KT&G President Kyungman Bang: "Pioneering Corporate Value Enhancement"... Accelerating Dividend Expansion

Next-Generation Tobacco (NGP) Innovative Platform to Launch Within the Year

"We will take the lead in enhancing corporate value by proactively expanding dividends and executing share buybacks and cancellations, fulfilling our responsibilities as a company."

On March 26, at the 39th Annual General Meeting of Shareholders held at the Daejeon Future Talent Center, Kyungman Bang, President of KT&G, stated, "We will thoroughly implement capital allocation principles centered on shareholders."

The market expects that, as KT&G has announced plans to cancel all of its treasury shares, the core of this year's shareholder returns will be focused on 'dividend growth.' Recently, as the stock price has risen, the dividend yield has fallen from the previous 4–5% range to the high 3% range. There is a strong analysis that KT&G is likely to increase dividends to enhance its appeal to income investors.

In fact, KT&G has steadily increased its dividends over the past five years. The annual dividend per share rose from 4,800 won in 2021 to 5,000 won in 2022, 5,200 won in 2023, 5,400 won in 2024, and is set to reach 6,000 won in 2025. This represents an increase of about 25% compared to five years ago.

Kyungman Bang, President of KT&G, is delivering a greeting at the 39th Annual General Meeting of Shareholders held on the 26th at the Daejeon Future Talent Center. Provided by KT&G.

The introduction of separate taxation on dividend income is also being highlighted as a positive factor. The policy targets companies with a dividend payout ratio of at least 40%, or at least 25% with dividend increases of 10% or more compared to the previous year. KT&G, which has maintained a payout ratio above 50% for a long time, is being mentioned as a potential beneficiary.

Bang's remarks are based on confidence in the company's recent performance. At the shareholders' meeting, it was reported that KT&G's consolidated revenue for last year reached 6.5797 trillion won, up 11.4% from the previous year, while operating profit jumped 13% to 1.3443 trillion won. Overseas exports of cigarettes, including the Esse brand, exceeded 1 trillion won and drove these results.

Bang emphasized, "We will further advance the profit structure of our overseas cigarette business," adding, "We will continue to pursue quality growth focused on profitability by implementing sophisticated country-specific pricing strategies and fully deploying locally integrated production systems."

KT&G plans to enhance its cost structure and profitability by establishing a 'locally integrated value chain' that manages production, marketing, and distribution in overseas markets. Following the expansion of its factory in Turkiye and the launch of a new plant in Kazakhstan, this year will see the full-scale operation of its Indonesian plant, further expanding KT&G's global production bases. The strategy is to achieve 'quality growth' not simply by increasing volume, but by raising average selling prices (ASP) and improving cost efficiency.

The next-generation tobacco (NGP) business is also gaining momentum. Bang stated, "We will strengthen our leadership in the domestic market and our overseas business capabilities," adding, "Based on differentiated R&D, we will launch innovative platforms early and maximize global partnership synergies to secure a competitive edge in the non-combustible product market."

KT&G maintains the No. 1 share in the domestic e-cigarette market through key products such as lil Hybrid and lil Able. With the announcement of new platform launches, the company's market dominance is expected to become even stronger. Last year, KT&G, together with U.S. tobacco company Altria, jointly acquired a Swedish nicotine pouch company as part of its efforts to expand its NGP business.

Meanwhile, all the agenda items proposed by the board of directors were approved as originally drafted at the shareholders' meeting. As a result, the annual dividend per share was confirmed at 6,000 won, an increase of 600 won (11.1%) from the previous year. KT&G previously reaffirmed its commitment to strengthening shareholder returns by announcing its plan to cancel all of its treasury shares immediately following the passage of recent amendments to the Commercial Act.

This content was produced with the assistance of AI translation services.