve this, we:

• provide the necessary tools to position • Implement and monitor Compliance and differentiate JTI as an employer, programs to ensure we meet our legal and to increase the attractiveness of JTI obligations and manage Compliance risks as a place to work; effectively. These programs include; Know Your Customer/Supplier, Anti-Bribery and • conduct regular global surveys across Corruption, Anti-Money Laundering, Gifts, JTI to measure the engagement of Hospitality and Entertainment, Sanctioned our employees and take the necessary Party Lists and Conflicts of Interest actions to continuously improve our Company; • Maintain and make regular updates to our Code of Conduct and related • compare ourselves to other employers by Compliance policies participating in HR benchmarking and certification schemes all around the world; • Provide ongoing communication and training activities so that employees are • develop a long-term attraction strategy aware of their Compliance responsibilities that understands and addresses and how to act responsibly and with the requirements of future employees. integrity in all that they do

Rewards • Conduct a Compliance Survey periodically We develop Rewards to shape talent to gain feedback on the level of and performance. embeddedness of standards of ethical behavior throughout JTI and identify We: areas for improvement

• design, communicate, and implement • Manage an independent and confidential Rewards solutions that enhance employee reporting channel called “Your Voice” performance and, therefore, the for employees and business partners to performance of the Company overall; report concerns, without fear of retaliation. Conduct investigations into reported • ensure competitiveness through systemic allegations and make recommendations to external benchmarking, taking into local management for appropriate follow consideration the industry specific needs up actions, as needed. of a global tobacco company; Corporate Security • make sure we are perceived internally We identify and mitigate threats to our as fair and equitable, and we strive for employees, facilities, products and reputation maximum clarity and transparency. 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.

Finance

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.

What we do

Performance Management Transaction Processing We collaborate with our business partners We process in excess of 5 million transactions to compile, assess and report on the planned per year through Business Service Centers and actual performance of JTI. Through located in Manchester, St. Petersburg and this process we also support local, regional, Kuala Lumpur. We continuously improve the functional and executive management who efficiency and effectiveness of end-to-end review expected and actual performance, transactional processes and act as the talent resource allocation, and support and fuel pipeline for the broader finance organization. decisions that drive the achievement of JTI’s performance targets. Financial Risk Management We are responsible for the development Decision Support of key programs that are designed We provide quality financial analysis and to mitigate JTI’s financial risk exposure. fact-based advice to our business partners Such programs address areas which include with the goal of ensuring the Company’s the management of foreign exchange, resources are appropriately allocated, funding and liquidity and tax compliance generate an optimal return on investment as well as insuring business operations and ultimately create incremental corporate against unforeseen losses. value. Corporate Financial Governance Accounting & Reporting We retain a custodianship role centered We deliver reliable financial reporting within on maintaining robust financial governance a framework of strong financial controls, principles. These principles include finance governance and cost-effective processes. and accounting related processes, J-SOX As part of this responsibility, we ensure that and internal controls and financial policies the transactions are recorded and financial and procedures. Additionally, we are statements prepared in accordance with the custodians of the Operating Guidelines International Financial Reporting Standards and related Business Approval Process (IFRS). Additionally, we ensure statutory (BAPs & MEMOs), which are key elements financial and tax reports are prepared and of our Corporate Governance framework. filed in compliance with applicable standards and regulations.

Legal & Regulatory Affairs (LRA)

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

What we do

Legal These mission-critical responsibilities also Legal provides guidance to the Company in apply to the development and navigating through a complex environment commercialization of new tobacco and of laws and regulations that govern how e-vapor products. SRA is directly involved we do business around the world. We work in the planning, development and production closely with our business colleagues to of new devices and their constituent parts understand their goals and agree on ways to ensure they comply with regulatory to reach them based on shared risk-benefit requirements before they are marketed. assessments. We also identify growth SRA also formulates and implements testing opportunities and ways to secure them, strategies, including toxicological testing such as by utilizing our expertise in and clinical trials, to ensure that new trademarks, patents and other forms of products do not increase health risks for intellectual property. consumers who choose to use them.

Scientific & Regulatory Affairs (SRA) SRA further contributes to the Company’s SRA ensures that JTI sells quality products growth by working with markets, regions and that comply with all relevant laws governing other functions to shape the operating the use of ingredients and materials. All environment. We proactively monitor and ingredients and materials used in our products report on regulatory developments affecting are thoroughly evaluated by SRA using a our products. We also lead the creation of variety of means, including a comprehensive company positions and supporting toxicological assessment. SRA is responsible documentation on product-related topics for filing ingredient submissions, product and issues, engaging directly with regulators registrations, and other information with and policy makers to ensure our views government regulators as required by law. are heard and considered before new regulations are adopted.

Information Technology

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.

What we do

The Business Technology Services (BTS) and applications support through the BTS is IT’s business-facing organization. Its role Global Service Desk. The team also provides is to partner with respective business Infrastructure and Operations Services counterparts, understand the objectives of the including Networks, Data Centers and various functions and regions, and to define Cloud platforms integration to all Markets, together with them the systems, processes and Factories and Corporate Business Functions. technical solutions needed to support them to achieve these objectives. Information Security Information Security is concerned with The Global Development Center (GDC) ensuring that the people who use Company The GDC’s role is to establish JTI’s strategic information understand the value it has to direction on business applications development, JTI’s business. Information can only be project management, and training for all effectively protected through a combination of global business applications. The team is also technical measures, responsible behavior and responsible for improving JTI decision making appropriate practices. Information Security is capabilities through analytics and Business therefore everyone’s responsibility. Intelligence and for managing all accounts and roles of global applications (SAP, Siebel, etc.) Our aim is to ensure: to ensure access to information and in • Confidentiality: information is accessible compliance with internal controls as defined only by authorized people who need by J-SOX. the information

The Global Technical Center (GTC) • Integrity: information can be modified The GTC provides every employee with only by people who are authorized to do so a Digital Workplace environment including as part of their job responsibilities personal computers, mobile devices and • Availability: information is accessible by collaboration tools as well as 24x7 technical those who need it when they need it

Research & Development

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.

What we do

Product development competitiveness via enhancing expertise in To secure long-term competitiveness, we state-of-the-art printing techniques and new ensure our products are of the best possible materials, while optimizing costs. quality, innovative, fully compliant, and at optimum cost. To meet JTI commercial Quality assurance and requirements, we closely collaborate with product maintenance Marketing, Global Supply Chain, Global Quality assurance for traditional and Reduced- Reduced-Risk Products and other relevant Risk products is another critical element functions to develop new products and of R&D activity. Maintaining product quality improve existing ones, covering Ready in a changing environment (e.g. crop-by- Made Cigarettes, Reduced-Risk Products crop quality change of tobacco) requires and Other Tobacco Products categories. very careful attention to all elements of our product. To guarantee consistent product Our R&D Product Technology Center in quality, the team of highly skilled scientists Trier has full technical capabilities to enable and engineers performs evaluations, analyses development of our entire tobacco product and certification of all materials and finished portfolios and testing of innovative solutions goods in our in-house laboratories. In addition, prior to commercial launch. Similarly, the they do in-market product monitoring to Reduced-Risk Products Technology Center in ensure competitiveness of JTI brands. Weybridge enables this for non-combustible, novel products such as e-cigarettes and Innovation for the future heated tobacco products. To satisfy JTI’s commercial requirements and deliver on long-term strategies, we actively Packaging development explore and develop new technologies applied Based on designs developed by Marketing, to both traditional and Reduced-Risk Products we create graphics for all our packaging. that answer our consumers’ wide range of We ensure design consistency throughout needs. We work seamlessly as one team with the world, by building in all regulatory and JT R&D to fully optimize internal knowledge commercial requirements on to a tiny surface and expertise, to secure best in class know- of the package. We strive to maintain our how and enhance innovation capabilities.

Corporate Strategy

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.

What we do

Support in defining JTI’s strategic direction competitors’ results, major industry events, We identify and anticipate future trends, industry analysts’ perspectives and insights challenges and opportunities in existing core from other relevant industries and key businesses as well as in new business macro-economic developments. opportunities (e.g. emerging markets and Reduced-Risk Products). We provide internal Represent JTI in investor relations activities consultations and lead strategic projects We represent JTI in front of investors and such as forecasting models and scenario financial analysts in close collaboration planning. with JT investor relations. In addition, we coordinate, develop and further enhance Strategic planning processes JTI’s contribution to the JT Group’s investor We are responsible for designing, coordinating relations activities. This includes quarterly and improving strategic planning processes – results announcements, semi-annual investor e.g. Annual & Strategic Plan (A&SP) and Top events and annual report development. Down Target (TDT) – in addition to leading the development of strategic plan presentations Facilitate certain global activities/ to JT senior management. liaison with JT We facilitate global activities not falling Provide relevant fact-based business into specific functions and /or operations. intelligence We also act as a liaison office with JT’s We benchmark competitors’ results and strategic functions such as Tobacco Business strategies to challenge our business Planning, Corporate Strategy and Investor performance, as well as follow and report Relations.

Reduced-Risk Products

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.

What we do

New product development We also assess the product’s commercial We focus on the mid- to long-term development potential and we evaluate the relevance of our RRP business by preparing a strong of its technology. pipeline of new products. Additionally we are developing a framework To achieve this, we focus our strategic efforts and process for Reduced Risk Assessment in two main directions. which could enable us to benefit in the future from Reduced Risk claims associated with • Internally: we work closely with our R&D our products as approved by Regulators. experts and other functions to drive the timely development of new products. Product commercialization We develop appropriate marketing and • Externally: we work with leading technology commercial strategies to ensure our products companies to develop next generation are ready to be deployed in a market. products and continuously scout for new partnerships and acquisitions of innovative We coordinate a cross-functional effort in products that we believe adult consumers order to develop the brand, undertake product will enjoy. design and packaging development, create marketing campaigns, implement an optimal Product assessment manufacturing infrastructure, prepare detailed We work closely with colleagues in SRA commercial plans and assess regulatory and and R&D to ensure that all products are taxation regimes. thoroughly assessed from a safety, regulatory and performance perspective. In short, once a new product has been developed and assessed, we make it ready for a JTI market to sell it.

Business Development

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

What we do

Identify opportunities ensuring sustainability of supply of quality External growth opportunities can take a tobacco. In more recent years, the JT Group variety of forms. For example, entering into reached agreements to acquire numerous a contract manufacturing arrangement, Ready Made Cigarette (RMC) businesses whereby a third party will manufacture for including Haggar Cigarette & Tobacco Factory JTI or vice versa. Alternately, it could include Ltd, with operations in the Republics of Sudan acquisitions of other companies or more and South Sudan; Natural American Spirit complex projects such as licensing from Reynolds, ATI in Iran, a majority share arrangements or joint ventures, where in the Ethiopian manufacturer NTE, the assets two parties join resources in order to share of in the Philippines, and the business and financial benefits of KDM a kretek cigarette producer in Indonesia. such cooperation. Additions to the non-core business have included the Belgium company Gryson, which Oversee mergers & acquisitions strengthened JTI’s European portfolio of Business Development is responsible for Roll Your Own and Make Your Own tobacco merger and acquisition activities, including products; the Egyptian Al Nahkla Tobacco participating as a buyer in privatizations of Company, adding shisha to the portfolio. state tobacco companies. The most significant JTI has also made important acquisitions to illustration of an acquisition project is strengthen the Reduced-Risk Products undoubtedly the successful acquisition of (RRP) portfolio including E-Lites in the UK Gallaher in April 2007, for GBP 9.4 billion. and Logic in the US, as well as other smaller companies, and intellectual property (IP). As part of our commitment to deliver long-term growth, in 2009 JTI acquired leaf operations in Africa, Brazil and the US,

Corporate Development

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.

What we do

Public Affairs Corporate Sustainability Public Affairs is how we describe our approach JTI is committed to making a positive to engaging with external stakeholders, difference in all that we do. This means primarily regulators, decision-makers, doing the right thing and acting responsibly academia, Non-Government Organizations and with integrity for the greater benefit (NGOs). In Public Affairs, JTI is focused of society. We aim to make sustainable on providing workable solutions that address business practices an everyday part of how the needs of society, government and the we all think and do business at JTI. business. We are responsible for protecting JTI’s profitability, volumes, ability to compete The mission of the Corporate Sustainability and innovate, our intellectual property and department is to drive the sustainability brands. We do this through government agenda to secure responsible long-term relations and advocacy efforts. success. We engage with all relevant parts of the business to ensure we set and meet Corporate Communications challenging and meaningful sustainability Corporate Communications is responsible targets and report on progress. We support for ensuring JTI speaks with a unified voice the sustainability agenda overall in the areas to our internal and external audiences, of human rights; environment, health and ensuring consistency across the business safety; as well as community investment. and alignment with JT, our parent company. Within Corporate Communications, there Fiscal Affairs & AIT (Anti-Illicit Trade) is Internal Communications and External Tobacco products are taxed differently in Communications. many countries throughout the world. The Fiscal Affairs team’s mission is to support Internal Communications guides employee JTI’s markets in defining and achieving the behavior in line with JTI’s business priorities. most favorable tax environment to ensure In addition to communicating top-down sustainable profit generation. While defining messages from our leaders, the team partners the most favorable tax environment differs closely with functions and markets to develop from market to market, some core principles and implement communication plans and on tobacco taxation include ensuring that campaigns. Internal Communications bring taxation is predictable, reasonable, and allows JTI’s stories to life through the INSIDE family the Company to compete in the marketplace of channels: INSIDE Magazines, INSIDE and educate decision makers on the Online (our intranet), INSIDE TV (our internal consequences of ineffective or inefficient business television channel) and INSIDE taxation policies. Engage (our on-line community-based collaboration tool). Illegal trade hurts our business, undermines our brands and jeopardizes our ability External Communications is responsible to plan for the long term. Our focus is to for communicating with our external ensure that our products do not end up audiences, and ensuring that the Company in the hands of criminals, and that we protect is presented in a relevant and consistent some of our most valuable assets: manner outside the business. This includes our brands and trademarks. AIT’s vision is developing the messages, strategies and to reduce the amount of illegal tobacco tools to support markets, regions and across the globe and support JTI’s goal to be functions when they communicate on the the #1 international tobacco company by issues affecting our Company. External 2030 – helping JTI meet its legal obligations Communications communicates with our while protecting JTI’s reputation, personnel external audiences through a range of and financial interests. The AIT team works channels, including the Company’s website closely with law enforcement authorities (www.jti.com) and through traditional across the world, conducts research and social media channels. to quantify the impact of illegal trade and helps JTI’s markets better secure our supply chain. Home JTI today

JTI history Brands and products Fundamentals

Leading Functions Going forward

Going forward

Employees in JTI headquarters in Geneva, Switzerland

Going forward

Learn more Connect, share, collaborate.

We hope that this guide to the Company has Like all JTI employees with a JTI network aided you in gaining a better understanding account, you have access to our business of how we operate and deliver our business networking platform, called INSIDE Engage. success. The platform is designed to help JTI employees communicate openly with one You have made the right choice in joining the another, collaborate and share. JTI team. Now we hope that you will take every opportunity to enjoy your time with us, Engage allows you to create a profile, add while helping us to go forward and meet both colleagues to your network and join JTI’s and your future ambitions. communities, just like external networking websites.

Stay updated It is easy to get started on Engage – just click on the link on the INSIDE Online homepage. Visit our intranet “INSIDE” regularly. Take a few moments to explore the platform You will find it a great source of information, and find out what Engage has to offer you. providing you with tools to support your daily work. You will have access to: How can INSIDE Engage help you in your daily work? • global and local news, including job vacancies Networking: By updating your profile you have the opportunity to introduce yourself • policies and procedures and talk about your work experience, expertize and skills, so that colleagues can • global documents such as the Code of find you and ask for your support or advice in Conduct and JT Annual Report the area of your expertize. In return, you can also search for specialized skills or • corporate magazines and publications, knowledge. such as INSIDE Magazine or JTI At a glance Feedback: You can ask colleagues to give you feedback on a product, an idea, a • corporate identity guidelines presentation, an event, etc. Engage helps you (the JTI Brand), including templates 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.

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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)” • – @JTIcareers 2. and leave a review on Glassdoor – search for “Japan Tobacco International” under Companies. © by JT International SA, June 201

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