Philip Morris International Inc · NYSE:PM

Philip Morris International — Philip Morris ČR a.s. — Shareholder Meeting (April 2014)

20 slides from Philip Morris International's shareholder meeting presentation, Apr 25, 2014

  1. Slide 1: Annual General Meeting of Shareholders of Philip Morris ČR a.s.

    Annual General Meeting of Shareholders of Philip Morris ČR a.s. Kutná Hora April 25, 2014 András Tövisi Chairman of the Board of Directors

  2. Slide 2: Philip Morris ČR a.s. Annual General Meeting of Shareholders 2014

    Philip Morris ČR a.s. Annual General Meeting of Shareholders 2014 © 2014 Philip Morris ČR a.s. 2

  3. Slide 3: Cigarette Market – Czech Republic

    Cigarette Market Czech Republic Total Cigarette Market (billion units) -3.3% 20.5 19.8 2012 2013 In 2013, the total cigarette market declined by 3.3% versus the prior year to 19.8 billion units, mainly reflecting: • impact of excise tax driven price increases in 2012 and excise tax and VAT-driven pr

  4. Slide 4: Price Increases – Czech Republic

    Price Increases Czech Republic Dec'11 Dec'12 Dec'13 Premium 84 86 89 Segment Medium 72 74 77 Segment Low 65 68 72 Segment • Excise tax increase as of January 1, 2012 • Excise tax and VAT increase as of January 1, 2013 Note: Retail prices in CZK/pack of 20 cigarettes Source: Price Gazette of the Mini

  5. Slide 5: Cigarette Market Share and Shipments – Czech Republic

    Cigarette Market Share and Shipments Czech Republic Market share Shipments (billion units) -2.1pp -7.2%* 50.7% 8.6 48.6% 8.0 2012 2013 2012 2013 Market share decline -2.1pp: Domestic shipments down • losses from local brands -7.2% reflecting lower total and Red & White; market and lower market share

  6. Slide 6: Fine Cut Tobacco Segment – Czech Republic

    Fine Cut Tobacco Segment Czech Republic Total Market Shipments (billion cigarette equivalent units) (billion cigarette equivalent units) +10.3% +29.9%* 2.0 0.4 1.8 0.3 2012 2013 2012 2013 * Variance in % is based on unrounded data in million cigarette equivalent units Note: Fine cut refers to tobacc

  7. Slide 7: Cigarette Market – Slovakia

    Cigarette Market Slovakia Total Cigarette Market (billion units) -3.9% 7.2 6.9 2012 2013 In 2013, the total cigarette market declined by 3.9% versus the prior year to 6.9 billion units, mainly reflecting: • excise tax driven price increases in 2012 following the excise tax increases effective as of

  8. Slide 8: Price Increases – Slovakia

    Price Increases Slovakia Dec '11 Feb '12 Dec '12 Dec '13 Premium 3.20 3.30 3.40 3.40 Segment Medium 2.60 2.70 2.80 2.90 Segment Super Low 2.50 2.60 2.70 2.80 Segment 2.40 2.50 2.60 2.70 2.30 2.50 2.60 2.70 • Excise tax increase February 1, 2012 and October 1, 2012 • Price increases March - June, 201

  9. Slide 9: Cigarette Market Share and Shipments – Slovakia

    Cigarette Market Share and Shipments Slovakia Market share Shipments (billion units) +0.8pp -2.3%* 50.9% 51.7% 3.7 3.6 2012 2013 2012 2013 Market share increase +0.8pp: Domestic shipments down • strong performance of L&M, -2.3% reflecting lower total Philip Morris and Marlboro; market, partially off

  10. Slide 10: Export Shipments

    Export Shipments Export Shipments (billion cigarette equivalent units) +23.7%* -4.9%* 19.4 18.4 15.7 2011 2012 2013 Export shipments decreased by 4.9% to 18.4 billion cigarette equivalent units: • cigarettes down by 1.9 billion units (-11.2%); • other tobacco products up by 0.9 billion cigarette equ

  11. Slide 11: Kutna Hora Factory

    Kutna Hora Factory Continuous focus on maintaining high standards in Kutna Hora factory and increasing its competitiveness within Europe through: • investing to modern/flexible manufacturing equipment; • constantly improving factory performance; • focusing on environmental sustainability; • continuo

  12. Slide 12: Business Overview – Consolidated Financial Results

    Business Overview Consolidated Financial Results Revenues Profit from Operations Net of Excise Tax & VAT (CZK billion) (CZK billion) -1.5% -8.5% 13.0 3.0 12.8 2.8 2012 2013 2012 2013 • Revenues, net of excise tax and VAT, decreased by 1.5% to CZK 12.8 billion versus the prior year; • Profit from ope

  13. Slide 13: Revenues, Net of Excise Tax and VAT

    Revenues, Net of Excise Tax and VAT Consolidated Financial Results (CZK billion) 0.1 (0.4) 0.2 13.0 0.1 (0.2) 12.8 2012 Currency Price Vol / Mix Slovakia Exports 2013 Czech Republic Excluding the impact of currency, decrease of CZK 0.4 billion (-3.4%) driven primarily by: • unfavorable volume/mix in

  14. Slide 14: Profit from Operations

    Profit from Operations Consolidated Financial Results (CZK billion) 0.1 (0.4) 3.0 0.1 0.1 (0.1) 0.0 2.8 2012 Currency Price Vol / Mix /Costs Slovakia Exports Other 2013 Czech Republic Excluding the impact of currency, decrease of CZK 0.3 billion (-10.2%) due to: • unfavorable volume/mix in the Czech

  15. Slide 15: Cash and Cash Equivalents

    Cash and Cash Equivalents Consolidated Financial Results (CZK billion) 2.8 (0.6) 0.5 (0.2) 5.2 (2.5) 5.2 Cash at Dec'12 2012 Dividends 2013 Profit before Income tax Change in working Other Cash at Dec'13 paid tax capital Cash position maintained at the same level as previous year. Source: Philip Mor

  16. Slide 16: Short-term Loan to PMI Inc.

    Short-term Loan to PMI Inc. Call Loan facility agreement signed in September 2013 Short-term loan provided to Philip Morris International, Inc. • Amount CZK 4.0 billion • Duration 5 days • Interest rate 0.05% p.a. Moody's rating Moody's rating Credit ratings of Czech Banks Credit rating agency agenc

  17. Slide 17: Fiscal Environment – Czech Republic

    Fiscal Environment Czech Republic €90 /’000 CZK 2,308 /’000 Minimum Excise Tax Development (EU minimum) (Oct’13 ex.rate 25.647) (CZK / ’000) not reached CZK 2,466 /’000 (Mar’14 ex.rate 27.394) in Jan‘14 2,250 2,180 2,100 2,010 2,010 2010 2011 2012 Jan'13 Jan'14 end of 2014 • Predictable fiscal envir

  18. Slide 18: Fiscal Environment – Slovakia

    Fiscal Environment Slovakia Minimum Excise Tax Development (EUR / ’000) €90 /’000 (EU minimum) 91.0 91.0 88.5 85.0 81.3 2010 2011 Feb'12 Oct'12 2013 2014 • Excise tax increase in February and October 2012 • Minimum excise tax reached in 2012 • No excise tax increase in 2013 Source: Act no. 546/2011

  19. Slide 19: Dividend proposal

    Dividend proposal (CZK / share) 2010 2011 2012 2013 Earnings Current Year 884 920 885 819 Retained Earnings Prior Year 376 15 1 Dividend Paid / Proposed 1,260 920 900 820 Reserve Fund Cancellation 60 Total Payout Proposed 1,260 920 900 880 Source: Philip Morris ČR a.s. financials © 2014 Philip Morri

  20. Slide 20: Thank you

    Thank you © 2014 Philip Morris ČR a.s. 20

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