- Group operating profit rises 27% based on 56% global cigarette business operating profit growth

- Core competitiveness reinforcement results in heightened profitability, new shareholder return policies focusing on stronger dividend payout to be announced H2

SEOUL, South Korea, May 7, 2026 /PRNewswire/ -- KT&G (KRX: 033780) announced on the 7^th through its IR session that proactive profitability focused management schemes led to 56.1% YoY global cigarette operating profit growth in Q1, which in turn led to a solid performance of the entire group.

To start, based on the strong global cigarette business performance, KT&G's Q1 consolidated revenue reached 1.7036 trillion KRW and operating profit 364.5 billion KRW, a respective YoY growth of 14.3% and 27.6%. In detail, the tobacco business saw a revenue of 1.1559 trillion KRW and operating profit of 321.6 billion KRW, respective gains of 17% and 27.2%.

In particular, the global cigarette business saw a balanced sales volume growth throughout major regions including Asia-Pacific and Eurasia, while sustained strategic price hikes led to historic quarterly revenues. Q1 revenue rose 24.6% YoY to 559.6 billion KRW, while operating profit increased 56.1% YoY based on costs and SG&A expenses reduction, resulting in a "triple growth" of revenue, operating profit, and sales volume.

The domestic cigarette business maintained an overwhelming lead with a 68.8% market share. The NGP (Next Generation Products) business yielded a revenue of 241 billion KRW, a 51.5% increase from the previous year, due to growth in both domestic and global markets and base effects from the overseas device supply chain issues. In order to fortify NGP products' market leadership, KT&G plans to launch new products throughout the year.

KT&G plans to utilize its global cigarette direct business capabilities in order to scale entry into global markets with its NGP products. Based on the know-hows and distribution networks in major regions including Asia-Pacific and Eurasia that has shown meaningful performance in the global tobacco market, the company targets building a foundation for expanding direct global heat-not-burn business.

KGC's health functional foods business generated a revenue of 332.6 billion KRW, a 5.8% YoY growth, based on robust results from "Seollal (Korean New Year's day)" promotion and brand campaign effects for "Cheon Nok" and "Everytime" among others. Operating profit rose 53.3% YoY to 27.9 billion KRW based on revenue expansions in high-profit channels and profitability-focused strategies.

In addition, KT&G plans to directly carry out global nutrition business. To do so, KT&G established a center dedicated to the project earlier this month and plans to pursue "red ginseng ingredient business-to-business (B2B) projects" targeting global food & beverages companies, cosmetics, and other relevant businesses. KT&G plans to collaborate with global partners to diversify the global business through measures including launching new products that reflect local trends.

Meanwhile, on the 23^rd last month, KT&G preemptively took action to incorporate the legislative intent of the third Commercial Act amendments, cancelling the entire inventory of treasury shares amounting to 10,866,189 shares (equivalent to 9.5% of total issued shares, worth approximately 1.8516 trillion KRW). KT&G has overachieved its shareholder return share cancellation targets under the 2024~2027 corporate value improvement plan ahead of schedule and accordingly is planning to announce new shareholder policies with reinforced dividend payouts in H2.

Sang-hak Lee, CFO of KT&G, stated "despite uncertainties due to geopolitical issues in the Middle East, stable revenue growth trend has continued in all regions including Asia-Pacific, Eurasia, and New Markets, leading to projections of a sustained growth of the global cigarette business." He further commented that "based on the performance growth from global business expansion, the company will continue to implement new shareholder return policies including dividend reinforcement and improve shareholder value."

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