Philip Morris International Inc · NYSE:PM
Philip Morris International — FY2010 Earnings Presentation
39 slides from Philip Morris International's earnings presentation, Feb 10, 2011
Slide 1: 2010 Full-Year and Fourth-Quarter Results
Exhibit 99.3 February 10, 2011 2010 Full-Year and Fourth-Quarter Results
Slide 2: Introduction
Introduction Unless otherwise stated, we will be talking about results for the full-year or fourth-quarter 2010 and comparing them with the same period in 2009 References to PMI volumes refer to PMI shipment data, unless otherwise stated Industry volume and market shares are the latest data availabl
Slide 3: Forward-Looking and Cautionary Statements
Forward-Looking and Cautionary Statements This presentation and related discussion contain statements that, to the extent they do not relate strictly to historical or current facts, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Su
Slide 4: 2010 PMI Highlights
2010 PMI Highlights Solid financial performance, given: Unprecedented excise tax increases in six markets Continued economic uncertainty and high unemployment Consumer downtrading in some markets More pronounced patterns of heightened price competition Surge in illicit trade in markets where disrupt
Slide 5: 2010 Strategic Highlight - Philippines
2010 Strategic Highlight - Philippines Business combination with Fortune Tobacco in February 101 billion unit market, characterized by favorable demographics and increasing purchasing power Strong potential for solid income growth (a) Excluding China Source: PMI estimates 19.1 24.1 (%) PMI Asia Regi
Slide 6: PMI Results
PMI Results Source: PMI Financials - 5.1% + 3.1% - 2.5% + 4.1% Cigarette Volume Excl. Acquisitions Actual Excl. Acquisitions Actual Fourth-Quarter 2010 Full-Year 2010 (% Growth vs. same period in 2009)
Slide 7: PMI Market Share Developments
34.6 35.0 36.2 Q4 34.9 35.5 36.1 Q4 PMI Market Share Developments (a) (a) Excluding USA and China. Historical data adjusted for pro-forma inclusion of business combination with FTC in the Philippines (b) Also excluding duty-free (c) List of Organisation for Economic Co-operation and Development (OEC
Slide 8: Marlboro Market Share
Marlboro – Market Share 8.8 8.9 9.0 9.1 9.2 9.3 Marlboro Global Share of Market (a) – Months Moving Average (%) (a) Excluding China and USA Source: PMI estimates Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Slide 9: L&M Market Share
4.9 6.1 4.3 2.3 L&M Market Share (%) (a) Eastern Europe markets are: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russia, Tadjikistan, Turkmenistan, Ukraine and Uzbekistan Source: PMI estimates EU Region Eastern Europe (a)
Slide 10: PMI Results
PMI Results Source: PMI Financials + 2.8% + 4.8% + 3.4% + 8.7% Net Revenues Excl. Curr. & Acquisitions Actual Excl. Curr. & Acquisitions Actual Fourth-Quarter 2010 Full-Year 2010 (% Growth vs. same period in 2009)
Slide 11: PMI Results
PMI Results Source: PMI Financials + 9.9% + 12.2% + 5.8% + 10.3% Adjusted OCI + 2.8% + 4.8% + 3.4% + 8.7% Net Revenues Excl. Curr. & Acquisitions Actual Excl. Curr. & Acquisitions Actual Fourth-Quarter 2010 Full-Year 2010 (% Growth vs. same period in 2009)
Slide 12: Pricing Variance
Pricing Variance 1,082 1,223 1,984 1,662 2,000 ($ million) Q4 YTD Sep 35% Source: PMI Financials
Slide 13: Operating Margins
Operating Margins Adjusted OCI Margins 2.6 37.7 40.3 0.9 41.7 42.6 Total 0.7 28.0 28.7 0.3 30.0 30.3 LA&C 8.9 29.3 38.2 1.4 37.3 38.7 Asia 0.7 36.4 37.1 2.4 39.2 41.6 EEMA 0.7 pp 48.0 % 48.7 % 0.2 pp 50.2 % 50.4 % EU Variance (a) Variance (a) Fourth-Quarter Full-Year (a) Excluding currency and acqui
Slide 14: PMI Results
PMI Results + 18.5% (a) + 19.8% + 14.0% (a) + 17.6% Adjusted diluted EPS + 9.9% + 12.2% + 5.8% + 10.3% Adjusted OCI + 2.8% + 4.8% + 3.4% + 8.7% Net Revenues Excl. Curr. & Acquisitions Actual Excl. Curr. & Acquisitions Actual Fourth-Quarter 2010 Full-Year 2010 (% Growth vs. same period in 2009) (a) O
Slide 15: Cash Flow
Cash Flow (a) Free cash flow equals net cash provided by operating activities less capital expenditures Source: PMI Financials Free Cash Flow (a) ($ million) +21.7% Improvement driven in large part by the strict management of our working capital, and in particular a reduction in our receivables and
Slide 16: Cumulative Operating Cash Flow (2008-2010)
Cumulative Operating Cash Flow (2008-2010) 6.6 7.9 7.3 7.9 7.8 9.4 21.7 25.2 March 2008 Actual ($ billion) Source: PMI Financials Forecast Results
Slide 17: Shareholder Returns
Shareholder Returns Cumulative increase in dividend of 39.1% since March 2008 spin-off By the end of December 2010, total of 334 million shares had been repurchased, representing 15.8% of shares outstanding at that time, at an average price of $47.83 • •
Slide 18: 2011 EPS Guidance
2011 EPS Guidance At prevailing exchange rates, reported diluted EPS guidance for 2011 is $4.35 to $4.45, versus $3.92 in 2010 On an adjusted basis, compared to $3.87 in 2010, this corresponds to a growth rate of approximately 12.5% to 15% at prevailing exchange rates, or approximately 10% to 12.5%
Slide 19: Excise Taxation
Excise Taxation Disruptive excise tax increases remain the key risk to our business Outlook is for reasonable increases in 2011 other than in Mexico • •
Slide 20: Excise Taxation
Excise Taxation Disruptive excise tax increases remain the key risk to our business Outlook is for reasonable increases in 2011 other than in Mexico New EU excise tax directive since January 2011 Important structural improvements in excise tax systems in France, Greece, the Netherlands and Sweden Vi
Slide 21: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon
Slide 22: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon Organic volume performance expected to be in line wi
Slide 23: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon Organic volume performance expected to be in line wi
Slide 24: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon Organic volume performance expected to be in line wi
Slide 25: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon Organic volume performance expected to be in line wi
Slide 26: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon Organic volume performance expected to be in line wi
Slide 27: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon Organic volume performance expected to be in line wi
Slide 28: 2011 Business Outlook
2011 Business Outlook Reasonable excise tax increases, except Mexico High unemployment continuing to impact industry volumes and mix Recent events in North Africa likely to impact our performance there, but hope this will be a temporary phenomenon Organic volume performance expected to be in line wi
Slide 29: Questions & Answers
Questions & Answers 2010 Full-Year and Fourth-Quarter Results
Slide 30: Reconciliation of Non-GAAP Measures
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Adjustments for the Impact of Currency and Acquisitions For the Quarters Ended December 31, ($ in millions) (Unaudited) (1) Represents the business combination in the Philippines (2) Represents the business combina
Slide 31: Adjusted Operating Companies Income Reconciliation
Reported Operating Companies Income Less Asset Impairment & Exit Costs Adjusted Operating Companies Income Less Currency Adjusted Operating Companies Income excluding Currency Less Acquisi- tions Adjusted Operating Companies Income excluding Currency & Acquisitions Reported Operating Companies Incom
Slide 32: Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and Adjusted Diluted EPS, excluding Currency For the Quarters Ended December 31, (Unaudited) % Change Reported Diluted EPS 0.96 $ 0.80 $ 20.0% Adjustme
Slide 33: Reconciliation of Reported Diluted EPS, excluding Currency
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency For the Quarters Ended December 31, (Unaudited) % Change Reported Diluted EPS 0.96 $ 0.80 $ 20.0% Less: Currency Impact 0.01 Report
Slide 34: Reported Net Revenues Reconciliation
Reported Net Revenues Less Excise Taxes Reported Net Revenues excluding Excise Taxes Less Currency Reported Net Revenues excluding Excise Taxes & Currency Less Acquisi- tions Reported Net Revenues excluding Excise Taxes, Currency & Acquisitions Reported Net Revenues Less Excise Taxes Reported Net Re
Slide 35: Adjusted Operating Companies Income Reconciliation
Reported Operating Companies Income Less Asset Impairment & Exit Costs Adjusted Operating Companies Income Less Currency Adjusted Operating Companies Income excluding Currency Less Acquisi- tions Adjusted Operating Companies Income excluding Currency & Acquisitions Reported Operating Companies Incom
Slide 36: Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and Adjusted Diluted EPS, excluding Currency For the Years Ended December 31, (Unaudited) % Change Reported Diluted EPS 3.92 $ 3.24 $ 21.0% Adjustments
Slide 37: Reconciliation of Reported Diluted EPS, excluding Currency
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency For the Years Ended December 31, (Unaudited) % Change Reported Diluted EPS 3.92 $ 3.24 $ 21.0% Less: Currency Impact 0.12 Reported
Slide 38: Reconciliation of Operating Cash Flow to Free Cash Flow
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Operating Cash Flow to Free Cash Flow and Free Cash Flow, excluding Currency Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency For the Quarters and Years Ended Decem
Slide 39: Full-Year and Fourth-Quarter Results
Full-Year and Fourth-Quarter Results February 10, 2011
Philip Morris International — FY2010 Earnings Presentation on 6ix