Philip Morris International Inc · NYSE:PM
Philip Morris International — Philip Morris ČR a.s. — Shareholder Meeting (April 2015)
23 slides from Philip Morris International's shareholder meeting presentation, Apr 30, 2015
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 30, 2015 András Tövisi Chairman of the Board of Directors
Slide 2: Cigarette Market - Czech Republic
Cigarette Market Czech Republic Total cigarette market up by 1.6% reflecting mainly • stronger seasonality partially offset by • excise tax and VAT increase in 2013 • excise tax increase in 2014 • the continued growth of the lower-taxed fine cut tobacco category Source: Philip Morris ČR a.s. interna
Slide 3: Price Increases 2012 – 2014 - Czech Republic
Price Increases 2012 – 2014 Czech Republic Dec'12 Dec'13 Jun'14 Dec'14 Registered RSP's Registered RSP's Premium 86 89 91 96 • Excise tax and VAT increase January 1, 2013 Medium 74 77 79 84 • Excise tax increase January 1, 2014 • Excise tax increase December 1, 2014 68 72 74 79 Low 66 70 72 77 Note:
Slide 4: RGD in the Czech Republic and Slovakia
RGD in the Czech Republic and Slovakia Cooperation agreement between PMI and the China National Tobacco Corporation • as of 2008, Philip Morris ČR a.s. and Philip Morris Slovakia s.r.o. distribute and sell RGD in the Czech and Slovak markets New sub-license agreement between CTPM International S.A.
Slide 5: Cigarette Market Share and Shipments - Czech Republic
Cigarette Market Share and Shipments Czech Republic Market share decline by 1.2pp to 47.4% Excluding RGD, decline by 2.2pp • losses on local brands and Red & White • partially offset by increase on Marlboro, L&M, Chesterfield and Philip Morris Domestic cigarette shipments up by 2.3% Excluding RGD, s
Slide 6: Consolidation of local brands portfolio
Consolidation of local brands portfolio Czech Republic Petra L&M • Petra Klasik launched in low- price segment in Jan’13 • other Petra variants migrated to L&M in Nov’13 Start Chesterfield • Start RS variants endorsed by Chesterfield • Start KS variants morphed to Chesterfield KS in Dec’13 Source: A
Slide 7: Fine Cut Tobacco Market and Shipments
Fine Cut Tobacco Market and Shipments Czech Republic Note: Fine Cut Tobacco refers to tobacco products such as make-your-own cigarettes (0.73 g is equivalent to 1 cigarette), roll-your-own Note: RGD is included in Shipments cigarettes (0.60 g is equivalent to 1 cigarette) and make-your-own volume ci
Slide 8: Cigarette Market - Slovakia
Cigarette Market Slovakia Total cigarette market up by 1.8% reflecting mainly • stronger seasonality • improved macro-economic conditions Source: Philip Morris Slovakia s.r.o. internal estimates © 2015 Philip Morris ČR a.s. 8
Slide 9: Price Increases 2012 – 2014 - Slovakia
Price Increases 2012 – 2014 Slovakia Dec '12 Dec '13 Dec '14 Premium 3.40 3.40 3.50 • Last excise tax increase in October 2012 • Price increases in Q2 2013 and Q3 2014 Medium* 2.80 2.90 2.90 Super Low 2.70 2.80 2.90 Note: Retail prices in EUR/pack of 19 cigarettes 2.60 2.70 2.80 * Petra (other than
Slide 10: Cigarette Market Share and Shipments - Slovakia
Cigarette Market Share and Shipments Slovakia Market share increase by 3.3pp to 55.0% Excluding RGD, increase by 1.4pp • strong performance of Marlboro, L&M and Philip Morris • partially offset by share declines of local brands and Red & White Domestic cigarette shipments up by 7.5% Excluding RGD, s
Slide 11: Consolidation of brand portfolio – Red & White
Consolidation of brand portfolio – Red & White Slovakia Morph of Red & White into Philip Morris in Jan’14 Supported by Price promotion on pack in Apr’14 © 2015 Philip Morris ČR a.s. 11
Slide 12: Export Shipments
Export Shipments Export shipments increased by 12.7% to 20.8 billion units • Cigarettes up by 1.7 billion units (+11.6%) • Fine cut tobacco up by 0.6 billion units equivalent (+17.3%) Source: Philip Morris ČR a.s. financials © 2015 Philip Morris ČR a.s. 12
Slide 13: Kutna Hora Factory
Kutna Hora Factory Continuous focus on maintaining high standards in Kutna Hora factory and increasing its competitiveness within Europe through: • constantly improving factory performance; • investing to modern/flexible manufacturing equipment; • focusing on environmental sustainability; • continuo
Slide 14: Operating Model Change in Production
Operating Model Change in Production Transformation of Kutna Hora factory from “Contract Manufacturer” to “Manufacturing Service Provider” with • full responsibility for manufacturing facility, machinery equipment, production scheduling and manning, service quality • no impact on legal entity struct
Slide 15: Revenues, net of Excise Tax and VAT
Revenues, net of Excise Tax and VAT Consolidated Financial Results (CZK million) Czech Republic Consolidated net revenues up by 10.0% or by 6.9% excluding currency, mainly driven by: • favorable pricing and volume/mix in the Czech Republic and Slovakia; • higher exports to other PMI affiliates. Sour
Slide 16: Profit from Operations
Profit from Operations Consolidated Financial Results (CZK million) Czech Republic Consolidated profit from operations increased by 1.5% or by 3.8% excluding currency, primarily reflecting: • favorable pricing and volume/mix in the Czech Republic and Slovakia; • higher exports to other PMI affiliate
Slide 17: Fiscal Environment - Czech Republic
Fiscal Environment Czech Republic Minimum Excise Tax for Cigarettes €90 /’000 (CZK/’000) (EU minimum) FX rate @ FX rate ET Yield Oct 1, 2013 25.647 € / '000 87.7 92.4 Oct 1, 2014 27.502 € / '000 86.2 • Excise tax increase as of Jan’14 and Dec’14 • MOF proposal for three-years excise tax roadmap (201
Slide 18: Fiscal Environment - Slovakia
Fiscal Environment Slovakia Minimum Excise Tax for Cigarettes €90 /’000 (EUR/’000) (EU minimum) • Last excise tax increase in October 2012 • Minimum excise tax reached EUR 91/’000 (Specific EUR 59.50/’000 cigarettes, Ad valorem unchanged at 23%) Source: Act no. 546/2011 Coll. amending Act no. 98/200
Slide 19: Assets & Liabilities
Assets & Liabilities Consolidated Financial Results (CZK million) Assets Dec 2014 Dec 2013 Incr./(Decr.) Cash & Equivalents 4 524 5 219 (695) Inventories 328 2 120 (1 792) Receivables 2 716 1 514 1 202 Other Non-Financial Assets 1 638 9 935 (8 297) Excise tax on Inventories Prepaid Income Tax 10 2 8
Slide 20: Cash and Cash Equivalents
Cash and Cash Equivalents Consolidated Financial Results (CZK million) Total Payout • Available Cash at year-end was utilized for Loan to PMI Incorporation Source: Philip Morris ČR a.s. financials © 2015 Philip Morris ČR a.s. 20
Slide 21: 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 3.75 billion • Duration from Dec 31, 2014 to Jan 2, 2015 • Interest rate 0.05% p.a. (best offer compared to banks) Moody's rating Moody's ratin
Slide 22: Dividend proposal
Dividend proposal (CZK / share) 2010 2011 2012 2013 2014 Earnings Current Year 884 920 885 819 825 Retained Earnings Prior Year 376 15 1 55 Dividend Paid / Proposed 1 260 920 900 820 880 Reserve Fund Cancellation 60 Total Payout Proposed 1 260 920 900 880 880 Source: Philip Morris ČR a.s. financials
Slide 23: Thank you
Thank you © 2015 Philip Morris ČR a.s. 23
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