[0] Strategic Investment Builds JT's Business Platform in Fiscal 2000; Board of Directors to be Streamlined.Business Editors TOKYO--(BUSINESS WIRE)--May 19, 2000 Japan Tobacco Inc. (JT) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : 2914) today announced its consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: and non-consolidated results for the fiscal year ended March 31, 2000. Consolidated net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight jumped 12.8 % ((Y)494.7 billion) to (Y)4,371.2 billion ($41.2 billion(1)), boosted by revenue from a series of acquisitions including the former RJR RJR R.J. Reynolds RJR Thorny Skate (FAO fish species code) International (renamed as JT International), the food business of Asahi Asahi (朝日 or 旭) means "morning sun" in Japanese. It is a name of several places in Japan:
Symbolic gateway marking the entrance to Shinto shrines or other sacred spots in Japan. It has many variations, but it characteristically consists of two cylindrical posts topped by a crosswise rectangular beam extending beyond the posts on either side and a second Pharmaceutical Co., Ltd. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (2), one of the key performance measures for JT, climbed 16.7% to (Y)315.1 billion ($3.0 billion). Meanwhile, further strategic investment to build JT's business platform, and (Y)44.8 billion in additional depreciation and amortization expenses for trademarks and goodwill of acquired companies were the main factors behind a decline in profits. Rigorous attention to operational efficiency and cost reductions allowed JT to better the net income forecast made at the interim results by 5.6% and produce net income for the period of (Y)50.7 billion ($478 million), even though this period included an extraordinary loss of (Y)11.9 billion relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc an early retirement program introduced by JT as part of its drive to improve productivity. JT also announced its intention to reduce the number of board directors from 31 to 24 as part of its ongoing management reforms.
Summary of consolidated results
Unit: Billion Yen
FY3/1999 FY 3/2000 FY3/ 2000
(Actual) (Interim forecast) (Actual)
Sales including tax 3,876.5 4,330 4,371.2
EBITDA 270.1 293 315.1
Net income 74.6 48 50.7
Results by Business segment Tobacco Consolidated tobacco business sales increased by (Y)407.7 billion to (Y)4,024.4 billion ($37.9 billion) with sales volume of 386.0 billion cigarettes. This reflected the inclusion of eight months of overseas sales from the acquisition of the former RJR International, while price revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. covering the introduction of the tobacco special excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. in December December: see month. 1998 contributed to a fall in domestic tobacco sales volumes of 7.4 billion cigarettes to 250.1 billion cigarettes. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from this business fell (Y)12.3 billion to (Y)181.5 billion ($1.7 billion) primarily due to higher depreciation and amortization expenses for trademarks and goodwill acquired amounting to (Y)36.4 billion. Nevertheless domestic unit price gains combined with strict cost control outweighed the effects of the fall in domestic volume. Pharmaceuticals Pharmaceuticals sales rose (Y)44.0 billion to (Y)67.7 billion ($638 million), boosted by steady sales of anti-HIV drug Viracept Vir·a·cept A trademark for the drug nelfinavir. nelfinavir mesylate Viracept Pharmacologic class: Protease inhibitor Therapeutic class: Antiretroviral and sales from Torii Pharmaceutical Co., Ltd., which became a consolidated subsidiary on a profit and loss statement basis in fiscal 2000. This sales growth enabled JT to offset increased R&D spending and amortization of goodwill of (Y)4.6 billion, reducing operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in this business segment by (Y)1.1 billion to (Y)11.4 billion ($107 million). Foods With the food business acquired from Asahi Chemical Industry becoming part of consolidated operations during the period under review, sales rose (Y)44.2 billion to (Y)195.0 billion ($1.8 billion). Increased sales and marketing investment in food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. operations and goodwill amortization charges amounted to (Y)3.6 billion. These factors contributed to an increase in operating losses of (Y)5.9 billion to (Y)14.5 billion ($137 million). Other Businesses As a result of ongoing efforts to restructure other businesses and improve earnings, operating losses were reduced by (Y)800 million to (Y)1.7 billion ($16 million). Businesses in this category include agribusiness agribusiness Agriculture operated by business; specifically, that part of a modern national economy devoted to the production, processing, and distribution of food and fibre products and byproducts. , real estate and engineering-related operations. Fiscal 2001 outlook JT plans in the current year to continue to implement the steps outlined in its Mid-term Management Plan, announced in February February: see month. 2000, in order to achieve its strategic objectives. As regards the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. outlook, management today also issued consolidated sales and earnings forecasts for the fiscal year ending March 31, 2001. With the full-year inclusion of JTI JTI Japan Tobacco International JTI Jaan Tonisson Institute JTI Justice Teaching Institute JTI Joint Technology Initiative JTI Joint Training Institute JTI Job Training Initiative (EPA) JTI Joint TCIM Interface operations, management is anticipating that sales will increase (Y)208.8 billion to (Y)4,580.0 billion ($43.1 billion). EBITDA is expected to increase slightly to (Y)321.0 billion ($3.0 billion). Although domestic tobacco volumes are expected to steadily recover, recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. profit is likely to decrease to (Y)126.0 billion ($1.2 billion), and net income to (Y)35.0 billion ($330 million). The primary factor behind this anticipated decrease is continued strategic marketing and R&D investment for future growth in overseas tobacco, pharmaceutical and foods operations. Other factors such as a decrease in profit from the sale of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has may also contribute. Board changes JT also announced that it plans to reduce the number of board directors from 31 to 24. This move follows JT's initiatives to reform its management practices which were announced in February this year. Through such moves, JT aims to delineate clearly the responsibilities of board and operating executive, to empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems the operating divisions and also to tie rewards to management more closely to performance. This will allow JT to respond more effectively and rapidly to its changing business environment. By introducing these changes JT aims to enhance corporate value and to achieve the targets set out in the mid-term plan. Japan Tobacco Inc., with sales in the year ended March 31 2000 of US $41 billion (translated at a rate of US $1 = Yen 106.15), is one of the world's largest manufacturers of tobacco products and has three of the world's top five brands in its product portfolio. Since its privatisation Noun 1. privatisation - changing something from state to private ownership or control denationalisation, denationalization, privatization social control - control exerted (actively or passively) by group action in 1985, it has actively diversified diversified (di·verˑ·s its operations into pharmaceuticals and foods. This document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , and actual results might differ materially from these projections. (1) Figures stated in U.S dollars are translated solely for convenience at the March 31, 2000 rate of (Y) 106.15 per US $. (2) EBITDA = operating profit + depreciation + amortization.
Annual Financial Results for Year Ended March 2000
1. Key Feature of the consolidated statements of income
Mar. 31 Mar. 31 Difference
1,999 2,000
Net sales 3,876.5 4,371.2 494.7
Tobacco 3,616.7 4,024.4 407.7
Domestic 3,499.5 3,645.7 146.2
Overseas 117.1 378.7 261.5
Pharmaceuticals 23.7 67.7 44.0
Foods 150.7 195.0 44.2
Other businesses 85.3 83.9 (1.3)
Cost of sales 3,149.3 3,504.6 355.2
Gross profit 727.1 866.6 139.4
Selling, general and
administrative 558.2 712.6 154.3
EBITDA (1) 270.1 315.1 45.0
Operating Profit 168.8 153.9 (14.9)
Tobacco 193.8 181.5 (12.3)
Pharmaceuticals (12.6) (11.4) 1.1
Foods (8.6) (14.5) (5.9)
Other businesses (2.6) (1.7) 0.8
Non-operating
profit/loss (3.6) (14.4) (10.7)
(net)
Financing balance 5.0 (6.3) (11.3)
Recurring profit 165.2 139.5 (25.6)
Extraordinary
profit/loss (net) (5.0) (12.0) (7.0)
Income before income
taxes 160.2 127.5 (32.6)
Income taxes:
current 84.0 76.1 (7.9)
Income taxes:
deferred (5.5) (5.5)
Minority interests 1.4 6.1 4.6
Net income 74.6 50.7 (23.8)
Depreciation and
amortization (3) 101.2 161.1 59.9
Capital
expenditure 91.5 446.9 355.4
Free cashflow 0.0 (786.4) (786.4)
Free cashflow
(simplified) 84.2 (235.0) (319.2)
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Note 1: Including amounts equivalent to national tobacco excise
tax/national tobacco special excise tax levied on imported
tobacco products for domestic sale handled by TS (5 Tobacco
Services)
Note 2: EBITDA = Operating profit + Depreciation + Amortization
Note 3: Depreciation of tangible property, plant, and equipment +
amortization of intangible fixed assets + amortization of
long-term prepaid expenses + amortization of goodwill
Note 4: Free cashflow (simplified) = Net income + depreciation +
amortization - capital expenditure
2. Key Features of consolidated balance sheets
Mar. 31 Mar. 31 Difference
1999 2000
Current assets 1,389.3 1,245.0 (144.3)
Cash and deposits 500.1 353.9 (146.1)
Marketable securities 306.1 142.9 (163.2)
Trade notes receivable and
accounts receivable 72.7 104.8 32.0
Inventories 452.2 544.1 91.8
Deferred tax assets 0.0 13.9 13.9
Other current assets 66.3 89.0 22.6
Allowance for doubtful
accounts (8.2) (3.7) 4.4
Fixed assets 837.9 1,751.1 913.1
Property, plant, and
equipment 675.8 770.6 94.7
Intangible fixed assets 53.6 820.0 766.3
Goodwill 43.6 389.3 345.6
Trademark rights 0.0 367.5 367.5
Other intangible assets 10.0 63.0 53.0
Investments and other
assets 108.4 160.5 52.0
Investment securities 44.1 52.3 8.2
Long-term loan 1.4 2.8 8.2
Contribution to JT Mutual
Assistance Association 22.8 0.0 (22.8)
Long-term deferred tax
assets 0.0 74.4 74.4
Other assets 39.9 30.7 (9.1)
Foreign currency statement
translation adjustments 1.2 99.1 97.9
Total assets 2,228.5 3,095.2 866.7
Current liabilities 505.2 628.2 122.9
Trade notes payable and
accounts payable 99.3 112.7 13.3
Short-term bank loans 17.0 31.8 14.7
Current portion of
long-term debt 32.6 67.5 34.8
Other current
liabilities 356.1 416.1 60.0
Non-current liabilities 276.1 887.3 611.1
Bonds 1.6 273.1 271.5
Long-term debt 62.0 287.5 225.5
Allowance for liabilities
for
severance payments 169.8 178.0 8.1
Deferred tax liabilities 0.0 36.0 36.0
Other non-current
liabilities 42.6 112.5 69.9
Total liabilities 781.4 1,515.5 734.0
Minority interests 31.1 53.1 22.0
Total shareholders'
equity 1,415.9 1,526.5 110.5
Total liabilities,
minority interests,
and shareholder's
equity 2,228.5 3,095.2 866.7
Forecasted consolidated financial results in FY 2001
Unit: JPY in billions
FY2000 FY2001 Difference
(actual) (forecasted)
Net sales 4,371.2 4,580.0 208.8
EBITDA (1) 315.1 321.0 5.9
Operating profit 153.9 139.0 (14.9)
Recurring profit 139.5 126.0 (13.5)
Net income 50.7 35.0 (15.7)
Depreciation
and Amortization (2) 161.1 182.0 20.9
Net sales by segment
Tobacco 4,024.4 4,190.0 165.6
Pharmaceuticals 67.7 72.0 4.3
Food 195.0 220.0 25.0
Other businesses 83.9 98.0 14.1
Capital expenditure 446.9 139.0 (307.9)
----------------------------------------------------------------------
Note 1: EBITDA = Operating profit + Depreciation + Amortization
Note 2: Depreciation of tangible property, plant and equipment +
amortization of intangible fixed assets + amortization of
long-term prepaid expenses + amortization of goodwill
3. Non-consolidated Financial Statements
(1) Statements of income JPY in billions
Mar. 31 Mar. 31 Difference
1999 2000
Net sales 2,757.0 2,865.1 108.0
Tobacco 2,652.2 2,739.6 87.3
Pharmaceuticals 22.5 18.5 (3.9)
Foods 45.1 76.4 31.3
Other businesses 37.1 30.5 (6.5)
Cost of sales 2,178.0 2,263.8 85.7
Gross profit 578.9 601.3 22.3
Selling, general, and
administrative expense 432.8 470.5 37.6
Personnel 140.2 134.8 (5.3)
Advertisement 26.8 23.7 (3.0)
Sales promotion 86.9 83.1 (3.8)
Depreciation and amortization 10.4 40.9 30.4
R&D 36.9 42.1 5.1
Other expenses 131.4 145.6 14.2
EBITDA (1) 204.5 217.4 12.8
Operating profit 146.0 130.8 (15.2)
Non-operating profit (net) (4.6) 4.0 8.7
Recurring profit 141.3 134.8 (6.5)
Extraordinary profit/loss (net) (4.4) (17.7) (13.3)
Income before income taxes 136.9 117.1 (19.8)
Income taxes 69.2 46.6 (22.5)
Net income 67.7 70.4 2.6
Depreciation and amortization (2) 58.4 86.5 28.1
Capital expenditure 38.3 407.5 369.2
Note 1: EBITDA = Operating profit + Depreciation + Amortization
Note 2: Depreciation of tangible property, plant, and equipment
+ amortization of intangible fixed assets
+ amortization of long-term prepaid expenses
(2) Balance sheets JPY in billions
Mar. 31 Mar. 31 Difference
1999 2000
Current assets 1,168.5 849.6 (318.9)
Cash and deposits 402.9 228.2 (174.7)
Marketable securities 278.1 108.7 (169.3)
Trade notes receivable and
accounts receivables 32.9 37.8 4.9
Inventories 404.2 398.5 (5.6)
Deferred tax assets 0.0 9.5 9.5
Other current assets 57.8 66.8 9.0
Allowance for doubtful
accounts (7.5) (0.2) 7.3
Fixed assets 733.0 1,731.4 998.4
Property, plant, and equipment 535.8 544.8 8.9
Intangible fixed assets 3.8 317.4 313.6
Patents 2.5 31.2 28.7
Trademark rights 0.4 266.5 266.0
Other intangible assets 0.7 19.6 18.8
Investments and other assets 193.3 869.1 675.8
Investment securities 151.4 794.1 642.6
(including interests in
affiliated companies)
Long-term loan 4.2 7.6 3.3
Contribution to JT Mutual
Assistance Associate 22.8 0.0 (22.8)
Deferred tax assets 0.0 58.5 58.5
Other assets 14.7 8.8 (5.8)
Total assets 1,901.6 2,581.0 679.4
Current liabilities 309.7 320.9 11.1
Notes receivable 15.6 16.9 1.2
Current portion of long-term
debt 5.2 32.7 27.5
Other current liabilities 278.8 271.1 (7.6)
Non-current liabilities 198.6 746.3 547.7
Bonds 0.0 272.0 272.0
Long-term loan 2.8 240.0 237.2
Liabilities for severance
payments 156.4 163.4 7.0
Accrued pension liabilities 19.8 29.1 9.2
Other liabilities 19.4 41.7 22.2
Total liabilities 508.3 1,067.2 558.9
Total shareholders' equity 1,393.2 1,513.8 120.5
Total liabilities and
shareholders' equity 1,901.6 2,581.0 679.4
(3) Forecasted financial results in FY 2001 JPY in billions
FY 00 FY 01 Difference
(actual) (forecasted)
Net sales 2,865.1 2,880.0 14.9
Tobacco 2,739.6 2,740.0 0.4
Pharmaceuticals 18.5 5.0 (13.5)
Foods 76.4 107.0 30.6
Other businesses 30.5 32.0 1.5
EBITDA (1) 217.4 Approx. 204.0 Approx. (13.4)
Operating Profit 130.8 Approx. 109.0 Approx. (21.8)
Recurring profit 134.8 101.0 (33.8)
Net income 70.4 53.0 (17.4)
Depreciation and
amortization (2) 86.5 95.0 8.5
Capital expenditure 407.5 85.0 (322.5)
Note 1: EBITDA = Operating profit + Depreciation + Amortization
Note 2: Depreciation of tangible property, plant, and equipment
+ amortization of intangible fixed assets
+ amortization of long-term prepaid expenses
For Reference
(As of
May 19, 2000)
Clinical Development Pipeline
[Japan]
======================================================================
Code Number Indication Development Stage Notes
======================================================================
JTT-501 Diabetes Phase 2
JTE-522 Inflammatory (COX-2 inhibitor) Phase 2
JTV-519 Myocardial infarction Phase 2
JTE-607 SIRS (systemic inflammatory
responses syndrome) Phase 2
JTT-705 Hyperlipidemia Phase 1
JTV-803 Anticoagulant Phase 1
JTC-801 (inj/oral) Analgesic Phase 1
JTT-811 Diabetic Complications Phase 1
[Overseas]
======================================================================
Code Number Indication Development Stage Notes
======================================================================
JTT-705 Hyperlipidemia Phase 2
JTC-801 (inj) Analgesic Phase 1
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