Philip Morris International Inc · NYSE:PM
Philip Morris International — Investor Day (June 2014)
99 slides from Philip Morris International's investor day presentation, Jun 26, 2014
Slide 1: Investor Day – Reduced-Risk Products
Investor Day – Reduced-Risk Products Lausanne, June 26, 2014 Bertrand Bonvin Senior Vice President, Research & Development Manuel Peitsch Vice President, Biological Systems Research Frederic de Wilde Senior Vice President, Marketing & Sales Note: Reduced-Risk Products ("RRPs") is the term we use to
Slide 2: Reduced-Risk Products is a Consumer Category of its Own
Reduced-Risk Products is a Consumer Category of its Own Reduced-Risk Products ("RRPs") Heated Tobacco Products Nicotine Containing Products Platform 1 Platform 2 Platform 3 Platform 4 Fast-Moving Consumer Consumer Scientific Goods for Adult Smokers Electronics Substantiation Electronics Note: Reduce
Slide 3: Leadership in Reduced-Risk Products
Leadership in Reduced-Risk Products Reduced-Risk Products ("RRPs") Heated Tobacco Products Nicotine Containing Products Platform 1 Platform 2 Platform 3 Platform 4 R&D and RRPs Marketing and Scientific Substantiation Regulation Commercialization Note: Reduced-Risk Products ("RRPs") is the term we us
Slide 4: Agenda
Agenda ● R&D capabilities and assets ● RRPs portfolio ● Scientific substantiation Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm 4
Slide 5: Best-In-Class R&D Capability in the Industry
Best-In-Class R&D Capability in the Industry ● PMI’s long experience in RRP ● Since the spin, PMI has significantly enhanced its R&D capabilities ● Invested approximately $2 billion ● Hired over 300 scientists with deep expertise in key fields Note: Reduced-Risk Products ("RRPs") is the term we use
Slide 6: PMI R&D Centers and Global Partnerships Network
PMI R&D Centers and Global Partnerships Network Technology and Scientific Network (2014) 2 R&D Centers Major partners and service providers 6
Slide 7: RRPs Development and Scale-up
RRPs Development and Scale-up ● Heat-not-burn consumables: Bologna, Italy - Internally developed and manufactured - New factory (30 billion units by the end of 2016) ● Devices: - PMI’s technology developed with external partners - Scale up and manufacturing by third-party - Manufacturing for pilot l
Slide 8: Long-Term RRPs Pipeline
Long-Term RRPs Pipeline ● Portfolio of over 500 granted patents worldwide ● Pipeline of around 1,000 pending patent applications ● Basis for long-term RRPs pipeline to address range of adult smoker preferences Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the
Slide 9: Developing Robust Evidence to Support a Claim of Reduced Risk
Developing Robust Evidence to Support a Claim of Reduced Risk ● Leading RRPs science ● State-of-the-art product assessment ● Sharing and collaborating with the scientific community and regulators ● 80 peer-reviewed scientific publications ● Clinical studies registered on ClinicalTrials.gov Note: Red
Slide 10: Agenda
Agenda ● R&D capabilities and assets ● RRPs portfolio ● Scientific substantiation Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm 10
Slide 11: RRPs: Our Product Platforms
RRPs: Our Product Platforms Heated Tobacco Products Nicotine Containing Products Platform 1 Platform 2 Platform 3 Platform 4 Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm. The RRPs depicted are subje
Slide 12: Platform 1: Precisely Controlled Electrically-Heated Tobacco System
Platform 1: Precisely Controlled Electrically-Heated Tobacco System ● Heater maintains tobacco temperature below combustion ● Custom designed HeatStick tobacco stick ● Aerosol delivers volume, flavor and satisfaction Source: Baker R. R., 1975, High Temp. Sci., 7, 236-247 and PMI Research & Developme
Slide 13: Platform 2: Heat-Not-Burn with Combustible Cigarette Ritual
Platform 2: Heat-Not-Burn with Combustible Cigarette Ritual ● Pressed carbon heat source ● Tobacco temperature control by design: - Physically separated to prevent tobacco combustion ● Proprietary blend & flavor system ● Plan to start clinical studies in 2014 ● Manufacturing synergies with Platform
Slide 14: E-Vapor Products
E-Vapor Products ● Current e-vapor product challenges: - Satisfaction - Consistency - Manual manufacturing ● PMI’s approach: - Enter e-vapor product category in 2014 - Develop innovative NCP delivery technology addressing current challenges 14
Slide 15: Platform 4: Innovative Technology
Platform 4: Innovative Technology ● Novel aerosolization technology: - Proprietary cartridge-battery combination - Improved e-liquid - Automated manufacturing ● Consistency of aerosol delivery ● Nicotine delivery profile superior to existing products ● Pilot city test in H2, 2016 15
Slide 16: Platform 3: Effective Delivery of Nicotine Salt Aerosol
Platform 3: Effective Delivery of Nicotine Salt Aerosol ● Product development on-going ● Organic acid and nicotine contained in separate sections ● Nicotine salt is formed in a visible aerosol ● Provide nicotine delivery and satisfaction similar to combustible cigarettes ● Initial pre-clinical testi
Slide 17: Agenda
Agenda ● R&D capabilities and assets ● RRPs portfolio ● Scientific substantiation 17
Slide 18: Substantiating Reduced Risk
Substantiating Reduced Risk ● Developing robust evidence packages based on state-of-the-art science and best in class data Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in
Slide 19: Substantiating Reduced Risk
Substantiating Reduced Risk Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessm
Slide 20: Substantiating Reduced Risk
Substantiating Reduced Risk Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessm
Slide 21: Substantiating Reduced Risk
Substantiating Reduced Risk Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessm
Slide 22: Substantiating Reduced Risk
Substantiating Reduced Risk Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessm
Slide 23: Substantiating Reduced Risk
Substantiating Reduced Risk Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessm
Slide 24: Substantiating Reduced Risk
Substantiating Reduced Risk Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessm
Slide 25: Cessation: The "Gold Standard"
Cessation: The "Gold Standard" ● We apply the US Institute of Medicine’s "gold standard" for assessing risk reduction: comparability to cessation From Point of Epidemiology Intervention Disease Risk Time Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the poten
Slide 26: Investor Day – Reduced-Risk Products
Investor Day – Reduced-Risk Products Lausanne, June 26, 2014 Manuel Peitsch Vice President, Biological Systems Research Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm
Slide 27: Evidence Package
Evidence Package Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessment Aerosol
Slide 28: Reduction of HPHCs in Platform 1 and Platform 2 Aerosols
Reduction of HPHCs in Platform 1 and Platform 2 Aerosols Aerosol Composition(a): Relative Amounts Reported on a Nicotine Basis Compared to a 3R4F Reference Cigarette (%) Laboratory Filter Pad Combustible Cigarette 100 Combustible Reference Cigarette 90 80 70 Platform 1 Platform 2 60 50 40 30 20 Labo
Slide 29: Evidence Package
Evidence Package Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessment Aerosol
Slide 30: Reduction of Toxicity in Heat-Not-Burn Platforms
Reduction of Toxicity in Heat-Not-Burn Platforms ● Compared to combustible cigarette smoke: - reduces biological activity (in vitro / in vivo) Cytotoxicity Relative to 3R4F Number of Genotoxicity Relative to 3R4F Mean ± SE Mean ± SE Revertants 100% TPM 3R4F 600 GVP Platform 1 Regular Platform 1 Ment
Slide 31: Systems Toxicology-Based Risk Assessment
Systems Toxicology-Based Risk Assessment ● Integrated large scale molecular measurements with advanced computational models of disease mechanisms ● Ability to quantify the perturbation of the core mechanisms leading to disease Biological Networks Cell Inflammation Cell Stress DNA Damage Apoptosis Au
Slide 32: Heat-not-Burn vs Continued Smoking and Cessation in Mouse Model
Compare Heat-not-Burn Platforms with Continued Smoking and Cessation in Mouse Model: Impact on Disease Mechanisms Group Exposure Combustible Cigarette CC Cessation CC Air Switching CC Platform 2 Prototype Platform 2 Prototype Platform 2 Prototype Reference: Air Air Start Month 2 Month 7 Note: CC is
Slide 33: Heat-not-Burn vs Continued Smoking and Cessation in Mouse Model
Compare Heat-not-Burn Platforms with Continued Smoking and Cessation in Mouse Model: Impact on Disease Mechanisms Time (months) 1 2 3 5 7 Combustible Cigarette Use Combustible Cigarette Cessation Platform 2 Use Note: These data alone do not represent a claim of reduced exposure or reduced risk. Pr
Slide 34: Heat-not-Burn vs Continued Smoking and Cessation in Mouse Model
Compare Heat-not-Burn Platforms with Continued Smoking and Cessation in Mouse Model: Impact on Disease Mechanisms Time (months) 1 2 3 5 7 Combustible Cigarette Use Combustible Cigarette Cessation Combustible Cigarette Platform 2 Prototype (Switching) Platform 2 Use Note: These data alone do not
Slide 35: Heat-not-Burn vs Continued Smoking and Cessation in Mouse Model
Compare Heat-not-Burn Platforms with Continued Smoking and Cessation in Mouse Model: Impact on Disease Mechanisms Time (months) 1 2 3 5 7 Combustible Cigarette Use Combustible Cigarette Cessation Combustible Cigarette Platform 2 Prototype (Switching) Platform 2 Prototype Use Note: These data alo
Slide 36: Heat-not-Burn vs Continued Smoking and Cessation in Mouse Model
Compare Heat-not-Burn Platforms with Continued Smoking and Cessation in Mouse Model: Impact on Disease Mechanisms Cell Changes: Tissue Changes: Physiological Changes/Disease: Inflammation Lung Emphysema Lung Function Total Cells Emphysema Relative Loss of (x105) Index Lung Function 30 4 After 7 mont
Slide 37: Evidence Package
Evidence Package Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessment Aerosol
Slide 38: PMI’s Approach to Clinical Assessment
PMI’s Approach to Clinical Assessment Clinical Assessment 1 2 3 Pharmacokinetics / Reduced Exposure Exposure Response Pharmacodynamics Measures: Measures: Measures: Nicotine Uptake Biomarkers of Exposure Clinical Risk Endpoints Subjective Effects Clinical Risk Endpoints Product Use 1 week in a clini
Slide 39: Platform 1 Clinical Assessment: Pharmacokinetic
Platform 1 Clinical Assessment: Pharmacokinetic Preliminary Results Combustible Nicotine Pharmacokinetic Profile Cigarette 18 Platform 1 16 14 12 Nicotine (ng/mL) 10 8 6 4 2 0 0 10 20 30 40 50 60 70 80 90 100 110 120 Time (min) Note: These data alone do not represent a claim of reduced exposure or r
Slide 40: Platform 1 Clinical Assessment: Reduced Exposure
Platform 1 Clinical Assessment: Reduced Exposure Preliminary Results Carbon Monoxide Benzene 6 4000 3500 S-phenylmercapturic acid Carboxyhemoglobin (%) 5 3000 (pg/mg creat) 4 2500 3 2000 Continued smoking 2 1500 1000 1 500 0 0 Switched to Baseline Day 1 Day 2 Day 3 Day 4 Day 5 Baseline Day 1 Day 2 D
Slide 41: Platform 1 Clinical Assessment: Ambulatory and Exposure Response Study
Platform 1 Clinical Assessment: Reduced Exposure: Ambulatory and Exposure Response Study Reduced Exposure Studies Exposure Response Study (3-month Ambulatory) ● 160 adult smokers ● 950 adult smokers ● Confined & Ambulatory ● Ambulatory ● Exposure to harmful and potentially harmful ● Changes in clini
Slide 42: Evidence Package
Evidence Package Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessment Aerosol
Slide 43: Consumer Perception and Behavior Assessment
Consumer Perception and Behavior Assessment ● Based on FDA guidance ● Designed to assess consumer perception and understanding of RRPs ● Assess label, labeling and marketing material ● Assess intent to use among adult consumer groups ● Progressing according to plan Note: Reduced-Risk Products ("RRPs
Slide 44: PMI’s Post-Market Assessment
PMI’s Post-Market Assessment ● Surveys and surveillance to: - Understand how product is used - Monitor spontaneous health events (safety surveillance) ● Under development; to be initiated as of pilot market launch 44
Slide 45: Evidence Package
Evidence Package Post-Market Studies & Surveillance Reduced Population Harm Consumer Perception and Behavior Assessment Reduced Exposure & Risk Clinical Trials Systems Toxicology Reduced Risk in Laboratory Models Assessment Standard Toxicology Reduced Toxicity in Laboratory Models Assessment Aerosol
Slide 46: Reduced-Risk Products: R&D
Reduced-Risk Products: R&D R&D and Scientific Substantiation • Ready for RRPs era • Strong product portfolio and innovation pipeline • Industry-leading risk assessment capabilities RRPs Marketing and Regulation Commercialization Note: Reduced-Risk Products ("RRPs") is the term we use to refer to pro
Slide 47: Reduced-Risk Products: Regulation
Reduced-Risk Products: Regulation Reduced-Risk Products ("RRPs") Heated Tobacco Products Nicotine Containing Products Platform 1 Platform 2 Platform 3 Platform 4 R&D and RRPs Marketing and Scientific Substantiation Regulation Commercialization Note: Reduced-Risk Products ("RRPs") is the term we use
Slide 48: Reduced-Risk Products: Regulation
Reduced-Risk Products: Regulation ● Advocating rigorous regulatory standards, which can provide: - Assurance to regulators and the public - Confidence for consumers - Clarity for the marketplace ● Momentum for evidence based RRPs regulation 48
Slide 49: Reduced-Risk Products: Regulation
Reduced-Risk Products: Regulation ● US FDA: - Statute and MRTP Draft Guidance - "Deeming Regulations" ● EU Tobacco Products Directive: - E-cigarettes regulated as tobacco-related products - "Novel Tobacco Products" 49
Slide 50: Reduced-Risk Products: RRPs Regulation
Reduced-Risk Products: R&D RRPs Regulation • Uncharted territory • Can provide assurance to regulators, public and consumers R&D and Scientific Marketing and Substantiation • Clarity for marketplace Commercialization • PMI well-positioned Note: Reduced-Risk Products ("RRPs") is the term we use to re
Slide 51: Investor Day – Reduced-Risk Products
Investor Day – Reduced-Risk Products Lausanne, June 26, 2014 Frederic de Wilde Senior Vice President, Marketing & Sales Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm
Slide 52: Reduced-Risk Products: Commercialization
Reduced-Risk Products: Commercialization Reduced-Risk Products ("RRPs") Heated Tobacco Products Nicotine Containing Products Platform 1 Platform 2 Platform 3 Platform 4 R&D and RRPs Marketing and Scientific Substantiation Regulation Commercialization Note: Reduced-Risk Products ("RRPs") is the term
Slide 53: Commercialization of RRPs
Commercialization of RRPs ● Evolution of E-Vapor Product market ● PMI’s RRPs portfolio ● PMI’s Platform 1 commercialization ● PMI’s Platform 4 commercialization Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and populati
Slide 54: Evolution of E-Vapor Products Market
Evolution of E-Vapor Products Market ● Changing the dynamics of the industry ● Classified as medicinal or prohibited product in more than half of OECD markets ● Growth driven by adult smokers’ desire for Reduced-Risk Products, but also by: - Lower price particularly for e-liquid products - Convenien
Slide 55: Evolution of E-Vapor Products Market
Evolution of E-Vapor Products Market ● Some markets dominated by e-liquid products – rechargeable "tanks" with nicotine containing liquids – whilst in others "cartomizer" products are leading ● Wide range of penetration levels in various markets ● High interest but potential of the category currentl
Slide 56: Maturity Levels of E-Vapor Markets
Maturity Levels of E-Vapor Markets ● Mature markets: - UK (7.8% adult smokers used an e-vapor in the past 7 days), Poland (4.9%), Italy (3.5%) ● Developing markets: - France (11.9%), Spain (2.0%), Denmark (7.6%), Netherlands (3.8%) ● Low penetration markets: - Germany (0.4%), Austria (1.2%) Note: Re
Slide 57: Italy: Adoption of E-Vapor Products
Italy: Adoption of E-Vapor Products (% of adult smokers) 100 Awareness of 96 e-vapor products 79 70 40 Trial 39 (past 12 months) 13 10 16 Purchase 15 (past 12 months) 5 Usage 3 (past 7 days) 0 Oct Nov Dec Jan Feb Mar Apr May Jun Sept Oct Nov Dec 2012 2013 Note: n ~ 2,300 for each wave Source: PMI RR
Slide 58: E-Vapor Market: Conclusions
E-Vapor Market: Conclusions ● E-vapor is a product category which is here to stay ● The category will continue to grow at different rates depending on the market specificities and product improvements ● Excise taxation will probably be implemented ● E-vapor products do not fully respond to evolving
Slide 59: RRPs Commercialization
RRPs Commercialization ● Evolution of E-Vapor Product market ● PMI’s RRPs portfolio ● PMI’s Platform 1 commercialization ● PMI’s Platform 4 commercialization Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population
Slide 60: PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities
PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities Importance of satisfaction P4 like Openness to departure from cigarette flavor and ritual Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk a
Slide 61: PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities
PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities Importance of satisfaction P1 like P4 like Openness to departure from cigarette flavor and ritual Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individua
Slide 62: PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities
PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities Importance of satisfaction P1 like P2 like P4 like Openness to departure from cigarette flavor and ritual Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce i
Slide 63: PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities
PMI’s RRPs Portfolio Addresses Adult Smokers Preferences and Market Opportunities Importance of satisfaction P1 like P3 like P2 like P4 like Openness to departure from cigarette flavor and ritual Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to
Slide 64: Italy: Adoption of E-Vapor Products
Italy: Adoption of E-Vapor Products (million adult smokers) 9.1 8.7 100% 95% 3.3 36% 1.5 17% 0.4(a) 3% Adult Awareness of Trial Purchase Usage Smokers E-vapor Products (past 12 months) (past 12 months) (past 7 days) (a) Includes all users of tobacco products in the past 7 days Note: Number of adult
Slide 65: Italy: Size of the Opportunity
Italy: Size of the Opportunity # of Adult Smokers (millions) Platform 4 • Current generation taste No Tobacco e-vapor product users 0.4 satisfaction • Electronics • Convenience, less smell, no ash Note: The RRPs depicted are subject to ongoing development and therefore the descriptions are • Price a
Slide 66: Italy: Size of the Opportunity
Italy: Size of the Opportunity # of Adult Smokers (millions) Tobacco Platform 1 • Taste satisfaction • Convenience, less smell, no ash • Electronics Tried and rejected 3.0 e-vapor products Platform 4 • Current generation taste No Tobacco e-vapor product users 0.4 satisfaction • Electronics • Conveni
Slide 67: Italy: Size of the Opportunity
Italy: Size of the Opportunity # of Adult Smokers (millions) Aware of but did not 55.0% 5.4 Tobacco try e-vapor products Platform 1 • Taste satisfaction • Convenience, less smell, no ash • Electronics Tried and rejected 3.0 e-vapor products Platform 4 • Current generation taste No Tobacco e-vapor pr
Slide 68: Italy: Size of the Opportunity
Italy: Size of the Opportunity # of Adult Platform 2 • Taste satisfaction Smokers • Convenience, less smell, no ash (millions) • Cigarette-like ritual Aware of but did not 55.0% 5.4 Tobacco try e-vapor products Platform 1 • Taste satisfaction • Convenience, less smell, no ash • Electronics Tried and
Slide 69: Italy: Size of the Opportunity
Italy: Size of the Opportunity # of Adult Platform 2 • Taste satisfaction Smokers • Convenience, less smell, no ash (millions) • Cigarette-like ritual Tobacco Aware of but did not 55.0% 5.4 try e-vapor products Platform 1 • Taste satisfaction • Convenience, less smell, no ash • Electronics Platform
Slide 70: RRPs Commercialization
RRPs Commercialization ● Evolution of E-Vapor Product market ● PMI’s RRPs portfolio ● PMI’s Platform 1 commercialization ● PMI’s Platform 4 commercialization Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population
Slide 71: Investor Day – Reduced-Risk Products (Video)
Investor Day – Reduced-Risk Products Lausanne, June 26, 2014 Video (Approximately 45-second video) Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm
Slide 72: Introducing The System
Introducing The System Note: Reference images only 72
Slide 73: Kit Packaging
Kit Packaging Note: Reference images only 73
Slide 74: Kit Packaging
Kit Packaging Note: Reference images only 74
Slide 75: Kit Packaging Components
Kit Packaging Components Note: Reference images only 75
Slide 76: Components Line-Up
Components Line-Up Note: Reference images only 76
Slide 77: Device Color Customization
Device Color Customization Note: Reference images only 77
Slide 78: Marlboro HeatStick: Tobacco Sticks Specially Designed
Marlboro HeatStick: Tobacco Sticks Specially Designed for Note: Reference images only 78
Slide 79: Marlboro HeatStick: Tobacco Sticks Specially Designed
Marlboro HeatStick: Tobacco Sticks Specially Designed for Note: Reference images only 79
Slide 80: Communication and Commercialization
Communication and Commercialization ● campaign ● Leverage current infrastructure ● New capabilities and channels 80
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Slide 86: Communication and Commercialization
Communication and Commercialization ● campaign ● Leverage current infrastructure ● New capabilities and channels 86
Slide 87: Leverage Current Infrastructure
Leverage Current Infrastructure ● Ensure product availability in C-stores and general trade ● Traditional media to boost awareness ● Leverage existing touch points ● Develop engagement activities to enable longer interaction 87
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Slide 91: New Capabilities and Channels
New Capabilities and Channels E-Commerce ● Digital Platform: - 24/7 online platform providing end-to-end service • Integrated e-commerce platform for adult consumers • Video tutorials, hotline, troubleshooting, FAQ • Testimonials ● Customer Care: ● Personalized, multi-channel customer support center
Slide 92: Launch Plan
: Launch Plan ● shows high potential to address the emerging preferences of adult smokers ● The system and Marlboro HeatSticks tobacco sticks manufacturing has started ● will be introduced in two test cities in Q4 2014, one in Japan and one in Italy ● National expansion starting in 2015 and launch i
Slide 93: Platform 4
Platform 4 PHILIP MORRIS INTERNATIONAL 93
Slide 94: Platform 4: Commercialization Plan
Platform 4: Commercialization Plan ● Agreement with Altria to commercialize their products ● Invest in the development of second generation products for global expansion ● Enter the category starting in the second half of 2014 ● Explore acquisition opportunities that could accelerate the achievement
Slide 95: Nicocigs: Company Information
Nicocigs: Company Information ● Founded in 2008, based in Birmingham ● Strong market position in the UK & Ireland ● Excellent supply chain capability ● Skilled and well trained marketing & sales teams ● Nicolites: company’s main brand: - 26% YTD April Retail SoM - Present in more than 20,000 POS Sou
Slide 96: Reduced-Risk Products: Marketing and Commercialization
Reduced-Risk Products: Marketing and Commercialization Marketing and Commercialization • A strong RRPs portfolio to address all adult smoker R&D and preferences Scientific Regulation Substantiation • New city launches in Q4, 2014 • Entered e-vapor in 2014 / Nicocigs acquisition Note: Reduced-Risk Pr
Slide 97: Reduced-Risk Products: Conclusions
Reduced-Risk Products: Conclusions Reduced-Risk Products ("RRPs") Heated Tobacco Products Nicotine Containing Products Platform 1 Platform 2 Platform 3 Platform 4 R&D and RRPs Marketing and Scientific Substantiation Regulation Commercialization Note: Reduced-Risk Products ("RRPs") is the term we use
Slide 98: Questions & Answers
Investor Day – Reduced-Risk Products Lausanne, June 26, 2014 Questions & Answers Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm
Slide 99: Reconciliation of non-GAAP measures included in this presentation
Reconciliation of non-GAAP measures included in this presentation to the most comparable GAAP measures are provided on our website at: www.pmi.com/2014InvestorDay/RecSlides Glossary of Terms: www.pmi.com/2014InvestorDay/Glossary
Philip Morris International — Investor Day (June 2014) on 6ix