Philip Morris International Inc · NYSE:PM
Philip Morris International — Investor Day (September 2023)
25 slides from Philip Morris International's investor day presentation, Sep 28, 2023
Slide 1: Championing a Smoke-Free World
Championing a Smoke-Free World Stefano Volpetti President Smoke-Free Inhalable Products & Chief Consumer Officer September 28, 2023 Forward-Looking and Cautionary Statements • This presentation contains projections of future results and goals and other forward-looking statements, including statement
Slide 2: Glossary and Key Terms and Definitions
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: Net Revenue Contribution Exceeded 30% in 2022
IQOS: Net Revenue Contribution Exceeded 30% in 2022 Smoke-Free Net Revenues(a) (% of Total PMI Net Revenues) 35.4% 32.1% 19.2% >$5bn >30% ~$10bn(b) 0.7% 2015 2019 2022 Q2’23 (a) Smoke-free net revenues include SFP net revenues and net revenues from the Wellness and Healthcare segment (b) Reflects an
Slide 4: IQOS: Superior Progress across All Stages of Adult Smokers' Conversion Journey
IQOS: Delivers a Superior Progress across All Stages of Adult Smokers’ Conversion Journey Consumer Journey Metrics - Jul’23 (Index = LANU) vs. Closest Competition Convert: 17% Conversion 72% Buy: 24% >100% Try: 46% >40% Aware: 87% >20% 7 Source: PMI Market Research, Nicotine Containing Product Track
Slide 5: IQOS ILUMA: Improves NPS, Conversion, and Accelerates Share Growth
IQOS ILUMA: Improves NPS, Conversion, and Accelerates Share Growth Conversion Rate Launch Time Sep’21 Nov’21 Jul’22 +13 Brand NPS +10 +7 Jul’23 +8pp vs. Blade before launch Japan Switzerland Greece +5.5pp +5.3pp Share of Market +3.7pp Q2, 2023 vs. Quarter before launch Japan Switzerland Greece 92% 9
Slide 6: IQOS: Next Level Innovation with IQOS ILUMA
IQOS: Next Level Innovation with IQOS ILUMA Address Pain Points Increase Delight 2014 2018 2021-2024 2024 Onwards INNOVATION IQOS 2.2, 2.4 & 2.4+ IQOS 3, Multi & DUO IQOS ILUMA FORWARD Category Pioneer Lifestyle Design & Induction Ultimate Convenience Consecutive Use Seamlessly & Pleasure 11 IQOS: E
Slide 7: IQOS: Superior Tobacco Flavor Portfolio
IQOS: Superior Tobacco Flavor Portfolio Cigarette HTU Tobacco Flavor Tobacco Flavor (non-menthol, non-NTD(a)) Volume Share 91% 1.7x of exclusive Legal Age Smokers of Closest Competition (a) NTD stands for New Taste Dimension Note: International cigarette tobacco flavor share excluding China 13 Sourc
Slide 8: TEREA: Innovate & Enhance Tobacco Flavor Experience
TEREA: Innovate & Enhance Tobacco Flavor Experience Today Future 8 CLASSIC TOBACCO VARIANTS ENRICH PORTFOLIO NEW SPACES New & More Complex Tastes 15 TEREA CRAFTED: Botanicals Enhanced Tobacco Taste Natural ingredients, rich taste, distinctive taste experience. For legal age nicotine users who seek t
Slide 9: LEVIA: Zero Tobacco, Rich Flavor Discovery
LEVIA: Zero Tobacco, Rich Flavor Discovery Flavor Forward: LEVIA Rich flavor, pleasant smell, one device - different taste experiences. For early adopters within IQOS franchise / legal age nicotine users that are flavor explorers 17 SENTIA & DELIA: Essentials of Taste PMI HTU SoM(a) in Japan DELIA E
Slide 10: IQOS: a Meaningful Loved Brand Operating in the Same Space as Iconic Brands
#1 SMOKE-FREE BRAND 19 19 IQOS: a Meaningful Loved Brand Operating in the Same Space as Iconic Brands 220 Niche different Meaningful & different 200 IKEA 180 Netflix 160 Difference index Marlboro 140 IQOS Google Heineken 120 Shell 100 Closest Competition 80 60 Meaningful but un-differentiated 60 65
Slide 11: IQOS: Leads the Way Across All Attributes Among IQOS Legal Age Users
IQOS: Leads the Way Across All Attributes Among IQOS Legal Age Users User Experience 7% Category Leadership 10% IQOS Closest Competition Intentional Design 10% Trust, Quality & Backed by Science 7% Satisfaction 10% Accessible 7% Conversion Aid 9% Range 8% Prove We Care 8% Social Moments 8% Reduced R
Slide 12: IQOS: Winning Whilst Having Premium Positioning
IQOS: Winning Whilst Having Premium Positioning IQOS Share of Category (Q2’23) 70% 85% 86% 63% 78% 149 139 128 116 117 100 100 100 100 100 HTU Retail Price Jun’23 (Index = Closest Competition) Japan Italy Germany Poland Czech Republic TEREA Closest Competition 23 Source: PMI Financials or estimates
Slide 13: Credibility
Leverage Credibility Build Engage through Emotional Superior Connection Experiences Behavior Change 25 IQOS: Provides LAS a Tobacco Pleasure that Enables Them to Move Away from Smoking and Feel the Joy of Belonging 26
Slide 14: Experiential Touchpoints
27 27 40% 1 5.4k 10 YoY > m > > k Point of Sales IQOS Stores & Sales & Service Staff for Smoke-Free Partners at Experiential Products Includes Flagship stores, small, Touchpoints large & temporary boutiques as Includes staff at our stores, service As of June 2023 of June 2023 (ex. Russia) centers, c
Slide 15: Experiential Touchpoints Deliver Higher Purchase Intent, Conversion and Advocacy
Experiential Touchpoints Deliver Higher Purchase Intent, Conversion and Advocacy 2x LAS Intention to Purchase >20pp Conversion Uplift 2x Advocacy & Positive Word of Mouth 29 Source: PMI Internal Estimate Digitalization and Scale Optimize the Commercial Engine Efficiency HNB Commercial Cost per Legal
Slide 16: Lil & Bonds: 2nd Tier HNB Portfolio to Broaden the LAS Reach
Lil & Bonds: 2nd Tier HNB Portfolio to Broaden the LAS Reach lil Bonds by IQOS Simple & Convenient Trusted & Affordable 31 Growth Opportunities 32
Slide 17: HNB: Mid-Term Opportunities in Existing IQOS Launch Markets
HNB: Mid-Term Opportunities in Existing IQOS Launch Markets 2022 IQOS Launch Markets Cigarette + HTU Industry Volume 1.3 tn 1.2 tn 0.1 tn IQOS Growth <110m Premium ~25% Opportunity 15% of industry ~25% ≈200 bn units Cigarette HTU Industry 33 Source: PMI Financials or estimates HNB: Mid-Term Opportun
Slide 18: HNB: Vast Greenfield Markets to Unlock
HNB: Vast Greenfield Markets to Unlock Ambition 10% cigarette market ≈18 billion units (a) ~30 million adult smokers ~180 billion cigarette units ~$70 billion cigarette retail value (a) Illustrative target share 35 Source: PMI Financials or estimates HNB: Vast Greenfield Markets to Unlock (Cont’d) 2
Slide 19: HNB: Strong Category Outlook '24-26
HNB: Strong Category Outlook ’24-26 Drive PMI profit growth while investing in high return opportunities IQOS ILUMA HNB leader to drive top line growth Target Lil & Bonds broaden the LAS 180-200bn reach units by 2026 Seize opportunity in accessible greenfield markets 37 Source: PMI Financials or est
Slide 20: eVapor: High Prevalence, Unfavorable Profitability
eVapor: High Prevalence, Unfavorable Profitability 60+ million Adult Vape Users Brand Loyalty Conversion vs. HNB 39 eVapor: Industry Challenges Regulation Negative Media Coverage 2,228 +236% • Youth Access Prevention • Sustainability • Non-compliance 664 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Source: Factiva
Slide 21: eVapor: Vaping Made Right
eVapor: Vaping Made Right Product Marketing Youth • Design - for Adult Nicotine Users, • Content - Must reflect intended focus on Adult Nicotine Users and must Access including flavor, device, package be accurate and non-misleading Prevention • Access - Must be age verified • Access - Only be access
Slide 22: VEEV: Focus On Select Markets
VEEV: Focus On Select Markets ~20 Markets ~20 million Adult Vape Users Source: PMI Financials or estimates 43 VEEV Now & VEEV One: Promising Commercial Start VEEV Now VEEV One 16 9 Markets Markets 2x 2x Weekly Offtake vs. Q1, 2023 Weekly Offtake vs. VEEV Source: PMI Financials or estimates 44
Slide 23: VEEV Accents: Innovation to Improve Conversion & Retention
VEEV Accents: Innovation to Improve Conversion & Retention 2022 Consumer Test In comparison to regular tobacco variants LAS fully switch +11% Retention +65% 2023 Market Pilot In comparison to regular tobacco variants Pod offtake / store +42% (LTD Jul’23) 45 Source: Italy Consumer Test; PMI Financial
Slide 24: In Summary: We are Well Equipped for 2030
Multi-Category Drives Commercial Engine Effectiveness & Efficiency Consumer Research Awareness +17pp Contact to Buy Ratio +5pp Market Pilot Dubai 2.4X Airport Duty Free 47 Source: PMI Market Research; PMI Financial or estimates In Summary: We are Well Equipped for 2030 • IQOS, significant growth opp
Slide 25: 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
Philip Morris International — Investor Day (September 2023) on 6ix