Philip Morris Identifies Cost Savings and Efficiency Gains, CFO Says

Philip Morris International Inc. is making progress identifying potential cost savings and enhancing efficiency, Chief Financial Officer Martin King said Thursday.

"We are scrubbing costs across the entire company," Mr. King said in an interview with CFO Journal, referring to a three-year effort that is set to free over $1 billion for new investments. Philip Morris -- over a year into the project -- is zeroing in on its manufacturing footprint, its supply chain and its external spending on consultants, travel, legal fees and other items. www.wsj.com/articles/philip-morris-moves-to-zero-based-budgeting-amid-product-shift-1538420609

The company selected an individual, the so-called cost category owner, for each of these categories within external spending and tasked them with creating transparency around costs across the whole organization, Mr. King said.

"The goal is to find pools of money that are much bigger than if everyone is trying to optimize their little corner of the world," he said.

The plan is aimed at boosting returns on investments, not just cutting costs, according to Mr. King.

Write to Nina Trentmann at Nina.Trentmann@wsj.com

(END) Dow Jones Newswires

October 17, 2019 18:51 ET (22:51 GMT)

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