Philip Morris International Inc. 2017 Fourth-Quarter and Full-Year ResultsMore Info
Philip Morris International Inc (PMI) is a leading international tobacco company. We sell our products in more than 180 markets worldwide. Our main competitors include three international tobacco companies and several regional, local, and state-owned tobacco enterprises.
We are the market leader in seven of the 10 largest OECD countries by industry volume and second-largest in another two. In non-OECD countries, we hold a number-one position in three of the 10 largest countries by industry volume and are second-largest in another four.
Our strong brand portfolio underpins our leadership position. We have six of the top 15 international brands, led by Marlboro, the number-one global cigarette brand, L&M, the third-largest international cigarette brand, Chesterfield, Parliament, Bond Street, and Philip Morris.Read More
Based on the strength of our brand portfolio, we enjoy robust pricing power. Since becoming a public company in 2008, our annual average pricing variance has been approximately six percent of net revenues, excluding excise taxes.
With 48 manufacturing facilities around the world, we have a well-balanced factory footprint. In addition, we have agreements with 22 third-party manufacturers and 38 third-party cigarette hand-rolling operators in Indonesia, the largest tobacco market outside of China.
We anticipate that our new manufacturing facility for reduced-risk products (RRPs)*, situated in Bologna, Italy, will expand to an annualized production capacity of more than 30 billion units by the end of 2017.
We enjoy best-in-class operational efficiency, reinforced by strong cost control and productivity improvements. We purchase tobacco leaf of various types, grades, and styles throughout the world, mostly through independent tobacco suppliers. We also contract directly with farmers in several countries.
In addition, we purchase a wide variety of materials from about 450 suppliers. The three most significant direct materials we purchase are printed board used in packaging, acetate tow used in filter making, and fine paper used in cigarette manufacturing.
One of our key strategic priorities is to develop, assess, and commercialize a portfolio of innovative tobacco and other nicotine-containing products. We draw on the expertise of a team of world-class scientists from a broad spectrum of disciplines. Our goal is to ensure that less harmful alternatives ultimately replace cigarettes, to the benefit of adult smokers, society, our company, and our shareholders.
A desire to maintain a single-A credit rating governs our capital structure. At the end of 2016, the weighted-average all-in financing cost of our total debt stood at 2.8%, and the weighted-average time-to-maturity of our total long-term debt was 10.6 years.
Dividends are currently the primary use of our free cash flow. Since becoming a public company in 2008, we have raised our dividend for ten consecutive years, representing a total increase of 132.6%, or a compound annual growth rate of 9.8%.
Our sustainability work is focused on creating long-term value while continuously improving our understanding, management, and performance of the social, economic, and environmental impacts of our operations and our wider value chain.
Through our sustainability efforts we remain committed to the UN Sustainable Development Goals (SDGs). Our environmental performance was again recognized in 2017, as PMI made the CDP Climate A list for the fourth year in a row, and also made the CDP Water A list.
Our strong management and highly motivated and diverse workforce of some 80,000 people worldwide represent over 80 nationalities. Attracting, motivating, and retaining the best global talent is a critical component of our success.Read More