KT&G (033780) CMD 2026 summary

Q3 performance

• Consolidated revenue rose 4.3% YoY to KRW 1,905.2B; operating profit rose 13.9% to a record KRW 530.1B, while EBITDA increased 12.2% to KRW 606.2B at a 31.8% margin.

• Net income fell 75.1% YoY to KRW 104.1B, mainly on lower valuation gains on foreign-currency assets amid quarterly exchange-rate movements; EPS was KRW 1,022.

• Tobacco revenue rose 6% YoY to a quarterly record KRW 1,306.5B; operating profit increased 14.4% with a 32.6% margin, and international sales reached 64.8% of tobacco volume.

• International cigarettes logged 10 consecutive quarters of growth in volume, revenue and operating profit; volume rose 6.2% to 19.57B sticks and revenue increased 10.5% to KRW 579B.

• Korea NGP stick volume grew 6.8% and market share reached 49.1%; HFF revenue rose 3.4% to KRW 372.2B and operating profit increased 12.2% to KRW 80.1B.

Financial outlook and targets

• 2026 revenue target is KRW 7T, a record; annual guidance implies revenue growth of 19% and operating profit growth of 28% vs. 2023, with operating profit targeted at KRW 1.5T.

• Operating profit is targeted to grow at a mid-to-high single-digit CAGR from 2026 to 2030.

• By 2030, overseas cigarette revenue is targeted to exceed 70% of the combustible cigarette business, NGP to exceed 30% of tobacco revenue, and overseas revenue to exceed 30% of HFF business.

Combustible cigarette growth

• International cigarettes target double-digit revenue and operating profit growth through 2030, driven by premium mix, pricing, market expansion, subsidiary growth and structural cost savings.

• Pricing plans include strategic ASP increases, with cited pricing headroom of ~20%, alongside product innovation to improve mix.

• Distribution coverage targets at least 70% from ~50%, with entry into 30+ new markets, including India and Vietnam; whitespace markets represent 500B+ sticks of TAM.

• Subsidiary revenue is planned to grow at least 50% from 2026 to 2030; overseas production targets at least 70%, with capacity doubled from 2024 to 2026E and KRW 550B+ cost savings over 2027–2030.