JTI Switzerland. JTI Schweiz 3

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1 JTI Schweiz 3

2 Who we are 300 employees JTI has been manufacturing tobacco products in the Wiggertal area for over 45 years. The local market organization and the production facility in Dagmersellen (canton of Lucerne) employ 300 people. Switzerland plays a key role in our company: the international headquarters is located in Geneva. The foundations of today s JTI were laid with the sale of R. J. Reynolds to Japan Tobacco Inc. in This was followed by the takeover of British firm Gallaher in Since then, our company has seen continuous growth. Our portfolio now includes internationally-known cigarette brands such as Camel and Winston. We are also developing next-generation products such as Ploom and Logic to meet new customer demands. Our action focuses on meeting the needs of our customers, shareholders, employees and society at large. The aim is to satisfy all four interest groups. We are convinced that this is the right way to achieve sustainable growth. 2 Schweiz JTI Schweiz 3

3 Our principles 1 8 minimum age As a manufacturer of tobacco products, we are aware of our special responsibility to society. As a result, we have been pressing for years for a Switzerland-wide minimum age of 18 for the sale of cigarettes. In addition, we have subjected ourselves to strict self-regulation. But because tobacco is a legal product, advertising aimed at adults must continue to be permitted. In our daily work, we always adhere to six principles: 1 Openness about the risks of smoking 2 Transparency about our products 3 Commitment to reduced-risk products 4 Tobacco prevention among young people 5 Accommodation between smokers and non-smokers 6 Respect for local standards and cultures 42 Schweiz JTI Schweiz 35

4 Our brands 20 % market share Tobacco is our passion. JTI has produced some legendary brands in the course of its history. One smoker in five in Switzerland chooses one of our brands. Two of the four best-selling brands in Switzerland, Winston and Camel, are in our portfolio. Cigarettes: Fine-cut tobacco: Reduced-risk products: 62 Schweiz JTI Schweiz 37

5 Production 84 % Export Thanks to its excellent general business conditions and free-trade agreements, Switzerland is a world exporting leader. 84 % of our cigarette production goes abroad. The total value of exports by the sector is comparable to that of cheese. The Dagmersellen production facility has been gradually expanded over the years and is one of JTI s most modern plants worldwide. In the last 12 years, JTI has invested around CHF 200 million in Switzerland. With increasing automation in Dagmersellen, productivity has also continued to grow: approximately 43 million cigarettes now leave the factory daily. 82 Schweiz JTI Schweiz 39

6 Innovation Swiss industry is known to be highly innovative; consumers, too, are open to trying out new products. There is therefore a strong demand for sustainably-grown, additive-free tobacco, such as that of Natural American Spirit. 99 % reduction in 9 toxic substances Interest in reduced-risk products is also high. Studies * show a 99 % reduction in analyzed substances in Ploom Tech compared with traditional cigarettes. * Based on the comparison of 9 harmful constituents, recommended for reduction by the World Health Organization in Cigarette Smoke, measured in the smoke of a standard reference cigarette (3R4F) versus the vapor from Ploom Tech. Use of this product does not mean it is necessarily safer than smoking regular cigarettes

7 Economic importance Tobacco sector effect on economy is valued at CHF 6.3 billion annually, or 1 % of gross domestic product. Almost 10 billion cigarettes are taxed in Switzerland every year, providing the federal government with over CHF 2 billion in revenue. This amount is entirely used in funding the AHV old age and survivors insurance program billion CHF tobacco taxes Directly and indirectly, the tobacco sector creates over jobs in Switzerland. Tobacco products are sold at 13,500 sales outlets. JTI works closely with 160 tobacco farmers in Switzerland. Around 1147 tonnes are harvested from a total of 460 hectares annually

8 Excellent jobs 26 nationalities Over 1200 internationally-active companies have their headquarters in Switzerland. One of these is JTI. In total, we employ 1300 people here. JTI has received the Top Employer Award several times. Every year, the Top Employers Institute certifies employers in Switzerland and throughout the world. Criteria include staff development, talent management, conditions of employment and corporate culture. In 2017, JTI also received the Swiss Employers Award, presented on the basis of assessment by employees. JTI is training just short of a dozen apprentices as commercial, logistics and systems operation apprentices. It doesn t just pay lip service to diversity: three out of eight senior management positions in Switzerland are held by women. People from a total of 26 nations work at the Dagmersellen site

9 Responsibility 45 projects Responsibility is apparent not only in the operational field, where we are demanding that the minimum age for tobacco purchase should be 18, but also in our commitment to society at large. This is part of our corporate culture. We are engaged in the social, artistic and environmental fields. Through national and regional partnerships, we support 45 projects throughout Switzerland. The focus is on long-term cooperation. This involves providing more than financial support: many of our employees make an active commitment, such as on Clean-up Day

10 Sustainability -38 % CO 2 For us, sustainability is a key factor throughout the value chain. Our initiatives in the environmental, health and safety areas promote the wellbeing of our employees and foster environmentally sustainable production. We support best agricultural practices, projects for clean drinking water and the fight against child labor. We also aim at targets for reduced waste, water usage and energy consumption, and encourage a culture of health and safety awareness in our production facilities. At Dagmersellen, we have reduced CO 2 emissions by 38 % since We have also created a system for collecting and recycling the capsules used in our Ploom product and taking back used products

11 Japan Tobacco International Baselstrasse 65, Postfach 6252 Dagmersellen Telefon jti.com

04 WE ARE DEVELOPING SAFER CHOICES 06 WE WORK AS PARTNERS 08

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