Philip Morris International Inc · NYSE:PM
Philip Morris International — Q2 2023 Earnings Presentation
16 slides from Philip Morris International's earnings presentation, Jul 20, 2023
Slide 1: Delivering a Smoke-Free Future: 2023 Second-Quarter Results
Delivering a Smoke-Free Future 2023 Second-Quarter Results July 20, 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 me
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: Q2 and H1 2023 Results Summary
Q2, 2023: Excellent Volume, Net Revenue and EPS Growth Shipment Volume +19% (Organic variance vs. PY) +3.3% Q2’23 Swedish Match Pro forma Net Revenue Growth Net Revenues +10.5% Excl. Currency (Organic variance vs. PY) Net Revenue per Unit(a) +7.0% (Organic variance vs. PY) Operating Income +6.9% (Or
Slide 4: Net Revenue Growth Drivers and Gross Margin Dynamics
Volume, Price & HTU Mix Driving Organic Net Revenue Growth 14.5% +15% Swedish Match +4.0pp Smoke-Free Volume 10.5% vs. Q2’22(a) +1.2pp Currency & Category Mix & Acquisitions Other, Incl. +6.0pp Device Impact 3.3% Combustible and HTU Pricing Q2, 2023 Organic Q2, 2023 Organic Shipment Net Revenue Net
Slide 5: SG&A-to-Sales Ratio and Raised 2023 Forecasts
Increasingly Favorable SG&A-to-Sales Ratio (as a % of Net Revenues) Adj. Marketing, Admin. & Research Costs 25.3% 24.8% +0.1pp 24.9% (1.7)pp Currency & Acquisitions +2.5pp Timing / Base of Comparison (1.3)pp Effects Cost Efficiencies Inflation and / Other Investments Q2, 2022 Q2, 2023 Q2, 2023 Organ
Slide 6: Continued Strong Momentum into H2; IQOS Driving Volume Growth
Continued Strong Momentum into H2 • Strong H2, 2023 expected on all key metrics • Q3 key assumptions: ⎼ High single-digit organic top-line growth ⎼ HTU shipments of 31-33 billion units ⎼ Adjusted diluted EPS of $1.60-$1.65, including unfavorable currency impact of 6 cents at prevailing exchange rate
Slide 7: Rapid Progress in Smoke-Free Transformation
Rapid Progress in Smoke-Free Transformation HTU Volume Contribution(a) Smoke-Free Net Revenues(b) (As a % of PMI Total Shipment Volume) (Smoke-Free Net Revenues as a % of Total PMI Adjusted Net Revenues) ~18% Volume Contribution Incl Oral smoke-free(c) 16.4% 35.0% 14.0% 30.9% H1, 2022 H1, 2023 H1, 2
Slide 8: Total Market Share Momentum and IQOS User Growth
Positive Total Market Share Momentum Q2 Change H1 Change vs. PY vs. PY Total 28.5% +1.1pp Total 27.9% +0.5pp 27.4% 27.4% HTUs 4.6% +0.7pp 3.9% 4.0% HTUs 4.6% +0.6pp 23.5% Cigarettes 23.9% +0.4pp 23.4% Cigarettes 23.3% (0.1)pp Q2, 2022 Q2, 2023 H1, 2022 H1, 2023 Note: Total may not foot due to roundi
Slide 9: Europe Region: Continued IQOS Success
Europe Region: Continued IQOS Success 11.6 11.0 10.5 10.0 9.5 8.9 Adj. IMS(a) HTU Adjusted SoM(b) 9.2% (in billion units) 9.0% 8.3% 7.5% 7.4% 7.2% (a) Excluding the impact of estimated distributor and wholesaler inventory movements, based on a four-quarter moving average Q1 Q2 Q3 Q4 Q1 Q2 (b) Adjust
Slide 10: Japan: ILUMA Momentum; Low and Middle-Income Markets
Japan: ILUMA Momentum Continues 9.3 PMI HTU Offtake Shares(c) 9.0 8.7 Tokyo 32.5% 8.4 8.2 28.8% 8.0 26.2% 26.3% Adj. IMS(a) (in billion units) HTU Adjusted SoM(b) +3.7pp 24.5% Sendai 30.3% 23.6% 27.7% 22.8% 22.9% +2.6pp Fukuoka 28.6% 25.2% Q1 Q2 Q3 Q4 Q1 Q2 2022 2023 +3.4pp (a) Excluding the impact
Slide 11: Swedish Match Accelerating Our Smoke-Free Trajectory; ZYN Growth
Swedish Match Accelerating Our Smoke-Free Trajectory • Strong Q2 ex-currency top-line growth of +19% enhancing PMI growth trajectory • Adding +70bps of ex-currency growth to PMI H1 top-line(a), +60bps to adj. OI margin • Exceptional U.S. ZYN volume and share • Robust cigar results • Integration prog
Slide 12: Continued Innovation & Expansion; Championing Sustainability
Continued Innovation & Expansion • Full global roll-out of IQOS ILUMA: ⎼ Aim to be present in ~50 markets by year-end • Investing behind ZYN in the U.S. and readying capabilities for IQOS • BONDS pilot launches progressing well • International expansion of nicotine pouches • Attractive long-term gro
Slide 13: Another Strong Year in Our Smoke-Free Transformation; Questions & Answers
Another Strong Year in Our Smoke-Free Transformation • On track for third consecutive year of volume growth • Strong top and bottom-line delivery despite headwinds • Outstanding IQOS and ZYN performance • Exciting opportunities to accelerate smoke-free future • Committed to progressive dividend poli
Slide 14: Appendix
Delivering a Smoke-Free Future 2023 Second-Quarter Results July 20, 2023 Appendix 28
Slide 15: 2023 EPS Guidance; Our Sustainability Strategy
2023: EPS Guidance Full-Year ($/share) 2023 Forecast 2022 Growth Reported Diluted EPS $5.36 – $5.45 $5.81 Adjustments: - Asset impairment and exit costs 0.06 – - Termination of distribution arrangement in the Middle East 0.04 – - Tax benefit associated with Swedish Match AB financing (0.06) (0.13) -
Slide 16: Delivering a Smoke-Free Future: 2023 Second-Quarter Results
Delivering a Smoke-Free Future 2023 Second-Quarter Results July 20, 2023
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