Philip Morris International Inc · NYSE:PM
Philip Morris International — Investor Day (September 2023)
26 slides from Philip Morris International's investor day presentation, Sep 28, 2023
Slide 1: Championing a Smoke-Free World
Championing a Smoke-Free World Jacek Olczak Chief Executive Officer September 28, 2023 Forward-Looking and Cautionary Statements • This presentation contains projections of future results and goals and other forward-looking statements, including statements regarding business and regulatory plans, ex
Slide 2: Unprecedented Pace and Scale of PMI's Transformation
Glossary and Key Terms and Definitions • A glossary of terms, including the definition for smoke-free products as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures for non-GAAP financial measures cited in this presentation are available on
Slide 3: IQOS: Creating $10bn+ Smoke-Free Business in Under a Decade
IQOS: Creating $10bn+ Smoke-Free Business in Under a Decade Annual Net Revenues ($ billion) (a) $10 billion milestone $10 $5 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Years Since Founding / Inception(b) (a) Total smoke-free product net revenues. In 2022, IQOS accounted for $9.5 billion of PMI’s $10.2
Slide 4: From Vision to Reality: Strong Progress Already Clear
Agenda • Leading the industry’s smoke-free transformation • Regulation as an enabler of tobacco harm reduction • Our next growth phase (2024-26) • Our 2030 vision 7 From Vision to Reality: Strong Progress Already Clear Smoke-Free Markets With PMI’s SFPs Net Revenues / Total Available for Sale >35% 8
Slide 5: Undisputed Leader of Industry Transformation
Undisputed Leader of Industry Transformation • Largest positive impact on harm reduction • Highest investments in R&D, commercial infrastructure and brand equity • Category leader, with premium portfolio and strongest brands • Most advanced organizational transformation • Leading scientific capabili
Slide 6: Strong Leadership in Most Attractive SFP Categories
Strong Leadership in Most Attractive SFP Categories 2022 PMI Category Volume Share (International, excluding China) ~ 75% ~66% ~ 50% ~ 36% ~ 23% ~ 1% Cigarettes Smoke-Free Heat-Not- Nicotine E-Vapor(a) Products (a) Burn Pouches (a) Excludes open tank e-vapor systems Note: Reflects pro forma figures,
Slide 7: SFPs Have Important Role to Play in Tobacco Harm Reduction
Agenda • Leading the industry’s smoke-free transformation • Regulation as an enabler of tobacco harm reduction • Our next growth phase (2024-26) • Our 2030 vision 13 SFPs Have Important Role to Play in Tobacco Harm Reduction Cigarette Industry Volume % Change Vs. Previous Year 2018 2019 2020 2021 20
Slide 8: Policy Principles to Better Enable Switching to SFPs
Policy Principles to Better Enable Switching to SFPs Government regulations should aim to support smoke-free products through greater: Awareness Acceptability Availability Affordability Ability to communicate Ensure SFPs are Market access and Tax differentiation that information about SFPs acceptabl
Slide 9: Countries Moving Towards Sustainable Fiscal Policies for SFPs
Countries Moving Towards Sustainable Fiscal Policies for SFPs Key Developments Since 2021 +8 +16 +21 Markets Markets Markets Are recognizing or re- Are creating dedicated Have instituted multi- stating support for a excise tax categories for year tax plans covering THR approach for SFP HTP HTPs taxa
Slide 10: Nicotine Misinformation Slowing Tobacco Harm Reduction
Nicotine Misinformation Slowing Tobacco Harm Reduction • The science is clear: nicotine is not the “Nicotine, though not benign, is not primary cause of smoking-related disease(a), directly responsible for the tobacco- combustion is caused cancer, lung disease, and heart disease that kill hundreds o
Slide 11: Restrictive Regulations Limit SFP Growth
Restrictive Regulations Limit SFP Growth Median PMI HTU Market Share(a) ~15% ‘Best-in-Class’ Markets(b) ~ 7% ~ 2% 'THR Supportive' 'Non-THR Supportive' Markets Markets (a) Reflects median quarterly HTU market share six years after the launch of IQOS (b) ‘Best-in-Class’ Markets reflect the median sha
Slide 12: Smoke-Free Transformation Drives More Sustainable Growth Model
Smoke-Free Transformation Drives More Sustainable Growth Model Combustible Smoke-Free • Volume decline driven by secular • Volume growth at substantially higher net revenue per unit trend and adult smokers switching to SFPs • Higher commercial investment as new markets launched • More than offset by
Slide 13: Focused Multicategory Smoke-Free Strategy
Focused Multicategory Smoke-Free Strategy, Prioritizing Heat- not-Burn and Nicotine Pouches Drive next growth phase Lead category development Compete in select markets through expansion and and growth with profitability focus innovation 25 Focus on Highest Growth Smoke-Free Categories… Volume (a) Re
Slide 14: With Most Attractive Financial Returns
… With Most Attractive Financial Returns 2022 Category Product Contribution ($/000) (Index = Intl. Cigarettes) 6x >2x Mid-Term 3-4x Opportunity 1.5x 1.5x 1 Intl. Intl. Nordics U.S. U.S. Cigarettes IQOS(a) NPs IQOS(a)(b) ZYN Negligible PMI Cannibalization for U.S. IQOS & ZYN (a) IQOS financials, incl
Slide 15: Further Growth Opportunity in Existing IQOS Markets
Further Growth Opportunity in Existing IQOS Markets 2022 Weighted-Average PMI HTU Share by IQOS Launch Market Vintage ~15% +75 bn ~7% Illustrative Incremental HTU Volume Opportunity if Later Launch Vintages ~2% Reach 15% < 4 Years 4 - 7 Years ≥ 8 Years Note: Reflects weighted-average HTU share by IQ
Slide 16: National Shares Reaching Prior City Levels Within 2-3 years
National Shares Reaching Prior City Levels Within 2-3 years PMI HTU National and Key City Share of Total Cigarette and HTU Market 32.5% Japan(a) Hungary 31.4% 28.5% 24.9% 26.3% 20.1% 18.8% 17.7% 15.1% 13.2% N/A Q4, 2018 Q4, 2020 Q2, 2023 Q4, 2018 Q4, 2020 Q2, 2023 Italy 28.0% Greece 28.6% 19.8% 19.0
Slide 17: Enhancing IQOS Portfolio to Switch More Adult Smokers
Enhancing IQOS Portfolio to Switch More Adult Smokers • Multi-tier IQOS device and HTU portfolio, with broad consumables selection • Superior tobacco taste, with further innovation: ⎼ TEREA CRAFTED: curated collection of tobacco flavors ⎼ DELIA: essence of taste at more affordable price • Expanding
Slide 18: Growth Opportunity in Markets Where IQOS Not Yet Commercialized
Growth Opportunity in Markets Where IQOS Not Yet Commercialized • Sizable opportunity over time, with Top Cigarette Markets ~1 trillion in total cigarette volume Volume • Consumer readiness influences Indonesia ~300bn potential launch timelines U.S. ~180bn • Indonesia pilot launch in select cities B
Slide 19: IQOS: Untapped Future Growth Driver
IQOS: Untapped Future Growth Driver • Preparation for 2024 launch well underway • Initial launch of IQOS 3 blade product in two states, focusing on select key cities: Ambition: ⎼ Disciplined commercial investment • ILUMA PMTA application planned for October: ~10% ⎼ PMTA timelines hard to predict; ex
Slide 20: ZYN: Leading the Way With Strong Premium Brand
ZYN: Leading the Way With Strong Premium Brand • U.S. nicotine pouch category still in its infancy • ZYN now $2 billion retail value brand(a) in the U.S. within five years of national launch • Continued focus on responsible marketing practices • Active innovation pipeline, subject to FDA market auth
Slide 21: A Focused Approach to Wellness & Healthcare Business
A Focused Approach to Wellness & Healthcare Business • W&H business provides sizable long-term potential in pharmaceutical, medical and consumer wellness segments • Excellent technology platforms for both oral and inhalation delivery with Vectura Fertin Pharma, supplemented by PMI expertise • Reprio
Slide 22: Ambitious 2024-2026 Targets
Ambitious 2024-2026 Targets Positive 6-8% Total Shipment Net Revenue Volume CAGR(a) Organic CAGR 8-10% 9-11% Adjusted OI Adjusted Diluted EPS Organic CAGR Currency-Neutral CAGR(b) (a) Reflects cigarettes, HTUs and oral smoke-free products (excluding U.S. Chew) (b) At current corporate income tax rat
Slide 23: Enhanced Top-Line & Strong Bottom-Line Growth While Transforming
Enhanced Top-Line & Strong Bottom-Line Growth While Transforming CAGR Targets 8% 6% 6% Net ≥5% >5% Revenues (organic) 4% 11% Adjusted 10% EPS >9% 9% (ex-currency) 8% ≥8% Target Period(s) 2015-17; 2017-19 2019-21 2021-23 2024-26(a) (a) Adjusted EPS CAGR reflects current corporate income tax rates Not
Slide 24: 2030 Vision: On Path to Becoming Smoke-Free Company
Agenda • Leading the industry’s smoke-free transformation • Regulation as an enabler of tobacco harm reduction • Our next growth phase (2024-26) • Our 2030 vision 47 2030 Vision: On Path to Becoming Smoke-Free Company • Building upon significant progress Smoke-Free on smoke-free transformation to da
Slide 25: Transforming for Good and Driving Sustainable Growth
Transforming for Good and Driving Sustainable Growth • Working relentlessly to phase out cigarettes by replacing them with less harmful alternatives as quickly as possible • Transforming our own operations and every step of our value chain to serve our company purpose • Working together with various
Slide 26: Championing a Smoke-Free World
Championing a Smoke-Free World iOS Download Android Download Have you downloaded the new PMI Investor Relations App yet? The free IR App is available to download at the Apple App Store for iOS devices and at Google Play for Android mobile devices
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