Philip Morris International Inc · NYSE:PM
Philip Morris International — FY2008 Earnings Presentation
24 slides from Philip Morris International's earnings presentation, Feb 4, 2009
Slide 1: 2008 Fourth Quarter and Annual Earnings Call
2008 Fourth Quarter and Annual Earnings Call 4 February 2009 Exhibit 99.3
Slide 2: Introduction
Introduction Introduction Unless otherwise stated, we will be talking about results in the fourth quarter or the full year 2008 and comparing them with the same periods in 2007 References to volumes are PMI shipment data Net revenues exclude excise taxes Data tables showing adjustments to revenues a
Slide 3: Growth Rates
Growth Rates 2008 Results Cigarette Volume 1 – 2% Net Revenues 4 – 6% Operating Income 6 – 8% EPS 10 – 12% Mid Mid to to Long-Term Long-Term Constant Constant Currency Targets Currency Targets
Slide 4: PMI Results
PMI Results PMI Results + 1.0% + 2.5% + 0.6% + 2.0% Cigarette Volume Excl. Acquisitions Actual Excl. Acquisitions Actual Full Year 2008 Fourth Quarter 2008 (% Growth vs. same period in 2007)
Slide 5: PMI Results
PMI Results PMI Results + 5.6 + 12.7 + 5.6 + 3.6 Net Revenues + 1.0% + 2.5% + 0.6% + 2.0% Cigarette Volume Excl. Curr. & Acquisitions Actual Excl. Curr. & Acquisitions Actual Full Year 2008 Fourth Quarter 2008 (% Growth vs. same period in 2007)
Slide 6: PMI Results
PMI Results PMI Results + 9.9 + 16.7 + 7.4 + 0.1 OCI + 5.6 + 12.7 + 5.6 + 3.6 Net Revenues + 1.0% + 2.5% + 0.6% + 2.0% Cigarette Volume Excl. Curr. & Acquisitions Actual Excl. Curr. & Acquisitions Actual Full Year 2008 Fourth Quarter 2008 (% Growth vs. same period in 2007)
Slide 7: 2008 OCI Growth Drivers
2008 OCI Growth Drivers 2008 OCI Growth Drivers Stronger volume and better mix $1.2 billion in pricing Productivity and cost savings program Favorable currency of $481 million
Slide 8: PMI Results
PMI Results PMI Results + 13.2 + 18.6 + 12.5 - 1.4 Adjusted EPS (a) + 9.9 + 16.7 + 7.4 + 0.1 OCI + 5.6 + 12.7 + 5.6 + 3.6 Net Revenues + 1.0% + 2.5% + 0.6% + 2.0% Cigarette Volume Excl. Currency Actual Excl. Currency Actual Full Year 2008 Fourth Quarter 2008 (% Growth vs. same period in 2007) (a) Ac
Slide 9: PMI Results
PMI Results PMI Results + 13.2 + 18.6 + 12.5 - 1.4 Adjusted EPS + 52.7 Free Cash Flow (a) + 9.9 + 16.7 + 7.4 + 0.1 OCI + 5.6 + 12.7 + 5.6 + 3.6 Net Revenues + 1.0% + 2.5% + 0.6% + 2.0% Cigarette Volume Excl. Currency Actual Excl. Currency Actual Full Year 2008 Fourth Quarter 2008 (% Growth vs. same
Slide 10: Strong Liquidity Position
Strong Liquidity Position Strong Liquidity Position Year-end net debt to EBITDA ratio of 0.94 to 1 (a) $10.1 billion bonds issued in 2008 in variety of currencies and maturities at interest cost of 5.8% Continuous access to commercial paper market at particularly favorable rates (a) At the end of 20
Slide 11: Shareholder Returns
Shareholder Returns Shareholder Returns Dividend increased in August 2008 by 17.4% to an annualized rate of $2.16 / share Dividend target payout ratio of 65% Share repurchases in 2008 totaled $5.4 billion
Slide 12: Brand Performance
Brand Performance Brand Performance Marlboro volume of 310.7 billion in 2008 was up 0.2%: – EEMA + 2.8% – Asia + 6.4% – Latin America & Canada + 4.1% – EU - 6.0% Marlboro volume increased 2.0% in the fourth quarter
Slide 13: Marlboro Innovation
Marlboro Marlboro Innovation Innovation Marlboro Filter / Flavor Plus Marlboro Intense / Compact Marlboro Gold Edge New Marlboro Gold pack Marlboro Black Menthol and other new menthol line extensions
Slide 14: Brand Performance
Brand Performance Brand Performance Marlboro volume of 310.7 billion in 2008 was up 0.2% Marlboro volume increased 2.0% in the fourth quarter Parliament volume increased by 20.0% and Virginia Slims volume up 8.2% in 2008
Slide 15: Brand Performance
Brand Performance Brand Performance Marlboro volume of 310.7 billion in 2008 was up 0.2% Marlboro volume increased 2.0% in the fourth quarter Parliament volume increased by 20.0% and Virginia Slims volume up 8.2% in 2008 Chesterfield volume increased by 13.7% in 2008 and more than offset L&M volume
Slide 16: Brand Performance
Brand Performance Brand Performance Marlboro volume of 310.7 billion in 2008 was up 0.2% Marlboro volume increased 2.0% in the fourth quarter Parliament volume increased by 20.0% and Virginia Slims volume up 8.2% in 2008 Chesterfield volume increased by 13.7% in 2008 and more than offset L&M volume
Slide 17: Business Development
Business Development Business Development Rothmans Inc. acquisition in Canada Acquisition of Interval and Petter ø es fine cut brands Exclusive smokeless tobacco products joint venture with Swedish Match
Slide 18: 2009 Guidance
2009 Guidance 2009 Guidance Excellent 2008 results provide solid foundation for future success Since end of the third quarter: – US Dollar appreciated against the Euro – Steep depreciation in the value of many emerging market currencies – Huge volatility in exchange rates Current 2009 guidance for r
Slide 19: Growth Rates
Growth Rates 2009 Expectations Cigarette Volume 1 – 2% Net Revenues 4 – 6% Operating Income 6 – 8% EPS 10 – 12% Source: PMI Finance Mid to Long-Term Constant Mid to Long-Term Constant Currency Targets Currency Targets
Slide 20: Strong Business Fundamentals
Strong Business Fundamentals Strong Business Fundamentals Seven of top fifteen international cigarette brands, led by Marlboro Greatest global reach and best geographic balance Enhanced speed to market and flexibility Productivity and cost saving programs Manageable excise tax and regulatory environ
Slide 21: Questions and Answers
2008 Fourth Quarter and Annual Earnings Call Questions and Answers 4 February, 2009
Slide 22: Adjustments for the Impact of Currency and Acquisitions
Adjustments for the Impact of Currency Adjustments for the Impact of Currency and Acquisitions and Acquisitions Acquisitions Currency Less 7.4 % $ 2,301 $ 2,301 $ 2,472 $ $ (237) $ 2,303 Total 4.7 % (19) LA & Canada 5.9 % (23) Asia 24.8 % (104) EEMA – 1.8 % $ 1,059 $ 1,059 $ 1,040 $ $ (91) $ EU Oper
Slide 23: Adjustments for the Impact of Currency and Acquisitions
Adjustments for the Impact of Currency Adjustments for the Impact of Currency and Acquisitions and Acquisitions Full Year 2007 Acquisitions Currency Less 9.9 % $ 8,943 $ 8,943 $ 9,828 $ $ $ 10,434 Total –17.5 % (4) LA & Canada 12.0 % 1,803 1,803 2,020 2,057 Asia 27.4 % 2,431 2,431 3,098 3,119 EEMA 2
Slide 24: Philip Morris International
Philip Morris International — FY2008 Earnings Presentation on 6ix