Third-Quarter Reported Diluted EPS grew
49.2% to $1.97, Adjusted Diluted EPS increased by 14.4% to
$1.91 and grew by 18.0% excluding currency
Regulatory News:
Philip Morris International Inc. (PMI) (NYSE: PM) today
announces its 2024 third-quarter and first nine-months
results.1
“In the third quarter, we delivered exceptionally strong
performance, with record quarterly net revenues and earnings per
share,” said Jacek Olczak, Chief Executive Officer. “This reflects
excellent momentum across all regions and categories, with a
reacceleration in IQOS adjusted in-market sales growth, strong ZYN
volumes, and resilient combustible performance.” “As a result of
our strong year-to-date delivery, we are raising our full-year
growth outlook for adjusted diluted EPS to a range of 14% to 15%,
excluding currency.”
Third Quarter
Highlights
- Smoke-free business (SFB): Quarterly shipments of
smoke-free products (SFP), available in 92 markets, reached close
to 40 billion units. The smoke-free business accounted for 38% of
our total net revenues and 40% of gross profit (up by 1.9pp and
2.2pp respectively, versus third-quarter last year), and continues
to deliver superior performance, with net revenues increasing by
14.2% (16.8% organically) and gross profit increasing by 15.9%
(20.2% organically).
- Inhalable smoke-free products: IQOS continues
strengthening its overall position as the second largest nicotine
‘brand’ in markets where present (gaining 1.0pp of combined
cigarette and HTU industry volumes) and driving the growth of the
heat-not-burn category (reaching nearly 77% of global category
volumes). HTU adjusted in-market sales (IMS) volume, which excludes
the net impact of estimated distributor and wholesaler inventory
movements, was up by an estimated 14.8%.
- In Japan, ILUMA i fueled the growth of IQOS, with adjusted IMS
up by 14.3%, the 8th consecutive quarter of double-digit growth.
IQOS HTU adjusted market share increased by 3.2pp to nearly 30%,
driving the overall category to at least 50% of total nicotine
offtake share in 8 major cites, including Tokyo and Yokohama.
- In Europe, IQOS HTU adjusted market share increased by 0.8pp to
9.5%. Adjusted IMS growth reaccelerated to 11.3%, with Italy
recovering well and 8 markets growing in excess of 20%, including
Greece and Germany. Our portfolio of IQOS consumables continues to
expand with both DELIA and LEVIA now being available in 9 markets
each, with further launches planned in Q4.
- Outside Europe and Japan, adjusted IMS growth accelerated and
we grew offtake share in key cities across the globe, including
Seoul, Toronto, Mexico City, Cairo, and Jakarta. Our strong growth
in Indonesia benefits from the expansion of our geographic reach
and consumables portfolio, with premium clove and capsule
products.
In the vaping category, our focused strategy
is delivering good results with excellent volume momentum and unit
cost improvements. Europe is at the forefront, as the closed pod
segment continues to take share from disposables. VEEV continues to
lead the closed pod segment in several markets, including Italy,
Romania, and the Czech Republic.
- Oral SFP2: Shipment volume increased by 24.7% in cans
(22.2% in pouches or pouch equivalents), fueled by ZYN nicotine
pouch growth in the U.S., where shipments reached 149.1 million
cans, representing growth of 41.4% versus prior year as supply
constraints start to ease. Outside the U.S., our nicotine pouch
volume in cans grew by nearly 70%, with notable contributions from
Pakistan and South Africa. The number of markets with ZYN presence
increased to 30, including recent launches in Greece and Czech
Republic.
- Combustibles: Net revenues grew by 5.2% (8.6%
organically), driven by another quarter of high single-digit
pricing and resilient industry volumes. Both our global brands
portfolio and Marlboro achieved their highest quarterly market
shares since the 2008 spin-off.
- Dividend: Increased regular quarterly dividend by 3.8%
to $1.35 per share, or an annualized $5.40 per share.
____________________ 1 Explanation of PMI's use of non-GAAP
measures cited in this document and reconciliations to the most
directly comparable U.S. GAAP measures can be found in the
“Non-GAAP Measures, Glossary and Explanatory Notes” section of this
release, in Exhibit 99.2 to the company's Form 8-K dated October
22, 2024, and at www.pmi.com/2024Q3earnings. 2 Oral smoke-free
products volume excludes snuff, snuff leaf and U.S. chew
Operating Review - Third
Quarter
Total
HTU
Oral SFP3
Cigarettes
Shipment Volume (units bn)
203.0
35.3
4.4
163.2
vs. Q3 2023
2.9%
8.9%
22.2%
1.3%
PMI
Smoke Free
Business
Combustibles
Net Revenues ($ bn)
$9.9
$3.8
$6.1
reported vs. Q3 2023
8.4%
14.2%
5.2%
organic vs. Q3 2023
11.6%
16.8%
8.6%
Gross Profit ($ bn)
$6.5
$2.6
$3.9
reported vs. Q3 2023
9.5%
15.9%
5.7%
organic vs. Q3 2023
13.0%
20.2%
8.7%
Operating Income ($ bn)
$3.7
reported vs. Q3 2023
8.4%
organic vs. Q3 2023
13.8%
Reported Diluted
EPS
Adjusting
Items*
Adjusted Diluted
EPS
Currency Impact
Adjusted Diluted
EPS ex. Currency
EPS
$1.97
$0.06
$1.91
$(0.06)
$1.97
vs. Q3 2023
49.2%
14.4%
18.0%
(*) For a list of adjusting items refer to
page 21
____________________ 3 In pouches or pouch equivalents
Full-Year Forecast
Full-Year
2024
Forecast
2023
Growth
Reported Diluted EPS
$6.20
-
$6.26
$ 5.02
Adjustments:
Asset impairment and exit costs
0.09
0.06
Termination of distribution arrangement in
the Middle East
—
0.04
Impairment of goodwill and other
intangibles
0.01
0.44
Amortization of intangibles(1)
0.42
0.25
Impairment related to Vectura Group's
expected sale
0.13
—
Egypt sales tax charge
0.03
—
Charges related to the war in Ukraine
—
0.03
Swedish Match AB acquisition accounting
related items
—
0.01
Income tax impact associated with Swedish
Match AB financing
(0.01)
(0.11)
South Korea indirect tax charge
—
0.11
Termination of agreement with Foundation
for a Smoke-Free World
—
0.07
Fair value adjustment for equity security
investments
(0.39)
(0.02)
Tax items
(0.03)
0.11
Total Adjustments
0.25
0.99
Adjusted Diluted EPS
$6.45
-
$6.51
$ 6.01
7.3%
-
8.3%
Less: Currency
(0.40)
Adjusted Diluted EPS, excluding
currency
$6.85
-
$6.91
$ 6.01
14.0%
-
15.0%
(1) See forecast assumptions for
details
Reported diluted EPS is forecast to be in a range of $6.20 to
$6.26, at prevailing exchange rates, versus reported diluted EPS of
$5.02 in 2023. Excluding a total 2024 adjustment of $0.25 per
share, this forecast represents a projected increase of 7.3% to
8.3% versus adjusted diluted EPS of $6.01 in 2023. Also excluding
an adverse currency impact of $0.40, at prevailing exchange rates,
this forecast represents a projected increase of 14.0% to 15.0%
versus adjusted diluted EPS of $6.01 in 2023, as outlined in the
above table.
2024 Full-Year Forecast Assumptions
This forecast assumes:
- An estimated total international industry volume growth of up
to 1% for cigarettes and HTUs, excluding China and the U.S.;
- Total cigarette, HTU and oral smoke-free product shipment
volume growth for PMI of 2% to 3% driven by smoke-free
products;
- HTU adjusted IMS to deliver around 13% growth for the full
year, and HTU shipment volumes of around 140 billion units;
- Nicotine pouch shipment volume in the U.S. of 570 to 580
million cans;
- Net revenue growth of around 9.5% on an organic basis;
- Organic operating income growth of 14% to 14.5%;
- An acceleration in organic smoke-free net revenue and gross
profit growth compared to 2023;
- Broadly unchanged net revenue and adjusted operating loss in
the Wellness and Healthcare segment compared to 2023;
- No earnings impact from the May 15, 2024 Fiscal Court in
Dusseldorf ruling related to the legality of a supplemental tax
surcharge on HTUs in Germany, which went into effect in 2022. On
June 19, 2024, a German subsidiary of PMI submitted an appeal;
- No earnings impact from potential impairments of equity
holdings, including potential impairment of PMI’s Canadian
affiliate, Rothmans, Benson & Hedges Inc.;
- Full-year amortization of acquired intangibles of $0.42 per
share, which includes an estimate of amortization of IQOS
commercialization rights in the U.S. following the closing of the
agreement to end our commercial relationship with Altria Group,
Inc. covering IQOS in the U.S. effective May 1, 2024;
- Net financing costs of approximately $1.1 to $1.2 billion;
- An effective tax rate, excluding discrete tax events, of
approximately 21% to 22%;
- Operating cash flow of approximately $11 billion at prevailing
exchange rates, subject to year-end working capital
requirements;
- Capital expenditures of around $1.4 billion, including further
investments in ZYN capacity in the U.S.;
- Net debt to adjusted EBITDA ratio improvement of 0.3x to 0.4x
at prevailing exchange rates as we continue to target a ratio of
around 2x by the end of 2026; and
- No share repurchases in 2024
Factors described in the Forward-Looking and Cautionary
Statements section of this release represent continuing risks to
these projections.
Sale of Vectura Group
In September 2024, PMI announced the sale of its subsidiary
Vectura Group Ltd. (Vectura) to Molex Asia Holdings Ltd., and the
establishment of master service agreements to develop Vectura
Fertin Pharma’s inhaled therapeutics proprietary pipeline. The
transaction is expected to close by the end of 2024, subject to
regulatory approval, which may impact the timing, and other
customary closing conditions. See PMI's Form 8-K dated September
17, 2024 for additional details. In the third quarter of 2024, PMI
recorded an impairment charge of $198 million (previously estimated
to be approximately $220 million at the time of announcement)
related to Vectura's classification as held for sale.
The remaining units of Vectura Fertin Pharma will continue to
operate as a separate company under PMI’s ownership and will be
given a new corporate identity. This business will focus on
developing and commercializing oral consumer health and wellness
offerings and inhaled prescription products for therapy areas that
include pain management and cardiovascular emergencies.
Update on CCAA Proceeding in
Canada
In October 2024, PMI was informed by its deconsolidated Canadian
affiliate, Rothmans, Benson & Hedges Inc. (RBH), that the
court-appointed mediator and monitor in RBH’s Companies’ Creditors
Arrangement Act (CCAA) proceeding filed a proposed plan of
compromise and arrangement outlining certain terms of a
comprehensive resolution of tobacco product-related claims and
litigation in Canada against RBH and its affiliates. See PMI's Form
8-K dated October 18, 2024 for additional details.
Conference Call
A conference call hosted by Emmanuel Babeau, Chief Financial
Officer, will be webcast at 9:00 a.m., Eastern Time, on October 22,
2024. Access the webcast at www.pmi.com/2024Q3earnings.
Financial Review
TOTAL MARKET, CONSOLIDATED SHIPMENT VOLUME
& MARKET SHARE
Total Market Volume
Third-Quarter Estimated international industry volume
(excluding China and the U.S.) for cigarettes and HTUs increased by
1.3%, reflecting increases in the SSEA, CIS & MEA and Europe
Regions, partly offset by decreases in the EA, AU & PMI DF and
Americas Regions, as described in the Regional sections below.
Nine Months Year-to-Date Estimated international industry
volume (excluding China and the U.S.) for cigarettes and HTUs
increased by 1.2%, reflecting an increase in the SSEA, CIS &
MEA Region, partly offset by a decrease in the Americas Region, and
broad stability in the EA, AU & PMI DF and Europe Regions, as
described in the Regional sections below.
Consolidated Shipment Volume
PMI Cigarettes and HTUs
Third-Quarter
Nine Months
Year-to-Date
(million units)
2024
2023
Change
2024
2023
Change
Cigarettes
163,238
161,137
1.3%
464,047
461,855
0.5%
Heated Tobacco Units
35,347
32,471
8.9%
104,025
91,291
13.9%
Total Cigarettes and HTUs
198,585
193,608
2.6%
568,072
553,146
2.7%
PMI Oral SFP(1)
Third-Quarter
Nine Months
Year-to-Date
(million cans)
2024
2023
Change
2024
2023
Change
Nicotine Pouches
164.6
114.6
43.6%
460.2
295.4
55.8%
Snus
61.3
60.3
1.6%
181.5
178.5
1.7%
Moist Snuff
34.1
33.2
2.6%
102.6
102.5
0.1%
Other Oral SFP(2)
0.7
0.9
(20.9)%
2.7
3.3
(17.9)%
Total Oral SFP
260.7
209.0
24.7%
747.0
579.8
28.9%
(1) Excluding snuff, snuff leaf and U.S.
chew
(2) Includes chew bags and tobacco
bits
Note: Sum may not foot due to
rounding.
Third-Quarter PMI's total cigarette and HTU shipment
volume increased by 2.6% (HTU shipments increased by 8.9%, and
cigarette shipments increased by 1.3%), with increases across all
regions except the Americas Region.
PMI’s total oral product shipment volume in cans increased by
24.7%, predominantly reflecting growth in nicotine pouches.
Adjusted in-market sales for HTUs increased by 14.8%, including
growth in Japan of 14.3% and Europe of 11.3%.
Nine Months Year-to-Date PMI's total cigarette and HTU
shipment volume increased by 2.7% (HTU shipments increased by
13.9%, while cigarette shipments were broadly stable).
PMI’s total oral product shipment volume in cans increased by
28.9%, primarily reflecting growth in nicotine pouches.
Adjusted in-market sales for HTUs increased by 12.6%, including
growth in Japan of 13.4% and Europe of 9.2%.
International Share of Market - Cigarettes and HTUs
Third-Quarter
Nine Months
Year-to-Date
2024
2023
Change (pp)
2024
2023
Change (pp)
Total International Market
Share(1)
29.5%
28.9%
0.6
28.7%
28.3%
0.4
Cigarettes
24.2%
24.3%
(0.1)
23.6%
23.7%
(0.1)
HTU
5.3%
4.6%
0.7
5.2%
4.6%
0.6
Cigarette over Cigarette Market
Share(2)
26.0%
25.9%
0.1
25.3%
25.2%
0.1
(1) Defined as PMI's cigarette and heated
tobacco unit in-market sales volume as a percentage of total
industry cigarette and heated tobacco unit sales volume, excluding
China and the U.S., including cigarillos in Japan
(2) Defined as PMI's cigarette in-market
sales volume as a percentage of total industry cigarette sales
volume, excluding China and the U.S., including cigarillos in
Japan
Note: Sum of share of market by product
categories might not foot to total due to rounding.
CONSOLIDATED FINANCIAL SUMMARY
Third-Quarter
Financial Summary
- Quarters Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
9,911
$
9,141
8.4
%
11.6
%
770
(289
)
—
689
322
48
Cost of Sales(1)
(3,366
)
(3,165
)
(6.4
)%
(9.0
)%
(201
)
63
21
—
(159
)
(126
)
Marketing, Administration and Research
Costs(2)
(2,891
)
(2,606
)
(10.9
)%
(15.1
)%
(285
)
108
—
—
—
(393
)
Operating Income
$
3,654
$
3,370
8.4
%
11.3
%
284
(118
)
21
689
163
(471
)
Amortization of Intangibles
(256
)
(205
)
(24.9
)%
(24.9
)%
(51
)
—
—
—
—
(51
)
Impairment related to Vectura Group's
expected sale
(198
)
—
—
%
—
%
(198
)
—
—
—
—
(198
)
Egypt sales tax charge
(45
)
—
—
%
—
%
(45
)
—
—
—
—
(45
)
Charges related to the war in Ukraine
—
(19
)
+100
%
+100
%
19
—
—
—
—
19
Termination of agreement with Foundation
for a Smoke-Free World
—
(140
)
+100
%
+100
%
140
—
—
—
—
140
Adjusted Operating Income
$
4,153
$
3,734
11.2
%
13.8
%
419
(118
)
21
689
163
(336
)
Adjusted Operating Income
Margin
41.9
%
40.8
%
1.1
pp
0.9
pp
(1) Includes $14 million in 2024 and $10
million in 2023 related to the special items below.
(2) Includes $485 million in 2024 and $354
million in 2023 related to the special items below.
Net revenues increased by 11.6% on an organic basis, mainly
reflecting: a favorable pricing variance, primarily due to higher
combustible tobacco pricing; and favorable volume/mix, mainly
driven by higher smoke-free products volume.
Adjusted operating income increased by 13.8% on an organic
basis, mainly reflecting: the same factors as for net revenues,
notwithstanding unfavorable cigarette mix; partly offset by higher
manufacturing costs, notably related to tobacco leaf, and higher
marketing, administration and research costs.
Nine Months Year-to-Date
Financial Summary
- Nine Months Ended September 30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
28,172
$
26,127
7.8
%
11.0
%
2,045
(841
)
—
1,721
1,089
76
Termination of distribution arrangement in
the Middle East
—
(80
)
+100
%
+100
%
80
—
—
—
—
80
Adjusted Net Revenues
$
28,172
$
26,207
7.5
%
10.7
%
1,965
(841
)
—
1,721
1,089
(4
)
Net Revenues
$
28,172
$
26,127
7.8
%
11.0
%
2,045
(841
)
—
1,721
1,089
76
Cost of Sales (1)
(9,906
)
(9,431
)
(5.0
)%
(6.8
)%
(475
)
134
33
—
(473
)
(169
)
Marketing, Administration and Research
Costs (2)
(8,123
)
(7,364
)
(10.3
)%
(9.4
)%
(759
)
(70
)
—
—
—
(689
)
Impairment of Goodwill
—
(665
)
+100
%
+100
%
665
—
—
—
—
665
Operating Income
$
10,143
$
8,667
17.0
%
25.6
%
1,476
(777
)
33
1,721
616
(117
)
Asset Impairment & Exit Costs
(168
)
(109
)
(54.1
)%
(54.1
)%
(59
)
—
—
—
—
(59
)
Impairment related to Vectura Group's
expected sale
(198
)
—
—
%
—
%
(198
)
—
—
—
—
(198
)
Egypt sales tax charge
(45
)
—
—
%
—
%
(45
)
—
—
—
—
(45
)
Termination of distribution arrangement in
the Middle East (3)
—
(80
)
+100
%
+100
%
80
—
—
—
—
80
Impairment of Goodwill and Other
Intangibles (4)
(27
)
(680
)
96.0
%
96.0
%
653
—
—
—
—
653
Amortization of Intangibles
(588
)
(368
)
(59.8
)%
(59.8
)%
(220
)
—
—
—
—
(220
)
Charges related to the war in Ukraine
—
(19
)
+100
%
+100
%
19
—
—
—
—
19
Swedish Match AB acquisition accounting
related items
—
(18
)
+100
%
+100
%
18
—
—
—
—
18
South Korea Indirect Tax Charge
—
(204
)
+100
%
+100
%
204
—
—
—
—
204
Termination of agreement with Foundation
for a Smoke-Free World
—
(140
)
+100
%
+100
%
140
—
—
—
—
140
Adjusted Operating Income
$
11,169
$
10,285
8.6
%
15.8
%
884
(777
)
33
1,721
616
(709
)
Adjusted Operating Income
Margin
39.6
%
39.2
%
0.4
pp
1.9
pp
(1) Includes $46 million in 2024 and $72
million in 2023 related to the special items below.
(2) Includes $980 million in 2024 and $801
million in 2023 related to the special items below.
(3) Included in Net Revenues above.
(4) Includes $665 million impairment of
goodwill in 2023.
Adjusted net revenues increased by 10.7% on an organic basis,
mainly reflecting: a favorable pricing variance, primarily driven
by higher combustible tobacco pricing; and favorable volume/mix,
driven by higher smoke-free products volume, partly offset by
unfavorable cigarette mix.
Adjusted operating income increased by 15.8% on an organic
basis, mainly reflecting: the same factors as for net revenues;
partly offset by higher marketing, administration and research
costs (primarily due to inflationary impacts, notably related to
wages, and higher commercial investments), as well as higher
manufacturing costs, notably related to tobacco leaf and the impact
of the EU single-use plastics directive, partly offset by
productivity.
EUROPE REGION
Total Market, PMI Shipment & Market Share
Commentaries
Third-Quarter The estimated total market for cigarettes
and HTUs in the Region increased by 1.8% to 148.6 billion units,
reflecting a 0.6% increase for cigarettes and continued HTU growth.
The increase in the estimated total market was predominantly due to
Ukraine (up by 9.4%), Italy (up by 3.5%) and Spain (up by 3.8%),
partly offset by France (down by 10.9%), the Netherlands (down by
25.6%), and Belgium (down by 16.2%).
Nine Months Year-to-Date The estimated total market for
cigarettes and HTUs in the Region was broadly stable, reflecting a
1.5% decrease for cigarettes, largely offset by an increase for
HTUs. The decrease in the estimated total market was predominantly
due to France (down by 12.8%), the United Kingdom (down by 11.0%),
and the Netherlands (down by 18.7%), partly offset by Bulgaria (up
by 7.9%), Greece (up by 8.2%), and Poland (up by 1.9%).
Europe Key Data
Third-Quarter
Nine Months
Year-to-Date
Change
Change
2024
2023
% / pp
2024
2023
% / pp
PMI Shipment Volume (million
units)
Cigarettes
43,735
43,365
0.9%
124,291
126,263
(1.6)%
Heated Tobacco Units
14,199
13,155
7.9%
38,474
34,959
10.1%
Total Europe
57,934
56,520
2.5%
162,765
161,222
1.0%
PMI Market Share
Cigarettes
30.1%
30.5%
(0.4)
30.1%
30.4%
(0.3)
Heated Tobacco Units
9.5%
8.6%
0.9
9.7%
8.8%
0.9
Total Europe
39.6%
39.1%
0.5
39.8%
39.1%
0.7
Note: Sum may not foot due to
rounding.
Europe Oral SFP
Third-Quarter
Nine Months
Year-to-Date
2024
2023
Change
2024
2023
Change
PMI Shipment Volume (million
cans)
Nicotine Pouches
11.2
9.1
23.5%
35.3
26.2
34.4%
Snus
60.5
59.5
1.7%
179.2
175.3
2.2%
Other Oral SFP(1)
0.7
0.9
(22.3)%
2.7
3.3
(18.2)%
Total Europe
72.4
69.5
4.2%
217.2
204.9
6.0%
(1) Includes chew bags and tobacco
bits
Note: Sum may not foot due to
rounding.
Third-Quarter PMI's total cigarette and HTU shipment
volume in the Region increased by 2.5% to 57.9 billion units. Total
cigarette and HTU shipment volume increased notably in Ukraine (up
by 12.3%) and Poland (up by 5.7%), and decreased notably in Belgium
(down by 25.8%) as well as the Netherlands (down by 24.9%).
PMI's estimated HTU adjusted in-market sales volume in the
Region increased by 11.3% in the quarter, reflecting continued
growth momentum for IQOS.
PMI's HTU share of the total cigarette and HTU market in the
Region increased by 0.8 pp on an adjusted basis.
Oral SFP shipments increased by 4.2%, primarily driven by
nicotine pouches (up by 23.5%).
Nine Months Year-to-Date PMI's total cigarette and HTU
shipment volume in the Region increased by 1.0% to 162.8 billion
units. Total cigarette and HTU shipment volume increased notably in
Poland (up by 7.1%) and Ukraine (up by 8.7%), and decreased notably
in France (down by 18.4%) as well as the Netherlands (down by
18.2%).
PMI's estimated HTU adjusted in-market sales volume in the
Region increased by 9.2%, reflecting continued growth momentum for
IQOS, partly offset by the impact from the EU characterizing flavor
ban.
PMI's HTU share of the total cigarette and HTU market in the
Region increased by 0.9 pp on an adjusted basis.
Oral SFP shipments increased by 6.0%, driven by growth of
nicotine pouches (up by 34.4%).
Financial Summary
Third-Quarter
Financial Summary
- Quarters Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
4,121
$
3,823
7.8
%
8.7
%
298
(35
)
—
228
105
—
Operating Income
$
2,020
$
1,717
17.6
%
15.5
%
303
37
—
228
47
(9
)
Adjustments (1)
(40
)
(148
)
73.0
%
73.0
%
108
—
—
—
—
108
Adjusted Operating Income
$
2,059
$
1,865
10.4
%
8.4
%
194
37
—
228
47
(117
)
Adjusted Operating Income
Margin
50.0
%
48.8
%
1.2
pp
(0.1
)pp
(1) See Schedule 10 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 8.7% on an organic basis, reflecting:
a favorable pricing variance, mainly driven by higher combustible
tobacco pricing; and favorable volume/mix, primarily driven by
higher HTU volume, partly offset by adverse cigarette mix.
Adjusted operating income increased by 8.4% on an organic basis,
primarily reflecting: the same factors as for net revenues; partly
offset by higher marketing, administration and research costs.
Nine Months Year-to-Date
Financial Summary
-
Nine Months
Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
11,301
$
10,465
8.0
%
7.7
%
836
34
—
596
206
—
Operating Income
$
5,136
$
4,551
12.9
%
12.7
%
585
6
—
596
113
(130
)
Adjustments (1)
(120
)
(251
)
52.1
%
52.1
%
131
—
—
—
—
131
Adjusted Operating Income
$
5,256
$
4,802
9.5
%
9.3
%
454
6
—
596
113
(260
)
Adjusted Operating Income
Margin
46.5
%
45.9
%
0.6
pp
0.7
pp
(1) See Schedule 11 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 7.7% on an organic basis, primarily
driven by the same factors as for the quarter.
Adjusted operating income increased by 9.3% on an organic basis,
primarily reflecting: a favorable pricing variance, mainly driven
by higher combustible tobacco pricing; and favorable volume/mix,
primarily driven by higher HTU volume, notwithstanding lower
cigarette volume; partly offset by higher marketing, administration
and research costs as well as manufacturing costs, including the
impact of the EU single-use plastics directive.
SSEA, CIS & MEA REGION
Total Market, PMI Shipment & Market Share
Commentaries
Third-Quarter The estimated total market for cigarettes
and HTUs in the Region increased by 2.0% to 399.4 billion units.
The increase in the estimated total market was mainly due to Egypt
(up by 32.4%), Russia (up by 8.3%), and Turkey (up by 9.4%), partly
offset by Bangladesh (down by 30.8%), Indonesia (down by 3.3%), and
Thailand (down by 17.0%).
Nine Months Year-to-Date The estimated total market for
cigarettes and HTUs in the Region increased by 2.4% to 1,167.0
billion units. The increase in the estimated total market was
mainly due to Turkey (up by 10.4%), Russia (up by 6.4%), and Egypt
(up by 9.4%), partly offset by Bangladesh (down by 4.9%), Thailand
(down by 15.4%), and the Philippines (down by 5.4%).
PMI Shipment Volume
Third-Quarter
Nine Months
Year-to-Date
(million units)
2024
2023
Change
2024
2023
Change
Cigarettes
91,456
89,398
2.3%
259,038
250,344
3.5%
Heated Tobacco Units
7,127
6,088
17.1%
20,142
17,388
15.8%
Total SSEA, CIS & MEA
98,583
95,486
3.2%
279,180
267,732
4.3%
Third-Quarter PMI's total cigarette and HTU shipment
volume in the Region increased by 3.2% to 98.6 billion units,
mainly driven by Turkey (up by 13.1%), partly offset by Indonesia
(down by 8.9%). PMI's estimated HTU adjusted in-market sales volume
increased by 20.9%, with 17.1% HTU shipment volume growth.
Nine Months Year-to-Date PMI's total cigarette and HTU
shipment volume in the Region increased by 4.3% to 279.2 billion
units, mainly driven by Turkey (up by 14.9%), partly offset by
Indonesia (down by 4.6%). PMI's estimated HTU adjusted in-market
sales volume increased by 15.5%, with 15.8% HTU shipment volume
growth.
Financial Summary
Third-Quarter
Financial Summary
- Quarters Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
2,964
$
2,777
6.7
%
12.1
%
187
(148
)
—
296
39
—
Operating Income
$
960
$
823
16.6
%
29.8
%
137
(129
)
21
296
21
(72
)
Adjustments (1)
(50
)
(46
)
(7.6
)%
(7.6
)%
(4
)
—
—
—
—
(4
)
Adjusted Operating Income
$
1,009
$
869
16.1
%
28.5
%
140
(129
)
21
296
21
(68
)
Adjusted Operating Income
Margin
34.0
%
31.3
%
2.7
pp
4.6
pp
(1) See Schedule 10 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 12.1% on an organic basis, primarily
reflecting: a favorable pricing variance, predominantly driven by
higher combustible tobacco pricing; and favorable volume/mix,
driven by HTU performance.
Adjusted operating income increased by 28.5% on an organic
basis, primarily reflecting: the same factors as for net revenues;
partly offset by higher manufacturing costs (primarily due to
higher cost of tobacco leaf).
Nine Months Year-to-Date
Financial Summary
- Nine Months Ended September 30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
8,393
$
7,922
5.9
%
13.4
%
471
(593
)
—
680
306
78
Adjustment (1)
—
(80
)
+100
%
+100
%
80
—
—
—
—
80
Adjusted Net Revenues
$
8,393
$
8,002
4.9
%
12.3
%
391
(593
)
—
680
306
(2
)
Net Revenues
$
8,393
$
7,922
5.9
%
13.4
%
471
(593
)
—
680
306
78
Operating Income
$
2,623
$
2,437
7.6
%
30.9
%
186
(600
)
33
680
117
(44
)
Adjustments (2)
(59
)
(168
)
64.8
%
64.8
%
109
—
—
—
—
109
Adjusted Operating Income
$
2,682
$
2,605
3.0
%
24.7
%
77
(600
)
33
680
117
(152
)
Adjusted Operating Income
Margin
32.0
%
32.6
%
(0.6
)pp
3.6
pp
(1) Termination of distribution
arrangement in the Middle East.
(2) See Schedule 11 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Adjusted net revenues increased by 12.3% on an organic basis,
primarily reflecting: a favorable pricing variance, predominantly
driven by higher combustible tobacco pricing; and favorable
volume/mix, driven by higher cigarette and HTU volume as well as
favorable mix.
Adjusted operating income increased by 24.7% on an organic
basis, primarily reflecting: a favorable pricing variance,
predominantly driven by higher combustible tobacco pricing; and
favorable volume/mix, driven by higher cigarette and HTU volume,
notwithstanding unfavorable cigarette mix; partly offset by higher
manufacturing costs (primarily due to higher cost of tobacco
leaf).
EA, AU AND PMI DF REGION
Total Market, PMI Shipment & Market Share
Commentaries
Third-Quarter The estimated total market for cigarettes
and HTUs in the Region, excluding China, decreased by 1.4% to 82.2
billion units, with a decrease in cigarettes, partly offset by HTU
growth. The decrease in the estimated total market was mainly
driven by Taiwan (down by 10.0%) and Korea (down by 3.2%), partly
offset by International Duty Free (up by 7.2%) and Japan (up by
0.9%).
Nine Months Year-to-Date The estimated total market for
cigarettes and HTUs in the Region, excluding China, was broadly
stable, with a decrease in cigarettes, largely offset by HTU
growth. The decrease in the estimated total market was mainly
driven by Australia (down by 29.0%) and Korea (down by 2.5%),
partly offset by International Duty Free (up by 10.9%) and Japan
(up by 1.0%).
PMI Shipment Volume
Third-Quarter
Nine Months
Year-to-Date
(million units)
2024
2023
Change
2024
2023
Change
Cigarettes
12,806
12,941
(1.0)%
36,246
39,402
(8.0)%
Heated Tobacco Units
13,864
13,099
5.8%
44,937
38,561
16.5%
Total EA, AU & PMI DF
26,670
26,040
2.4%
81,183
77,963
4.1%
Third-Quarter PMI's total cigarette and HTU shipment
volume in the Region increased by 2.4% to 26.7 billion units,
driven by Japan (up by 1.5%), partly offset by Australia (down by
30.0%).
PMI's estimated HTU adjusted in-market sales volume in the
Region increased by 15.5% in the quarter, including growth in Japan
of 14.3%.
Nine Months Year-to-Date PMI's total cigarette and HTU
shipment volume in the Region increased by 4.1% to 81.2 billion
units, driven by Japan (up by 8.9%), partly offset by Australia
(down by 28.2%).
PMI's estimated HTU adjusted in-market sales volume in the
Region increased by 14.7%, including growth in Japan of 13.4%.
Financial Summary
Third-Quarter
Financial Summary
- Quarters Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
1,602
$
1,571
2.0
%
7.4
%
31
(85
)
—
71
45
—
Operating Income
$
788
$
769
2.5
%
7.8
%
19
(41
)
—
71
(21
)
10
Adjustments (1)
(1
)
(25
)
97.2
%
97.2
%
24
—
—
—
—
24
Adjusted Operating Income
$
789
$
794
(0.6
)%
4.5
%
(5
)
(41
)
—
71
(21
)
(14
)
Adjusted Operating Income
Margin
49.3
%
50.5
%
(1.2
)pp
(1.3
)pp
(1) See Schedule 10 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 7.4% on an organic basis, reflecting:
a favorable pricing variance and favorable volume/mix, mainly
driven by higher HTU volume, partly offset by lower cigarette
volume.
Adjusted operating income increased by 4.5% on an organic basis,
reflecting: favorable pricing variance, partly offset by
unfavorable volume/mix, driven by cigarettes, and higher marketing,
administration and research costs.
Nine Months Year-to-Date
Financial Summary
- Nine Months Ended September 30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
4,959
$
4,771
3.9
%
10.5
%
188
(314
)
—
289
213
—
Operating Income
$
2,304
$
1,963
17.4
%
30.5
%
341
(257
)
—
289
53
256
Adjustments (1)
(2
)
(250
)
99.1
%
99.1
%
248
—
—
—
—
248
Adjusted Operating Income
$
2,306
$
2,213
4.2
%
15.8
%
93
(257
)
—
289
53
8
Adjusted Operating Income
Margin
46.5
%
46.4
%
0.1
pp
2.2
pp
(1) See Schedule 11 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 10.5% on an organic basis, reflecting:
a favorable pricing variance and favorable volume/mix, mainly
driven by higher HTU volume, partly offset by lower cigarette
volume.
Adjusted operating income increased by 15.8% on an organic
basis, primarily driven by the same factors as for net
revenues.
AMERICAS REGION
Total Market, PMI Shipment & Market Share
Commentaries
Third-Quarter The estimated total market for cigarettes
and HTUs in the Region, excluding the U.S., decreased by 0.7% to
46.5 billion units, primarily reflecting a decline in the cigarette
market. The decrease in the estimated total market was mainly due
to Canada (down by 15.4%) and Mexico (down by 5.8%), partly offset
by Brazil (up by 12.3%).
Nine Months Year-to-Date The estimated total market for
cigarettes and HTUs in the Region, excluding the U.S., decreased by
2.1% to 136.1 billion units, primarily reflecting a decline for
cigarettes. The decrease in the estimated total market was mainly
due to Argentina (down by 11.5%) and Canada (down by 13.1%), partly
offset by Brazil (up by 8.5%).
PMI Shipment Volume
Third-Quarter
Nine Months
Year-to-Date
(million units)
2024
2023
Change
2024
2023
Change
Cigarettes
15,241
15,433
(1.2)%
44,472
45,846
(3.0)%
Heated Tobacco Units
157
129
21.7%
472
383
23.2%
Total Americas
15,398
15,562
(1.1)%
44,944
46,229
(2.8)%
Note: Sum may not foot due to
rounding.
Americas Oral SFP1
Third-Quarter
Nine Months
Year-to-Date
2024
2023
Change
2024
2023
Change
PMI Shipment Volume (million
cans)
Nicotine Pouches
149.6
105.4
41.9%
416.3
268.5
55.0%
Moist Snuff
34.1
33.2
2.6%
102.6
102.5
0.1%
Snus
0.7
0.8
(4.3)%
2.2
3.2
(30.0)%
Total Americas
184.4
139.4
32.3%
521.1
374.2
39.3%
(1) Excluding U.S. chew;
Note: Volumes of other oral SFP introduced
in Q3'24 are not material. Sum may not foot due to rounding.
Third-Quarter PMI's total cigarette and HTU shipment
volume in the Region decreased by 1.1% to 15.4 billion units,
mainly due to Mexico (down by 5.9%) and Argentina (down by 4.3%),
partly offset by Brazil (up by 13.6%).
Oral products shipments increased by 32.3%, predominantly driven
by ZYN nicotine pouches in the U.S.
Nine Months Year-to-Date PMI's total cigarette and HTU
shipment volume in the Region decreased by 2.8% to 44.9 billion
units, mainly due to Argentina (down by 11.6%), partly offset by
Brazil (up by 10.8%).
Cigar shipment volume decreased by 14.6%, predominantly due to
trade inventory movements in the prior-year around the April 2023
price increase. Gross profit for cigars grew robustly.
Oral products shipments increased by 39.3%, predominantly driven
by ZYN nicotine pouches in the U.S.
Financial Summary
Third-Quarter
Financial Summary
- Quarters Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
1,148
$
895
28.3
%
30.5
%
253
(20
)
—
92
133
48
Operating Income
$
137
$
98
39.8
%
20.4
%
39
19
—
92
116
(188
)
Adjustments (1)
(198
)
(131
)
(51.3
)%
(51.3
)%
(67
)
—
—
—
—
(67
)
Adjusted Operating Income
$
336
$
229
46.7
%
38.4
%
107
19
—
92
116
(121
)
Adjusted Operating Income
Margin
29.3
%
25.6
%
3.7
pp
1.5
pp
(1) See Schedule 10 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 30.5% on an organic basis, primarily
reflecting: a favorable pricing variance and favorable volume/mix,
both predominantly driven by nicotine pouches in the U.S., partly
offset by lower cigarette volume and unfavorable cigarette mix
outside of the U.S.
Adjusted operating income increased by 38.4% on an organic
basis, mainly reflecting: favorable volume/mix and price variance,
mainly due to the same factors as for net revenues; partly offset
by higher marketing, administration and research costs, including
incremental investment in the U.S.
Nine Months Year-to-Date
Financial Summary
-
Nine Months
Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
3,273
$
2,732
19.8
%
18.7
%
541
31
—
146
364
—
Operating Income
$
419
$
524
(20.0
)%
(34.5
)%
(105
)
76
—
146
333
(660
)
Adjustments (1)
(578
)
(226
)
-(100
)%
-(100
)%
(352
)
—
—
—
—
(352
)
Adjusted Operating Income
$
997
$
750
32.9
%
22.8
%
247
76
—
146
333
(309
)
Adjusted Operating Income
Margin
30.5
%
27.5
%
3.0
pp
0.9
pp
(1) See Schedule 11 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 18.7% on an organic basis, primarily
reflecting: favorable volume/mix, mainly due to growth of ZYN
nicotine pouches in the U.S., partly offset by cigarette volume
declines outside of the U.S.; and favorable cigarette pricing.
Adjusted operating income increased by 22.8% on an organic
basis, mainly reflecting: favorable price variance and favorable
volume/mix, mainly due to the same factors as for net revenues,
partly offset by higher marketing, administration and research
costs, including incremental investment in the U.S.
WELLNESS AND HEALTHCARE
The results of PMI’s Vectura Fertin Pharma business are reported
in the Wellness and Healthcare segment.
Third-Quarter
Financial Summary
- Quarters Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
76
$
75
1.3
%
2.7
%
1
(1
)
—
2
—
—
Operating Income / (Loss)
$
(251
)
$
(37
)
-(100
)%
-(100
)%
(214
)
(4
)
—
2
—
(212
)
Adjustments (1)
(211
)
(14
)
-(100
)%
-(100
)%
(197
)
—
—
—
—
(197
)
Adjusted Operating Income /
(Loss)
$
(40
)
$
(23
)
(73.9
)%
(56.5
)%
(17
)
(4
)
—
2
—
(16
)
Adjusted Operating Income / (Loss)
Margin
(52.6
)%
(30.7
)%
(21.9
)pp
(16.1
)pp
(1) See Schedule 10 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 2.7% on an organic basis. The adjusted
operating loss of $40 million was primarily due to R&D and
administration costs.
Nine Months Year-to-Date
Financial Summary
- Nine Months Ended
September
30,
Change
Fav./(Unfav.)
Variance
Fav./(Unfav.)
2024
2023
Total
Excl. Curr. &
Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
246
$
237
3.8
%
3.4
%
9
1
—
10
—
(2
)
Operating Income / (Loss)
$
(339
)
$
(808
)
58.0
%
58.3
%
469
(2
)
—
10
—
461
Adjustments (1)
(266
)
(723
)
63.2
%
63.2
%
457
—
—
—
—
457
Adjusted Operating Income /
(Loss)
$
(72
)
$
(85
)
15.3
%
17.6
%
13
(2
)
—
10
—
4
Adjusted Operating Income / (Loss)
Margin
(29.3
)%
(35.9
)%
6.6
pp
7.3
pp
(1) See Schedule 11 in Exhibit 99.2 to the
Form 8-K dated October 22, 2024, for additional detail.
Net revenues increased by 3.4% on an organic basis. The adjusted
operating loss of $72 million was primarily due to R&D and
administration costs.
Philip Morris International: Delivering a Smoke-Free
Future
Philip Morris International (PMI) is a leading international
tobacco company, actively delivering a smoke-free future and
evolving 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. Since 2008, PMI has invested over $12.5 billion to
develop, scientifically substantiate and commercialize innovative
smoke-free products for adults who would otherwise continue to
smoke, with the goal of completely ending the sale of cigarettes.
This includes the building of world-class scientific assessment
capabilities, notably in the areas of pre-clinical systems
toxicology, clinical and behavioral research, as well as
post-market studies. In 2022, PMI acquired Swedish Match – a leader
in oral nicotine delivery – creating a global smoke-free champion
led by the companies’ IQOS and ZYN brands. The U.S. Food and Drug
Administration has authorized versions of PMI’s IQOS devices and
consumables and Swedish Match’s General snus as Modified Risk
Tobacco Products and renewal applications for these products are
presently pending before the FDA. As of June 30, 2024, PMI's
smoke-free products were available for sale in 90 markets, and PMI
estimates that 36.5 million adults around the world use PMI's
smoke-free products. The smoke-free business accounted for
approximately 38% of PMI’s total first-nine months 2024 net
revenues. With a strong foundation and significant expertise in
life sciences, PMI announced in February 2021 its ambition to
expand into wellness and healthcare areas and aims to enhance life
through the delivery of seamless health experiences. References to
“PMI”, “we”, “our” and “us” mean Philip Morris International Inc.,
including its subsidiaries. For more information, please visit
www.pmi.com and www.pmiscience.com.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and
goals and other forward-looking statements, including statements
regarding expected financial or operational performance; capital
allocation plans; investment strategies; regulatory outcomes;
market expectations; and business plans and strategies. 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 in certain markets or countries; health concerns relating
to the use of tobacco and other nicotine-containing products and
exposure to environmental tobacco smoke; litigation related to
tobacco and/or nicotine use and intellectual property; intense
competition; the effects of global and individual country economic,
regulatory and political developments, natural disasters and
conflicts; the impact and consequences of Russia's invasion of
Ukraine; changes in adult smoker behavior; the impact of natural
disasters and pandemics on PMI's business; 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, availability, and quality of tobacco
and other agricultural products and raw materials, as well as
components and materials for our electronic devices; 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 introduce,
commercialize, and grow smoke-free 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; if it is unable to
attract and retain the best global talent, including women or
diverse candidates; or if it is unable to successfully integrate
and realize the expected benefits from recent transactions and
acquisitions. Future results are also subject to the lower
predictability of our smoke-free products performance.
PMI is further subject to other risks detailed from time to time
in its publicly filed documents, including PMI's Annual Report on
Form 10-K for the fourth quarter and year ended December 31, 2023,
Quarterly Report on Form 10-Q for the second quarter ended June 30,
2024, and the Quarterly Report on Form 10-Q for the third quarter
ended September 30, 2024, which will be filed in the coming days.
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.
Non-GAAP Measures, Glossary and Explanatory Notes
Reconciliations of non-GAAP measures in this release to the most
directly comparable U.S. GAAP measures can be found in Exhibit 99.2
to the Form 8-K dated October 22, 2024, and at
www.pmi.com/2024Q3earnings. A glossary of key terms, definitions
and explanatory notes is available in the aforementioned Exhibit
99.2 and on the same webpage, where additional financial schedules,
as well as adjustments and other calculations have also been made
available.
Management reviews net revenues, gross profit, operating income,
operating income margin, operating cash flow and earnings per
share, or "EPS," on an adjusted basis, which may exclude the impact
of currency and other items such as acquisitions, asset impairment
and exit costs, tax items and other special items. Additionally,
starting in 2022 and on a comparative basis, for these measures
other than net revenues and operating cash flow, PMI includes
adjustments to add back amortization expense on acquisition related
intangible assets that are recorded as part of purchase accounting
and contribute to PMI’s revenue generation, as well as impairment
of intangible assets, if any. While amortization expense on
acquisition related intangible assets is excluded in these adjusted
measures, the net revenues generated from these acquired intangible
assets are included in the company's adjusted measures, unless
otherwise stated. Currency-neutral and organic growth rates reflect
the way management views underlying performance for these measures.
PMI believes that such measures provide useful insight into
underlying business trends and results. Management reviews these
measures because they exclude changes in currency exchange rates
and other factors that may distort underlying business trends,
thereby improving the comparability of PMI’s business performance
between reporting periods. Furthermore, PMI uses several of these
measures in its management compensation program to promote internal
fairness and a disciplined assessment of performance against
company targets. PMI discloses these measures to enable investors
to view the business through the eyes of management.
Non-GAAP measures used in this release should neither be
considered in isolation nor as a substitute for the financial
measures prepared in accordance with U.S. GAAP.
Diluted EPS
reconciliation
Third-Quarter
2024
2023
% Change
Reported Diluted EPS
$
1.97
$
1.32
49.2
%
Amortization of intangibles
0.12
0.10
Egypt sales tax charge
0.03
—
Impairment related to Vectura Group's
expected sale
0.13
—
Income tax impact associated with Swedish
Match AB financing
(0.10
)
0.09
Charges related to the war in Ukraine
—
0.01
Termination of agreement with Foundation
for a Smoke-Free World
—
0.07
Fair value adjustment for equity security
investments
(0.24
)
(0.03
)
Tax items
—
0.11
Adjusted Diluted EPS
$
1.91
$
1.67
14.4
%
Less: Currency
(0.06
)
Adjusted Diluted EPS, excluding
Currency
$
1.97
$
1.67
18.0
%
Appendix 1
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Key Market Data
Quarters Ended September
30,
Market
Total Market,
bio units
PMI Shipments, bio
units
PMI Market Share(2), %
Total
Cigarette
HTU
Total
HTU
2024
2023
% Change
2024
2023
% Change
2024
2023
% Change
2024
2023
% Change
2024
2023
pp Change
2024
2023
pp Change
Total(1)(2)
676.7
667.8
1.3
198.6
193.6
2.6
163.2
161.1
1.3
35.3
32.5
8.9
29.5
28.9
0.6
5.3
4.6
0.7
Europe
France
6.8
7.6
(10.9)
2.4
2.7
(9.0)
2.4
2.6
(9.4)
—
—
—
41.0
42.2
(1.2)
0.6
0.7
(0.1)
Germany(3)
19.7
19.3
2.1
7.0
6.9
0.3
5.9
6.0
(2.7)
1.1
0.9
20.9
37.9
38.4
(0.5)
5.9
4.9
1.0
Italy(3)
20.1
19.4
3.5
10.5
10.4
0.9
7.2
6.8
5.0
3.3
3.6
(6.8)
54.9
53.5
1.4
16.6
16.0
0.6
Poland(3)
15.4
15.2
1.1
6.9
6.5
5.7
5.5
5.2
7.0
1.3
1.3
0.8
44.0
42.0
2.0
8.6
8.4
0.2
Spain
12.3
11.9
3.8
3.6
3.5
3.6
3.2
3.1
2.5
0.4
0.3
14.3
29.6
29.9
(0.3)
2.7
2.3
0.4
SSEA, CIS & MEA
Egypt
21.5
16.2
32.4
6.5
6.4
2.1
6.0
6.1
(1.5)
0.5
0.2
92.8
30.4
40.2
(9.8)
1.9
2.0
(0.1)
Indonesia
75.5
78.1
(3.3)
20.7
22.7
(8.9)
20.3
22.5
(9.7)
0.3
0.2
99.9
27.4
29.0
(1.6)
0.4
0.2
0.2
Philippines
10.4
10.5
(0.9)
5.3
5.7
(7.9)
5.2
5.6
(8.3)
0.1
0.1
39.4
50.7
54.5
(3.8)
0.7
0.5
0.2
Russia
58.8
54.3
8.3
19.0
17.1
11.4
14.5
12.9
11.9
4.6
4.2
9.9
32.9
31.8
1.1
8.1
7.7
0.4
Turkey
41.2
37.7
9.4
21.4
18.9
13.1
21.4
18.9
13.1
—
—
—
52.0
50.3
1.7
—
—
—
EA, AU & PMI DF
Australia
1.3
1.8
(28.3)
0.5
0.7
(30.0)
0.5
0.7
(30.0)
—
—
—
37.2
38.1
(0.9)
—
—
—
Japan(2)
38.6
38.2
0.9
15.7
15.5
1.5
4.2
4.3
(3.0)
11.5
11.2
3.2
41.4
39.5
1.9
30.0
26.5
3.5
South Korea
18.2
18.8
(3.2)
3.7
3.7
(1.2)
2.2
2.4
(9.0)
1.5
1.3
12.6
19.9
19.6
0.3
8.2
7.1
1.1
Americas
Argentina
6.1
6.6
(6.4)
3.9
4.0
(4.3)
3.9
4.0
(4.3)
—
—
—
62.7
61.4
1.3
—
—
—
Mexico
7.3
7.7
(5.8)
4.6
4.9
(5.9)
4.5
4.8
(6.2)
0.1
—
—
62.7
62.7
—
0.7
0.5
0.2
(1) Market share estimates are calculated
using IMS data, unless otherwise stated
(2) Total market and market share
estimates include cigarillos in Japan
(3) PMI market share reflects estimated
adjusted IMS volume share; Total Market is based on reported
IMS
Note: % change for Total Market and PMI
shipments is computed based on millions of units. "-" indicates
volume below 50 million units and market share below 0.1%
Appendix 2
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Key Market Data
Nine Months Ended September
30,
Market
Total Market,
bio units
PMI Shipments, bio
units
PMI Market Share(2), %
Total
Cigarette
HTU
Total
HTU
2024
2023
% Change
2024
2023
% Change
2024
2023
% Change
2024
2023
% Change
2024
2023
pp Change
2024
2023
pp Change
Total(1)(2)
1,952.0
1,929.4
1.2
568.1
553.1
2.7
464.0
461.9
0.5
104.0
91.3
13.9
28.7
28.3
0.4
5.2
4.6
0.6
Europe
France
19.8
22.7
(12.8)
8.3
10.2
(18.4)
8.2
10.0
(18.3)
0.1
0.2
(22.1)
40.9
42.3
(1.4)
0.6
0.7
(0.1)
Germany(3)
53.0
53.0
—
20.1
19.8
1.3
17.0
17.7
(4.0)
3.1
2.2
44.7
38.8
39.0
(0.2)
6.1
5.2
0.9
Italy(3)
55.7
55.1
1.2
29.0
29.1
(0.3)
20.9
20.8
0.8
8.1
8.4
(2.9)
53.7
53.6
0.1
17.0
16.6
0.4
Poland(3)
44.5
43.7
1.9
19.4
18.1
7.1
15.4
14.3
7.5
4.0
3.8
5.7
43.5
41.3
2.2
8.9
8.8
0.1
Spain
33.3
33.0
0.7
9.9
9.9
(0.6)
9.0
9.2
(1.9)
0.9
0.8
15.1
29.2
29.4
(0.2)
2.7
2.2
0.5
SSEA, CIS & MEA
Egypt
59.9
54.8
9.4
18.5
18.1
2.0
17.4
17.4
(0.1)
1.1
0.7
55.0
30.6
33.3
(2.7)
1.9
1.6
0.3
Indonesia
221.4
219.5
0.9
60.5
63.5
(4.6)
59.7
63.1
(5.3)
0.8
0.4
+100
27.3
28.9
(1.6)
0.4
0.2
0.2
Philippines
30.4
32.2
(5.4)
15.8
18.0
(12.2)
15.6
17.8
(12.6)
0.2
0.2
33.2
52.0
56.0
(4.0)
0.7
0.5
0.2
Russia
160.7
151.0
6.4
51.9
48.3
7.5
38.9
36.5
6.6
13.0
11.8
10.3
32.3
31.9
0.4
8.5
7.9
0.6
Turkey
111.7
101.2
10.4
57.8
50.3
14.9
57.8
50.3
14.9
—
—
—
51.7
49.7
2.0
—
—
—
EA, AU & PMI DF
Australia
4.0
5.6
(29.0)
1.4
2.0
(28.2)
1.4
2.0
(28.2)
—
—
—
35.8
35.4
0.4
—
—
—
Japan(2)
112.2
111.1
1.0
51.1
47.0
8.9
12.6
13.9
(9.6)
38.5
33.0
16.7
41.1
39.5
1.6
29.6
26.4
3.2
South Korea
52.9
54.3
(2.5)
10.6
10.6
(0.1)
6.3
6.8
(6.8)
4.3
3.8
12.0
20.0
19.5
0.5
8.0
7.0
1.0
Americas
Argentina
19.1
21.6
(11.5)
11.8
13.4
(11.6)
11.8
13.4
(11.6)
—
—
—
61.9
62.0
(0.1)
—
—
—
Mexico
21.0
21.3
(1.4)
12.9
13.2
(2.1)
12.8
13.1
(2.6)
0.2
0.1
61.2
61.6
62.1
(0.5)
0.8
0.5
0.3
(1) Market share estimates are calculated
using IMS data, unless otherwise stated
(2) Total market and market share
estimates include cigarillos in Japan
(3) PMI market share reflects estimated
adjusted IMS volume share; Total Market is based on reported
IMS
Note: % change for Total Market and PMI
shipments is computed based on millions of units. "-" indicates
volume below 50 million units and market share below 0.1%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241021238001/en/
Philip Morris International Investor Relations: Stamford,
CT: +1 (203) 905 2413 Lausanne, Switzerland: +41 582 424 666 Email:
InvestorRelations@pmi.com
Media: Lausanne: +41 582 424 500 Email: David.Fraser@pmi.com
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