Philip Morris International Inc · NYSE:PM
Philip Morris International — Q3 2023 Earnings Presentation
16 slides from Philip Morris International's earnings presentation, Oct 19, 2023
Slide 1: 2023 Third-Quarter Results
Championing a Smoke-Free World 2023 Third-Quarter Results October 19, 2023 Introduction • A glossary of terms, including the definition for smoke-free products(a) as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures for non-GAAP financial
Slide 2: Forward-Looking and Cautionary Statements
Forward-Looking and Cautionary Statements • This presentation contains projections of future results and goals and other forward-looking statements, including statements regarding business plans, expectations and strategies. Achievement of future results is subject to risks, uncertainties and inaccu
Slide 3: Excellent Q3 Performance Across All Key Metrics
Excellent Q3 Performance Across All Key Metrics Shipment Volume +2.2% +22% (Variance vs. PY) Q3’23 Swedish Match Adj. Net Revenue Growth Net Revenues +9.3% Excl. Currency(a) (Organic variance vs. PY) Operating Income +11.3% (Organic variance vs. PY) Adj. Diluted EPS +20.3% (Currency neutral variance
Slide 4: Raising 2023 Currency-Neutral Growth Outlook
Raising 2023 Currency-Neutral Growth Outlook FY 2023 Outlook Previous Updated HTU Shipments (units) 125-130bn 125-127.5bn Nicotine Pouch Shipments (cans) 370-400m 390-410m Net Revenue Growth(a) 7.5-8.5% ~8% Adj. Diluted EPS Growth(b) 8-9.5% 10.0-10.5% (a) On an organic basis (b) Currency-neutral var
Slide 5: Total Volume Growth Driven by IQOS
Total Volume Growth Driven by IQOS (billion units) Q3 vs. PY YTD Sept vs. PY Oral Nicotine(a) Oral Nicotine(a) 175.1 (in million cans) 209.0 19.4% 506.6 (in million cans) 579.8 14.4% 189.5 Total 193.6 2.2% 545.0 Total 553.1 1.5% 27.5 HTUs 32.5 18.0% 77.1 HTUs 91.3 18.3% 162.0 Cigarettes 161.1 (0.5)%
Slide 6: Acceleration in Organic Growth Continues
Acceleration in Organic Growth Continues Organic OI Growth (Change vs. PY) 13.0% 11.3% 6.9% 4.6% 5.4% Q1’23 2020 2021 2022 Q2'23 Q3'23 (10.7)% 11 Source: PMI Financials or estimates Return to Organic Margin Expansion Adjusted OI Margin +42.2% +0.4pp +41.5% +0.3pp SG&A (1.4)pp Gross Margin +40.8% Cur
Slide 7: Accelerating Momentum for Swedish Match
Accelerating Momentum for Swedish Match • Excellent Q3 ex-currency top- line growth of +22%(a) • Accretive to top-line and margins • Already approaching 1/4 of total smoke-free product contribution(b) • Remarkable U.S. ZYN growth (a) Excluding accounting reclassification impacts, but including $10m
Slide 8: Continued IQOS User Growth with Normal Seasonality
Continued IQOS User Growth with Normal Seasonality (in millions) Total IQOS Users(a) Total IQOS Users(a) Quarterly Growth 27.2 27.4 25.8 24.9 Q3'23 +0.2 23.7 23.7 22.7 Q3'22 ─ Estimated users who have switched to IQOS 72% 71% 71% 71% 72% 72% 72% and stopped smoking(a) Q3'21 +0.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 9: Japan: ILUMA Momentum Continues
Japan: ILUMA Momentum Continues 9.6 9.3 Japan HTU Offtake Share(c) 9.0 8.7 Tokyo 33.3% 8.4 29.7% 8.2 8.0 Adj. IMS(a) (in billion units) HTU Adjusted SoM(b) 26.6% 26.2% 26.3% +3.6pp Sendai 30.5% 28.4% 24.5% 23.6% 22.8% 22.9% +2.1pp Fukuoka 28.9% 26.3% +2.6pp Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3’22 Q3’23 2022 2023
Slide 10: Combustibles: Higher Pricing and Category Share
Combustibles: Higher Pricing and Category Share Combustible Pricing Share of Cigarette Category(b) (% organic change vs. PY) (a) (Change vs. PY in pp) 2020 2021 0.3 8.6 0.1 2022 YTD Sept, 5.0 2023 3.7 (0.7) 2.7 (1.2) 2020 2021 2022 YTD Sept, 2023 (a) Pricing variance is based on adjusted net revenue
Slide 11: Innovation & Expansion Driving Future Growth
Innovation & Expansion Driving Future Growth • Global roll-out of IQOS ILUMA continues • Evolution of IQOS consumables with LEVIA: ⎼ Non-tobacco experience to switch more adult smokers • Investing behind ZYN & readying for U.S. IQOS launch • Expanding ZYN internationally 21 Sustainability: Continued
Slide 12: Transforming, Delivering & Rewarding Shareholders
Transforming, Delivering & Rewarding Shareholders • On track for a very strong year • Excellent IQOS and ZYN performance • Innovating to accelerate smoke-free future • Confident in 2024-26 growth targets • Ambition to be substantially smoke- free by 2030 (>2/3 net revenues) • 16 years of dividend gr
Slide 13: Appendix, and Reconciliation of Non-GAAP Measures
Championing a Smoke-Free World 2023 Third-Quarter Results October 19, 2023 Appendix, and Reconciliation of Non-GAAP Measures 26
Slide 14: 2023: EPS Guidance
2023: EPS Guidance Full-Year ($/share) 2023 Forecast 2022 Growth Reported Diluted EPS $4.95 – $4.98 $5.81 Adjustments: - Asset impairment and exit costs 0.06 – - Termination of distribution arrangement in the Middle East 0.04 – - Income tax impact associated with Swedish Match AB financing 0.03 (0.1
Slide 15: Impressive Progress in European Key Cities
Impressive Progress in European Key Cities PMI HTU Offtake Share (Q3, 2023) Change vs. PY +1.2pp +1.3pp +0.8pp +1.9pp +1.2pp +2.1pp +2.8pp +2.0pp +0.3pp +4.1pp +5.0pp +5.2pp +0.1pp 38.5% 34.2% 28.4% 26.0% 19.9% 20.0% 20.0% 14.9% 10.0% 7.2% 7.5% 4.6% 5.1% Madrid Amsterdam London Vienna Munich Zurich
Slide 16: Reconciliation of Non-GAAP Measures
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Reported Operating Income to Adjusted Operating Income and RBH Impact ($ in millions) / (Unaudited) Year Ended Year Ended Year Ended Year Ended Quarter Ended Quarter Ended Quarter Ended Quarter En
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