November 4, 2019

Philip Morris International Inc. Revises, Only for Manufacturing Restructuring Charges in Germany of $0.20 Per Share, Its 2019 Full-Year Reported Diluted EPS Forecast to at Least $4.53 vs. $5.08 in 2018,


Reflecting Ex-Currency Like-for-Like Adjusted Diluted EPS Growth of at Least 9.0%

NEW YORK--(BUSINESS WIRE)--Nov. 4, 2019-- Regulatory News:

Philip Morris International Inc. (NYSE: PM) (PMI) today revises its 2019 full-year reported diluted earnings per share forecast for restructuring charges in Germany, as described below. Comparisons presented in this press release on a "like-for-like" basis reflect pro forma 2018 results, which have been adjusted for the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019 (the date of deconsolidation).

Germany Manufacturing Restructuring Charges

On November 4, 2019, PMI announced that, as part of its global manufacturing infrastructure optimization, its German affiliate, Philip Morris Manufacturing GmbH (PMMG) reached an agreement with employee representatives to end cigarette production in its factory in Berlin, Germany, by January 1, 2020. In connection with the agreement, PMI expects to record estimated pre-tax charges of approximately $355 million. This estimated amount includes pension and employee separation costs of approximately $265 million, which will be paid in cash, and asset impairment costs of approximately $90 million, primarily related to machinery and equipment, which are non-cash charges. The final amount of the charges, as well as the timing of payments, will depend on the separation options selected by impacted employees under the agreement and the final evaluation of the potential future use of assets. PMI expects that most of the pre-tax charges will be recorded in the fourth quarter of 2019 and most of the cash expenditures will occur in 2020.

The Berlin factory has a projected 2019 production capacity of approximately 40 billion units. Approximately 950 employees are impacted under the agreement. PMMG will continue the production of expanded tobacco in Berlin.

Cost savings anticipated from this initiative are included in PMI’s previously communicated annualized cost efficiencies target of over $1 billion for the period 2019-2021.




2019 EPS Forecast

2019 Forecast




Adjusted Growth












Reported Diluted EPS









2018 Tax items









2019 Tax items









2019 Asset impairment and exit costs









2019 Canadian tobacco litigation-related expense









2019 Loss on deconsolidation of RBH









2019 Russia excise and VAT audit charge









Adjusted Diluted EPS










Net earnings attributable to RBH










Adjusted Diluted EPS




















Adjusted Diluted EPS, excluding currency








(a) Reflects the exclusion of previously anticipated net EPS of approximately $0.28 attributable to RBH from March 22, 2019 through December 31, 2019. The impact relating to the eight-day stub period was not material.
(b) Net reported diluted EPS attributable to RBH from March 22, 2018 through December 31, 2018.
(c) Pro forma.

PMI revises its full-year 2019 reported diluted EPS forecast to be at least $4.53 at prevailing exchange rates (compared to the previously communicated forecast of at least $4.73) versus $5.08 in 2018.

This revised full-year guidance reflects:

  • A favorable tax item of $0.04 per share related to a reduction in estimated U.S. federal income tax on dividend repatriation for the years 2015-2018 recorded in the second quarter of 2019;
  • Aggregate asset impairment and exit costs of approximately $0.24 per share resulting from plant closures as part of global manufacturing infrastructure optimization, reflecting:
    • $0.01 per share related to Pakistan recorded in the first quarter of 2019;
    • $0.02 per share related to Colombia ($0.01 per share recorded in the second quarter of 2019 and $0.01 per share in the third quarter of 2019);
    • $0.20 per share expected in the fourth quarter of 2019 related to Germany, as described above; and
    • as previously communicated, $0.01 per share expected in the fourth quarter of 2019;
  • A Canadian tobacco litigation-related expense of approximately $0.09 per share, announced on March 4, 2019, as well as the net impact of the loss on deconsolidation of PMI's Canadian subsidiary Rothmans, Benson & Hedges Inc. (RBH) under U.S. GAAP of approximately $0.12 per share, recorded in the first quarter of 2019, which is a non-cash item;
  • A charge of approximately $0.20 per share related to an excise and VAT tax audit in Russia recorded in the third quarter of 2019;
  • An unfavorable currency impact, at prevailing exchange rates, of approximately $0.14 per share;
  • The exclusion, announced on March 22, 2019, of RBH’s previously anticipated net earnings from PMI’s consolidated financial statements, from March 22, 2019 (the date of deconsolidation) to December 31, 2019, of approximately $0.28 per share;
  • A full-year effective tax rate of approximately 23%, excluding discrete tax items and Loss on Deconsolidation of RBH; and
  • A projected increase of at least 9%, excluding currency, versus pro forma adjusted diluted earnings per share of $4.84 in 2018, as shown in the 2019 EPS Forecast table above.

2019 Full-Year Forecast Assumptions

Assumptions supporting the 2019 full-year forecast, as previously communicated in PMI’s third quarter 2019 earnings release of October 17, remain unchanged, including the assumption of 2019 full-year operating cash flow of approximately $9.2 billion, subject to year-end working capital requirements.

This forecast excludes the impact of any future acquisitions, unanticipated asset impairment and exit cost charges, future changes in currency exchange rates, further developments related to the Tax Cuts and Jobs Act, further developments pertaining to the judgment in the two Québec Class Action lawsuits and the Companies’ Creditors Arrangement Act (CCAA) protection granted to RBH and any unusual events.

Factors described below in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.

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; health concerns relating to the use of tobacco products and exposure to environmental tobacco smoke; litigation related to tobacco use; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; changes in adult smoker behavior; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost and quality of tobacco and other agricultural products and raw materials; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; or if it is unable to attract and retain the best global talent. Future results are also subject to the lower predictability of our reduced-risk product category's performance.

PMI is further subject to other risks detailed from time to time in its publicly filed documents, including the Form 10-Q for the quarter ended September 30, 2019. 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.

Definitions of key terms used in this release can be found in PMI’s third quarter 2019 earnings release, which is available at

Philip Morris International: Delivering a Smoke-Free Future

Philip Morris International (PMI) is leading a transformation in the tobacco industry to create a smoke-free future and ultimately replace cigarettes with smoke-free products to the benefit of adults who would otherwise continue to smoke, society, the company and its shareholders.  PMI is a leading international tobacco company engaged in the manufacture and sale of cigarettes, as well as smoke-free products and associated electronic devices and accessories, and other nicotine-containing products in markets outside the United States.  In addition, PMI ships a version of its IQOS Platform 1 device and its consumables authorized by the U.S. Food and Drug Administration to Altria Group, Inc. for sale in the United States under license.  PMI is building a future on a new category of smoke-free products that, while not risk-free, are a much better choice than continuing to smoke.  Through multidisciplinary capabilities in product development, state-of-the-art facilities and scientific substantiation, PMI aims to ensure that its smoke-free products meet adult consumer preferences and rigorous regulatory requirements.  PMI's smoke-free IQOS product portfolio includes heat-not-burn and nicotine-containing vapor products.  As of September 30, 2019, PMI estimates that approximately 8.8 million adult smokers around the world have already stopped smoking and switched to PMI's heat-not-burn product, available for sale in 51 markets in key cities or nationwide under the IQOS brand.  For more information, please visit and

Source: Philip Morris International

Investor Relations:
New York: +1 (917) 663 2233
Lausanne: +41 (0)58 242 4666

Lausanne: +41 (0)58 242 4500