Summary

• Philip Morris International is a holding company engaged in the manufacturing and sale of cigarettes, tobacco, and nicotine-containing products.
• Its current product portfolio primarily consists of cigarettes and smoke-free products, which include heat-not-burn, vapor, and oral nicotine products.

Philip Morris International (NYSE: PM, LSE :0M8V) is a holding company engaged in the manufacturing and sale of cigarettes, tobacco, and nicotine-containing products. The company's current product portfolio primarily consists of cigarettes and smoke-free products, which include heat-not-burn, vapor, and oral nicotine products.

Recent Developments

Philip Morris International to Extend and Deepen Collaboration With KT&G¹

Jan. 29, 2023; Philip Morris International Inc. announces a long-term collaboration with KT&G, South Korea’s leading tobacco and nicotine manufacturer, to continue to commercialize KT&G’s innovative smoke-free devices and consumables on an exclusive, worldwide basis (excluding South Korea). It builds on three years of successful collaboration that has seen PMI commercialize KT&G’s products in more than 30 markets.

The agreement covers fifteen years, to January 29, 2038, with performance-review cycles and associated commitments, based on volume, to be confirmed for each three-year period, to allow flexibility for evolving market conditions. PMI and KT&G expect these commitments to increase over the full duration of the agreement, starting with a total commitment for the first three-year period equivalent to 16 billion consumables.

Swedish Match Acquisition

In 2022, the company acquired Swedish Match AB, a market leader in oral nicotine delivery with a significant presence in the United States market. The Swedish Match acquisition is a key milestone in PMI’s transformation to becoming a smoke-free company. Swedish Match already has a leading nicotine pouch franchise in the U.S. under the ZYN brand name. The Swedish Match product portfolio is complementary to its existing portfolio, permitting it to bring together a leading oral nicotine product with the leading heat-not-burn product.

Financial Highlights

First-Quarter 2023 Results²

Net revenues increased by 3.5% on a reported basis and by 3.2% organically, reflecting accelerated combustible tobacco pricing and robust underlying heated tobacco unit shipment volume growth before the impact of inventory movements.

Apr. 20, 2023; Adjusted net revenues increased by 3.2% in organic terms, against a very strong prior year quarter that increased by 9% on the same basis. The increase was primarily driven by accelerated combustible tobacco pricing in excess of 7% and heated tobacco unit shipment volume growth of 10.4%, partly offset by a cigarette shipment volume decline of 3.1%.

HTU shipment volume in the quarter was adversely affected by the net estimated impact of both distributor and wholesaler inventory movements. Excluding these movements, HTU adjusted in-market sales volume increased by an estimated 16% in the quarter, reflecting continued strong IQOS momentum.

Adjusted operating income margin decreased by 5.8 points on an organic basis, against a steep comparison in the first quarter of 2022. The decline largely reflected anticipated cost headwinds with an outsized impact on the quarter, as outlined during the company's 2022 fourth-quarter and full-year results announcement on February 9, 2023, including: global inflationary pressures on cost of sales primarily impacting the combustible tobacco business (notably related to input costs and energy prices), supply chain inefficiencies mainly due to the transition to ILUMA, general inflationary pressures on operating costs, and the phasing of certain investments and other costs.

Adjusted diluted EPS of $1.38 decreased by 4.4%, excluding currency. This exceeded the company's forecast provided on February 9th, mainly due to strong underlying delivery, excellent Swedish Match performance and favorable phasing of interest costs.

Company Overview

Philip Morris International is a holding company engaged in the manufacturing and sale of cigarettes, tobacco, and nicotine-containing products. The company is developing its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company's current product portfolio primarily consists of cigarettes and smoke-free products, which include heat-not-burn, vapor, and oral nicotine products.

The company's cigarettes are sold in approximately 175 markets, and in many of these markets they hold the number one or number two market share position. Philip Morris has a wide range of premium, mid-price and low-price brands. The company's portfolio comprises both international and local brands. Smoke-free products ("SFPs") is the term the company primarily use to refer to all of its products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral nicotine.

Brands

The company's flagship brand is Marlboro, which is the world's best-selling cigarette brand. PMI also markets a number of other popular brands, including Parliament, Virginia Slims, and L&M.

Company History

In 1847, Mr. Philip Morris opened a shop on London’s Bond Street.³

References

1. ^ https://www.pmi.com/investor-relations/press-releases-and-events/press-releases-overview/press-release-details/?newsId=25886
2. ^ https://www.pmi.com/investor-relations/press-releases-and-events/press-releases-overview/press-release-details/?newsId=26331
3. ^ https://www.pmi.com/who-we-are/key-milestones