Regulatory News:
Philip Morris International Inc.’s (NYSE:PM) Chief Operating
Officer, Jacek Olczak, and Chief Financial Officer, Emmanuel
Babeau, address investors today at the Deutsche Bank Global
Consumer Conference.
The presentation and Q&A session will be conducted in a
virtual format, beginning at approximately 7:00 a.m. Eastern Time.
A live audio call for the entire PMI session will be held in a
listen-only mode. Investors and other parties may register for the
call at www.pmi.com/2020deutschebank, in order to receive dial-in
instructions and numbers. Presentation slides will be available on
the same site.
An archived copy of the call will be available at
www.pmi.com/2020deutschebank until 5:00 p.m. Eastern Time on
Friday, July 10, 2020. The archived call can also be accessed on
iOS or Android devices by downloading PMI’s free Investor Relations
Mobile Application at www.pmi.com/irapp.
2020 Second-Quarter Forecast
The company is on-track to deliver second-quarter reported
diluted EPS toward the upper end of its previously communicated
range of $1.00 to $1.10, provided on Tuesday, April 21st. The
forecast includes an unfavorable currency impact, at prevailing
exchange rates, of approximately $0.07 per share, compared to an
unfavorable impact of approximately $0.12 per share, communicated
previously.
The forecast assumes a currency-neutral net revenue decline –
wholly attributable to COVID-19-related factors – around the high
end of the company’s previously communicated decline range of 8% to
12%. This primarily reflects industry cigarette volume declines at
the high end of our initial estimates due to stricter or longer
lockdowns in certain Latin America and EU markets during April and
May. We have observed, however, better-than-anticipated IQOS
performance and, in recent weeks, signs of recovery for combustible
products.
The forecast also assumes no disruption in the company's ability
to supply its customers, based on its current operations and
inventory levels.
Until PMI is able to estimate the full-year 2020 impact of
COVID-19 on its business with greater certainty, the company plans
to continue providing quarterly forecasts on a one quarter forward
basis, with the exception of the following items forecasted for the
full year:
- capital expenditures of approximately $0.7 billion, compared to
approximately $0.8 billion disclosed previously; and
- an effective tax rate of approximately 23%, subject to changes
in full-year earnings mix.
The company will issue its 2020 second-quarter results on
Tuesday, July 21st.
The forecasts in this press release exclude the impact of any
future acquisitions, unanticipated asset impairment and exit cost
charges, future changes in currency exchange rates, further
developments related to the U.S. Tax Cuts and Jobs Act, further
developments pertaining to the judgment in the two Québec Class
Action lawsuits and the Companies’ Creditors Arrangement Act (CCAA)
protection granted to RBH, any unusual events, and any
COVID-19-related developments different from the assumptions set
forth in the company's forecasts.
Factors described in the Forward-Looking and Cautionary
Statements section of this release represent continuing risks to
these projections.
Forward-Looking and Cautionary Statements
The presentation, related discussion and this press release
contain projections of future results and other forward-looking
statements. Achievement of future results is subject to risks,
uncertainties and inaccurate assumptions. In the event that risks
or uncertainties materialize, or underlying assumptions prove
inaccurate, actual results could vary materially from those
contained in such forward-looking statements. Pursuant to the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995, PMI is identifying important factors that, individually or
in the aggregate, could cause actual results and outcomes to differ
materially from those contained in any forward-looking statements
made by PMI.
PMI's business risks include: excise tax increases and
discriminatory tax structures; increasing marketing and regulatory
restrictions that could reduce our competitiveness, eliminate our
ability to communicate with adult consumers, or ban certain of our
products; health concerns relating to the use of tobacco and other
nicotine-containing products and exposure to environmental tobacco
smoke; litigation related to tobacco use; intense competition; the
effects of global and individual country economic, regulatory and
political developments, natural disasters and conflicts; changes in
adult smoker behavior; lost revenues as a result of counterfeiting,
contraband and cross-border purchases; governmental investigations;
unfavorable currency exchange rates and currency devaluations, and
limitations on the ability to repatriate funds; adverse changes in
applicable corporate tax laws; adverse changes in the cost and
quality of tobacco and other agricultural products and raw
materials; and the integrity of its information systems and
effectiveness of its data privacy policies. PMI's future
profitability may also be adversely affected should it be
unsuccessful in its attempts to produce and commercialize
reduced-risk products or if regulation or taxation do not
differentiate between such products and cigarettes; if it is unable
to successfully introduce new products, promote brand equity, enter
new markets or improve its margins through increased prices and
productivity gains; if it is unable to expand its brand portfolio
internally or through acquisitions and the development of strategic
business relationships; or if it is unable to attract and retain
the best global talent. Future results are also subject to the
lower predictability of our reduced-risk product category's
performance.
PMI is further subject to other risks detailed from time to time
in its publicly filed documents, including the Form 10-Q for the
quarter ended March 31, 2020. PMI cautions that the foregoing list
of important factors is not a complete discussion of all potential
risks and uncertainties. PMI does not undertake to update any
forward-looking statement that it may make from time to time,
except in the normal course of its public disclosure
obligations.
The COVID-19 pandemic has created significant societal and
economic disruption, and resulted in closures of stores, factories
and offices, and restrictions on manufacturing, distribution and
travel, all of which will adversely impact our business, results of
operations, cash flows and financial position during the
continuation of the pandemic. Our business continuity plans and
other safeguards may not be effective to mitigate the results of
the pandemic.
While much of the COVID-19 pandemic and its effect on our
business is still unknown, currently, significant risks include our
diminished ability to convert adult smokers to our RRPs as store
closures preclude in-person guided trials, significant volume
declines in our duty-free business and certain other key markets,
disruptions or delays in our manufacturing and supply chain,
increased currency volatility, and delays in certain cost saving,
transformation and restructuring initiatives. Our business could
also be adversely impacted if key personnel or a significant number
of employees or business partners become unavailable due to the
COVID-19 outbreak. The significant adverse impact of COVID-19 on
the economic or political conditions in markets in which we operate
could result in changes to the preferences of our adult consumers
and lower demand for our products, particularly for our mid-price
or premium-price brands. Continuation of the pandemic could disrupt
our access to the credit markets or increase our borrowing costs.
Governments may temporarily be unable to focus on the development
of science-based regulatory frameworks for the development and
commercialization of RRPs or on the enforcement or implementation
of regulations that are significant to our business. In addition,
messaging about the potential negative impacts of the use of our
products on COVID-19 risks may lead to increasingly restrictive
regulatory measures on the sale and use of our products, negatively
impact demand for our products, the willingness of adult consumers
to switch to our RRPs and our efforts to advocate for the
development of science-based regulatory frameworks for the
development and commercialization of RRPs.
The impact of these risks also depends on factors beyond our
knowledge or control, including the duration and severity of the
outbreak and actions taken to contain its spread and to mitigate
its public health effects, and the ultimate economic consequences
thereof.
Philip Morris International: Delivering a
Smoke-Free Future
Philip Morris International (PMI) is leading a transformation in
the tobacco industry to create a smoke-free future and ultimately
replace cigarettes with smoke-free products to the benefit of
adults who would otherwise continue to smoke, society, the company
and its shareholders. PMI is a leading international tobacco
company engaged in the manufacture and sale of cigarettes, as well
as smoke-free products and associated electronic devices and
accessories, and other nicotine-containing products in markets
outside the United States. In addition, PMI ships a version of its
IQOS Platform 1 device and its consumables authorized by the U.S.
Food and Drug Administration to Altria Group, Inc. for sale in the
United States under license. PMI is building a future on a new
category of smoke-free products that, while not risk-free, are a
much better choice than continuing to smoke. Through
multidisciplinary capabilities in product development,
state-of-the-art facilities and scientific substantiation, PMI aims
to ensure that its smoke-free products meet adult consumer
preferences and rigorous regulatory requirements. PMI's smoke-free
IQOS product portfolio includes heat-not-burn and
nicotine-containing vapor products. As of March 31, 2020, PMI
estimates that approximately 10.6 million adult smokers around the
world have already stopped smoking and switched to PMI's
heat-not-burn product, available for sale in 53 markets in key
cities or nationwide under the IQOS brand. For more information,
please visit www.pmi.com and www.pmiscience.com.
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