Recently, KT&G released its first quarter financial report for 2025, among which the new tobacco products (NGP) segment showed a differentiated development trend in the first quarter of 2025.
- The total revenue of the global NGP business reached 159 billion won, a decrease of 9.7% from the same period last year;
- Among them, the domestic market performed relatively steadily, with revenue of 138.5 billion won, a year-on-year increase of 6.5%, mainly due to the increase of 1.8 percentage points in category penetration and the optimization of online channels.
Despite the fierce competition, the company has successfully maintained its market leadership by expanding new brand product lines such as Gidarim and GL-Pro and strengthening the operation of three major e-commerce platforms.
The global NGP business encountered periodic challenges, with sales falling 10.4% year-on-year to 1.89 billion units and revenue falling sharply to 20.5 billion won.
The performance fluctuations were mainly due to procurement delays caused by sudden equipment supply interruptions. This supply chain problem directly affected the rhythm of product launches in multiple overseas markets.
It is worth noting that regional market performance showed differentiation. The Middle East and Southeast Asian markets maintained growth momentum through aggressive pricing strategies, while some emerging markets experienced a short-term sales decline due to logistics bottlenecks.
From the perspective of business strategy, the company is taking two-track response measures:
Domestic business focuses on product structure upgrades, and the increase in the proportion of Lil series high-end heat-not-burn products has driven ASP growth by 2.5%;
Overseas operations accelerate localized brand cultivation and promote the channel sinking of the own brand "FILTER Plus" in key markets such as Indonesia and Russia.
It is worth noting that the financial report specifically disclosed that the technical reserve of new heating equipment has been started, and it is planned to launch independently developed heating equipment in the second half of 2025. This move may open up a new growth curve.
Financial data showed that the operating profit margin of the NGP segment narrowed by 3.2 percentage points year-on-year, mainly due to the weakening scale effect of global business and the increase in supply chain costs.
In the appendix, the management emphasized that an emergency procurement mechanism has been established to ensure the supply of equipment in the second quarter. At the same time, by optimizing the capacity configuration of the Indonesian production base, it strives to maintain the annual equipment production target at more than 5.8 million units.
In terms of R&D investment, 23 new patent applications were filed in the first quarter, involving core areas such as low-temperature heating control and sealing technology, demonstrating the determination to continue to invest in innovation.
source：https://en.ktng.com/download?CMS_CD=CM0044&fnm=CM0044_105.pdf&orgFnm=KTNG_25_1Q_IR_ENG.pdf
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