Philip Morris International Inc · NYSE:PM
Philip Morris International — Investor Day (February 2021)
78 slides from Philip Morris International's investor day presentation, Feb 10, 2021
Slide 1: The Next Growth Phase
2021 Delivering a Smoke-Free Future INVESTOR DAY The Next Growth Phase Jacek Olczak, Chief Operating Officer Philip Morris International February 10, 2021
Slide 2: Delivering The Next Growth Phase
Delivering The Next Growth Phase • Leading Industry Transformation • IQOS Performance • Consumer at the Core • Commercial Model • The Next Stage of Growth • Combustibles Performance 2
Slide 3: IQOS: Rapid Adoption of New Technologies
IQOS: Rapid Adoption of New Technologies Other Technologies IQOS HEETS (3-month moving average) Hybrid & Electric Cars (Europe) 10 10 HEETS Italy Smart Watches (Global) 8 8 HEETS Russia Share of Market (%) Solar Power (Italy) Share of Market (%) 6 6 4 4 2 2 0 0 0 12 24 36 48 0 12 24 36 48 Months fro
Slide 4: Undisputed Leader of Industry Transformation
Undisputed Leader of Industry Transformation • Biggest positive impact on harm reduction • Segment leader, strongest brand, first mover advantage • Highest investments • Most advanced internal transformation • Rigor around scientific validation / standards • Leading responsible and sustainable marke
Slide 5: Almost 13 Million Users Switched to IQOS and Stopped Smoking
Almost 13 Million Users Switched to IQOS and Stopped Smoking Total IQOS Users(a) 17.6 Estimated users who are in various stages of conversion(a) Estimated users who switched to IQOS and have stopped smoking (a) 13.5 9.6 6.9 12.7 2.1 73% 69% 69% 71% 72% 2016 2017 2018 2019 2020 (a) In millions. See G
Slide 6: Clear Leadership of the Biggest Smoke-Free Category
Clear Leadership of the Biggest Smoke-Free Category PMI Category Share 81% 81% 82% 50% 52% 46% 27% 27% 26% 2018 2019 2020 HnB HnB & E-vapor Cigarettes International volume share excl. China and the U.S. Source: PMI Financials or estimates 6
Slide 7: IQOS Brand Equity is Strong
IQOS Brand Equity is Strong Brand Equity Score(a) 130 153 138 146 Gap to competition(b) +40 +54 +34 +64 (a) Meaningful difference index: meaningful refers to the capacity of brands to drive affinity among Legal Age Smokers (LAS) and address their needs; difference refers to the ability of brands to
Slide 8: Third-Largest 'Brand' in IQOS Markets
Third-Largest ‘Brand’ in IQOS Markets Share in IQOS Markets (Q4, 2020)(a) 13.1% 6.7% 3.8% #3 Marlboro Winston PMI HTUs Rothmans L&M (a) Reflects 63 markets where IQOS is available in key cities or nationwide at December 31, 2020. Excludes the U.S. Note: All ‘brands’ except ‘PMI HTUs’ include cigaret
Slide 9: Substantial Investment in Best-in-Class Capabilities
Substantial Investment in Best-in-Class Capabilities (in $ billion) Cumulative RRP Investments 8.1 7.2 6.2 4.6 3.2 2.4 2015 2016 2017 2018 2019 2020 Annual 0.5 0.8 1.4 1.6 1.0 0.9 Incremental Note: Investments reflect research, product and commercial development, production capacity, scientific subs
Slide 10: Delivering The Next Growth Phase
Delivering The Next Growth Phase • Leading Industry Transformation • IQOS Performance • Consumer at the Core • Commercial Model • The Next Stage of Growth • Combustibles Performance 10
Slide 11: Strong Market Share Growth in Key Geographies
Strong Market Share Growth in Key Geographies HTU Share of Market in Russia (%) HTU Share of Market in Japan (%)(a) HTU Share of Market in EU (%) 7.2 20.1 5.0 5.0 3.2 16.7 1.7 15.1 1.7 Q4, 2018 Q4, 2019 Q4, 2020 Q4, 2018 Q4, 2019 Q4, 2020 Q4, 2018 Q4, 2019 Q4, 2020 (a) Including the cigarillo catego
Slide 12: Broadening Geographic Sources of IQOS Growth
Broadening Geographic Sources of IQOS Growth (in billion units) HTU In-Market Sales 76 18% Others 60 18% Russia 20% 44 23% 14% EU Region 6% 20% 26% 23 13% 11% 7% Japan 5 95% 81% 59% 45% 38% 2016 2017 2018 2019 2020 Market 13 18 6 8 12 Launches Note: Does not sum up to 100% due to rounding Source: PM
Slide 13: IQOS Successful Across Market Archetypes
IQOS Successful Across Market Archetypes 22.1% Q4, 2020 HTU Share of Market 10.9% 7.2% 7.4% 5.3% Portugal Malaysia Russia Poland Japan Full Flavor Share of Market Year 77% 71% 34% 26% 25% Before Launch Menthol Share of Market Year 9% 23% 2% 24% 28% Before Launch Source: PMI Financials or estimates 1
Slide 14: Strong Double-Digit Shares in Many Key Cities
Strong Double-Digit Shares in Many Key Cities (PMI HTU offtake share) Vilnius Prague 34.5% 16.0% 16.5% 29.8% 14.5% 15.0% 28.4% 29.3% 29.1% 13.7% Tokyo(a) Rome 24.9% 16.4% 23.1% 23.4% 13.3% 13.7% 12.7% 20.6% 22.0% 10.7% Kiev Moscow 22.8% 14.4% 14.4% 14.4% 14.6% 13.6% 18.1% 15.3% 18.1% 13.5% Athens Wa
Slide 15: Accelerating Key City Shares in Western Europe
Accelerating Key City Shares in Western Europe (PMI HTU offtake share) London Zurich 2.8% 2.8% 3.8% 4.9% 4.7% 6.3% 2.2% 3.3% 4.1% 1.6% Madrid Lisbon 13.2% 1.9% 1.9% 1.6% 2.1% 10.3% 10.9% 1.5% 8.7% 9.7% Milan Munich 11.7% 5.7% 6.6% 5.7% 6.6% 10.2% 9.5% 8.3% 8.8% 4.4% Torino Stuttgart 6.8% 8.1% 6.6% 5
Slide 16: Growing City Shares in Emerging Markets
Growing City Shares in Emerging Markets (PMI HTU offtake share) Kuala Lumpur Almaty, Kazakhstan(a) 11.5% 12.1% 17.4% 15.6% 15.3% 14.9% 7.9% 8.4% 8.4% 13.1% Chisinau, Moldova 13.6% Guatemala City 10.7% 11.4% 11.8% 7.9% 7.4% 8.5% 6.3% 7.0% 6.2% Skopje, North Macedonia 7.6% Cape Town 4.5% 2.5% 4.4% 4.5
Slide 17: Excellent Progress in Recent Launch Cities
Excellent Progress in Recent Launch Cities (PMI HTU offtake share) Mexico City 0.9% Vienna 1.8% 0.6% 0.6% 0.6% 0.8% 0.8% 0.1% 0.3% Beirut, Lebanon Tbilisi, Georgia 6.1% 6.4% 7.6% 5.0% 3.0% 2.5% Stockholm, Sweden Metro Manila, Philippines 0.7% 2.6% 1.7% 1.9% 0.2% 1.2% West Amman, Jordan 5.3% San Jose
Slide 18: National Shares in Q4'20 Above Key City Shares in Q4'18
National Shares in Q4’20 Above Key City Shares in Q4’18 Ukraine 22.8% Germany 6.6% 6.4% 9.7% 2.5% 2.6% 1.8% 0.8% Q4 2018 Q4 2020 Q4 2018 Q4 2020 Czech Republic 16.5% 14.6% 10.0% 10.2% Russia 5.6% 7.2% 4.2% 1.7% Q4 2018 Q4 2020 Q4 2018 Q4 2020 Japan(a) 20.1% 24.9% Italy 16.4% 18.8% 9.6% 15.1% 3.3% 6.
Slide 19: Growth Path to 2023 HTU Target
Growth Path to 2023 HTU Target (in billion units) 140-160 ~135 76 2020 PMI HTU Volume PMI Equivalent HTU Volume 2023 Target With National Shares at Q4'20 Key City Levels Source: PMI Financials or estimates 19
Slide 20: Successful IQOS Expansion in Russia
Successful IQOS Expansion in Russia St. Petersburg Wave 1 Wave 2 Wave 3 Moscow Number of Cities 8 27 40 2017 0.1 IQOS Users (in millions) 2018 0.6 0.1 IQOS Users (in millions) 2019 IQOS Users (in millions) 1.3 0.6 0.3 • Total of 75 cities in 2020 2020 IQOS Users (in millions) 1.7 0.9 0.5 • Total of
Slide 21: Delivering The Next Growth Phase
Delivering The Next Growth Phase • Leading Industry Transformation • IQOS Performance • Consumer at the Core • Commercial Model • The Next Stage of Growth • Combustibles Performance 21
Slide 22: Consumer at the Core: IQOS Consumer Journey Drives Development and Commercialization
Consumer at the Core: IQOS Consumer Journey Drives Development and Commercialization Learn Try Buy / Live Discover Consider Evaluate Find Try Buy Use Convert Bond Advocate 2.1 million NPS(a) surveys Over 600 from over 180,000 improvement 1.6 million call backs initiatives unique consumers (a) Net Pr
Slide 23: Innovation Pipeline Responding to Consumer Feedback
Innovation Pipeline Responding to Consumer Feedback IQOS 3 IQOS 3 IQOS 2.4+ IQOS 3 DUO Multi • Faster charging • Faster charging, Sequential • Faster charging • Bluetooth connectivity heating • Two consecutive uses without • More intuitive recharging the holder Conversion rate Conversion rate +6pp +
Slide 24: Major Growth Opportunity Remains in Key Markets
Major Growth Opportunity Remains in Key Markets NOT AWARE AWARE NO JOURNEY LEARN TRY BUY/LIVE RUSSIA 41 JAPAN 20 ITALY 19 POLAND 58 KOREA 21 UKRAINE 28 GERMANY 48 Note: Percentage of Legal Age Smokers in PMI Research panel not aware of IQOS Source: Consumer Journey Tracker Oct’20 24
Slide 25: Misperceptions on Main Causes of Smoking Harm
Misperceptions on Main Causes of Smoking Harm Legal-Age Smokers Legal-Age Smokers IQOS Users (spontaneous number of mentions) (selection from list)(a) (selection from list)(a) Nicotine 67% Tar 30% Tar 38% Tar 52% Nicotine 27% Nicotine 12% Burning 1% Burning 4% Burning 10% (a) 9 options provided: tar
Slide 26: Misperceptions of Relative Risk Profile
Misperceptions of Relative Risk Profile Categories Ranked Along Spectrum of Harm: EU Average Harmfulness Harmfulness Harmfulness Score Score Score 88 91 100 Heated Tobacco E-Vapor Manufactured Product Cigarettes 10 50 60 70 80 90 100 LEAST MOST HARMFUL HARMFUL BUY / LIVE(a) TRY LEARN(a) Note: Harmfu
Slide 27: Misperceptions of Relative Risk Profile
Misperceptions of Relative Risk Profile Categories Ranked Along Spectrum of Harm: EU Average Harmfulness Score 88 Heated Tobacco Manufactured Product Cigarettes 10 50 60 70 80 90 100 LEAST MOST HARMFUL HARMFUL Heated Tobacco AWARE Products BUY / LIVE(a) TRY LEARN(a) NO JOURNEY Harmfulness Harmfulnes
Slide 28: IQOS heats tobacco
IQOS heats tobacco instead of burning it, so it doesn't produce fire, ash or smoke. This product is not risk-free. It contains nicotine, which is addictive. Only for use by adults who would otherwise continue to smoke or use nicotine products.
Slide 29: IQOS heats tobacco
IQOS heats tobacco instead of burning it, so it doesn't produce fire, ash or smoke. z i ossible:, My al This product is not risk-free. It contains nicotine, which is addictive. Only for use by adults who would otherwise continue to smoke or use nicotine products.
Slide 30: IQOS heats tobacco
IQOS heats tobacco instead of burning it, so it doesn't produce fire, ash or smoke. This product is not risk-free. It contains nicotine, which is addictive. Only for use by adults who would otherwise continue to smoke or use nicotine products.
Slide 31: Growing Recognition of Tobacco Harm Reduction
Growing Recognition of Tobacco Harm Reduction 31
Slide 32: Delivering The Next Growth Phase
Delivering The Next Growth Phase • Leading Industry Transformation • IQOS Performance • Consumer at the Core • Commercial Model • The Next Stage of Growth • Combustibles Performance 32
Slide 33: Consumer Journey: Unique Combination of Episodes & Channels
Consumer Journey: Unique Combination of Episodes & Channels Learn Try Buy / Live Discover Consider Evaluate Find Try Buy Use Convert Bond Advocate Awareness Referral Social Opinion Online Coach Evaluate Options Research WWW Buy HEETS Trade In Social Media Take Notice Find Trial Option Friend Referra
Slide 34: Consumer Journey: Unique Combination of Episodes & Channels
Consumer Journey: Unique Combination of Episodes & Channels Aware NOT ON Not Aware Journey Aware ON Journey Learn Try Buy/ Live Discover Consider Evaluate Find Try Buy Use Convert Bond Advocate Online Offline - Owned Offline – Not Owned iqos.com IQOS Boutiques Indirect Retail (Key Accounts / website
Slide 35: Digital Transformation Win-Win: Driving Growth & Efficiency
Digital Transformation Win-Win: Driving Growth & Efficiency • Multi-channel to omnichannel • One consolidated IQOS digital platform across markets: ⎼ Consistent brand experience & communication • IQOS.com as our number one flagship store • ‘Digital-first’ consumer journey 35
Slide 36: Unmatched Digital and Physical Infrastructure
Unmatched Digital and Physical Infrastructure (20)% (10)% 10.5 +30% vs. PY 2.2 vs. PY 3.8 vs. PY 259 thousand thousand thousand Commercial Exclusive Indirect Retail IQOS Stores(a) Salespeople IQOS Retail Brand Experience (Sales experts and Touchpoints Touchpoints IQOS coaches) +5% +50% +40% vs. PY 2
Slide 37: Shift to 'Organic' User Acquisition as Momentum Grows
Shift to ‘Organic’ User Acquisition as Momentum Grows (in %) Italy Portugal Russia 74 42 56 30 65 25 2018 2020 2018 2020 2018 2020 Note: Organic sales are defined as those coming from demand-driven purchase decisions; unprompted by our commercial programs Source: PMI Financials or estimates 37
Slide 38: Digitalization and Scale Increasing Commercial Efficiency
Digitalization and Scale Increasing Commercial Efficiency Acquisition Retention Cost per user (indexed to Acquisition 2018) Cost per user (indexed to Acquisition 2018) 100 64 28 5 6 7 100 75 47 57 46 35 100 57 48 62 44 38 100 72 50 59 45 29 2018 2019 2020 2018 2019 2020 Source: PMIContribution Note:
Slide 39: Execution Learnings Drive Faster Results
Execution Learnings Drive Faster Results PMI HTU SoM Performance Since Initial Commercial Launch (3-month moving average) 12% 2015-2016 10% 8% 6% 4% 2% Italy(a) Germany 0% Russia M0 M6 M12 M18 M24 (a) Reflects date of initial geographic expansion beyond pilot launch city Source: PMI Financials or es
Slide 40: Execution Learnings Drive Faster Results
Execution Learnings Drive Faster Results PMI HTU SoM Performance Since Initial Commercial Launch (3-month moving average) 12% 2015-2016 Lithuania Latvia 2017-2018 10% 8% Czech Republic 6% Malaysia 4% 2% Italy(a) Germany 0% Russia M0 M6 M12 M18 M24 (a) Reflects date of initial geographic expansion be
Slide 41: Execution Learnings Drive Faster Results
Execution Learnings Drive Faster Results PMI HTU SoM Performance Since Initial Commercial Launch (3-month moving average) Hungary 12% 2015-2016 Lithuania Latvia 2017-2018 10% 2019-2020 8% Czech Republic 6% Malaysia 4% Georgia UAE 2% Italy(a) Germany 0% Russia M0 M6 M12 M18 M24 (a) Reflects date of i
Slide 42: IQOS Break-Even Faster in Recent Launch Markets
IQOS Break-Even Faster in Recent Launch Markets Months After Launch to Break-Even HTU IMS SoM (%) at Break-Even 25 2.4 2.0 11 Cluster A Cluster B Cluster A Cluster B (a) (b) (2015-16) (a) (2017-19)(b) (2015-16) (2017-19) (a) Japan, Italy, Greece, Ukraine, Russia and Kazakhstan (b) Poland, the Czech
Slide 43: Delivering The Next Growth Phase
Delivering The Next Growth Phase • Leading Industry Transformation • IQOS Performance • Consumer at the Core • Commercial Model • The Next Stage of Growth • Combustibles Performance 43
Slide 44: IQOS: One Brand Across Smoke-Free Products
IQOS: One Brand Across Smoke-Free Products • IQOS is the leading smoke-free brand • Taking IQOS to the next level: ⎼ From functional benefits to category understanding, brand appeal, points of difference, emotional connection • No brand fragmentation, strong brand identity, hard to build 44 44
Slide 45: IQOS Brand Video
IQOS Brand Video 45
Slide 46: IQOS Portfolio Expansion
IQOS Portfolio Expansion • Untapped consumer occasions, adult smoker segments and geographies: ⎼ Driving awareness among legal-age smokers as a key enabler • Broadening and enriching the category • User acquisition and volume growth • Premiumization, pricing and segmentation 46
Slide 47: Poly-Use: Multi-Category Opportunity for IQOS
Poly-Use: Multi-Category Opportunity for IQOS 2019 nicotine product use(a) “Transforming rapidly to a multi- category company” CC PMI Investor Day, September 2016 66% 7% 4% E-vape 7% HnB Significant dual and poly-usage 7% 1% 8% of nicotine products (a) PMI Market Research in the U.K., Germany, Japan
Slide 48: RRP Portfolio Expansion – Innovation & Technology
RRP Portfolio Expansion – Innovation & Technology • Technological prowess begets winning products: ⎼ Early and sustained investment ⎼ Strong R&D capabilities • Technology expansion: blade internal heating, pin and induction technologies, e-vapor and pouches: ⎼ Further pipeline of future innovations
Slide 49: Multi-Category Portfolio Addressing Range of Consumer Preferences
Multi-Category Portfolio Addressing Range of Consumer Preferences Rooted Ritual Evolving Ritual New Rituals & Moments Novelty, Design, Taste Exploration, Familiarity, Authenticity Convenience, No-frills Versatility, Discretion Customization Beyond Tobacco Prestige Premium Affordable 49
Slide 50: Expanded Reach Via Differentiated Portfolio of Consumables
Expanded Reach Via Differentiated Portfolio of Consumables Rooted Ritual Evolving Ritual New Rituals & Moments Novelty, Design, Taste Exploration, Familiarity, Authenticity Convenience, No-frills Versatility, Discretion Customization Beyond Tobacco ENHANCED, INDULGENT TASTES Prestige New to the Worl
Slide 51: Platform 1: Introducing IQOS ILUMA
Platform 1: Introducing IQOS ILUMA • Major new launch in second half of 2021 • Next generation of IQOS • IQOS ILUMA: Pleasure simplified • New internal heating technology ⎼ Based on Smartcore TM induction • Same great taste 51
Slide 52: IQOS ILUMA: Intuitive Product for Acquisition and Retention
IQOS ILUMA: Intuitive Product for Acquisition and Retention • Addresses consumer feedback on IQOS blade heating product • Robust and reliable, superior satisfaction • Simple and Intuitive: ⎼ No maintenance and simple use ⎼ Self-activation • Less explanation needed, positive for: ⎼ Time and cost of a
Slide 53: IQOS ILUMA: Premium & Ground-Breaking
IQOS ILUMA: Premium & Ground-Breaking • Premium design and customization for enhanced lifestyle appeal, advanced features • 3 device designs covering 3 price points • New broad range of consumables 53
Slide 54: Heat-not-Burn: LIL and LIL HYBRID
Heat-not-Burn: LIL and LIL HYBRID • Broadening our portfolio to accelerate user acquisition and grow the category, expand target audience of adult smokers: ⎼ High conversion, driving new users in-switching from cigarettes • IQOS introduction drives awareness and credibility • PMI commercial engine d
Slide 55: E-Vapor: The Right Time For The Right Product
E-Vapor: The Right Time For The Right Product • Category is growing and consolidating… ⎼ Expected annual growth in users 7-10% over International E-Vapor Category (2020) next 5y, albeit concentrated in specific geographies Rest of World ⎼ Different consumer experience and occasions to Heat-not-Burn
Slide 56: Full Conversion and Investment Drives Returns
Full Conversion and Investment Drives Returns EU illustration, where IQOS HEETS are at current accessible price points European Union Estimated Yearly Gross Margin per User Consumables Only (Index = LAS) 274 164 123 100 LAS Closed System Closed System IQOS IQOS HnB Dual (a) Exclusive Exclusive Exclu
Slide 57: IQOS VEEV Video: Vaping Made Right
IQOS VEEV Video Vaping Made Right 57
Slide 58: IQOS VEEV: Vaping Made Right
IQOS VEEV: Vaping Made Right • Power of IQOS brand • Premium product with superior experience to existing offers • Leveraging IQOS infrastructure with bespoke route-to- market approach • Potential accelerator of conversion to IQOS franchise for RRP poly-users, dual users with cigarettes • Plan to la
Slide 59: Portfolio Expansion: Nicotine Pouches
Portfolio Expansion: Nicotine Pouches • Small & concentrated, but growing category with potential to advance harm reduction: International Nicotine Pouch Category (2020) ⎼ Still very early in category development Other ⎼ Convenience, discretion, flexibility and Switzerland satisfaction ⎼ Attractive
Slide 60: Portfolio Expansion: P2/P3
Portfolio Expansion: P2/P3 P2: Heated Tobacco Product P3: Electronic-free Nicotine Product • Closest to cigarette ritual and • Hygiene, simplicity, convenience from experience a novel and complex technology • New consumer test in 2021 • Aim to commercialize within 3 years 60
Slide 61: IQOS Geographic Expansion
IQOS Geographic Expansion 64 Markets Worldwide(a) Market Launches Of which 2015 (7) 2016 (13) 33 2017 (18) Non-OECD 2018 (6) 2019 (8) 2020 (12) (a) Status at December 31, 2020 Note: Reflects markets where IQOS is available in key cities or nationwide. Reflects date of initial geographic expansion be
Slide 62: IQOS Geographic Expansion
IQOS Geographic Expansion 64 Expect to be in Markets Worldwide(a) Market Launches 100 Of which 2015 (7) 2016 (13) markets in 5 years 33 2017 (18) Non-OECD 2018 (6) 2019 (8) 2020 (12) (a) Status at December 31, 2020 Note: Reflects markets where IQOS is available in key cities or nationwide. Reflects
Slide 63: IQOS in the U.S.: Large Opportunity
IQOS in the U.S.: Large Opportunity • U.S. adult smokers display a high interest in smoke-free alternatives • Taste and satisfaction preferences addressed by IQOS: ⎼ Full-flavor market with large menthol segment • Rational and robust regulatory environment for building awareness: ⎼ Clear and rigorou
Slide 64: IQOS in the U.S.: Key Developments
IQOS in the U.S.: Key Developments 2021 Est. Dec 2020 Initial FDA submissions Early 2021 commercialization of April 2019 Q3 2020 (sPMTA Bronze & IQOS 3 Bronze and Sienna, PMTA granted on 2.4 MRTP authorization/ Sienna), authorization Initial subject to FDA device utilization in the U.S. (IQOS 3 sPMT
Slide 65: Delivering The Next Growth Phase
Delivering The Next Growth Phase • Leading Industry Transformation • IQOS Performance • Consumer at the Core • Commercial Model • The Next Stage of Growth • Combustibles Performance 65
Slide 66: Combustible Market Declines Reflect Growth of RRPs
Combustible Market Declines Reflect Growth of RRPs Cigarette Industry(a) % Change Cigarette Industry(a) % Change in IQOS(b) Markets CAGR Vs. Previous Year Estimates Vs. Previous Year 2016 2017 2018 2019 2020 2019-23 2016 2017 2018 2019 2020 (2.4)% (3.6)% (2.8)% (2.6)% (6.7)% (3-4)% (2.0)% (5.7)% (6.
Slide 67: Cigarette Consumption Driven by Reduction of Social Smoking Moments During COVID
Cigarette Consumption Driven by Reduction of Social Smoking Moments During Height of COVID Restrictions SOLO SOCIAL - EVERYDAY SOCIAL - SPECIAL Turkey Argentina Indonesia Italy Philippines Social Moments Consumption loss(a) (8)% (20)% (14)% (21)% (11)% Total Consumption (3)% (13)% (12)% (5)% (18)% L
Slide 68: Majority of Downtrading From Mid to Low & Super-Low
Majority of Downtrading From Mid to Low & Super-Low Cigarette Industry Price Tiers (%) Premium 27% 26% 26% 26% 26% 25% 26% 26% 25% 25% 26% 26% 27% 26% 25% 24% 23% 24% 23% Mid 28% 31% 30% 30% 29% Low & 51% 51% 46% 47% 48% 49% 50% 51% 45% Super Low 44% 44% 44% 2016 2017 2018 2019 Q1 Q2 Q3 Q4 2008 2009
Slide 69: Total PMI Market Share
Total PMI Market Share # of Top 30 RRP Markets Where Total PMI Share is Growing or Stable # of Top 30 CC Markets Where Share of CC over CC is Growing or Stable 22 21 20 16 14 14 2018 2019 2020 Source: PMI Financials or estimates. Excluding China and the U.S. 69
Slide 70: Combustible Share Performance
Combustible Share Performance • Modest underlying decline despite IQOS cannibalization and market mix impacts • Impacted by pandemic effects in 2020, notable challenges in Indonesia • Target stable/growing share of combustibles over next 3 years (0.5pp) 27.7% (0.3pp) 27.2% 27.2% (0.4pp) 26.9% Indone
Slide 71: Strong Marlboro Brand Equity Endures
Strong Marlboro Brand Equity Endures Temporary Headwind From Reduced Social Consumption Occasions in 2020, Evidence of Recovery as Restrictions Ease 2020 Marlboro Share of Market Marlboro brand power 3x market average 293 302 10.0% 280 Marlboro 9.7% 9.7% 9.5% 9.4% 9.3% 123 130 Closest major 118 comp
Slide 72: Strong Global Brands in Downtrading Environment
Strong Global Brands in Downtrading Environment PMI Share of Market Global Brands(a) as a % of Total IMS Volume 72.7% 71.1% 7.4% 7.6% 7.7% 69.0% 7.2% 67.8% Total 6.5% 1.8% 1.9% 1.9% Philip Morris 1.2% 1.7% 63.7% 2.3% 2.2% 2.2% Chesterfield 1.9% 2.2% L&M 3.4% 3.3% 3.3% 3.5% 3.7% 2016 2017 2018 2019 2
Slide 73: New Product Launches and Brand Equity Building
New Product Launches and Brand Equity Building Number of New Product Launches Strike 31% 46% 49% 57% Rate 163 99 67 62 68 2016 2017 2018 2019 2020 Source: PMI estimates. Strike rate is 0.7% share of market within 12 months of launch 73
Slide 74: Leadership in Key Segments
Leadership in Key Segments New Taste Dimension (in %) Full Flavor (in %) #1 Rank #1 Rank PMI Share PMI Share 16.6% 25.5% 30.6% 31.3% 31.2% 23.7% 23.0% 22.9% 22.6% 21.6% of Segment of Segment 1.0 1.9 2.7 3.4 3.9 56.5 56.3 57.2 57.4 58.1 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Low Tar (in %)
Slide 75: Leveraging Leadership in Combustibles to Support Smoke-Free Expansion
Leveraging Leadership in Combustibles to Continue Supporting Smoke-Free Expansion and Sustainability Efforts • Anti-littering initiatives: ⎼ Our world is not an ashtray • Excellence in digital execution with trade: ⎼ Productivity and effectiveness of operation ⎼ Trade advocacy to convert smokers to
Slide 76: Remaining Competitive and Maintaining Leadership in Combustibles
Remaining Competitive and Maintaining Leadership in Combustibles: Key Pillar of Smoke-Free Strategy • Leading combustible portfolio • Infrastructure and expertise (manufacturing, regulatory, commercial) • Responsible stewardship: market leader driving the obsolescence of the category • Target at lea
Slide 77: The Next Growth Phase
The Next Growth Phase • We continue as the undisputed leader of the industry transformation • IQOS is a compelling proposition across markets • We have an exciting innovation pipeline across smoke-free categories • Our business is built on the consumer at the core • Unparalleled capability in profit
Slide 78: The Next Growth Phase
2021 Delivering a Smoke-Free Future INVESTOR DAY The Next Growth Phase Break 10:55 – 11:05 ET 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 mobil
Philip Morris International — Investor Day (February 2021) on 6ix