Regulatory News:
Philip Morris International Inc. (NYSE: PM) today announces its 2021 fourth-quarter and full-year results. Growth rates presented in this press release on an organic basis reflect currency-neutral underlying results. A glossary of key terms, definitions and explanatory notes is included at the end of this press release. Adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures are included in the schedules to this press release.
2021 FULL-YEAR & FOURTH-QUARTER HIGHLIGHTS
2021 Full-Year
2021 Fourth-Quarter
"Our business delivered excellent performance in 2021, with strong underlying momentum driving total volume growth, high single-digit organic net revenue growth and double-digit adjusted diluted EPS growth against the pandemic-affected prior year," said Jacek Olczak, Chief Executive Officer.
"We were especially pleased by the reacceleration of our business in the fourth quarter to deliver better-than-expected results. This included a step-up in sequential IQOS user growth, as well as the outstanding initial performance of IQOS ILUMA. We also achieved essentially stable category share for cigarettes in the quarter, as our portfolio initiatives bore fruit and pandemic-linked restrictions receded in many markets."
"We enter 2022 with strong fundamentals, underpinned by IQOS, and exciting innovation to come across our broader smoke-free product portfolio. We are forecasting organic top-line growth of 4% to 6% and currency-neutral adjusted diluted EPS growth of 8% to 11%, which prudently incorporate the continuing uncertainty on full IQOS device availability and the pace of the ongoing pandemic recovery."
2022 FULL-YEAR FORECAST
|
Full-Year |
||||||||||||
|
2022
|
|
2021 |
|
Growth |
||||||||
|
|
|
|
|
|
|
|
|
|||||
Reported Diluted EPS |
$6.12 |
- |
$6.30 |
|
$ 5.83 |
|
|
|
|
||||
Saudi Arabia customs assessments |
— |
|
0.14 |
|
|
|
|
||||||
Asset impairment and exit costs |
— |
|
0.12 |
|
|
|
|
||||||
Asset acquisition cost |
— |
|
0.03 |
|
|
|
|
||||||
Equity investee ownership dilution |
— |
|
(0.04 |
) |
|
|
|
||||||
Adjusted Diluted EPS |
$6.12 |
- |
$6.30 |
|
$ 6.08 |
|
|
|
|
|
|||
Currency |
(0.45) |
|
|
|
|
|
|
||||||
Adjusted Diluted EPS, excluding currency |
$6.57 |
- |
$6.75 |
|
$ 6.08 |
|
|
8% |
- |
11% |
Reported diluted EPS forecast to be in a range of $6.12 to $6.30, at prevailing exchange rates, versus reported diluted EPS of $5.83 in 2021. Excluding an unfavorable currency impact, at prevailing exchange rates, of around $0.45 per share, this forecast represents a projected increase of around 8% to 11% versus adjusted diluted EPS of $6.08 in 2021, as outlined in the above table.
2022 Full-Year Forecast Assumptions
This forecast assumes:
This forecast excludes the impact of any future acquisitions, unanticipated or unquantifiable asset impairment and exit cost charges, future changes in currency exchange rates, further developments pertaining to the judgment in the two Québec Class Action lawsuits and the Companies’ Creditors Arrangement Act (CCAA) protection granted to PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), any unusual events, any intensification of the global shortage of semiconductors and the related impact on the supply of our electronic devices, and any COVID-19-related developments different from the assumptions set forth in the company's forecast.
Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.
IQOS in the U.S.
On November 29, 2021, an importation ban and cease-and-desist orders imposed by the U.S. International Trade Commission (ITC) relating to IQOS Platform 1 products (including consumables and infringing components) went into effect. As a result, IQOS is not currently available for sale in the U.S. PMI has appealed the patent and statutory issues related to the ITC's Final Determination, and also has contingency plans underway, including domestic production. PMI hopes to be able to resume U.S. supply in the first half of 2023. For more details on the ITC case and related legal matters, please refer to PMI's Form 10-K for 2021, which the company plans to file with the SEC in the coming days.
Note: The ITC decision has no bearing outside the U.S.; competitor lawsuits based on the same patent families have repeatedly and universally failed in European courts and the European Patent Office.
Platform 2
PMI conducted a consumer test of its Platform 2 TEEPS carbon tip product in the last quarter of 2021. As a result of the feedback from this consumer test, the design of the company's current Platform 2 technology has been discontinued. PMI is assessing alternative designs for this consumer segment.
Conference Call
A conference call, hosted by Jacek Olczak, Chief Executive Officer, and Emmanuel Babeau, Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on February 10, 2022. Access is at www.pmi.com/2021Q4earnings.
CONSOLIDATED SHIPMENT VOLUME & MARKET SHARE
PMI Shipment Volume by Region |
Fourth-Quarter |
Full-Year |
||||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||||
Cigarettes |
|
|
|
|
|
|
||||||||
European Union |
37,605 |
37,278 |
0.9 |
% |
157,843 |
163,420 |
(3.4 |
)% |
||||||
Eastern Europe |
20,927 |
22,725 |
(7.9 |
)% |
88,698 |
93,462 |
(5.1 |
)% |
||||||
Middle East & Africa |
34,756 |
29,912 |
16.2 |
% |
127,911 |
117,999 |
8.4 |
% |
||||||
South & Southeast Asia |
36,136 |
36,609 |
(1.3 |
)% |
141,923 |
144,788 |
(2.0 |
)% |
||||||
East Asia & Australia |
10,463 |
9,946 |
5.2 |
% |
43,913 |
45,100 |
(2.6 |
)% |
||||||
Americas |
18,495 |
18,207 |
1.6 |
% |
64,587 |
63,749 |
1.3 |
% |
||||||
Total PMI |
158,382 |
154,677 |
2.4 |
% |
624,875 |
628,518 |
(0.6 |
)% |
||||||
|
|
|
|
|
|
|
||||||||
Heated Tobacco Units |
|
|
|
|
|
|
||||||||
European Union |
7,803 |
5,773 |
35.2 |
% |
28,208 |
19,842 |
42.2 |
% |
||||||
Eastern Europe |
7,056 |
6,524 |
8.2 |
% |
25,650 |
20,898 |
22.7 |
% |
||||||
Middle East & Africa |
655 |
188 |
+100 |
% |
2,140 |
1,022 |
+100 |
% |
||||||
South & Southeast Asia |
89 |
26 |
+100 |
% |
240 |
36 |
+100 |
% |
||||||
East Asia & Australia |
9,684 |
9,063 |
6.9 |
% |
38,162 |
33,862 |
12.7 |
% |
||||||
Americas |
110 |
135 |
(18.5 |
)% |
576 |
451 |
27.7 |
% |
||||||
Total PMI |
25,397 |
21,709 |
17.0 |
% |
94,976 |
76,111 |
24.8 |
% |
||||||
|
|
|
|
|
|
|
||||||||
Cigarettes and Heated Tobacco Units |
|
|
|
|
|
|
||||||||
European Union |
45,408 |
43,051 |
5.5 |
% |
186,051 |
183,262 |
1.5 |
% |
||||||
Eastern Europe |
27,983 |
29,249 |
(4.3 |
)% |
114,348 |
114,360 |
— |
% |
||||||
Middle East & Africa |
35,411 |
30,100 |
17.6 |
% |
130,051 |
119,021 |
9.3 |
% |
||||||
South & Southeast Asia |
36,225 |
36,635 |
(1.1 |
)% |
142,163 |
144,824 |
(1.8 |
)% |
||||||
East Asia & Australia |
20,147 |
19,009 |
6.0 |
% |
82,075 |
78,962 |
3.9 |
% |
||||||
Americas |
18,605 |
18,342 |
1.4 |
% |
65,163 |
64,200 |
1.5 |
% |
||||||
Total PMI |
183,779 |
176,386 |
4.2 |
% |
719,851 |
704,629 |
2.2 |
% |
Full-Year
Estimated international industry cigarette and heated tobacco unit volume, excluding China and the U.S., of 2.6 trillion, increased by 2.4%, driven by the EU, Middle East & Africa, South & Southeast Asia and Americas Regions, partly offset by the Eastern Europe and East Asia & Australia Regions, as described in the Regional sections.
PMI's total shipment volume increased by 2.2%, driven by:
partly offset by
Total shipment volume in Eastern Europe was essentially flat, reflecting lower cigarette shipment volume, mainly in Russia and Ukraine, almost fully offset by higher heated tobacco unit shipment volume, primarily in Russia and Ukraine.
Impact of Inventory Movements
Excluding the net favorable impact of estimated distributor inventory movements of approximately 8.4 billion units, PMI’s total in-market sales increased by 1.0%, driven by a 21.1% increase in heated tobacco units, partly offset by a 1.5% decrease in cigarettes.
The net favorable impact of approximately 8.4 billion units reflected:
PMI's total heated tobacco unit in-market sales volume in the year was 92.5 billion units.
Fourth-Quarter
PMI's total shipment volume increased by 4.2%, driven by:
partly offset by
Impact of Inventory Movements
Excluding the net favorable impact of estimated distributor inventory movements of approximately 3.3 billion units, PMI’s total in-market sales increased by 2.3%, driven by a 15.1% increase in heated tobacco units and a 0.6% increase in cigarettes.
The net favorable impact of approximately 3.3 billion units reflected:
PMI's total heated tobacco unit in-market sales volume in the quarter was 23.6 billion units.
PMI Shipment Volume by Brand
PMI Shipment Volume by Brand |
|
Fourth-Quarter |
|
Full-Year |
||||||
(million units) |
|
2021 |
2020 |
Change |
|
2021 |
2020 |
Change |
||
Cigarettes |
|
|
|
|
|
|
|
|
||
Marlboro |
|
62,619 |
57,521 |
8.9 |
% |
|
239,905 |
233,158 |
2.9 |
% |
L&M |
|
20,314 |
21,883 |
(7.2 |
)% |
|
84,342 |
91,098 |
(7.4 |
)% |
Chesterfield |
|
15,780 |
12,864 |
22.7 |
% |
|
58,800 |
52,139 |
12.8 |
% |
Philip Morris |
|
10,514 |
10,822 |
(2.8 |
)% |
|
42,395 |
45,645 |
(7.1 |
)% |
Parliament |
|
11,085 |
9,162 |
21.0 |
% |
|
41,621 |
34,737 |
19.8 |
% |
Sampoerna A |
|
10,214 |
9,061 |
12.7 |
% |
|
37,815 |
32,862 |
15.1 |
% |
Dji Sam Soe |
|
5,983 |
6,410 |
(6.7 |
)% |
|
22,627 |
24,754 |
(8.6 |
)% |
Lark |
|
3,636 |
3,429 |
6.0 |
% |
|
15,487 |
15,489 |
— |
% |
Bond Street |
|
1,975 |
5,632 |
(64.9 |
)% |
|
14,175 |
24,113 |
(41.2 |
)% |
Next |
|
2,292 |
2,277 |
0.7 |
% |
|
8,849 |
8,980 |
(1.5 |
)% |
Others |
|
13,970 |
15,616 |
(10.5 |
)% |
|
58,859 |
65,543 |
(10.2 |
)% |
Total Cigarettes |
|
158,382 |
154,677 |
2.4 |
% |
|
624,875 |
628,518 |
(0.6 |
)% |
Heated Tobacco Units |
|
25,397 |
21,709 |
17.0 |
% |
|
94,976 |
76,111 |
24.8 |
% |
Total PMI |
|
183,779 |
176,386 |
4.2 |
% |
|
719,851 |
704,629 |
2.2 |
% |
Note: Lark includes Lark Harmony; Next includes Next Dubliss; Philip Morris includes Philip Morris/Dubliss; and Sampoerna A includes Sampoerna. |
Full-Year
The increase in PMI's heated tobacco unit shipment volume was mainly driven by the EU (notably Italy), Eastern Europe (notably Russia and Ukraine) and Japan.
PMI's cigarette shipment volume of the following brands increased:
PMI's cigarette shipment volume of the following brands decreased:
PMI's cigarette shipment volume for Lark was flat.
International Share of Market
PMI's total international market share (excluding China and the U.S.), defined as PMI's cigarette and heated tobacco unit sales volume as a percentage of total industry cigarette and heated tobacco unit sales volume, decreased by 0.4 points to 27.3%, reflecting:
PMI's total international cigarette sales volume as a percentage of total industry cigarette sales volume was down by 0.8 points to 24.9%, mainly reflecting lower cigarette market share and/or an unfavorable geographic mix impact, notably in Japan, the Philippines and Russia, partly offset by Indonesia and Turkey.
In 2021, PMI owned five of the world's top 15 international cigarette brands, with international cigarette market shares as follows: Marlboro, 9.5%; L&M, 3.4%; Chesterfield, 2.3%; Philip Morris, 1.7%; and Parliament, 1.7%.
Fourth-Quarter
The increase in PMI's heated tobacco unit shipment volume was mainly driven by the EU (notably Italy), Eastern Europe (notably Russia, partly offset by Belarus) and Japan.
PMI's cigarette shipment volume of the following brands increased:
PMI's cigarette shipment volume of the following brands decreased:
International Share of Market
PMI's total international market share (excluding China and the U.S.) increased by 0.1 point to 27.4%, reflecting:
PMI's total international cigarette sales volume as a percentage of total industry cigarette sales volume down by 0.1 point to 25.0%, mainly reflecting lower cigarette market share and/or an unfavorable geographic mix impact, notably in Egypt, the Philippines, Russia and Thailand, largely offset by Indonesia, PMI Duty-Free and Turkey.
CONSOLIDATED FINANCIAL SUMMARY
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net Revenues |
|
$ |
31,405 |
|
$ |
28,694 |
|
|
9.4 |
% |
6.7 |
% |
|
2,711 |
|
678 |
|
109 |
|
667 |
1,538 |
|
(281 |
) |
|||||||
Saudi Arabia Customs Assessments |
|
|
(246 |
) |
|
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
|
— |
— |
|
(246 |
) |
|||||||
Adjusted Net Revenues |
|
$ |
31,651 |
|
$ |
28,694 |
|
|
10.3 |
% |
7.6 |
% |
|
2,957 |
|
678 |
|
109 |
|
667 |
1,538 |
|
(35 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net Revenues (1) |
|
$ |
31,405 |
|
$ |
28,694 |
|
|
9.4 |
% |
6.7 |
% |
|
2,711 |
|
678 |
|
109 |
|
667 |
1,538 |
|
(281 |
) |
|||||||
Cost of Sales |
|
|
(10,030 |
) |
|
(9,569 |
) |
|
(4.8 |
)% |
(1.2 |
)% |
|
(461 |
) |
(266 |
) |
(82 |
) |
— |
(530 |
) |
417 |
|
|||||||
Marketing, Administration and Research Costs |
|
|
(8,304 |
) |
|
(7,384 |
) |
|
(12.5 |
)% |
(10.4 |
)% |
|
(920 |
) |
(143 |
) |
(8 |
) |
— |
— |
|
(769 |
) |
|||||||
Amortization of Intangibles |
|
|
(96 |
) |
|
(73 |
) |
|
(31.5 |
)% |
(5.5 |
)% |
|
(23 |
) |
(1 |
) |
(18 |
) |
— |
— |
|
(4 |
) |
|||||||
Operating Income |
|
$ |
12,975 |
|
$ |
11,668 |
|
|
11.2 |
% |
8.9 |
% |
|
1,307 |
|
268 |
|
1 |
|
667 |
1,008 |
|
(637 |
) |
|||||||
Asset Impairment & Exit Costs (2) |
|
|
(216 |
) |
|
(149 |
) |
|
(45.0 |
)% |
(45.0 |
)% |
|
(67 |
) |
— |
|
— |
|
— |
— |
|
(67 |
) |
|||||||
Saudi Arabia Customs Assessments (3) |
|
|
(246 |
) |
|
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
|
— |
— |
|
(246 |
) |
|||||||
Asset Acquisition Cost (2) |
|
|
(51 |
) |
|
— |
|
|
— |
% |
— |
% |
|
(51 |
) |
— |
|
— |
|
— |
— |
|
(51 |
) |
|||||||
Brazil Indirect Tax Credit (2) |
|
|
— |
|
|
119 |
|
|
-(100 |
)% |
-(100 |
)% |
|
(119 |
) |
— |
|
— |
|
— |
— |
|
(119 |
) |
|||||||
Adjusted Operating Income |
|
$ |
13,488 |
|
$ |
11,698 |
|
|
15.3 |
% |
13.0 |
% |
|
1,790 |
|
268 |
|
1 |
|
667 |
1,008 |
|
(154 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Adjusted Operating Income Margin |
|
|
42.6 |
% |
|
40.8 |
% |
|
1.8 |
pp |
2.0 |
pp |
|
|
|
|
|
|
|
||||||||||||
(1) Cost/Other variance includes a reduction in net revenues of $246 million in 2021 related to the Saudi Arabia customs assessments. |
|||||||||||||||||||||||||||||||
(2) Included in Marketing, Administration and Research Costs above. |
|||||||||||||||||||||||||||||||
(3) Included in Net Revenues above. |
Net revenues increased by 6.7%, excluding currency and acquisitions, mainly reflecting: favorable volume/mix, primarily driven by higher heated tobacco unit volume (notably in the EU, particularly Germany, Hungary, Italy and Poland, as well as Japan, Russia and Ukraine) and higher device volume (notably in the EU, primarily Italy, and Japan, partly offset by South Korea), partially offset by lower cigarette volume (mainly in the EU Region, notably the Czech Republic, France and Germany, as well as the GCC, North Africa, the Philippines, Russia and Ukraine, partly offset by India, Indonesia, PMI Duty Free and Turkey) and unfavorable cigarette mix (primarily in Germany, Japan and Russia, partially offset by Indonesia and PMI Duty Free); and a favorable pricing variance (notably driven by the Czech Republic, Germany, Japan, Kazakhstan, the Philippines, Russia and Turkey, partly offset by Australia, Indonesia, Poland and Ukraine); partially offset by the unfavorable impact of the Saudi Arabia customs assessments of $246 million, shown in "Cost/Other". Adjusted net revenues increased by 7.6% on an organic basis.
Operating income increased by 8.9%, excluding currency and acquisitions, primarily reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume, partly offset by lower cigarette volume and unfavorable cigarette mix (each mainly reflecting the same geographies as for net revenues noted above); a favorable pricing variance; and lower manufacturing costs (driven by significant productivity gains related to reduced-risk and combustible products); partly offset by higher marketing, administration and research costs, including an unfavorable comparison related to the Brazil indirect tax credit in 2020, higher asset impairment and exit costs (mainly related to organizational design optimization, as well as product distribution restructuring in South Korea) and asset acquisition costs related to OtiTopic; and the unfavorable impact of the Saudi Arabia customs assessments (as noted above for net revenues).
Adjusted operating income increased by 13.0% on an organic basis. Adjusted operating income margin increased by 2.0 points on the same basis.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net Revenues |
|
$ |
8,104 |
|
$ |
7,444 |
|
|
8.9 |
% |
8.4 |
% |
|
660 |
|
(74 |
) |
107 |
|
77 |
555 |
|
(5 |
) |
|||||||
Cost of Sales |
|
|
(2,807 |
) |
|
(2,572 |
) |
|
(9.1 |
)% |
(5.8 |
)% |
|
(235 |
) |
(6 |
) |
(81 |
) |
— |
(201 |
) |
53 |
|
|||||||
Marketing, Administration and Research Costs |
|
|
(2,309 |
) |
|
(1,949 |
) |
|
(18.5 |
)% |
(16.5 |
)% |
|
(360 |
) |
(31 |
) |
(7 |
) |
— |
— |
|
(322 |
) |
|||||||
Amortization of Intangibles |
|
|
(41 |
) |
|
(18 |
) |
|
-(100 |
)% |
(27.8 |
)% |
|
(23 |
) |
— |
|
(18 |
) |
— |
— |
|
(5 |
) |
|||||||
Operating Income |
|
$ |
2,947 |
|
$ |
2,905 |
|
|
1.4 |
% |
5.2 |
% |
|
42 |
|
(111 |
) |
1 |
|
77 |
354 |
|
(279 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(46 |
) |
|
(78 |
) |
|
41.0 |
% |
41.0 |
% |
|
32 |
|
— |
|
— |
|
— |
— |
|
32 |
|
|||||||
Brazil Indirect Tax Credit (1) |
|
|
— |
|
|
119 |
|
|
-(100 |
)% |
-(100 |
)% |
|
(119 |
) |
— |
|
— |
|
— |
— |
|
(119 |
) |
|||||||
Adjusted Operating Income |
|
$ |
2,993 |
|
$ |
2,864 |
|
|
4.5 |
% |
8.3 |
% |
|
129 |
|
(111 |
) |
1 |
|
77 |
354 |
|
(192 |
) |
|||||||
Adjusted Operating Income Margin |
|
|
36.9 |
% |
|
38.5 |
% |
|
(1.6 |
)pp |
(0.1 |
)pp |
|
|
|
|
|
|
|
||||||||||||
(1) Included in Marketing, Administration and Research Costs above. |
Net revenues increased by 8.4% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by higher heated tobacco unit volume (notably in the EU, particularly Germany and Italy, as well as Japan, PMI Duty Free and Russia) and higher cigarette volume (mainly in Indonesia, Italy, Japan, PMI Duty Free and Turkey, partly offset by Germany, the Philippines and Russia), partially offset by unfavorable cigarette mix (mainly in Japan); and a favorable pricing variance (notably driven by Japan and Turkey, partly offset by Australia, Indonesia and the Philippines).
Operating income increased by 5.2%, excluding currency and acquisitions, primarily reflecting: favorable volume/mix, mainly driven by the same factors and geographies as for net revenues noted above); a favorable pricing variance; and lower manufacturing costs (primarily driven by productivity gains related to reduced-risk products); partly offset by higher marketing, administration and research costs (mainly due to investments behind combustible and reduced-risk products, as well as an unfavorable comparison related to the Brazil indirect tax credit in 2020, partially offset by lower asset impairment and exit costs).
Adjusted operating income increased by 8.3% on an organic basis. Adjusted operating income margin decreased by 0.1 point on the same basis. The slight organic margin decline partly reflected: an unfavorable impact on gross margin of the higher initial cost of IQOS ILUMA devices and initial weight and cost of TEREA consumables, and higher logistics costs, including costs related to the use of air freight to support the strong up-take of IQOS ILUMA and TEREA consumables in Japan; as well as reaccelerated investment in commercial programs, digital infrastructure, research and development, and growth opportunities across product categories and geographies.
EUROPEAN UNION REGION
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
|||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
|||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net Revenues |
|
$ |
12,275 |
|
$ |
10,702 |
|
|
14.7 |
% |
8.8 |
% |
|
1,573 |
|
618 |
8 |
69 |
878 |
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating Income |
|
$ |
6,119 |
|
$ |
5,098 |
|
|
20.0 |
% |
12.5 |
% |
|
1,021 |
|
384 |
2 |
69 |
728 |
(162 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(68 |
) |
|
(57 |
) |
|
(19.3 |
)% |
(19.3 |
)% |
|
(11 |
) |
— |
— |
— |
— |
(11 |
) |
|||||||
Adjusted Operating Income |
|
$ |
6,187 |
|
$ |
5,155 |
|
|
20.0 |
% |
12.5 |
% |
|
1,032 |
|
384 |
2 |
69 |
728 |
(151 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Adjusted Operating Income Margin |
|
|
50.4 |
% |
|
48.2 |
% |
|
2.2 |
pp |
1.6 |
pp |
|
|
|
|
|
|
|
|||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 8.8% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume (notably in Germany, Hungary, Italy and Poland), as well as higher device volume and favorable device mix (notably in Italy), partly offset by lower cigarette volume (notably in the Czech Republic, France and Germany) and unfavorable cigarette mix (primarily in Germany); and a favorable pricing variance, driven by higher combustible pricing (mainly in Germany and Portugal, partly offset by France and Poland) and higher heated tobacco unit pricing (notably in the Czech Republic and Germany, partially offset by Poland), partly offset by lower device pricing (notably in Germany and Italy).
Operating income increased by 12.5%, excluding currency and acquisitions, primarily reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume and favorable device mix, partly offset by lower cigarette volume and unfavorable cigarette mix (each primarily reflecting the same geographies as for net revenues noted above); lower manufacturing costs (driven by combustible and reduced-risk products); and a favorable pricing variance; partly offset by higher marketing, administration and research costs (due to combustible and reduced-risk products).
Adjusted operating income increased by 12.5% on an organic basis. Adjusted operating income margin increased by 1.6 points on the same basis.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
|||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
|||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net Revenues |
|
$ |
3,025 |
|
$ |
2,742 |
|
|
10.3 |
% |
11.3 |
% |
|
283 |
(33 |
) |
6 |
2 |
308 |
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating Income |
|
$ |
1,308 |
|
$ |
1,174 |
|
|
11.4 |
% |
13.7 |
% |
|
134 |
(29 |
) |
2 |
2 |
221 |
(62 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(12 |
) |
|
(30 |
) |
|
60.0 |
% |
60.0 |
% |
|
18 |
— |
|
— |
— |
— |
18 |
|
|||||||
Adjusted Operating Income |
|
$ |
1,320 |
|
$ |
1,204 |
|
|
9.6 |
% |
11.9 |
% |
|
116 |
(29 |
) |
2 |
2 |
221 |
(80 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Adjusted Operating Income Margin |
|
|
43.6 |
% |
|
43.9 |
% |
|
(0.3 |
)pp |
0.2 |
pp |
|
|
|
|
|
|
|
|||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 11.3% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume (notably in Germany and Italy), as well as higher device volume and favorable device mix (notably in Italy), partly offset by unfavorable cigarette volume/mix (mainly due to unfavorable volume/mix in Germany, partly offset by higher volume in Italy). Pricing variance was slightly favorable, primarily reflecting higher combustible pricing (driven by most markets across the Region, partly offset by Poland), partially offset by lower pricing for devices (notably in Italy).
Operating income increased by 13.7%, excluding currency and acquisitions, primarily reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume and favorable device mix, partly offset by unfavorable cigarette volume/mix (each primarily reflecting the same geographies as for net revenues noted above); and lower manufacturing costs (driven by reduced-risk products); partly offset by higher marketing, administration and research costs (due to combustible and reduced-risk products).
Adjusted operating income increased by 11.9% on an organic basis. Adjusted operating income margin increased by 0.2 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
European Union Key Data |
Fourth-Quarter |
Full-Year |
||||||||||||
|
|
|
Change |
|
|
Change |
||||||||
|
2021 |
2020 |
% / pp |
2021 |
2020 |
% / pp |
||||||||
Total Market (billion units) |
117.8 |
115.3 |
2.2 |
% |
478.2 |
473.4 |
1.0 |
% |
||||||
|
|
|
|
|
|
|
||||||||
PMI Shipment Volume (million units) |
|
|
|
|
|
|
||||||||
Cigarettes |
37,605 |
37,278 |
0.9 |
% |
157,843 |
163,420 |
(3.4 |
)% |
||||||
Heated Tobacco Units |
7,803 |
5,773 |
35.2 |
% |
28,208 |
19,842 |
42.2 |
% |
||||||
Total EU |
45,408 |
43,051 |
5.5 |
% |
186,051 |
183,262 |
1.5 |
% |
||||||
|
|
|
|
|
|
|
||||||||
PMI Market Share |
|
|
|
|
|
|
||||||||
Marlboro |
16.2% |
17.0% |
(0.8 |
) |
16.6% |
17.5% |
(0.9 |
) |
||||||
L&M |
5.3% |
5.9% |
(0.6 |
) |
5.6% |
6.2% |
(0.6 |
) |
||||||
Chesterfield |
5.4% |
5.3% |
0.1 |
|
5.4% |
5.5% |
(0.1 |
) |
||||||
Philip Morris |
2.2% |
2.2% |
— |
|
2.2% |
2.4% |
(0.2 |
) |
||||||
Heated Tobacco Units |
6.4% |
5.0% |
1.4 |
|
5.7% |
4.2% |
1.5 |
|
||||||
Others |
3.0% |
3.2% |
(0.2 |
) |
3.1% |
3.0% |
0.1 |
|
||||||
Total EU |
38.5% |
38.6% |
(0.1 |
) |
38.6% |
38.8% |
(0.2 |
) |
Full-Year
The estimated total market in the EU increased by 1.0% to 478.2 billion units, primarily driven by:
partly offset by
PMI's Regional market share decreased by 0.2 points to 38.6%, with declines in the Czech Republic, France and Germany, partly offset by gains in Greece and Italy.
PMI's total shipment volume increased by 1.5% to 186.1 billion units, primarily driven by:
partly offset by
Fourth-Quarter
The estimated total market in the EU increased by 2.2% to 117.8 billion units, primarily driven by:
partly offset by
PMI's total shipment volume increased by 5.5% to 45.4 billion units, mainly driven by:
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 2.1%.
EASTERN EUROPE REGION
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Revenues |
|
$ |
3,544 |
|
$ |
3,378 |
|
|
4.9 |
% |
5.9 |
% |
|
166 |
(32 |
) |
— |
68 |
130 |
— |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating Income |
|
$ |
1,213 |
|
$ |
871 |
|
|
39.3 |
% |
38.5 |
% |
|
342 |
7 |
|
— |
68 |
139 |
128 |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(14 |
) |
|
(15 |
) |
|
6.7 |
% |
6.7 |
% |
|
1 |
— |
|
— |
— |
— |
1 |
|||||||
Adjusted Operating Income |
|
$ |
1,227 |
|
$ |
886 |
|
|
38.5 |
% |
37.7 |
% |
|
341 |
7 |
|
— |
68 |
139 |
127 |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted Operating Income Margin |
|
|
34.6 |
% |
|
26.2 |
% |
|
8.4 |
pp |
7.9 |
pp |
|
|
|
|
|
|
|
||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 5.9% on an organic basis, reflecting: favorable volume/mix, driven by higher heated tobacco unit volume (mainly in Russia and Ukraine), partly offset by lower cigarette volume (primarily in Russia and Ukraine), as well as unfavorable cigarette mix (mainly in Russia); and a favorable pricing variance, primarily driven by higher combustible pricing (mainly in Kazakhstan, Russia and Ukraine), partially offset by lower device pricing (primarily in Russia and Ukraine) and lower heated tobacco unit pricing (mainly in Ukraine, partly offset by Russia).
Operating income increased by 38.5%, excluding currency and acquisitions, primarily reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume, partly offset by lower cigarette volume and unfavorable cigarette mix (all primarily reflecting the same geographies as for net revenues noted above); lower manufacturing costs (mainly related to reduced-risk products, primarily in Russia); a favorable pricing variance; and lower marketing, administration and research costs.
Adjusted operating income increased by 37.7% on an organic basis. Adjusted operating income margin increased by 7.9 points on the same basis.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Revenues |
|
$ |
912 |
|
$ |
908 |
|
|
0.4 |
% |
(4.2 |
)% |
|
4 |
42 |
— |
— |
(38 |
) |
— |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating Income |
|
$ |
300 |
|
$ |
261 |
|
|
14.9 |
% |
11.5 |
% |
|
39 |
9 |
— |
— |
(1 |
) |
31 |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(3 |
) |
|
(8 |
) |
|
62.5 |
% |
62.5 |
% |
|
5 |
— |
— |
— |
— |
|
5 |
|||||||
Adjusted Operating Income |
|
$ |
303 |
|
$ |
269 |
|
|
12.6 |
% |
9.3 |
% |
|
34 |
9 |
— |
— |
(1 |
) |
26 |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted Operating Income Margin |
|
|
33.2 |
% |
|
29.6 |
% |
|
3.6 |
pp |
4.2 |
pp |
|
|
|
|
|
|
|
||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues decreased by 4.2% on an organic basis, reflecting: unfavorable volume/mix, mainly due to unfavorable cigarette volume/mix (primarily in Russia), partly offset by higher heated tobacco unit volume (notably in Russia). Pricing variance was flat, mainly reflecting higher combustible pricing (primarily in Kazakhstan and Russia), offset by lower heated tobacco unit pricing (mainly in Ukraine).
Operating income increased by 11.5%, excluding currency and acquisitions, primarily reflecting: lower manufacturing costs; and lower marketing, administration and research costs. Volume/mix was slightly unfavorable, mainly reflecting unfavorable cigarette volume/mix (primarily in Russia), largely offset by higher heated tobacco unit volume (notably in Russia) and the favorable impact of lower device volume (primarily in Russia).
Adjusted operating income increased by 9.3% on an organic basis. Adjusted operating income margin increased by 4.2 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Fourth-Quarter |
Full-Year |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
20,927 |
22,725 |
(7.9)% |
88,698 |
93,462 |
(5.1)% |
||||||
Heated Tobacco Units |
7,056 |
6,524 |
8.2% |
25,650 |
20,898 |
22.7% |
||||||
Total Eastern Europe |
27,983 |
29,249 |
(4.3)% |
114,348 |
114,360 |
—% |
Full-Year
The estimated total market in Eastern Europe decreased by 1.8% to 373.3 billion units, mainly due to:
PMI's Regional market share increased by 0.1 point to 30.6%.
PMI's total shipment volume was flat at 114.3 billion units, notably reflecting:
partly offset by
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume decreased by 1.3%.
Fourth-Quarter
The estimated total market in Eastern Europe decreased, mainly due to:
PMI's total shipment volume decreased by 4.3% to 28.0 billion units, primarily due to:
MIDDLE EAST & AFRICA REGION
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Revenues |
|
$ |
3,293 |
|
$ |
3,088 |
|
|
6.6 |
% |
10.4 |
% |
|
205 |
|
(115 |
) |
— |
287 |
320 |
(287 |
) |
|||||||
Saudi Arabia Customs Assessments |
|
|
(246 |
) |
|
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
— |
— |
(246 |
) |
|||||||
Adjusted Net Revenues |
|
$ |
3,539 |
|
$ |
3,088 |
|
|
14.6 |
% |
18.3 |
% |
|
451 |
|
(115 |
) |
— |
287 |
320 |
(41 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net Revenues (1) |
|
$ |
3,293 |
|
$ |
3,088 |
|
|
6.6 |
% |
10.4 |
% |
|
205 |
|
(115 |
) |
— |
287 |
320 |
(287 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating Income |
|
$ |
1,146 |
|
$ |
1,026 |
|
|
11.7 |
% |
23.8 |
% |
|
120 |
|
(124 |
) |
— |
287 |
237 |
(280 |
) |
|||||||
Asset Impairment & Exit Costs (2) |
|
|
(17 |
) |
|
(19 |
) |
|
10.5 |
% |
10.5 |
% |
|
2 |
|
— |
|
— |
— |
— |
2 |
|
|||||||
Saudi Arabia Customs Assessments (3) |
|
|
(246 |
) |
|
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
— |
— |
(246 |
) |
|||||||
Adjusted Operating Income |
|
$ |
1,409 |
|
$ |
1,045 |
|
|
34.8 |
% |
46.7 |
% |
|
364 |
|
(124 |
) |
— |
287 |
237 |
(36 |
) |
|||||||
Adjusted Operating Income Margin |
|
|
39.8 |
% |
|
33.8 |
% |
|
6.0 |
pp |
8.2 |
pp |
|
|
|
|
|
|
|
||||||||||
(1) Cost/Other variance includes a reduction in net revenues of $246 million in 2021 related to the Saudi Arabia customs assessments. |
|||||||||||||||||||||||||||||
(2) Included in Marketing, Administration and Research Costs above. |
|||||||||||||||||||||||||||||
(3) Included in Net Revenues above. |
Net revenues increased by 10.4%, excluding currency and acquisitions, despite the unfavorable impact of the Saudi Arabia customs assessments of $246 million, shown in "Cost/Other".
Adjusted net revenues increased by 18.3% on an organic basis, as detailed above, reflecting: favorable volume/mix, primarily driven by higher cigarette volume (predominantly in PMI Duty Free and Turkey, partly offset by the GCC and North Africa), higher heated tobacco unit volume (mainly in Egypt, Jordan and PMI Duty Free) and favorable cigarette mix (mainly in the GCC, PMI Duty Free and Turkey); and a favorable pricing variance, mainly driven by combustible pricing (primarily in Egypt and Turkey); partially offset by lower fees for certain distribution rights billed to customers in certain markets, shown in "Cost/Other".
Operating income increased by 23.8%, excluding currency and acquisitions, mainly reflecting: a favorable pricing variance; favorable volume/mix, driven by the same factors and geographies as for net revenues noted above; and lower manufacturing costs (primarily related to combustible products); partly offset by the unfavorable impact of the Saudi Arabia customs assessments, as noted above for net revenues; higher marketing, administration and research costs; and lower fees for certain distribution rights, as noted above for net revenues.
Adjusted operating income increased by 46.7% on an organic basis. Adjusted operating income margin increased by 8.2 points on the same basis.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
|||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
|||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net Revenues |
|
$ |
987 |
|
$ |
740 |
|
|
33.4 |
% |
40.0 |
% |
|
247 |
(49 |
) |
— |
96 |
210 |
(10 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating Income |
|
$ |
407 |
|
$ |
207 |
|
|
96.6 |
% |
+100 |
% |
|
200 |
(50 |
) |
— |
96 |
167 |
(13 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(4 |
) |
|
(10 |
) |
|
60.0 |
% |
60.0 |
% |
|
6 |
— |
|
— |
— |
— |
6 |
|
|||||||
Adjusted Operating Income |
|
$ |
411 |
|
$ |
217 |
|
|
89.4 |
% |
+100 |
% |
|
194 |
(50 |
) |
— |
96 |
167 |
(19 |
) |
|||||||
Adjusted Operating Income Margin |
|
|
41.6 |
% |
|
29.3 |
% |
|
12.3 |
pp |
15.2 |
pp |
|
|
|
|
|
|
|
|||||||||
(1) Included in Marketing, Administration and Research Costs above. |
Net revenues increased by 40.0% on an organic basis, primarily reflecting: favorable volume/mix, mainly driven by higher cigarette volume (primarily in PMI Duty Free and Turkey, partly offset by Saudi Arabia), higher heated tobacco unit volume (mainly in Egypt and PMI Duty Free) and favorable cigarette mix (primarily in PMI Duty Free); and a favorable pricing variance, driven by combustible pricing (mainly in Turkey).
Operating income increased by +100%, excluding currency and acquisitions, mainly reflecting: favorable volume/mix, mainly driven by the same factors and geographies as for net revenues noted above; and a favorable pricing variance; partly offset by higher marketing, administration and research costs.
Adjusted operating income increased by +100% on an organic basis. Adjusted operating income margin increased by 15.2 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Fourth-Quarter |
Full-Year |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
34,756 |
29,912 |
16.2% |
127,911 |
117,999 |
8.4% |
||||||
Heated Tobacco Units |
655 |
188 |
+100% |
2,140 |
1,022 |
+100% |
||||||
Total Middle East & Africa |
35,411 |
30,100 |
17.6% |
130,051 |
119,021 |
9.3% |
Full-Year
The estimated total market in the Middle East & Africa increased by 2.9% to 560.5 billion units, mainly driven by:
partly offset by
PMI's Regional market share increased by 1.1 points to 23.1%.
PMI's total shipment volume increased by 9.3% to 130.1 billion units, notably driven by:
partly offset by
Fourth-Quarter
The estimated total market in the Middle East & Africa increased, mainly driven by:
partly offset by
PMI's total shipment volume increased by 17.6% to 35.4 billion units, notably driven by:
partly offset by
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 13.4%.
SOUTH & SOUTHEAST ASIA REGION
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
|||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
|||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net Revenues |
|
$ |
4,396 |
|
$ |
4,396 |
|
|
— |
% |
(2.3 |
)% |
|
— |
|
99 |
— |
(93 |
) |
(6 |
) |
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating Income |
|
$ |
1,506 |
|
$ |
1,709 |
|
|
(11.9 |
)% |
(14.0 |
)% |
|
(203 |
) |
36 |
— |
(93 |
) |
(90 |
) |
(56 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(21 |
) |
|
(23 |
) |
|
8.7 |
% |
8.7 |
% |
|
2 |
|
— |
— |
— |
|
— |
|
2 |
|
|||||||
Adjusted Operating Income |
|
$ |
1,527 |
|
$ |
1,732 |
|
|
(11.8 |
)% |
(13.9 |
)% |
|
(205 |
) |
36 |
— |
(93 |
) |
(90 |
) |
(58 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted Operating Income Margin |
|
|
34.7 |
% |
|
39.4 |
% |
|
(4.7 |
)pp |
(4.7 |
)pp |
|
|
|
|
|
|
|
|||||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues decreased by 2.3% on an organic basis, primarily reflecting: an unfavorable pricing variance, mainly due to lower pricing for combustible products (primarily in Indonesia, partly offset by the Philippines). Volume/mix was slightly unfavorable, mainly due to lower cigarette volume (primarily in the Philippines, partly offset by India and Indonesia), largely offset by favorable cigarette mix (mainly in Indonesia and the Philippines).
Operating income decreased by 14.0%, excluding currency and acquisitions, primarily reflecting: an unfavorable pricing variance; unfavorable volume/mix, mainly due to lower cigarette volume (primarily in the Philippines, partly offset by India and Indonesia), partially offset by favorable cigarette mix (mainly in Indonesia and the Philippines); and higher marketing, administration and research costs (mainly in Indonesia and the Philippines).
Adjusted operating income decreased by 13.9% on an organic basis. Adjusted operating income margin decreased by 4.7 points on the same basis.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net Revenues |
|
$ |
1,112 |
|
$ |
1,185 |
|
|
(6.2 |
)% |
(5.9 |
)% |
|
(73 |
) |
(3 |
) |
— |
(89 |
) |
19 |
|
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Operating Income |
|
$ |
298 |
|
$ |
419 |
|
|
(28.9 |
)% |
(28.9 |
)% |
|
(121 |
) |
— |
|
— |
(89 |
) |
(9 |
) |
(23 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(4 |
) |
|
(12 |
) |
|
66.7 |
% |
66.7 |
% |
|
8 |
|
— |
|
— |
— |
|
— |
|
8 |
|
|||||||
Adjusted Operating Income |
|
$ |
302 |
|
$ |
431 |
|
|
(29.9 |
)% |
(29.9 |
)% |
|
(129 |
) |
— |
|
— |
(89 |
) |
(9 |
) |
(31 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Adjusted Operating Income Margin |
|
|
27.2 |
% |
|
36.4 |
% |
|
(9.2 |
)pp |
(9.3 |
)pp |
|
|
|
|
|
|
|
||||||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues decreased by 5.9% on an organic basis, reflecting: an unfavorable pricing variance, due to combustible pricing (mainly in Indonesia and the Philippines); partly offset by favorable volume/mix, primarily driven by favorable cigarette volume/mix in Indonesia, partially offset by lower cigarette volume in the Philippines.
Operating income decreased by 28.9%, excluding currency and acquisitions, primarily reflecting: an unfavorable pricing variance; and higher marketing, administration and research costs (notably in Indonesia). Volume/mix was slightly unfavorable, mainly reflecting a lower cigarette volume in the Philippines, partly offset by favorable cigarette volume/mix in Indonesia.
Adjusted operating income decreased by 29.9% on an organic basis. Adjusted operating income margin decreased by 9.3 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Fourth-Quarter |
Full-Year |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
36,136 |
36,609 |
(1.3)% |
141,923 |
144,788 |
(2.0)% |
||||||
Heated Tobacco Units |
89 |
26 |
+100% |
240 |
36 |
+100% |
||||||
Total South & Southeast Asia |
36,225 |
36,635 |
(1.1)% |
142,163 |
144,824 |
(1.8)% |
Full-Year
The estimated total market in South & Southeast Asia increased by 7.2% to 722.6 billion units, notably driven by:
partly offset by:
PMI's Regional market share decreased by 1.7 points to 19.7%.
PMI's total shipment volume decreased by 1.8% to 142.2 billion units, primarily due to:
partly offset by
Fourth-Quarter
The estimated total market in South & Southeast Asia increased, mainly driven by:
partly offset by
PMI's total shipment volume decreased by 1.1% to 36.2 billion units, mainly due to:
partly offset by
EAST ASIA & AUSTRALIA REGION
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
|||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
|||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net Revenues |
|
$ |
5,953 |
|
$ |
5,429 |
|
|
9.7 |
% |
8.5 |
% |
|
524 |
|
62 |
|
— |
291 |
171 |
|
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating Income |
|
$ |
2,556 |
|
$ |
2,400 |
|
|
6.5 |
% |
8.7 |
% |
|
156 |
|
(53 |
) |
— |
291 |
(2 |
) |
(80 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(88 |
) |
|
(26 |
) |
|
-(100 |
)% |
-(100 |
)% |
|
(62 |
) |
— |
|
— |
— |
— |
|
(62 |
) |
|||||||
Adjusted Operating Income |
|
$ |
2,644 |
|
$ |
2,426 |
|
|
9.0 |
% |
11.2 |
% |
|
218 |
|
(53 |
) |
— |
291 |
(2 |
) |
(18 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted Operating Income Margin |
|
|
44.4 |
% |
|
44.7 |
% |
|
(0.3 |
)pp |
1.1 |
pp |
|
|
|
|
|
|
|
|||||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 8.5% on an organic basis, reflecting: a favorable pricing variance, primarily driven by higher heated tobacco, combustible and device net pricing in Japan, partly offset by lower combustible pricing in Australia; and favorable volume/mix, mainly driven by higher heated tobacco unit volume and favorable device volume/mix in Japan (driven by the launch of IQOS ILUMA), partly offset by unfavorable cigarette mix (mainly in Australia and Japan), lower cigarette volume (primarily in Australia, Japan and South Korea) and unfavorable heated tobacco unit mix in Japan.
Operating income increased by 8.7%, excluding currency and acquisitions, mainly reflecting: a favorable pricing variance; and lower manufacturing costs (primarily related to reduced-risk products in Japan and South Korea); partly offset by higher marketing, administration and research costs (notably due to the launch of IQOS ILUMA in Japan and higher asset impairment and exit costs, mainly related to product distribution restructuring in South Korea). Volume/mix was slightly unfavorable, primarily reflecting unfavorable cigarette mix (mainly in Australia and Japan), lower cigarette volume (primarily in Australia, Japan and South Korea), as well as unfavorable heated tobacco unit mix and device mix in Japan, largely offset by higher heated tobacco unit volume in Japan.
Adjusted operating income increased by 11.2%, on an organic basis. Adjusted operating income margin increased by 1.1 points on the same basis.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
|||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
|||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net Revenues |
|
$ |
1,444 |
|
$ |
1,384 |
|
|
4.3 |
% |
7.2 |
% |
|
60 |
|
(39 |
) |
— |
51 |
48 |
|
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating Income |
|
$ |
515 |
|
$ |
608 |
|
|
(15.3 |
)% |
(7.6 |
)% |
|
(93 |
) |
(47 |
) |
— |
51 |
(23 |
) |
(74 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(21 |
) |
|
(13 |
) |
|
(61.5 |
)% |
(61.5 |
)% |
|
(8 |
) |
— |
|
— |
— |
— |
|
(8 |
) |
|||||||
Adjusted Operating Income |
|
$ |
536 |
|
$ |
621 |
|
|
(13.7 |
)% |
(6.1 |
)% |
|
(85 |
) |
(47 |
) |
— |
51 |
(23 |
) |
(66 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted Operating Income Margin |
|
|
37.1 |
% |
|
44.9 |
% |
|
(7.8 |
)pp |
(5.6 |
)pp |
|
|
|
|
|
|
|
|||||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 7.2% on an organic basis, reflecting: a favorable pricing variance, primarily driven by higher device net pricing and combustible pricing in Japan, partly offset by lower combustible pricing in Australia; and favorable volume/mix, mainly driven by higher heated tobacco unit and combustible volume in Japan, partly offset by unfavorable cigarette mix (primarily in Japan).
Operating income decreased by 7.6%, excluding currency and acquisitions, mainly reflecting: higher marketing, administration and research costs (notably due to the launch of IQOS ILUMA in Japan); unfavorable volume/mix, primarily reflecting unfavorable mix for cigarettes, heated tobacco units and devices in Japan, partly offset by higher volume for cigarettes and heated tobacco units in Japan; and higher manufacturing costs (mainly due to reduced-risk products); partially offset by a favorable pricing variance.
Adjusted operating income decreased by 6.1% on an organic basis. Adjusted operating income margin decreased by 5.6 points on the same basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Fourth-Quarter |
Full-Year |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
10,463 |
9,946 |
5.2% |
43,913 |
45,100 |
(2.6)% |
||||||
Heated Tobacco Units |
9,684 |
9,063 |
6.9% |
38,162 |
33,862 |
12.7% |
||||||
Total East Asia & Australia |
20,147 |
19,009 |
6.0% |
82,075 |
78,962 |
3.9% |
Full-Year
The estimated total market in East Asia & Australia, excluding China, decreased by 1.4% to 284.7 billion units, mainly due to:
PMI's Regional market share, excluding China, increased by 0.3 points to 27.5%.
PMI's total shipment volume increased by 3.9% to 82.1 billion units, mainly driven by:
partly offset by
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume declined by 0.4%.
Fourth-Quarter
The estimated total market in East Asia & Australia, excluding China, increased, mainly driven by:
PMI's total shipment volume increased by 6.0% to 20.1 billion units, mainly driven by:
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 0.4%.
AMERICAS REGION
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Revenues |
|
$ |
1,843 |
|
$ |
1,701 |
|
|
8.3 |
% |
5.6 |
% |
|
142 |
|
46 |
— |
45 |
45 |
|
6 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating Income |
|
$ |
487 |
|
$ |
564 |
|
|
(13.7 |
)% |
(16.8 |
)% |
|
(77 |
) |
18 |
— |
45 |
(4 |
) |
(136 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(8 |
) |
|
(9 |
) |
|
11.1 |
% |
11.1 |
% |
|
1 |
|
— |
— |
— |
— |
|
1 |
|
|||||||
Brazil Indirect Tax Credit (1) |
|
|
— |
|
|
119 |
|
|
-(100 |
)% |
-(100 |
)% |
|
(119 |
) |
— |
— |
— |
— |
|
(119 |
) |
|||||||
Adjusted Operating Income |
|
$ |
495 |
|
$ |
454 |
|
|
9.0 |
% |
5.1 |
% |
|
41 |
|
18 |
— |
45 |
(4 |
) |
(18 |
) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted Operating Income Margin |
|
|
26.9 |
% |
|
26.7 |
% |
|
0.2 |
pp |
(0.2 |
)pp |
|
|
|
|
|
|
|
||||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 5.6% on an organic basis, mainly reflecting: a favorable pricing variance, driven by higher combustible pricing (mainly in Argentina and Colombia); and favorable volume/mix, primarily driven by higher cigarette volume (mainly in Brazil and Mexico, partly offset by Argentina) and higher device volume, partially offset by unfavorable cigarette mix (primarily in Brazil).
Operating income decreased by 16.8%, excluding currency and acquisitions, mainly reflecting an unfavorable comparison related to the Brazil indirect tax credit in 2020.
Adjusted operating income increased by 5.1% on an organic basis, primarily reflecting: a favorable pricing variance; and lower marketing, administration and research costs; partly offset by higher manufacturing costs (due to reduced-risk and combustible products). Volume/mix was slightly unfavorable, mainly reflecting unfavorable cigarette mix (notably in Brazil), largely offset by higher cigarette volume (primarily in Brazil and Mexico, partly offset by Argentina).
Adjusted operating income margin decreased by 0.2 points on an organic basis.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Revenues |
|
$ |
523 |
|
$ |
485 |
|
|
7.8 |
% |
6.2 |
% |
|
38 |
|
8 |
— |
17 |
8 |
|
5 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating Income |
|
$ |
120 |
|
$ |
236 |
|
|
(49.2 |
)% |
(51.7 |
)% |
|
(116 |
) |
6 |
— |
17 |
(1 |
) |
(138 |
) |
|||||||
Asset Impairment & Exit Costs (1) |
|
|
(2 |
) |
|
(5 |
) |
|
60.0 |
% |
60.0 |
% |
|
3 |
|
— |
— |
— |
— |
|
3 |
|
|||||||
Brazil Indirect Tax Credit (1) |
|
|
— |
|
|
119 |
|
|
-(100 |
)% |
-(100 |
)% |
|
(119 |
) |
— |
|
— |
— |
|
(119 |
) |
|||||||
Adjusted Operating Income |
|
$ |
122 |
|
$ |
122 |
|
|
— |
% |
(4.9 |
)% |
|
— |
|
6 |
— |
17 |
(1 |
) |
(22 |
) |
|||||||
Adjusted Operating Income Margin |
|
|
23.3 |
% |
|
25.2 |
% |
|
(1.9 |
)pp |
(2.7 |
)pp |
|
|
|
|
|
|
|
||||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 6.2% on an organic basis, primarily reflecting: a favorable pricing variance driven by combustible products (notably in Argentina); and favorable volume/mix, mainly driven by higher cigarette volume (primarily in Mexico).
Operating income decreased by 51.7%, excluding currency and acquisitions, primarily reflecting an unfavorable comparison related to the Brazil indirect tax credit in 2020.
Adjusted operating income decreased by 4.9% on an organic basis, mainly reflecting: higher manufacturing costs (due to reduced-risk and combustible products); partly offset by a favorable pricing variance. Volume/mix was slightly unfavorable, primarily reflecting unfavorable cigarette mix (notably in Brazil), largely offset by higher cigarette volume (mainly in Mexico).
Adjusted operating income margin decreased by 2.7 points on an organic basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Fourth-Quarter |
Full-Year |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
18,495 |
18,207 |
1.6% |
64,587 |
63,749 |
1.3% |
||||||
Heated Tobacco Units |
110 |
135 |
(18.5)% |
576 |
451 |
27.7% |
||||||
Total Americas |
18,605 |
18,342 |
1.4% |
65,163 |
64,200 |
1.5% |
Full-Year
The estimated total market in Americas, excluding the U.S., increased by 2.2% to 193.9 billion units, mainly driven by:
partly offset by
PMI's Regional market share, excluding the U.S., decreased by 0.4 points to 33.4%.
PMI's total shipment volume increased by 1.5% to 65.2 billion units, primarily driven by:
partly offset by
Fourth-Quarter
The estimated total market in Americas, excluding the U.S., increased, primarily driven by:
partly offset by
PMI's total shipment volume increased by 1.4% to 18.6 billion units, mainly driven by:
partly offset by
OTHER
Following the acquisitions of Fertin Pharma A/S, OtiTopic, Inc. and Vectura Group plc., PMI added the "Other" category in the third quarter of 2021. Business operations for the Other category are managed and evaluated separately from the geographical operating segments.
Full-Year
Financial Summary - Years Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
|||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
|||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net Revenues |
|
$ |
101 |
|
$ |
— |
|
— |
% |
— |
% |
|
101 |
|
— |
101 |
|
— |
— |
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating Income / (Loss) |
|
$ |
(52 |
) |
$ |
— |
|
— |
% |
— |
% |
|
(52 |
) |
— |
(1 |
) |
— |
— |
(51 |
) |
|||||||
Asset Acquisition Cost (1) |
|
|
(51 |
) |
|
— |
|
— |
% |
— |
% |
|
(51 |
) |
— |
— |
|
— |
— |
(51 |
) |
|||||||
Adjusted Operating Income / (Loss) |
|
$ |
(1 |
) |
$ |
— |
|
— |
% |
— |
% |
|
(1 |
) |
— |
(1 |
) |
— |
— |
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Adjusted Operating Income / (Loss) Margin |
|
|
(1.0 |
)% |
|
n/a |
|
— |
pp |
— |
pp |
|
|
|
|
|
|
|
||||||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
PMI recorded net revenues of $101 million in the Other category, with approximately 39% of the total coming from Fertin Pharma's nicotine replacement therapy and nicotine-containing oral products businesses.
The operating loss of $52 million primarily reflected a pre-tax charge of $51 million in the third quarter of 2021 related to the OtiTopic transaction. The charge was recorded to research and development costs (within marketing, administration and research costs) and reflected PMI's accounting for the OtiTopic transaction as an asset acquisition, since the in-process research and development of the dry powder inhalation aspirin treatment represented substantially all of the fair value of the gross assets acquired and had no alternative future use. The charge has been excluded from adjusted results.
PMI recorded an adjusted operating loss of $1 million for the Other category, which included the adverse impact of the amortization of intangibles and other acquisition-related costs.
Fourth-Quarter
Financial Summary - Quarters Ended December 31, |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||||||
|
2021 |
|
2020 |
|
Total |
|
Excl.
|
|
Total |
|
Cur-
|
|
Acqui-
|
|
Price |
|
Vol/
|
|
Cost/
|
||||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Revenues |
|
$ |
101 |
|
$ |
— |
|
— |
% |
— |
% |
|
101 |
|
— |
101 |
|
— |
— |
— |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating Income / (Loss) |
|
$ |
(1 |
) |
$ |
— |
|
— |
% |
— |
% |
|
(1 |
) |
— |
(1 |
) |
— |
— |
— |
|||||||
Adjusted Operating Income / (Loss) |
|
$ |
(1 |
) |
$ |
— |
|
— |
% |
— |
% |
|
(1 |
) |
— |
(1 |
) |
— |
— |
— |
|||||||
Adjusted Operating Income / (Loss) Margin |
|
|
(1.0 |
)% |
|
n/a |
|
— |
pp |
— |
pp |
|
|
|
|
|
|
|
PMI recorded net revenues of $101 million and an operating loss of $1 million for the Other category, primarily reflecting the same factors as noted above for the full year.
Note: Results of operations from the acquisition dates through September 30th were included in the fourth quarter. These results were immaterial to PMI's consolidated operations.
Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is a leading international tobacco company working to deliver 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, including heat-not-burn, vapor and oral nicotine products, which are sold in markets outside the U.S. Since 2008, PMI has invested more than USD 9 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. The U.S. Food and Drug Administration (FDA) has authorized the marketing of a version of PMI’s IQOS Platform 1 device and consumables as a Modified Risk Tobacco Product (MRTP), finding that an exposure modification order for these products is appropriate to promote the public health. As of December 31, 2021, PMI's smoke-free products are available for sale in 71 markets, and PMI estimates that approximately 15.3 million adults around the world have already switched to IQOS and stopped smoking. With a strong foundation and significant expertise in life-sciences, in February 2021 PMI announced its ambition to expand into wellness and healthcare areas and deliver innovative products and solutions that aim to address unmet patient and consumer needs. 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 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 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 use and intellectual property; 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, 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 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, including women or diverse candidates. Future results are also subject to the lower predictability of our reduced-risk product category's performance.
In addition, PMI’s business risks also include risks and uncertainties related to PMI’s acquisitions of Fertin Pharma A/S (“Fertin”), OtiTopic, Inc. ("OtiTopic") and Vectura Group plc (“Vectura”), including, amongst other things: (1) the possibility that the integration of the operations of Fertin and Vectura with those of PMI may be more difficult and/or take longer than anticipated, and may not accelerate PMI’s desired entry into additional smoke-free and beyond nicotine platforms as quickly as anticipated; (2) the possibility that the respective integrations of Fertin and Vectura into PMI may be more costly than anticipated and may have unanticipated adverse results relating to Fertin, Vectura or PMI’s existing businesses; (3) the inability to gain access to or acquire differentiated proprietary assets, technology and/or pharmaceutical development expertise as anticipated by these acquisitions; (4) risks associated with third-party contracts containing consent and/or other contractual provisions that may be triggered by the acquisitions; (5) the success of the research and development efforts of Fertin, OtiTopic and Vectura, including the ability to obtain regulatory approval for new products, and the ability to commercialize or license these new products; (6) any unanticipated safety, quality or efficacy concerns and the impact of identified concerns associated with the products developed by Fertin, OtiTopic and Vectura; and (7) the ability of PMI to retain key personnel of Fertin and Vectura, or hire key talent to work in the Fertin and Vectura businesses due to their affiliation with PMI.
The ongoing 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 may adversely impact our business, results of operations, cash flows and financial position. Our business continuity plans and other safeguards may not be effective to mitigate the impact of the pandemic. Currently, significant risks include our diminished ability to convert adult smokers to our reduced-risk products, 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 continuation of the COVID-19 pandemic. 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 reduced-risk products 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 in relation to 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 reduced-risk products and our efforts to advocate for the development of science-based regulatory frameworks for the development and commercialization of reduced-risk products.
The impact of these risks also depends on factors beyond our knowledge or control, including the duration and severity of the pandemic, its recurrence in our key markets, actions taken to contain its spread and to mitigate its public health effects, and the ultimate economic consequences thereof.
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 September 30, 2021, and PMI's Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2021, 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.
Key Terms, Definitions and Explanatory Notes
General
Financial
Reduced-Risk Products
Note: The above IQOS user metrics reflect PMI estimates based on consumer claims and sample-based statistical assessments, the accuracy and reliability of which may vary based on individual market maturity and availability of information. The average margin of error for IQOS users in key volume markets is +/-5% at a 95% Confidence Interval.
As of December 2020, PMI heat-not-burn products and HTUs include licensed KT&G heat-not-burn products and HTUs, respectively.
IQOS in the United States
|
|
|
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|
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|
|
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|
|
|
|
Appendix 1 |
||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||||||||||||||||||||||||
Key Market Data |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|||||
Quarters Ended December 31, |
||||||||||||||||||||||||||||||
Market |
|
Total Market, bio units |
|
PMI Shipments, bio units |
|
PMI Market Share, % (1) |
||||||||||||||||||||||||
|
|
Total |
|
Cigarette |
|
HTU |
|
Total |
|
HTU |
||||||||||||||||||||
|
2021 |
2020 |
%
|
|
2021 |
2020 |
%
|
|
2021 |
2020 |
%
|
|
2021 |
2020 |
%
|
|
2021 |
2020 |
pp
|
|
2021 |
2020 |
pp
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
665.7 |
653.6 |
1.9 |
|
|
183.8 |
176.4 |
4.2 |
|
|
158.4 |
154.7 |
2.4 |
|
|
25.4 |
21.7 |
17.0 |
|
|
27.4 |
27.3 |
0.1 |
|
|
3.5 |
3.1 |
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
European Union |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
France |
|
8.0 |
8.6 |
(6.6 |
) |
|
3.6 |
3.6 |
(0.7 |
) |
|
3.5 |
3.6 |
(0.5 |
) |
|
— |
0.1 |
(12.7 |
) |
|
44.3 |
44.9 |
(0.6 |
) |
|
0.8 |
0.6 |
0.2 |
|
Germany |
|
17.6 |
18.2 |
(3.5 |
) |
|
7.0 |
7.1 |
(2.1 |
) |
|
6.4 |
6.6 |
(4.4 |
) |
|
0.6 |
0.5 |
30.5 |
|
|
39.6 |
39.0 |
0.6 |
|
|
3.5 |
2.6 |
0.9 |
|
Italy |
|
17.5 |
16.6 |
5.1 |
|
|
9.7 |
7.9 |
23.2 |
|
|
7.3 |
6.3 |
15.3 |
|
|
2.4 |
1.6 |
54.9 |
|
|
53.3 |
52.6 |
0.7 |
|
|
12.7 |
9.6 |
3.1 |
|
Poland |
|
12.1 |
10.6 |
13.7 |
|
|
4.5 |
4.1 |
8.0 |
|
|
3.6 |
3.4 |
6.7 |
|
|
0.9 |
0.8 |
13.9 |
|
|
37.1 |
39.0 |
(1.9 |
) |
|
7.4 |
7.4 |
— |
|
Spain |
|
10.5 |
10.1 |
3.5 |
|
|
3.0 |
3.1 |
(3.8 |
) |
|
2.8 |
3.0 |
(5.7 |
) |
|
0.2 |
0.1 |
52.2 |
|
|
30.0 |
31.2 |
(1.2 |
) |
|
1.3 |
1.1 |
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Eastern Europe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Russia |
|
52.9 |
55.7 |
(5.1 |
) |
|
16.8 |
17.6 |
(4.7 |
) |
|
12.1 |
13.3 |
(9.0 |
) |
|
4.6 |
4.3 |
8.5 |
|
|
32.1 |
32.3 |
(0.2 |
) |
|
8.0 |
7.2 |
0.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Middle East & Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Saudi Arabia |
|
4.9 |
5.8 |
(15.5 |
) |
|
2.3 |
2.9 |
(20.0 |
) |
|
2.3 |
2.8 |
(20.3 |
) |
|
0.1 |
0.1 |
(2.9 |
) |
|
41.9 |
40.4 |
1.5 |
|
|
1.2 |
0.5 |
0.7 |
|
Turkey |
|
|
33.0 |
28.4 |
16.1 |
|
|
15.2 |
12.2 |
24.8 |
|
|
15.2 |
12.2 |
24.8 |
|
|
— |
— |
— |
|
|
46.0 |
43.0 |
3.0 |
|
|
— |
— |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
South & Southeast Asia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Indonesia |
|
78.8 |
74.8 |
5.4 |
|
|
22.0 |
21.2 |
4.0 |
|
|
22.0 |
21.2 |
4.0 |
|
|
— |
— |
— |
|
|
27.9 |
28.3 |
(0.4 |
) |
|
— |
— |
— |
|
Philippines |
|
14.2 |
15.0 |
(5.5 |
) |
|
8.7 |
9.5 |
(8.5 |
) |
|
8.7 |
9.5 |
(8.7 |
) |
|
— |
— |
— |
|
|
61.4 |
63.5 |
(2.1 |
) |
|
0.3 |
0.2 |
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
East Asia & Australia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Australia |
|
2.6 |
2.6 |
(1.4 |
) |
|
0.8 |
0.8 |
2.3 |
|
|
0.8 |
0.8 |
2.3 |
|
|
— |
— |
— |
|
|
32.2 |
31.1 |
1.1 |
|
|
— |
— |
— |
|
Japan |
|
32.2 |
31.5 |
2.1 |
|
|
13.7 |
12.4 |
10.5 |
|
|
5.3 |
4.5 |
16.9 |
|
|
8.4 |
7.8 |
6.8 |
|
|
38.1 |
38.4 |
(0.3 |
) |
|
22.8 |
22.0 |
0.8 |
|
South Korea |
|
17.6 |
16.8 |
4.9 |
|
|
3.4 |
3.5 |
(2.6 |
) |
|
2.2 |
2.4 |
(7.0 |
) |
|
1.2 |
1.1 |
6.7 |
|
|
19.5 |
20.8 |
(1.3 |
) |
|
6.8 |
6.7 |
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Argentina |
|
9.7 |
9.3 |
4.5 |
|
|
5.3 |
5.6 |
(4.4 |
) |
|
5.3 |
5.6 |
(4.4 |
) |
|
— |
— |
— |
|
|
54.7 |
59.8 |
(5.1 |
) |
|
— |
— |
— |
|
Mexico |
|
9.4 |
8.7 |
7.6 |
|
|
6.3 |
5.9 |
6.7 |
|
|
6.3 |
5.9 |
6.6 |
|
|
— |
— |
— |
|
|
67.3 |
67.9 |
(0.6 |
) |
|
0.3 |
0.2 |
0.1 |
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) Market share estimates are calculated using IMS data |
||||||||||||||||||||||||||||||
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% |
|
|
|
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|
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|
|
|
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|
|
Appendix 2 |
|||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
|||||||||||||||||||||||||||||
Key Market Data |
|||||||||||||||||||||||||||||
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|
||||
Years Ended December 31, |
|||||||||||||||||||||||||||||
Market |
|
Total Market, bio units |
|
PMI Shipments, bio units |
|
PMI Market Share, % (1) |
|||||||||||||||||||||||
|
|
Total |
|
Cigarette |
|
HTU |
|
Total |
|
HTU |
|||||||||||||||||||
|
2021 |
2020 |
%
|
|
2021 |
2020 |
%
|
|
2021 |
2020 |
%
|
|
2021 |
2020 |
%
|
|
2021 |
2020 |
pp
|
|
2021 |
2020 |
pp
|
||||||
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|
|
|
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|
|
|
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|
||||
Total |
|
2,613.2 |
2,551.1 |
2.4 |
|
|
719.9 |
704.6 |
2.2 |
|
|
624.9 |
628.5 |
(0.6 |
) |
|
95.0 |
76.1 |
24.8 |
|
27.3 |
27.7 |
(0.4 |
) |
|
3.5 |
3.0 |
0.5 |
|
|
|
|
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|
||||
European Union |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
France |
|
34.3 |
36.6 |
(6.2 |
) |
|
15.2 |
16.3 |
(6.6 |
) |
|
15.0 |
16.1 |
(7.0 |
) |
|
0.2 |
0.2 |
22.5 |
|
43.9 |
44.9 |
(1.0 |
) |
|
0.7 |
0.5 |
0.2 |
|
Germany |
|
74.1 |
74.6 |
(0.8 |
) |
|
28.6 |
29.1 |
(1.6 |
) |
|
26.3 |
27.4 |
(4.1 |
) |
|
2.3 |
1.6 |
40.2 |
|
38.6 |
39.0 |
(0.4 |
) |
|
3.1 |
2.2 |
0.9 |
|
Italy |
|
70.4 |
67.4 |
4.4 |
|
|
38.6 |
34.6 |
11.5 |
|
|
29.7 |
29.0 |
2.2 |
|
|
8.9 |
5.6 |
60.5 |
|
53.0 |
52.2 |
0.8 |
|
|
11.5 |
8.1 |
3.4 |
|
Poland |
|
49.3 |
45.6 |
8.1 |
|
|
18.4 |
17.8 |
3.7 |
|
|
15.3 |
15.4 |
(0.7 |
) |
|
3.1 |
2.4 |
31.9 |
|
37.3 |
39.0 |
(1.7 |
) |
|
6.3 |
5.2 |
1.1 |
|
Spain |
|
42.7 |
41.8 |
1.9 |
|
|
13.2 |
13.2 |
(0.1 |
) |
|
12.6 |
12.8 |
(0.9 |
) |
|
0.5 |
0.4 |
26.3 |
|
31.1 |
31.4 |
(0.3 |
) |
|
1.2 |
1.0 |
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
||||
Eastern Europe |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Russia |
|
|
216.8 |
219.1 |
(1.0 |
) |
|
68.8 |
69.2 |
(0.5 |
) |
|
52.5 |
55.6 |
(5.6 |
) |
|
16.3 |
13.6 |
20.0 |
|
31.7 |
32.3 |
(0.6 |
) |
|
7.4 |
6.3 |
1.1 |
|
|
|
|
|
|
|
|
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|
||||
Middle East & Africa |
|
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|
|
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|
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|
|
|
|||||||||
Saudi Arabia |
|
21.1 |
21.7 |
(2.7 |
) |
|
8.9 |
9.1 |
(2.7 |
) |
|
8.7 |
9.0 |
(4.0 |
) |
|
0.2 |
0.1 |
+100 |
|
41.6 |
39.0 |
2.6 |
|
|
1.0 |
0.3 |
0.7 |
|
Turkey |
|
|
124.2 |
114.8 |
8.2 |
|
|
55.7 |
47.5 |
17.2 |
|
|
55.7 |
47.5 |
17.2 |
|
|
— |
— |
— |
|
44.8 |
41.3 |
3.5 |
|
|
— |
— |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
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|
||||
South & Southeast Asia |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Indonesia |
|
296.2 |
276.2 |
7.2 |
|
|
82.8 |
79.5 |
4.3 |
|
|
82.8 |
79.5 |
4.3 |
|
|
— |
— |
— |
|
28.0 |
28.8 |
(0.8 |
) |
|
— |
— |
— |
|
Philippines |
|
55.4 |
62.1 |
(10.7 |
) |
|
34.4 |
41.7 |
(17.6 |
) |
|
34.2 |
41.7 |
(17.9 |
) |
|
0.2 |
— |
— |
|
62.0 |
67.2 |
(5.2 |
) |
|
0.3 |
0.1 |
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
East Asia & Australia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Australia |
|
9.7 |
11.0 |
(11.3 |
) |
|
3.1 |
3.3 |
(4.2 |
) |
|
3.1 |
3.3 |
(4.2 |
) |
|
— |
— |
— |
|
32.3 |
29.9 |
2.4 |
|
|
— |
— |
— |
|
Japan |
|
139.5 |
142.9 |
(2.4 |
) |
|
55.2 |
51.1 |
8.0 |
|
|
22.1 |
22.2 |
(0.5 |
) |
|
33.1 |
28.9 |
14.5 |
|
38.5 |
37.1 |
1.4 |
|
|
22.9 |
20.4 |
2.5 |
|
South Korea |
|
71.7 |
71.6 |
0.1 |
|
|
14.1 |
14.8 |
(4.7 |
) |
|
9.4 |
10.2 |
(7.4 |
) |
|
4.7 |
4.6 |
1.4 |
|
19.7 |
20.7 |
(1.0 |
) |
|
6.5 |
6.5 |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Argentina |
|
36.1 |
33.6 |
7.4 |
|
|
19.9 |
20.5 |
(2.9 |
) |
|
19.9 |
20.5 |
(2.9 |
) |
|
— |
— |
— |
|
55.1 |
61.0 |
(5.9 |
) |
|
— |
— |
— |
|
Mexico |
|
32.0 |
30.7 |
4.2 |
|
|
20.5 |
19.5 |
4.7 |
|
|
20.4 |
19.5 |
4.6 |
|
|
0.1 |
0.1 |
47.8 |
|
64.0 |
63.7 |
0.3 |
|
|
0.3 |
0.2 |
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Market share estimates are calculated using IMS data |
|||||||||||||||||||||||||||||
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% |
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 1 |
||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
|||||||||||||||||||
Diluted Earnings Per Share (EPS) |
|||||||||||||||||||
($ in millions, except per share data) / (Unaudited) |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Quarters Ended |
|
Diluted EPS |
|
Years Ended |
||||||||||||||
|
December 31, |
|
|
December 31, |
|||||||||||||||
|
|
|
$ 1.34 |
|
|
|
|
2021 Diluted Earnings Per Share (1) |
|
|
|
$ 5.83 |
|
|
|
||||
|
|
|
$ 1.27 |
|
|
|
|
2020 Diluted Earnings Per Share (1) |
|
|
|
$ 5.16 |
|
|
|
||||
|
|
|
$ 0.07 |
|
|
|
|
Change |
|
|
|
$ 0.67 |
|
|
|
||||
|
|
|
5.5 |
% |
|
|
|
% Change |
|
|
|
13.0 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
Reconciliation: |
|
|
|
|
|
|
||||||
|
|
|
$ 1.27 |
|
|
|
|
2020 Diluted Earnings Per Share (1) |
|
|
|
$ 5.16 |
|
|
|
||||
|
|
|
0.04 |
|
|
|
|
2020 Asset impairment and exit costs |
|
|
|
0.08 |
|
|
|
||||
|
|
|
(0.05 |
) |
|
|
|
2020 Brazil indirect tax credit |
|
|
|
(0.05 |
) |
|
|
||||
|
|
|
— |
|
|
|
|
2020 Fair value adjustment for equity security investments |
|
|
|
0.04 |
|
|
|
||||
|
|
|
— |
|
|
|
|
2020 Tax items |
|
|
|
(0.06 |
) |
|
|
||||
|
|
|
(0.02 |
) |
|
|
|
2021 Asset impairment and exit costs |
|
|
|
(0.12 |
) |
|
|
||||
|
|
|
— |
|
|
|
|
2021 Saudi Arabia customs assessments |
|
|
|
(0.14 |
) |
|
|
||||
|
|
|
— |
|
|
|
|
2021 Asset acquisition cost |
|
|
|
(0.03 |
) |
|
|
||||
|
|
|
0.01 |
|
|
|
|
2021 Equity investee ownership dilution |
|
|
|
0.04 |
|
|
|
||||
|
|
|
— |
|
|
|
|
2021 Tax items |
|
|
|
— |
|
|
|
||||
|
|
|
(0.06 |
) |
|
|
|
Currency |
|
|
|
0.12 |
|
|
|
||||
|
|
|
0.01 |
|
|
|
|
Interest |
|
|
|
— |
|
|
|
||||
|
|
|
0.01 |
|
|
|
|
Change in tax rate |
|
|
|
0.08 |
|
|
|
||||
|
|
|
0.13 |
|
|
|
|
Operations (2) |
|
|
|
0.71 |
|
|
|
||||
|
|
|
$ 1.34 |
|
|
|
|
2021 Diluted Earnings Per Share (1) |
|
|
|
$ 5.83 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
(1) Basic and diluted EPS were calculated using the following (in millions): |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Quarters Ended |
|
|
|
Years Ended |
||||||||||||||
|
December 31, |
|
|
|
December 31, |
||||||||||||||
|
2021 |
|
2020 |
|
|
|
2021 |
|
2020 |
||||||||||
|
$ 2,093 |
|
$ 1,976 |
|
Net Earnings attributable to PMI |
|
$ 9,109 |
|
$ 8,056 |
||||||||||
|
5 |
|
5 |
|
Less: Distributed and undistributed earnings attributable to share-based payment awards |
|
26 |
|
20 |
||||||||||
|
$ 2,088 |
|
$ 1,971 |
|
Net Earnings for basic and diluted EPS |
|
$ 9,083 |
|
$ 8,036 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
1,556 |
|
1,557 |
|
Weighted-average shares for basic EPS |
|
1,558 |
|
1,557 |
||||||||||
|
1 |
|
1 |
|
Plus Contingently Issuable Performance Stock Units |
|
1 |
|
1 |
||||||||||
|
1,557 |
|
1,558 |
|
Weighted-average shares for diluted EPS |
|
1,559 |
|
1,558 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
(2) Includes the impact of shares outstanding and share-based payments |
|
|
|
|
|
|
|
Schedule 2 |
|||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||||
Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency, |
||||||||||||||||||
and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency |
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||
Quarters Ended December 31, |
|
|
|
Years Ended December 31, |
||||||||||||||
2021 |
|
2020 |
|
% Change |
|
|
|
2021 |
|
2020 |
|
% Change |
||||||
$ |
1.34 |
|
$ |
1.27 |
|
5.5 |
% |
|
Reported Diluted EPS |
|
$ |
5.83 |
|
$ |
5.16 |
|
13.0 |
% |
|
(0.06 |
) |
|
|
|
Less: Currency |
|
|
0.12 |
|
|
|
||||||
$ |
1.40 |
|
$ |
1.27 |
|
10.2 |
% |
|
Reported Diluted EPS, excluding Currency |
|
$ |
5.71 |
|
$ |
5.16 |
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||
Quarters Ended December 31, |
|
|
|
Years Ended December 31, |
||||||||||||||
|
2021 |
|
|
2020 |
|
% Change |
|
|
|
|
2021 |
|
|
2020 |
|
% Change |
||
$ |
1.34 |
|
$ |
1.27 |
|
5.5 |
% |
|
Reported Diluted EPS |
|
$ |
5.83 |
|
$ |
5.16 |
|
13.0 |
% |
|
— |
|
|
— |
|
|
|
Saudi Arabia customs assessments |
|
|
0.14 |
|
|
— |
|
|
||
|
0.02 |
|
|
0.04 |
|
|
|
Asset impairment and exit costs |
|
|
0.12 |
|
|
0.08 |
|
|
||
|
— |
|
|
— |
|
|
|
Asset acquisition cost |
|
|
0.03 |
|
|
— |
|
|
||
|
(0.01 |
) |
|
— |
|
|
|
Equity investee ownership dilution |
|
|
(0.04 |
) |
|
— |
|
|
||
|
— |
|
|
— |
|
|
|
Fair value adjustment for equity security investments |
|
|
— |
|
|
0.04 |
|
|
||
|
— |
|
|
— |
|
|
|
Tax items |
|
|
— |
|
|
(0.06 |
) |
|
||
|
— |
|
|
(0.05 |
) |
|
|
Brazil indirect tax credit |
|
|
— |
|
|
(0.05 |
) |
|
||
$ |
1.35 |
|
$ |
1.26 |
|
7.1 |
% |
|
Adjusted Diluted EPS |
|
$ |
6.08 |
|
$ |
5.17 |
|
17.6 |
% |
|
(0.06 |
) |
|
|
|
Less: Currency |
|
|
0.12 |
|
|
|
||||||
$ |
1.41 |
|
$ |
1.26 |
|
11.9 |
% |
|
Adjusted Diluted EPS, excluding Currency |
|
$ |
5.96 |
|
$ |
5.17 |
|
15.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Schedule 3 |
|
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions |
||||||||||||
($ in millions) / (Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
Currency |
Net
|
Acquisitions |
Net
|
|
Quarters Ended
|
|
Net
|
|
Total |
Excluding
|
Excluding
|
2021 |
|
Combustible Products |
|
2020 |
|
% Change |
||||||
$ 1,928 |
$ (20) |
$ 1,948 |
$ — |
$ 1,948 |
|
European Union |
|
$ 1,953 |
|
(1.3)% |
(0.3)% |
(0.3)% |
559 |
25 |
534 |
— |
534 |
|
Eastern Europe |
|
569 |
|
(1.8)% |
(6.2)% |
(6.2)% |
940 |
(49) |
989 |
— |
989 |
|
Middle East & Africa |
|
735 |
|
27.9% |
34.6% |
34.6% |
1,108 |
(3) |
1,111 |
— |
1,111 |
|
South & Southeast Asia |
|
1,184 |
|
(6.4)% |
(6.1)% |
(6.1)% |
564 |
(9) |
573 |
— |
573 |
|
East Asia & Australia |
|
592 |
|
(4.7)% |
(3.1)% |
(3.1)% |
513 |
8 |
505 |
— |
505 |
|
Americas |
|
474 |
|
8.1% |
6.5% |
6.5% |
$ 5,612 |
$ (49) |
$ 5,661 |
$ — |
$ 5,661 |
|
Total Combustible |
|
$ 5,507 |
|
1.9% |
2.8% |
2.8% |
2021 |
|
Reduced-Risk Products |
|
2020 |
|
% Change |
||||||
$ 1,097 |
$ (13) |
$ 1,110 |
$ 6 |
$ 1,104 |
|
European Union |
|
$ 789 |
|
39.1% |
40.7% |
40.0% |
353 |
17 |
336 |
— |
336 |
|
Eastern Europe |
|
339 |
|
4.2% |
(0.8)% |
(0.8)% |
47 |
— |
47 |
— |
47 |
|
Middle East & Africa |
|
5 |
|
+100% |
+100% |
+100% |
4 |
— |
4 |
— |
4 |
|
South & Southeast Asia |
|
1 |
|
+100% |
+100% |
+100% |
880 |
(30) |
910 |
— |
910 |
|
East Asia & Australia |
|
792 |
|
11.0% |
14.8% |
14.8% |
10 |
— |
10 |
— |
10 |
|
Americas |
|
11 |
|
(5.4)% |
(7.3)% |
(7.3)% |
$ 2,391 |
$ (25) |
$ 2,416 |
$ 6 |
$ 2,410 |
|
Total RRPs |
|
$ 1,937 |
|
23.4% |
24.7% |
24.4% |
2021 |
|
Other |
|
2020 |
|
% Change |
||||||
$ 101 |
$ — |
$101 |
$101 |
$ — |
|
Other |
|
$ — |
|
— % |
— % |
— % |
2021 |
|
PMI |
|
2020 |
|
% Change |
||||||
$ 3,025 |
$ (33) |
$ 3,058 |
$ 6 |
$ 3,052 |
|
European Union |
|
$ 2,742 |
|
10.3% |
11.5% |
11.3% |
912 |
42 |
870 |
— |
870 |
|
Eastern Europe |
|
908 |
|
0.4% |
(4.2)% |
(4.2)% |
987 |
(49) |
1,036 |
— |
1,036 |
|
Middle East & Africa |
|
740 |
|
33.4% |
40.0% |
40.0% |
1,112 |
(3) |
1,115 |
— |
1,115 |
|
South & Southeast Asia |
|
1,185 |
|
(6.2)% |
(5.9)% |
(5.9)% |
1,444 |
(39) |
1,483 |
— |
1,483 |
|
East Asia & Australia |
|
1,384 |
|
4.3% |
7.2% |
7.2% |
523 |
8 |
515 |
— |
515 |
|
Americas |
|
485 |
|
7.8% |
6.2% |
6.2% |
101 |
— |
101 |
101 |
— |
|
Other |
|
— |
|
—% |
—% |
—% |
$ 8,104 |
$ (74) |
$ 8,178 |
$107 |
$ 8,071 |
|
Total PMI |
|
$ 7,444 |
|
8.9% |
9.9% |
8.4% |
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million |
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 4 |
|
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
|||||||||||||
Reconciliation of Non-GAAP Measures |
|||||||||||||
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions |
|||||||||||||
($ in millions) / (Unaudited) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
Currency |
Net
|
Acquisitions |
Net
|
|
Years Ended December 31, |
|
Net
|
|
Total |
Excluding
|
Excluding
Currency &
|
|
2021 |
|
Combustible Products |
|
2020 |
|
% Change |
|||||||
$ 8,211 |
|
$ 425 |
$ 7,786 |
$ — |
$ 7,786 |
|
European Union |
|
$ 8,053 |
|
2.0% |
(3.3)% |
(3.3)% |
2,240 |
|
(4) |
2,244 |
— |
2,244 |
|
Eastern Europe |
|
2,250 |
|
(0.4)% |
(0.3)% |
(0.3)% |
3,148 |
(1) |
(116) |
3,264 |
— |
3,264 |
|
Middle East & Africa |
|
3,031 |
|
3.9% |
7.7% |
7.7% |
4,385 |
|
99 |
4,286 |
— |
4,286 |
|
South & Southeast Asia |
|
4,395 |
|
(0.2)% |
(2.5)% |
(2.5)% |
2,414 |
|
55 |
2,359 |
— |
2,359 |
|
East Asia & Australia |
|
2,468 |
|
(2.2)% |
(4.4)% |
(4.4)% |
1,790 |
|
45 |
1,745 |
— |
1,745 |
|
Americas |
|
1,670 |
|
7.2% |
4.5% |
4.5% |
$ 22,190 |
|
$ 504 |
$ 21,686 |
$ — |
$ 21,686 |
|
Total Combustible |
|
$ 21,867 |
|
1.5% |
(0.8)% |
(0.8)% |
2021 |
|
Reduced-Risk Products |
|
2020 |
|
% Change |
|||||||
$ 4,064 |
|
$ 193 |
$ 3,871 |
$ 8 |
$ 3,863 |
|
European Union |
|
$ 2,649 |
|
53.4% |
46.1% |
45.8% |
1,304 |
|
(28) |
1,332 |
— |
1,332 |
|
Eastern Europe |
|
1,128 |
|
15.6% |
18.1% |
18.1% |
145 |
|
1 |
144 |
— |
144 |
|
Middle East & Africa |
|
57 |
|
+100% |
+100% |
+100% |
11 |
|
— |
11 |
— |
11 |
|
South & Southeast Asia |
|
1 |
|
+100% |
+100% |
+100% |
3,539 |
|
7 |
3,532 |
— |
3,532 |
|
East Asia & Australia |
|
2,961 |
|
19.5% |
19.3% |
19.3% |
53 |
|
1 |
52 |
— |
52 |
|
Americas |
|
31 |
|
68.0% |
64.0% |
64.0% |
$ 9,115 |
|
$ 174 |
$ 8,940 |
$ 8 |
$ 8,932 |
|
Total RRPs |
|
$ 6,827 |
|
33.5% |
30.9% |
30.8% |
2021 |
|
Other |
|
2020 |
|
% Change |
|||||||
$ 101 |
|
$ — |
$101 |
$101 |
$ — |
|
Other |
|
$ — |
|
—% |
—% |
—% |
2021 |
|
PMI |
|
2020 |
|
% Change |
|||||||
$ 12,275 |
|
$ 618 |
$ 11,657 |
$ 8 |
$ 11,649 |
|
European Union |
|
$ 10,702 |
|
14.7% |
8.9% |
8.8% |
3,544 |
|
(32) |
3,576 |
— |
3,576 |
|
Eastern Europe |
|
3,378 |
|
4.9% |
5.9% |
5.9% |
3,293 |
(1) |
(115) |
3,408 |
— |
3,408 |
|
Middle East & Africa |
|
3,088 |
|
6.6% |
10.4% |
10.4% |
4,396 |
|
99 |
4,297 |
— |
4,297 |
|
South & Southeast Asia |
|
4,396 |
|
—% |
(2.3)% |
(2.3)% |
5,953 |
|
62 |
5,891 |
— |
5,891 |
|
East Asia & Australia |
|
5,429 |
|
9.7% |
8.5% |
8.5% |
1,843 |
|
46 |
1,797 |
— |
1,797 |
|
Americas |
|
1,701 |
|
8.3% |
5.6% |
5.6% |
101 |
|
— |
101 |
101 |
— |
|
Other |
|
— |
|
—% |
—% |
—% |
$ 31,405 |
|
$ 678 |
$ 30,727 |
$109 |
$ 30,618 |
|
Total PMI |
|
$ 28,694 |
|
9.4% |
7.1% |
6.7% |
(1) Includes a reduction in net revenues of $246 million related to the Saudi Arabia customs assessments |
|||||||||||||
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 5 |
|
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
|||||||||||||||||
Reconciliation of Non-GAAP Measures |
|||||||||||||||||
Reconciliation of Net Revenues to Adjusted Net Revenues, excluding Currency and Acquisitions |
|||||||||||||||||
($ in millions) / (Unaudited) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues |
Special
|
Adjusted
|
Currency |
Adjusted
|
Acqui-
|
Adjusted
|
|
|
|
Net
|
Special
|
Adjusted
|
|
Total |
Excluding
|
Excluding
|
|
2021 |
|
Quarters Ended
|
2020 |
|
% Change |
||||||||||||
$ 3,025 |
$ — |
|
$ 3,025 |
$ (33) |
$ 3,058 |
$ 6 |
$ 3,052 |
|
European Union |
|
$ 2,742 |
$ — |
$ 2,742 |
|
10.3% |
11.5% |
11.3% |
912 |
— |
|
912 |
42 |
870 |
— |
870 |
|
Eastern Europe |
|
908 |
— |
908 |
|
0.4% |
(4.2)% |
(4.2)% |
987 |
— |
|
987 |
(49) |
1,036 |
— |
1,036 |
|
Middle East & Africa |
|
740 |
— |
740 |
|
33.4% |
40.0% |
40.0% |
1,112 |
— |
|
1,112 |
(3) |
1,115 |
— |
1,115 |
|
South & Southeast Asia |
|
1,185 |
— |
1,185 |
|
(6.2)% |
(5.9)% |
(5.9)% |
1,444 |
— |
|
1,444 |
(39) |
1,483 |
— |
1,483 |
|
East Asia & Australia |
|
1,384 |
— |
1,384 |
|
4.3% |
7.2% |
7.2% |
523 |
— |
|
523 |
8 |
515 |
— |
515 |
|
Americas |
|
485 |
— |
485 |
|
7.8% |
6.2% |
6.2% |
101 |
— |
|
101 |
— |
101 |
101 |
— |
|
Other |
|
— |
— |
— |
|
—% |
—% |
—% |
$ 8,104 |
$ — |
|
$ 8,104 |
$ (74) |
$ 8,178 |
$ 107 |
$ 8,071 |
|
Total PMI |
|
$ 7,444 |
$ — |
$ 7,444 |
|
8.9% |
9.9% |
8.4% |
2021 |
Years Ended
|
2020 |
|
% Change |
|||||||||||||
$ 12,275 |
$ — |
|
$ 12,275 |
$ 618 |
$ 11,657 |
$ 8 |
$ 11,649 |
|
European Union |
|
$ 10,702 |
$ — |
$ 10,702 |
|
14.7% |
8.9% |
8.8% |
3,544 |
— |
|
3,544 |
(32) |
3,576 |
— |
3,576 |
|
Eastern Europe |
|
3,378 |
— |
3,378 |
|
4.9% |
5.9% |
5.9% |
3,293 |
(246) |
(1) |
3,539 |
(115) |
3,654 |
— |
3,654 |
|
Middle East & Africa |
|
3,088 |
— |
3,088 |
|
14.6% |
18.3% |
18.3% |
4,396 |
— |
|
4,396 |
99 |
4,297 |
— |
4,297 |
|
South & Southeast Asia |
|
4,396 |
— |
4,396 |
|
—% |
(2.3)% |
(2.3)% |
5,953 |
— |
|
5,953 |
62 |
5,891 |
— |
5,891 |
|
East Asia & Australia |
|
5,429 |
— |
5,429 |
|
9.7% |
8.5% |
8.5% |
1,843 |
— |
|
1,843 |
46 |
1,797 |
— |
1,797 |
|
Americas |
|
1,701 |
— |
1,701 |
|
8.3% |
5.6% |
5.6% |
101 |
— |
|
101 |
— |
101 |
101 |
— |
|
Other |
|
— |
— |
— |
|
—% |
—% |
—% |
$ 31,405 |
$ (246) |
|
$ 31,651 |
$ 678 |
$ 30,973 |
$ 109 |
$ 30,864 |
|
Total PMI |
|
$ 28,694 |
$ — |
$ 28,694 |
|
10.3% |
7.9% |
7.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents the Saudi Arabia customs assessments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 6 |
|
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||
Adjustments of Operating Income for the Impact of Currency and Acquisitions |
||||||||||||||
($ in millions) / (Unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
Currency |
Operating
|
Acquisitions |
Operating
excluding
|
|
|
|
Operating
|
|
Total |
Excluding
|
Excluding
Currency &
|
||
2021 |
|
Quarters Ended
|
|
2020 |
|
% Change |
||||||||
$ 1,308 |
(1) |
$ (29) |
$ 1,337 |
$ 2 |
$ 1,335 |
|
European Union |
|
$ 1,174 |
(2) |
|
11.4% |
13.9% |
13.7% |
300 |
(1) |
9 |
291 |
— |
291 |
|
Eastern Europe |
|
261 |
(2) |
|
14.9% |
11.5% |
11.5% |
407 |
(1) |
(50) |
457 |
— |
457 |
|
Middle East & Africa |
|
207 |
(2) |
|
96.6% |
+100% |
+100% |
298 |
(1) |
— |
298 |
— |
298 |
|
South & Southeast Asia |
|
419 |
(2) |
|
(28.9)% |
(28.9)% |
(28.9)% |
515 |
(1) |
(47) |
562 |
— |
562 |
|
East Asia & Australia |
|
608 |
(2) |
|
(15.3)% |
(7.6)% |
(7.6)% |
120 |
(1) |
6 |
114 |
— |
114 |
|
Americas |
|
236 |
(3) |
|
(49.2)% |
(51.7)% |
(51.7)% |
(1) |
|
— |
(1) |
(1) |
— |
|
Other |
|
— |
|
|
—% |
—% |
—% |
$ 2,947 |
|
$ (111) |
$ 3,058 |
$ 1 |
$ 3,057 |
|
Total PMI |
|
$ 2,905 |
|
|
1.4% |
5.3% |
5.2% |
2021 |
|
Years Ended
|
|
2020 |
|
% Change |
||||||||
$ 6,119 |
(4) |
$ 384 |
$ 5,735 |
$ 2 |
$ 5,733 |
|
European Union |
|
$ 5,098 |
(7) |
|
20.0% |
12.5% |
12.5% |
1,213 |
(4) |
7 |
1,206 |
— |
1,206 |
|
Eastern Europe |
|
871 |
(7) |
|
39.3% |
38.5% |
38.5% |
1,146 |
(5) |
(124) |
1,270 |
— |
1,270 |
|
Middle East & Africa |
|
1,026 |
(7) |
|
11.7% |
23.8% |
23.8% |
1,506 |
(4) |
36 |
1,470 |
— |
1,470 |
|
South & Southeast Asia |
|
1,709 |
(7) |
|
(11.9)% |
(14.0)% |
(14.0)% |
2,556 |
(4) |
(53) |
2,609 |
— |
2,609 |
|
East Asia & Australia |
|
2,400 |
(7) |
|
6.5% |
8.7% |
8.7% |
487 |
(4) |
18 |
469 |
— |
469 |
|
Americas |
|
564 |
(8) |
|
(13.7)% |
(16.8)% |
(16.8)% |
(52) |
(6) |
— |
(52) |
(1) |
(51) |
|
Other |
|
— |
|
|
—% |
—% |
—% |
$ 12,975 |
|
$ 268 |
$ 12,707 |
$ 1 |
$ 12,706 |
|
Total PMI |
|
$ 11,668 |
|
|
11.2% |
8.9% |
8.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes asset impairment and exit costs: EU ($12 million), EE ($3 million), ME&A ($4 million), S&SA ($4 million), EA&A ($21 million) and AMCS ($2 million) |
||||||||||||||
(2) Includes asset impairment and exit costs: EU ($30 million), EE ($8 million), ME&A ($10 million), S&SA ($12 million), EA&A ($13 million) |
||||||||||||||
(3) Includes the Brazil indirect tax credit $119 million and asset impairment and exit costs ($5 million) |
||||||||||||||
(4) Includes asset impairment and exit costs: EU ($68 million), EE ($14 million), S&SA ($21 million), EA&A ($88 million) and AMCS ($8 million) |
||||||||||||||
(5) Includes the Saudi Arabia customs assessments ($246 million) and asset impairment and exit costs ($17 million) |
||||||||||||||
(6) Includes asset acquisition cost ($51 million) related to OtiTopic Inc. in August 2021 |
||||||||||||||
(7) Includes asset impairment and exit costs: EU ($57 million), EE ($15 million), ME&A ($19 million), S&SA ($23 million), EA&A ($26 million) |
||||||||||||||
(8) Includes the Brazil indirect tax credit $119 million and asset impairment and exit costs ($9 million) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 7 |
|
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||||
Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions |
||||||||||||||||||
($ in millions) / (Unaudited) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
Asset
|
Adjusted
|
Currency |
Adjusted
|
Acqui-
|
Adjusted
|
|
|
|
Operating
|
Asset
|
Adjusted
|
|
Total |
Excluding
|
Excluding
|
||
2021 |
Quarters Ended
|
2020 |
|
% Change |
||||||||||||||
$ 1,308 |
$ (12) |
(1) |
$ 1,320 |
$ (29) |
$ 1,349 |
$ 2 |
$ 1,347 |
|
European Union |
|
$ 1,174 |
$ (30) |
(1) |
$ 1,204 |
|
9.6% |
12.0% |
11.9% |
300 |
(3) |
(1) |
303 |
9 |
294 |
— |
294 |
|
Eastern Europe |
|
261 |
(8) |
(1) |
269 |
|
12.6% |
9.3% |
9.3% |
407 |
(4) |
(1) |
411 |
(50) |
461 |
— |
461 |
|
Middle East & Africa |
|
207 |
(10) |
(1) |
217 |
|
89.4% |
+100% |
+100% |
298 |
(4) |
(1) |
302 |
— |
302 |
— |
302 |
|
South & Southeast Asia |
|
419 |
(12) |
(1) |
431 |
|
(29.9)% |
(29.9)% |
(29.9)% |
515 |
(21) |
(1) |
536 |
(47) |
583 |
— |
583 |
|
East Asia & Australia |
|
608 |
(13) |
(1) |
621 |
|
(13.7)% |
(6.1)% |
(6.1)% |
120 |
(2) |
(1) |
122 |
6 |
116 |
— |
116 |
|
Americas |
|
236 |
114 |
(2) |
122 |
|
—% |
(4.9)% |
(4.9)% |
(1) |
— |
|
(1) |
— |
(1) |
(1) |
— |
|
Other |
|
— |
— |
|
— |
|
—% |
—% |
—% |
$ 2,947 |
$ (46) |
|
$ 2,993 |
$ (111) |
$ 3,104 |
$ 1 |
$ 3,103 |
|
Total PMI |
|
$ 2,905 |
$ 41 |
|
$ 2,864 |
|
4.5% |
8.4% |
8.3% |
2021 |
|
Years Ended
|
|
2020 |
|
% Change |
||||||||||||
$ 6,119 |
$ (68) |
(1) |
$ 6,187 |
$ 384 |
$ 5,803 |
$ 2 |
$ 5,801 |
|
European Union |
|
$ 5,098 |
$ (57) |
(1) |
$ 5,155 |
|
20.0% |
12.6% |
12.5% |
1,213 |
(14) |
(1) |
1,227 |
7 |
1,220 |
— |
1,220 |
|
Eastern Europe |
|
871 |
(15) |
(1) |
886 |
|
38.5% |
37.7% |
37.7% |
1,146 |
(263) |
(3) |
1,409 |
(124) |
1,533 |
— |
1,533 |
|
Middle East & Africa |
|
1,026 |
(19) |
(1) |
1,045 |
|
34.8% |
46.7% |
46.7% |
1,506 |
(21) |
(1) |
1,527 |
36 |
1,491 |
— |
1,491 |
|
South & Southeast Asia |
|
1,709 |
(23) |
(1) |
1,732 |
|
(11.8)% |
(13.9)% |
(13.9)% |
2,556 |
(88) |
(1) |
2,644 |
(53) |
2,697 |
— |
2,697 |
|
East Asia & Australia |
|
2,400 |
(26) |
(1) |
2,426 |
|
9.0% |
11.2% |
11.2% |
487 |
(8) |
(1) |
495 |
18 |
477 |
— |
477 |
|
Americas |
|
564 |
110 |
(5) |
454 |
|
9.0% |
5.1% |
5.1% |
(52) |
(51) |
(4) |
(1) |
— |
(1) |
(1) |
— |
|
Other |
|
— |
— |
|
— |
|
—% |
—% |
—% |
$ 12,975 |
$ (513) |
|
$ 13,488 |
$ 268 |
$ 13,220 |
$ 1 |
$ 13,219 |
|
Total PMI |
|
$ 11,668 |
$ (30) |
|
$ 11,698 |
|
15.3% |
13.0% |
13.0% |
|
||||||||||||||||||
(1) Represents asset impairment and exit costs |
||||||||||||||||||
(2) Includes the Brazil indirect tax credit $119 million and asset impairment and exit costs ($5 million) |
||||||||||||||||||
(3) Includes the Saudi Arabia customs assessments ($246 million) and asset impairment and exit costs ($17 million) |
||||||||||||||||||
(4) Represents asset acquisition cost related to OtiTopic Inc. in August 2021 |
||||||||||||||||||
(5) Includes the Brazil indirect tax credit $119 million and asset impairment and exit costs ($9 million) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 8 |
|
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||||||
Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions |
||||||||||||||||||||
($ in millions) / (Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
|
Adjusted
|
Adjusted
|
|
Adjusted
|
Adjusted
|
Adjusted
|
|
Adjusted
|
Adjusted
|
Adjusted
|
|
|
|
Adjusted
|
Adjusted
|
Adjusted
|
|
Adjusted
|
Adjusted
|
Adjusted
|
2021 |
Quarters Ended
|
2020 |
|
% Points Change |
||||||||||||||||
$ 1,320 |
$ 3,025 |
43.6% |
|
$ 1,349 |
$ 3,058 |
44.1% |
|
$ 1,347 |
$ 3,052 |
44.1% |
|
European Union |
|
$ 1,204 |
$ 2,742 |
43.9% |
|
(0.3) |
0.2 |
0.2 |
303 |
912 |
33.2% |
|
294 |
870 |
33.8% |
|
294 |
870 |
33.8% |
|
Eastern Europe |
|
269 |
908 |
29.6% |
|
3.6 |
4.2 |
4.2 |
411 |
987 |
41.6% |
|
461 |
1,036 |
44.5% |
|
461 |
1,036 |
44.5% |
|
Middle East & Africa |
|
217 |
740 |
29.3% |
|
12.3 |
15.2 |
15.2 |
302 |
1,112 |
27.2% |
|
302 |
1,115 |
27.1% |
|
302 |
1,115 |
27.1% |
|
South & Southeast Asia |
|
431 |
1,185 |
36.4% |
|
(9.2) |
(9.3) |
(9.3) |
536 |
1,444 |
37.1% |
|
583 |
1,483 |
39.3% |
|
583 |
1,483 |
39.3% |
|
East Asia & Australia |
|
621 |
1,384 |
44.9% |
|
(7.8) |
(5.6) |
(5.6) |
122 |
523 |
23.3% |
|
116 |
515 |
22.5% |
|
116 |
515 |
22.5% |
|
Americas |
|
122 |
485 |
25.2% |
|
(1.9) |
(2.7) |
(2.7) |
$ (1) |
$ 101 |
(1.0)% |
|
$ (1) |
$ 101 |
(1.0)% |
|
$ — |
$ — |
—% |
|
Other |
|
$ — |
$ — |
—% |
|
— |
— |
— |
$ 2,993 |
$ 8,104 |
36.9% |
|
$ 3,104 |
$ 8,178 |
38.0% |
|
$ 3,103 |
$ 8,071 |
38.4% |
|
Total PMI |
|
$ 2,864 |
$ 7,444 |
38.5% |
|
(1.6) |
(0.5) |
(0.1) |
2021 |
|
Years Ended
|
|
2020 |
|
% Points Change |
||||||||||||||
$ 6,187 |
$ 12,275 |
50.4% |
|
$ 5,803 |
$ 11,657 |
49.8% |
|
$ 5,801 |
$ 11,649 |
49.8% |
|
European Union |
|
$ 5,155 |
$ 10,702 |
48.2% |
|
2.2 |
1.6 |
1.6 |
1,227 |
3,544 |
34.6% |
|
1,220 |
3,576 |
34.1% |
|
1,220 |
3,576 |
34.1% |
|
Eastern Europe |
|
886 |
3,378 |
26.2% |
|
8.4 |
7.9 |
7.9 |
1,409 |
3,539 |
39.8% |
|
1,533 |
3,654 |
42.0% |
|
1,533 |
3,654 |
42.0% |
|
Middle East & Africa |
|
1,045 |
3,088 |
33.8% |
|
6.0 |
8.2 |
8.2 |
1,527 |
4,396 |
34.7% |
|
1,491 |
4,297 |
34.7% |
|
1,491 |
4,297 |
34.7% |
|
South & Southeast Asia |
|
1,732 |
4,396 |
39.4% |
|
(4.7) |
(4.7) |
(4.7) |
2,644 |
5,953 |
44.4% |
|
2,697 |
5,891 |
45.8% |
|
2,697 |
5,891 |
45.8% |
|
East Asia & Australia |
|
2,426 |
5,429 |
44.7% |
|
(0.3) |
1.1 |
1.1 |
495 |
1,843 |
26.9% |
|
477 |
1,797 |
26.5% |
|
477 |
1,797 |
26.5% |
|
Americas |
|
454 |
1,701 |
26.7% |
|
0.2 |
(0.2) |
(0.2) |
(1) |
101 |
(1.0)% |
|
(1) |
101 |
(1.0)% |
|
— |
— |
—% |
|
Other |
|
— |
— |
—% |
|
— |
— |
— |
$ 13,488 |
$ 31,651 |
42.6% |
|
$ 13,220 |
$ 30,973 |
42.7% |
|
$ 13,219 |
$ 30,864 |
42.8% |
|
Total PMI |
|
$ 11,698 |
$ 28,694 |
40.8% |
|
1.8 |
1.9 |
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to Schedule 7 |
||||||||||||||||||||
(2) For the calculation of Adjusted Net Revenues excluding currency and acquisitions refer to Schedule 5 |
|
|
|
|
|
|
Schedule 9 |
||||||||||||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||||||||||||||||
Condensed Statements of Earnings |
||||||||||||||||||||||
($ in millions, except per share data) / (Unaudited) |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||
Quarters Ended December 31, |
|
|
|
Years Ended December 31, |
||||||||||||||||||
2021 |
|
2020 |
|
Change Fav./(Unfav.) |
|
|
|
2021 |
|
2020 |
|
Change Fav./(Unfav.) |
||||||||||
$ |
20,830 |
|
$ |
19,531 |
|
6.7 |
% |
|
Revenues including Excise Taxes (1) |
|
$ |
82,223 |
|
$ |
76,047 |
|
8.1 |
% |
||||
|
12,726 |
|
|
12,087 |
|
(5.3 |
)% |
|
Excise Taxes on products |
|
|
50,818 |
|
|
47,353 |
|
(7.3 |
)% |
||||
|
8,104 |
|
|
7,444 |
|
8.9 |
% |
|
Net Revenues (1) |
|
|
31,405 |
|
|
28,694 |
|
9.4 |
% |
||||
|
2,807 |
|
|
2,572 |
|
(9.1 |
)% |
|
Cost of sales |
|
|
10,030 |
|
|
9,569 |
|
(4.8 |
)% |
||||
|
5,297 |
|
|
4,872 |
|
8.7 |
% |
|
Gross profit |
|
|
21,375 |
|
|
19,125 |
|
11.8 |
% |
||||
|
2,309 |
|
|
1,949 |
|
(18.5 |
)% |
|
Marketing, administration and research costs (2) |
|
|
8,304 |
|
|
7,384 |
|
(12.5 |
)% |
||||
|
41 |
|
|
18 |
|
|
|
Amortization of intangibles |
|
|
96 |
|
|
73 |
|
|
||||||
|
2,947 |
|
|
2,905 |
|
1.4 |
% |
|
Operating Income |
|
|
12,975 |
|
|
11,668 |
|
11.2 |
% |
||||
|
146 |
|
|
164 |
|
11.0 |
% |
|
Interest expense, net |
|
|
628 |
|
|
618 |
|
(1.6 |
)% |
||||
|
33 |
|
|
29 |
|
(13.8 |
)% |
|
Pension and other employee benefit costs |
|
|
115 |
|
|
97 |
|
(18.6 |
)% |
||||
|
2,768 |
|
|
2,712 |
|
2.1 |
% |
|
Earnings before income taxes |
|
|
12,232 |
|
|
10,953 |
|
11.7 |
% |
||||
|
593 |
|
|
613 |
|
3.3 |
% |
|
Provision for income taxes |
|
|
2,671 |
|
|
2,377 |
|
(12.4 |
)% |
||||
|
(54 |
) |
|
(20 |
) |
|
|
Equity investments and securities (income)/loss, net |
|
|
(149 |
) |
|
(16 |
) |
|
||||||
|
2,229 |
|
|
2,119 |
|
5.2 |
% |
|
Net Earnings |
|
|
9,710 |
|
|
8,592 |
|
13.0 |
% |
||||
|
136 |
|
|
143 |
|
|
|
Net Earnings attributable to noncontrolling interests |
|
|
601 |
|
|
536 |
|
|
||||||
$ |
2,093 |
|
$ |
1,976 |
|
5.9 |
% |
|
Net Earnings attributable to PMI |
|
$ |
9,109 |
|
$ |
8,056 |
|
13.1 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
Per share data (3): |
|
|
|
|
||||||||||||||
$ |
1.34 |
|
$ |
1.27 |
|
5.5 |
% |
|
Basic Earnings Per Share |
|
$ |
5.83 |
|
$ |
5.16 |
|
13.0 |
% |
||||
$ |
1.34 |
|
$ |
1.27 |
|
5.5 |
% |
|
Diluted Earnings Per Share |
|
$ |
5.83 |
|
$ |
5.16 |
|
13.0 |
% |
(1) Year ended December 31, 2021 includes a reduction in net revenues ($246 million) related to the Saudi Arabia customs assessments |
(2) Quarter ended December 31, 2021 includes asset impairment and exit costs ($46 million). Year ended December 31, 2021 includes asset acquisition cost ($51 million) and asset impairment and exit costs ($216 million). Quarter ended December 31, 2020 includes asset impairment and exit costs ($78 million) and the Brazil indirect tax credit $119 million. Year ended December 31, 2020 includes asset impairment and exit costs ($149 million) and the Brazil indirect tax credit $119 million |
(3) Net Earnings and weighted-average shares used in the basic and diluted Earnings Per Share computations for the quarters and for the year ended December 31, 2021 and 2020 are shown on Schedule 1, Footnote 1 |
|
|
|
Schedule 10 |
|||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||
Condensed Balance Sheets |
||||||||
($ in millions) / (Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
December 31, |
|
December 31, |
||||
|
|
2021 |
|
2020 |
||||
Assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
4,496 |
|
|
$ |
7,280 |
|
All other current assets |
|
|
13,221 |
|
|
|
14,212 |
|
Property, plant and equipment, net |
|
|
6,168 |
|
|
|
6,365 |
|
Goodwill |
|
|
6,680 |
|
|
|
5,964 |
|
Other intangible assets, net |
|
|
2,818 |
|
|
|
2,019 |
|
Equity investments |
|
|
4,463 |
|
|
|
4,798 |
|
Other assets |
|
|
3,444 |
|
|
|
4,177 |
|
Total assets |
|
$ |
41,290 |
|
|
$ |
44,815 |
|
|
|
|
|
|
||||
Liabilities and Stockholders' (Deficit) Equity |
|
|
|
|
||||
Short-term borrowings |
|
$ |
225 |
|
|
$ |
244 |
|
Current portion of long-term debt |
|
|
2,798 |
|
|
|
3,124 |
|
All other current liabilities |
|
|
16,232 |
|
|
|
16,247 |
|
Long-term debt |
|
|
24,783 |
|
|
|
28,168 |
|
Deferred income taxes |
|
|
726 |
|
|
|
684 |
|
Other long-term liabilities |
|
|
4,734 |
|
|
|
6,979 |
|
Total liabilities |
|
|
49,498 |
|
|
|
55,446 |
|
|
|
|
|
|
||||
Total PMI stockholders' deficit |
|
|
(10,106 |
) |
|
|
(12,567 |
) |
Noncontrolling interests |
|
|
1,898 |
|
|
|
1,936 |
|
Total stockholders' (deficit) equity |
|
|
(8,208 |
) |
|
|
(10,631 |
) |
Total liabilities and stockholders' (deficit) equity |
|
$ |
41,290 |
|
|
$ |
44,815 |
|
|
|
Schedule 11 |
||||||
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
||||||||
Reconciliation of Non-GAAP Measures |
||||||||
Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios |
||||||||
($ in millions, except ratios) / (Unaudited) |
||||||||
Year Ended |
|
Year Ended |
||||||
December 31, |
|
December 31, |
||||||
2021 |
|
2020 |
||||||
Net Earnings |
$ |
9,710 |
|
$ |
8,592 |
|
||
Equity investments and securities (income)/loss, net |
|
(149 |
) |
|
(16 |
) |
||
Provision for income taxes |
|
2,671 |
|
|
2,377 |
|
||
Interest expense, net |
|
628 |
|
|
618 |
|
||
Depreciation and amortization |
|
998 |
|
|
981 |
|
||
Asset impairment and exit costs and Others (1) |
|
513 |
|
|
30 |
|
||
Adjusted EBITDA |
$ |
14,371 |
|
$ |
12,582 |
|
||
|
|
|
||||||
|
December 31, |
|
December 31, |
|||||
|
2021 |
|
2020 |
|||||
Short-term borrowings |
$ |
225 |
|
$ |
244 |
|
||
Current portion of long-term debt |
|
2,798 |
|
|
3,124 |
|
||
Long-term debt |
|
24,783 |
|
|
28,168 |
|
||
Total Debt |
$ |
27,806 |
|
$ |
31,536 |
|
||
Cash and cash equivalents |
|
4,496 |
|
|
7,280 |
|
||
Net Debt |
$ |
23,310 |
|
$ |
24,256 |
|
||
|
|
|
||||||
Ratios: |
|
|
||||||
Total Debt to Adjusted EBITDA |
|
1.93 |
|
|
2.51 |
|
||
Net Debt to Adjusted EBITDA |
|
1.62 |
|
|
1.93 |
|
(1) For the year ended December 31, 2021 "Others" includes a reduction in net revenues of $246 million related to the Saudi Arabia customs assessments that was recorded in the second quarter of 2021 and asset acquisition cost of $51 million related to OtiTopic Inc. in August 2021. For the year ended December 31, 2020, "Others" includes the Brazil indirect tax credit of $119 million. |
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Schedule 12 |
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PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries |
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Reconciliation of Non-GAAP Measures |
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Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency |
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($ in millions) / (Unaudited) |
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Quarters Ended December 31, |
|
|
|
Years Ended December 31, |
||||||||||||
2021 |
2020 |
% Change |
|
|
|
2021 |
2020 |
% Change |
||||||||
$ |
4,032 |
$ |
3,162 |
27.5% |
|
Net cash provided by operating activities (1) |
|
$ |
11,967 |
$ |
9,812 |
22.0% |
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|
40 |
|
|
|
Less: Currency |
|
|
799 |
|
|
||||||
$ |
3,992 |
$ |
3,162 |
26.2% |
|
Net cash provided by operating activities, excluding currency |
|
$ |
11,168 |
$ |
9,812 |
13.8% |
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|
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(1) Operating cash flow |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220209006141/en/
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