Philip Morris International Inc · NYSE:PM
Philip Morris International — Investor Day (September 2016)
41 slides from Philip Morris International's investor day presentation, Sep 29, 2016
Slide 1: Investor Day – Marketing & Sales
Investor Day – Marketing & Sales Lausanne, September 29, 2016 Werner Barth Senior Vice President, Marketing & Sales
Slide 2: PMI: A Winning Set of Assets to Build From
PMI: A Winning Set of Assets to Build From Superior Strong Powerful Brand Innovation Commercial Portfolio Pipeline Organization #1 selling Market leader in Commercial cigarette brand major growing Approach rolled in the world segments out in 60 markets FMCG brand Capability to Preparing
Slide 3: PMI: Superior Brand Portfolio
PMI: Superior Brand Portfolio International Local Heritage Premium & Above Mid-Price Low-Price Note: Pack designs are for illustrative purposes only 3
Slide 4: PMI: Powered by Four Key International Brands
PMI: Powered by Four Key International Brands % of Total PMI Cigarette Volume 56.8 55.4 54.5 52.8 51.2 2012 2013 2014 2015 H1, 2016 International Cigarette Share (%) 15.5 15.8 15.9 15.0 15.1 2012 2013 2014 2015 H1, 2016 Note: Excluding China and the U.S. Pack designs are for illustrative purposes on
Slide 5: Key Taste / Format Segment Dynamics
Key Taste / Format Segment Dynamics(a) International Cigarette Industry Share of Key Growing Segments (%) Low Tar(b) Slims(c) Capsules #1 #1 #1 +2.1pp +4.5pp +2.3pp 42.8 40.7 14.1 9.6 0.7 3.0 2011 2015 2011 2015 2011 2015 PMI SoS (%) 32.3 33.4 28.2 32.9 44.9 38.5 Var. vs. +1.1pp +4.7pp (6.4)pp 2011
Slide 6: Changing LAS Needs Turned into Global Innovation Focus Spaces
Changing LAS Needs Turned into Global Innovation Focus Spaces (% of LAS) PREMIUMIZATION PLEASURE 64% CONVENIENCE 70% PERSONALIZATION 72% SUSTAINABILITY 78% Note: LAS stands for Legal Age (minimum 18 year old) Smokers 6
Slide 7: Changing LAS Needs Turned into Global Innovation Focus Spaces
Changing LAS Needs Turned into Global Innovation Focus Spaces (% of LAS) PREMIUMIZATION PLEASURE 64% CONVENIENCE 70% PERSONALIZATION 72% SUSTAINABILITY 78% Lighter, more rounded Minimizing unpleasant Different intensities Additive free tobacco taste and experience smoke odor and varieties of
Slide 8: New Product Launches: Fewer, Better
New Product Launches: Fewer, Better Number of New Product Launches Strike Rate (index = 2012) (index = 2012) 100 101 146 150 94 93 132 70 100 2012 2013 2014 2015 2016 2012 2013 2014 2015 Latest Estimate(a) Latest Estimate(b) (a) Based on YTD August, 2016 submissions, annualized basis past trends (b)
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Slide 10: Marlboro: Summary
Marlboro: Summary ● Marlboro is the world´s largest brand and continues to perform well in difficult economic environment commanding a cigarette share of 9.6%(a): - Cigarette volume reached 286 billion units in 2015 - In the last five years, innovative new products have contributed 12.5% of Marlboro
Slide 11: Marlboro 2.0: Image Assessment in Key Markets
Marlboro 2.0: Image Assessment in Key Markets (index = Before 2.0) Germany Saudi Arabia Spain Before 2.0 After 2.0 Before 2.0 After 2.0 Before 2.0 After 2.0 Harsh 100 82 100 60 100 100 Modern 100 130 100 113 100 117 Gender Inclusive 100 113 Not available 100 110 Note: Pack designs are for illustrati
Slide 12: Marlboro Smooth 2.0: Continued Success into ESF
Marlboro Smooth 2.0: Continued Success into ESF Marlboro Touch: ● >1.0% cigarette SoM in 27 markets ● >0.5% cigarette SoM in 12 markets ● +5 markets in 2016 Marlboro Advance: ● Sold in 19 markets ● >0.5% cigarette SoM in 3 markets ● +4 markets in 2016 Note: ESF stands for Ego-Social Friendly Source:
Slide 13: Marlboro Innovation: New Taste Dimensions
Marlboro Innovation: New Taste Dimensions 2015 (Latin America) LAUNCH Note: Pack designs and visuals are for illustrative purposes only 13
Slide 14: Marlboro Innovation: New Taste Dimensions
Marlboro Innovation: New Taste Dimensions 2015 September 2016 (Latin America) (Japan) LAUNCH Note: Pack designs and visuals are for illustrative purposes only 14
Slide 15: Marlboro Innovation: New Taste Dimensions
Marlboro Innovation: New Taste Dimensions 2015 September 2016 September 2016 (Latin America) (Japan) (Indonesia) LAUNCH Note: Pack designs and visuals are for illustrative purposes only 15
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Slide 20: New Global Engagement Platform: Neuland
New Global Engagement Platform: "Neuland" ● An innovative engagement platform for LAS with online and offline experiences, tied into "You Decide" ● Designed to: - Enable collaboration and reward participation - Increase our digital footprint - Generate word of mouth ● 20+ markets for 2016 roll-out,
Slide 21: Video (not shown on webcast)
Investor Day – Marketing & Sales Lausanne, September 29, 2016 Video (not shown on webcast)
Slide 22: Note: Pack designs are for illustrative purposes only
Note: Pack designs are for illustrative purposes only 22
Slide 23: Parliament: Global Brand Performance
Parliament: Global Brand Performance Parliament Cigarette Share (%)(a) Key Market Cigarette Shares (%) 2014 2015 H1, 2016 11.6 11.6 1.6 11.2 1.5 1.5 7.6 7.1 7.2 3.7 3.9 3.9 2.9 2.3 2.4 2.5 2.2 2.2 2014 2015 H1, 2016 Turkey Russia Korea Japan GCC (a) Excluding China and the U.S. Source: PMI Financial
Slide 24: Parliament Innovation
Parliament Innovation ● A contemporary gender-inclusive expression of Parliament ● Launched in Moscow in April 2015, followed by national roll out ● Successful in addressing the needs of Female LAS (55% of LAS profile) Note: LAS stands for Legal Age (minimum 18 year old) Smokers. Pack designs are fo
Slide 25: Parliament Innovation
Parliament Innovation ● A contemporary gender-inclusive ● Parliament Carat – the epitome of luxury expression of Parliament ● New pack with laser-shaped bevel ● Launched in Moscow in April ● Diamond cut tobacco and less smell 2015, followed by national roll out feature ● Successful in addressing the
Slide 26: Parliament Innovation
Parliament Innovation ● A contemporary gender-inclusive ● Parliament Carat – the epitome of luxury ● A contemporary expression of expression of Parliament capsules ● New pack with laser-shaped bevel ● Launched in Moscow in April ● Launched in Japan in 2016 ● Diamond cut tobacco and less smell 2015,
Slide 27: Note: Visuals are for illustrative purposes only Note: Visuals are for illustrative purposes only
Note: Visuals are for illustrative purposes only 27 Note: Visuals are for illustrative purposes only
Slide 28: Fino secen duvan za ujednacen kvalitet
FINO SECEN DUVAN ZA UJEDNACEN KVALITET Nywewe y6uja. fyBaHckun AuM WteTH HYAUMA y Bawoj oKONNWHYN. 28
Slide 29: L&M: Summary
L&M: Summary ● 3rd largest international brand ● Cigarette volume reached 98 billion units in 2015 ● 3.3% share of international cigarette market in 2015(a) L&M Cigarette Share of Market (%) Variance 2014 2015 H1, 2016 (H1, 2016 +0.1pp +0.8pp (0.1)pp ̶ pp vs. 2014) 6.8 6.9 6.9 5.1 4.3 4.7 1.5 1.5 1.
Slide 30: L&M: Key Initiatives
L&M: Key Initiatives Note: Pack designs and visuals are for illustrative purposes only 30
Slide 31: Note: Visual is for illustrative purposes only
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Slide 33: Note: Pack designs are for illustrative purposes only
Note: Pack designs are for illustrative purposes only 33
Slide 34: Chesterfield: Global Brand Performance
Chesterfield: Global Brand Performance Chesterfield Cigarette Share (%)(a) Key Market Cigarette Shares (%) 2014 2015 H1, 2016 11.6 11.0 1.5 9.2 9.2 9.1 8.9 1.4 1.4 8.7 8.6 7.6 3.1 3.3 2.9 2014 2015 H1, 2016 Italy Spain Poland Turkey (a) Excluding China and the U.S. Source: PMI Financials or estimate
Slide 35: Chesterfield: Core Upgrade in Switzerland and Innovation in Croatia
Chesterfield Core Upgrade in Innovation in Switzerland Croatia ● Share continuously fueled by image-building ● Progressive, ego-social friendly offer (Less Smoke activities supporting the core (vs. new launches) Smell, Ash Control) ● Now over 5% cigarette SoM ● 2.8% cigarette SoM in less than 2 year
Slide 36: Commercial Organization
Commercial Organization Reach 14,000 60 90% People Trained Markets PMI Adjusted OCI weighted coverage % Markets Capability Building 88% Benefits Empowerment of Tools & Systems 72% Frontline Staff Territory Management 67% Marketing & Sales Deployment Tracking 77% Collaboration Project Management 90%
Slide 37: Digitalization: New Model of Commercial Organization
Digitalization: New Model of Commercial Organization TEN TaskApp ● Outsourcing low added ● One-stop shop on-line value activities Engagement Platform for Retailers ● Expand coverage Pilot in Ukraine vs. ● 3,800 users in May 2016 Traditional TaskApp Plan for 2017 Cost per Shop / month (28)% ● Global
Slide 38: Commercial Organization Journey to RRPs
Commercial Organization Journey to RRPs RRP Force: New Roles Required Skills Communication Impact Entrepreneurship 95% FTEs Execution Accuracy in newly designed roles Selling Skills Note: Reduced-Risk Products (RRPs) is the term company uses to refer to products with the potential to reduce individu
Slide 39: Conclusion
Conclusion ● Strong and differentiated brand portfolio ● Our flagship brand Marlboro continues to grow equity and share in 2015: - Supported by Marlboro Architecture 2.0, successful line extensions and a new, elevated communication platform ● Competitive international cigarette brand portfolio cover
Slide 40: Questions & Answers
Investor Day – Marketing & Sales Lausanne, September 29, 2016 Questions & Answers 40
Slide 41: Reconciliations of non-GAAP measures
Reconciliations of non-GAAP measures included in this presentation to the most comparable GAAP measures are provided on our website at: www.pmi.com/2016InvestorDay/RecSlides Glossary of Terms: www.pmi.com/2016InvestorDay/Glossary
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