INTERNATIONAL & USA PRESS INQUIRIES
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October 20, 2021
Philip Morris International Inc. Reports 2021 Third-Quarter Reported Diluted EPS of $1.55 and Adjusted Diluted EPS of $1.58, Representing Currency-Neutral Growth of 8.5%
downloadRevises and Narrows 2021 Full-Year Reported Diluted EPS Forecast to a Range of
2021 THIRD-QUARTER & YEAR-TO-DATE HIGHLIGHTS
2021 Third-Quarter
- Reported diluted EPS of
$1.55 , up by 4.7%; up by 2.0%, excluding currency - Adjusted diluted EPS of
$1.58 , up by 11.3%; up by 8.5%, excluding currency - Cigarette and heated tobacco unit shipment volume up by 2.1% (reflecting cigarette shipment volume down by 0.4%, and heated tobacco unit shipment volume up by 23.8% to 23.5 billion units)
- Market share for heated tobacco units in IQOS markets, excluding the
U.S. , up by 1.2 points to 6.8% - Net revenues up by 9.1%; up by 7.6%, on an organic basis
- Net revenues from smoke-free products accounted for 28.6% of total net revenues
- Operating income up by 6.5%; up by 4.5%, excluding currency
- Adjusted operating income up by 7.4% on an organic basis
- Adjusted operating income margin up by 0.1 point; down by 0.1 point on an organic basis
- Total IQOS users at quarter-end estimated at approximately 20.4 million, of which approximately 14.9 million have switched to IQOS and stopped smoking
- Increased its regular quarterly dividend by 4.2% to an annualized rate of
$5.00 per common share - Repurchased 0.9 million shares of its common stock for
$94 million , at an average price of$98.99 per share
2021 Nine Months Year-to-Date
- Reported diluted EPS of
$4.48 , up by 14.9%; up by 10.3%, excluding currency - Adjusted diluted EPS of
$4.72 , up by 20.4%; up by 15.8% excluding currency - Cigarette and heated tobacco unit shipment volume up by 1.5% (reflecting cigarette shipment volume down by 1.6%, and heated tobacco unit shipment volume up by 27.9% to 69.6 billion units)
- Market share for heated tobacco units in IQOS markets, excluding the
U.S. , up by 1.3 points to 6.9% - Net revenues up by 9.7%; up by 6.1% excluding currency
- Adjusted net revenues up by 7.3% on an organic basis
- Net revenues from smoke-free products accounted for 28.6% of total adjusted net revenues
- Operating income up by 14.4%; up by 10.1%, excluding currency
- Adjusted operating income up by 14.5% on an organic basis
- Adjusted operating income margin up by 3.0 points; up by 2.8 points on an organic basis
"Our business delivered another strong quarterly performance, coming ahead of our expectations with adjusted diluted EPS of
"The continued excellent performance of IQOS drove total shipment volume and organic net revenue growth of 2.1% and 7.6%, respectively, and was complemented by further sequential share gains for our combustible products."
"Today, we are reaffirming our strong growth outlook for 2021, with an adjusted diluted EPS forecast toward the upper-half of our previous range and representing currency-neutral growth of 13% to 14%, despite ongoing tightness in device supplies due to the global shortage of semiconductors, which impacts our ability to fulfill consumer demand for IQOS."
"We confirm our confidence in our 2021 to 2023 growth targets, despite device constraints that could persist into the first half of 2022, with temporarily lower IQOS user growth rates."
2021 FULL-YEAR FORECAST
|
Full-Year |
||||||||||||
|
2021 |
|
2020 |
|
Growth |
||||||||
|
|
|
|
|
|
|
|
||||||
Reported Diluted EPS |
|
- |
|
|
|
|
|
|
|||||
|
0.14 |
— |
|
|
|
|
|||||||
Asset impairment and exit costs |
0.09 |
0.08 |
|
|
|
|
|||||||
Asset acquisition cost |
0.03 |
— |
|
|
|
|
|||||||
Equity investee ownership dilution |
(0.02) |
— |
|
|
|
|
|||||||
Fair value adjustment for equity security investments |
|
0.04 |
|
|
|
|
|||||||
Tax items |
|
(0.06 |
) |
|
|
|
|||||||
|
|
(0.05 |
) |
|
|
|
|||||||
Adjusted Diluted EPS |
|
- |
|
|
|
|
|
|
|||||
Currency |
(0.17) |
|
|
|
|
||||||||
Adjusted Diluted EPS, excluding currency |
|
- |
|
|
|
13% |
- |
14% |
PMI revises and narrows its full-year reported diluted EPS forecast to a range of
- Asset impairment and exit costs of
$0.09 per share, compared to$0.07 per share previously, due to organizational design optimization and product distribution restructuring inSouth Korea ; - Asset acquisition cost of
$0.03 per share, due to a$51 million pre-tax charge related to the purchase of OtiTopic (see related discussion under "Other" on page 28); - A favorable impact related to equity ownership dilution in
Medicago, Inc. of$0.02 per share, following PMI's ownership reduction inJuly 2021 to approximately 25%, from approximately 32% previously; and - A favorable currency impact of
$0.17 at prevailing exchange rates, compared to$0.18 per share, previously.
This forecast represents a projected currency-neutral increase in adjusted diluted EPS of around 13% to 14% versus adjusted diluted EPS of
2021 Full-Year Forecast Assumptions
This forecast assumes:
- A continued gradual improvement in the general operating environment, with potential volatility around the duration and effects of pandemic-related mobility restrictions across PMI's key markets;
- Constrained IQOS device supply due to the ongoing global semiconductor shortage, with reduced device assortment and availability, and therefore lower IQOS user growth rates as PMI prioritizes devices for existing IQOS users; 2021 ILUMA launches in certain markets now planned for the second half of 2022;
- A slight recovery in PMI's duty-free business during the fourth quarter, following a modest improvement in the third quarter, with intercontinental and
Asia travel still very subdued; - An estimated total international industry volume progression, excluding
China and theU.S. , of approximately flat to +1%, compared to approximately -1% to +1%, previously; - A total cigarette and heated tobacco unit shipment volume increase for PMI of approximately 1% to 2%, compared to a progression of approximately flat to +2%, previously;
- Heated tobacco unit shipment volume of around 95 billion units;
- Adjusted net revenue growth of approximately 6.5% to 7% on an organic basis, compared to a range of 6% to 7%, previously;
- An increase in adjusted operating income margin of around 200 basis points on an organic basis;
- Incremental commercial investments in the second half of 2021 of approximately
$300 million versus the first half, compared to a range of approximately$300 to$400 million , previously; - Operating cash flow of around
$11 billion at prevailing exchange rates and subject to year-end working capital requirements; - Capital expenditures of approximately
$0.6 billion , compared to approximately$0.8 billion , previously; - An effective tax rate, excluding discrete tax events, of around 22%;
- No material impact of any share repurchases; and
- No material impact related to the acquisitions of
Fertin Pharma A/S or Vectura Group plc.
The foregoing is underpinned by the assumption that, even in the event of prolonged pandemic-related restrictions, there will not be a return to the depressed consumption levels of the second quarter of 2020. This assumption is consistent with the less severe impact on consumption levels observed in the second half of 2020 as COVID-19 spread in a number of markets.
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,
Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.
IQOS Device Supply
As communicated in September, the global semiconductor shortage is resulting in a tightness in IQOS device supply. This is affecting the availability and assortment of IQOS devices in certain markets, which is hampering the company’s ability to operate at full commercial and competitive capacity to fully meet demand. This has been reflected in lower IQOS user growth rates in the third quarter.
At this stage, supply forecasting remains volatile. PMI therefore assumes that the tight supply situation will persist into the first half of 2022 and, where necessary, the company will prioritize device replacements for existing IQOS users over device sales targeting user acquisition. PMI is also adjusting its launch timeline for IQOS ILUMA outside
PMI views this as a temporary phenomenon and expects IQOS user growth to re-accelerate once shortages ease, as consumer demand remains robust. PMI confirms its confidence in its 2021 to 2023 organic compound annual growth targets for net revenues and adjusted diluted EPS (more than 5% and 9%, respectively), though there are short-term shortage scenarios under which the transitory IQOS device supply impact on user growth could result in full-year 2022 organic growth rates below the company's 2021 to 2023 growth targets.
Acquisitions
On
On
As of
Conference Call
A conference call, hosted by
CONSOLIDATED SHIPMENT VOLUME & MARKET SHARE
PMI Shipment Volume by Region |
|
Third-Quarter |
|
Nine Months Year-to-Date |
||||||||||||||
(million units) |
|
2021 |
2020 |
Change |
|
2021 |
2020 |
Change |
||||||||||
Cigarettes |
|
|
|
|
|
|
|
|
||||||||||
|
|
41,965 |
|
45,179 |
|
(7.1 |
)% |
|
120,238 |
|
126,142 |
|
(4.7 |
)% |
||||
|
|
25,020 |
|
25,661 |
|
(2.5 |
)% |
|
67,771 |
|
70,737 |
|
(4.2 |
)% |
||||
|
|
35,166 |
|
30,903 |
|
13.8 |
% |
|
93,155 |
|
88,087 |
|
5.8 |
% |
||||
South & |
|
35,578 |
|
37,238 |
|
(4.5 |
)% |
|
105,787 |
|
108,179 |
|
(2.2 |
)% |
||||
|
|
11,120 |
|
10,784 |
|
3.1 |
% |
|
33,450 |
|
35,154 |
|
(4.8 |
)% |
||||
|
|
15,994 |
|
15,699 |
|
1.9 |
% |
|
46,092 |
|
45,542 |
|
1.2 |
% |
||||
Total PMI |
|
164,843 |
|
165,464 |
|
(0.4 |
)% |
|
466,493 |
|
473,841 |
|
(1.6 |
)% |
||||
|
|
|
|
|
|
|
|
|
||||||||||
Heated Tobacco Units |
|
|
|
|
|
|
|
|
||||||||||
|
|
7,058 |
|
5,181 |
|
36.2 |
% |
|
20,405 |
|
14,069 |
|
45.0 |
% |
||||
|
|
6,119 |
|
4,882 |
|
25.3 |
% |
|
18,594 |
|
14,374 |
|
29.4 |
% |
||||
|
|
577 |
|
179 |
|
+100% |
|
1,485 |
|
834 |
|
78.1 |
% |
|||||
South & |
|
79 |
|
10 |
|
+100% |
|
151 |
|
10 |
|
+100% |
||||||
|
|
9,435 |
|
8,601 |
|
9.7 |
% |
|
28,478 |
|
24,799 |
|
14.8 |
% |
||||
|
|
221 |
|
114 |
|
93.9 |
% |
|
466 |
|
316 |
|
47.5 |
% |
||||
Total PMI |
|
23,489 |
|
18,967 |
|
23.8 |
% |
|
69,579 |
|
54,402 |
|
27.9 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||||
Cigarettes and Heated Tobacco Units |
|
|
|
|
|
|
|
|
||||||||||
|
|
49,023 |
|
50,360 |
|
(2.7 |
)% |
|
140,643 |
|
140,211 |
|
0.3 |
% |
||||
|
|
31,139 |
|
30,543 |
|
2.0 |
% |
|
86,365 |
|
85,111 |
|
1.5 |
% |
||||
|
|
35,743 |
|
31,082 |
|
15.0 |
% |
|
94,640 |
|
88,921 |
|
6.4 |
% |
||||
South & |
|
35,657 |
|
37,248 |
|
(4.3 |
)% |
|
105,938 |
|
108,189 |
|
(2.1 |
)% |
||||
|
|
20,555 |
|
19,385 |
|
6.0 |
% |
|
61,928 |
|
59,953 |
|
3.3 |
% |
||||
|
|
16,215 |
|
15,813 |
|
2.5 |
% |
|
46,558 |
|
45,858 |
|
1.5 |
% |
||||
Total PMI |
|
188,332 |
|
184,431 |
|
2.1 |
% |
|
536,072 |
|
528,243 |
|
1.5 |
% |
Third-Quarter
PMI's total shipment volume increased by 2.1%, driven by:
Eastern Europe , reflecting higher heated tobacco unit shipment volume across the Region, primarily inRussia andUkraine , partly offset by lower cigarette shipment volume, mainly inRussia andUkraine ;Middle East &Africa , mainly reflecting higher cigarette shipment volume, primarily in PMI Duty Free andTurkey , partly offset byNorth Africa (particularlyEgypt );East Asia &Australia , reflecting higher heated tobacco unit shipment volume, primarily inJapan , and higher cigarette shipment volume, mainly inJapan , partly offset byAustralia andSouth Korea ; andAmericas , mainly reflecting higher cigarette shipment volume, notably inMexico ;
partly offset by
- the EU, reflecting lower cigarette shipment volume, mainly in
France ,Italy andSpain , partly offset by higher heated tobacco unit shipment volume across the Region, notably inItaly ; and - South &
Southeast Asia , primarily reflecting lower cigarette shipment volume, mainly inthe Philippines , partly offset byIndonesia .
Impact of Inventory Movements
Excluding the net favorable impact of estimated distributor inventory movements of approximately 2.8 billion units, PMI’s total in-market sales increased by 0.6%, driven by a 20.2% increase in heated tobacco units, partly offset by a 1.8% decrease in cigarettes.
The net favorable impact of approximately 2.8 billion units reflected:
- A net favorable impact of 2.4 billion cigarettes, mainly driven by 2020 movements in
Japan and PMI Duty Free; and - A net favorable impact of 0.4 billion heated tobacco units, notably reflecting 2020 movements in PMI Duty Free.
PMI's total heated tobacco unit in-market sales volume in the quarter was 24.6 billion units, reflecting sequential growth of 7.2% compared to the second quarter of 2021.
Nine Months Year-to-Date
PMI's total shipment volume increased by 1.5%, driven by:
- the EU, reflecting higher heated tobacco unit shipment volume across the Region, particularly in
Germany ,Hungary ,Italy andPoland , partly offset by lower cigarette shipment volume, notably in theCzech Republic ,France ,Germany andHungary ; Eastern Europe , reflecting higher heated tobacco unit shipment volume, primarily inRussia andUkraine , partly offset by lower cigarette shipment volume, mainly inRussia andUkraine ;Middle East &Africa , reflecting higher cigarette shipment volume (primarily in PMI Duty Free andTurkey , partly offset byNorth Africa ), as well as higher heated tobacco unit shipment volume across the Region;East Asia &Australia , reflecting higher heated tobacco unit shipment volume driven byJapan , partly offset by lower cigarette shipment volume, predominantly inJapan andSouth Korea ; andAmericas , mainly reflecting higher cigarette shipment volume, primarily inBrazil andMexico , partially offset byArgentina ;
partly offset by
- South &
Southeast Asia , primarily reflecting lower cigarette shipment volume, mainly inthe Philippines , partially offset byIndonesia andPakistan .
Impact of Inventory Movements
Excluding the net favorable impact of estimated distributor inventory movements of approximately 5.0 billion units, PMI’s total in-market sales increased by 0.5%, driven by a 23.3% increase in heated tobacco units, partly offset by a 2.1% decrease in cigarettes.
The net favorable impact of approximately 5.0 billion units reflected:
- A net favorable impact of 2.8 billion cigarettes, mainly driven by 2020 movements in
Japan , PMI Duty Free andRussia ; and - A net favorable impact of 2.2 billion heated tobacco units, primarily driven by 2020 movements in
Japan .
PMI's total heated tobacco unit in-market sales volume in the nine months year-to-date was 68.8 billion units.
PMI Shipment Volume by Brand
PMI Shipment Volume by Brand |
|
Third-Quarter |
|
Nine Months Year-to-Date |
||||||||||
(million units) |
|
2021 |
2020 |
Change |
|
2021 |
2020 |
Change |
||||||
Cigarettes |
|
|
|
|
|
|
|
|
||||||
|
|
65,139 |
|
61,581 |
|
5.8 |
% |
|
177,287 |
|
175,638 |
|
0.9 |
% |
L&M |
|
21,564 |
|
24,189 |
|
(10.9 |
)% |
|
64,028 |
|
69,215 |
|
(7.5 |
)% |
Chesterfield |
|
15,994 |
|
13,768 |
|
16.2 |
% |
|
43,021 |
|
39,274 |
|
9.5 |
% |
Philip Morris |
|
11,107 |
|
12,254 |
|
(9.4 |
)% |
|
31,881 |
|
34,823 |
|
(8.4 |
)% |
|
|
11,556 |
|
9,540 |
|
21.1 |
% |
|
30,535 |
|
25,575 |
|
19.4 |
% |
Sampoerna A |
|
9,717 |
|
7,999 |
|
21.5 |
% |
|
27,601 |
|
23,801 |
|
16.0 |
% |
Dji Sam Soe |
|
5,518 |
|
6,372 |
|
(13.4 |
)% |
|
16,644 |
|
18,344 |
|
(9.3 |
)% |
|
|
3,042 |
|
6,441 |
|
(52.8 |
)% |
|
12,200 |
|
18,481 |
|
(34.0 |
)% |
Lark |
|
4,070 |
|
3,846 |
|
5.8 |
% |
|
11,851 |
|
12,059 |
|
(1.7 |
)% |
Next |
|
2,388 |
|
2,327 |
|
2.7 |
% |
|
6,556 |
|
6,703 |
|
(2.2 |
)% |
Others |
|
14,748 |
|
17,147 |
|
(14.0 |
)% |
|
44,889 |
|
49,928 |
|
(10.1 |
)% |
Total Cigarettes |
|
164,843 |
|
165,464 |
|
(0.4 |
)% |
|
466,493 |
|
473,841 |
|
(1.6 |
)% |
Heated Tobacco Units |
|
23,489 |
|
18,967 |
|
23.8 |
% |
|
69,579 |
|
54,402 |
|
27.9 |
% |
Total PMI |
|
188,332 |
|
184,431 |
|
2.1 |
% |
|
536,072 |
|
528,243 |
|
1.5 |
% |
Note: Lark includes Lark Harmony; Next includes Next Dubliss; Philip Morris includes Philip Morris/Dubliss; and Sampoerna A includes Sampoerna. |
Third-Quarter
The increase in PMI's heated tobacco unit shipment volume was mainly driven by the EU (notably
PMI's cigarette shipment volume of the following brands increased:
Marlboro , mainly driven by PMI Duty Free,Russia andTurkey , partly offset byItaly andthe Philippines ;- Chesterfield, primarily driven by
Russia ; Parliament , mainly driven bySaudi Arabia andTurkey ;- Sampoerna A in
Indonesia , primarily driven by premium A Mild; - Lark, mainly driven by
Japan ; and - Next, primarily driven by
Russia .
PMI's cigarette shipment volume of the following brands decreased:
- L&M, primarily due to
Egypt ,Poland ,Russia ,Spain ,Thailand andTurkey ; - Philip Morris, mainly due to
Russia , partly offset byJapan ; - Dji Sam Soe in
Indonesia , primarily due to Dji Sam Soe Magnum Mild; Bond Street , mainly due toRussia ; and- "Others," primarily due to: mid-price Fortune (
Philippines ) and Sampoerna U (Indonesia ).
International Share of Market
PMI's total international market share (excluding
- Total international market share for heated tobacco units of 3.6%, up by 0.6 points; and
- Total international market share for cigarettes of 24.4%, down by 0.6 points.
PMI's total international cigarette sales volume as a percentage of total industry cigarette sales volume was down by 0.4 points to 25.6%, mainly reflecting lower cigarette market share and/or an unfavorable geographic mix impact, notably in
Nine Months Year-to-Date
The increase in PMI's heated tobacco unit shipment volume was mainly driven by the EU (notably
PMI's cigarette shipment volume of the following brands increased:
Marlboro , mainly driven byMexico , PMI Duty Free,Russia andTurkey , partly offset byFrance , the GCC,Japan andthe Philippines ;- Chesterfield, primarily driven by
Brazil ,the Philippines andRussia , partly offset bySaudi Arabia ; Parliament , mainly driven byRussia ,Saudi Arabia andTurkey , partly offset byJapan andSouth Korea ; and- Sampoerna A in
Indonesia , primarily driven by premium A Mild.
PMI's cigarette shipment volume of the following brands decreased:
- L&M, mainly due to
Egypt ,Germany ,Poland ,Russia andTurkey ; - Philip Morris, primarily due to
Indonesia ,Italy andRussia , partly offset byJapan ; - Dji Sam Soe in
Indonesia , mainly due to Dji Sam Soe Magnum Mild; Bond Street , primarily due toKazakhstan ,Russia andUkraine ;- Lark, mainly due to
Japan ; - Next, primarily due to
Canada andUkraine , partly offset byRussia ; and - "Others," notably due to: mid-price Fortune (
Philippines ) and Sampoerna U (Indonesia ); and low-price Jackpot (Philippines ) and More (Philippines ); partly offset by mid-price Sampoerna Hijau (Indonesia ) and low-price Morven (Pakistan ).
International Share of Market
PMI's total international market share (excluding
- Total international market share for cigarettes of 23.8%, down by 1.1 points; and
- Total international market share for heated tobacco units of 3.5%, up by 0.6 points.
PMI's total international cigarette sales volume as a percentage of total industry cigarette sales volume was down by 0.9 points to 24.9%, mainly reflecting lower cigarette market share and/or an unfavorable geographic mix impact, notably in
CONSOLIDATED FINANCIAL SUMMARY
Third-Quarter
Financial Summary - Quarters Ended |
Change |
Variance |
|||||||||||||||||||||
(in millions) |
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
Net Revenues |
|
|
|
|
9.1 |
% |
7.6 |
% |
676 |
|
107 |
|
2 |
|
158 |
439 |
|
(30 |
) |
||||
Cost of Sales |
(2,596) |
|
(2,416) |
|
(7.5 |
)% |
(5.8 |
)% |
(180 |
) |
(40 |
) |
(1 |
) |
— |
(211 |
) |
72 |
|
||||
Marketing, Administration and Research Costs |
(2,053) |
|
(1,769) |
|
(16.1) |
% |
(15.9) |
% |
(284 |
) |
(2 |
) |
(1 |
) |
— |
— |
|
(281 |
) |
||||
Amortization of Intangibles |
(18) |
|
(18) |
|
— |
% |
— |
% |
— |
|
— |
|
— |
|
— |
— |
|
— |
|
||||
Operating Income |
|
|
|
|
6.5 |
% |
4.5 |
% |
212 |
|
65 |
|
— |
|
158 |
228 |
|
(239 |
) |
||||
Asset Impairment & Exit Costs (1) |
(43) |
|
— |
|
— |
% |
— |
% |
(43 |
) |
— |
|
— |
|
— |
— |
|
(43 |
) |
||||
Asset Acquisition Cost (1) |
(51) |
|
— |
|
— |
% |
— |
% |
(51 |
) |
— |
|
— |
|
— |
— |
|
(51 |
) |
||||
Adjusted Operating Income |
|
|
|
|
9.4 |
% |
7.4 |
% |
306 |
|
65 |
|
— |
|
158 |
228 |
|
(145 |
) |
||||
Adjusted Operating Income Margin |
43.7 |
% |
43.6 |
% |
0.1 | pp |
(0.1 |
)pp |
|||||||||||||||
(1) Included in Marketing, Administration and Research Costs above. |
Net revenues increased by 7.6% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by higher heated tobacco unit volume (notably in the EU, particularly
Operating income increased by 4.5%, excluding currency, primarily reflecting: favorable volume/mix, primarily 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 productivity gains related to reduced-risk products); partly offset by higher marketing, administration and research costs (due mainly to investments behind reduced-risk products, asset acquisition costs related to OtiTopic, and higher asset impairment and exit costs due to organizational design optimization and product distribution restructuring in
Adjusted operating income increased by 7.4% on an organic basis. Adjusted operating income margin decreased by 0.1 point on the same basis, as detailed in Schedule 8.
Nine Months Year-to-Date
Financial Summary - Nine Months Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
9.7 |
% |
6.1 |
% |
|
2,051 |
|
752 |
|
2 |
|
590 |
|
983 |
|
(276 |
) |
Saudi Arabia Customs Assessments |
|
(246 |
) |
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
|
— |
|
— |
|
(246 |
) |
Adjusted Net Revenues |
|
|
|
|
|
|
10.8 |
% |
7.3 |
% |
|
2,297 |
|
752 |
|
2 |
|
590 |
|
983 |
|
(30 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Revenues (1) |
|
|
|
|
|
|
9.7 |
% |
6.1 |
% |
|
2,051 |
|
752 |
|
2 |
|
590 |
|
983 |
|
(276 |
) |
Cost of Sales |
|
(7,223 |
) |
(6,997 |
) |
|
(3.2 |
)% |
0.5 |
% |
|
(226 |
) |
(260 |
) |
(1 |
) |
— |
|
(329 |
) |
364 |
|
Marketing, Administration and Research Costs |
|
(5,995 |
) |
(5,435 |
) |
|
(10.3 |
)% |
(8.2 |
)% |
|
(560 |
) |
(112 |
) |
(1 |
) |
— |
|
— |
|
(447 |
) |
Amortization of Intangibles |
|
(55 |
) |
(55 |
) |
|
— |
% |
1.8 |
% |
|
— |
|
(1 |
) |
— |
|
— |
|
— |
|
1 |
|
Operating Income |
|
|
|
|
|
|
14.4 |
% |
10.1 |
% |
|
1,265 |
|
379 |
|
— |
|
590 |
|
654 |
|
(358 |
) |
Asset Impairment & Exit Costs (2) |
|
(170 |
) |
(71 |
) |
|
-(100 |
)% |
-(100 |
)% |
|
(99 |
) |
— |
|
— |
|
— |
|
— |
|
(99 |
) |
Saudi Arabia Customs Assessments (3) |
|
(246 |
) |
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
|
— |
|
— |
|
(246 |
) |
Asset Acquisition Cost (2) |
|
(51 |
) |
— |
|
|
— |
% |
— |
% |
|
(51 |
) |
— |
|
— |
|
— |
|
— |
|
(51 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
18.8 |
% |
14.5 |
% |
|
1,661 |
|
379 |
|
— |
|
590 |
|
654 |
|
38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
44.6 |
% |
41.6 |
% |
|
3.0 |
pp |
2.8 |
pp |
|
|
|
|
|
|
|
||||||
(1) Cost/Other variance includes a reduction in net revenues of |
|||||||||||||||||||||||
(2) Included in Marketing, Administration and Research Costs above. |
|||||||||||||||||||||||
(3) Included in Net Revenues above. |
Net revenues increased by 6.1%, excluding currency, mainly reflecting: favorable volume/mix, primarily driven by higher heated tobacco unit volume (notably in the EU, particularly
Operating income increased by 10.1%, excluding currency, primarily reflecting: favorable volume/mix, mainly driven by the same factors as for net revenues noted above; a favorable pricing variance; and lower manufacturing costs (driven by productivity gains related to reduced-risk and combustible products); partly offset by the unfavorable impact of the
Adjusted operating income increased by 14.5% on an organic basis. Adjusted operating income margin increased by 2.8 points on the same basis, as detailed in Schedule 8.
EUROPEAN UNION REGION
Third-Quarter
Financial Summary - Quarters Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. Curr. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
8.2 |
% |
3.9 |
% |
|
242 |
|
128 |
|
2 |
|
(5 |
) |
117 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
5.8 |
% |
0.8 |
% |
|
92 |
|
79 |
|
— |
|
(5 |
) |
102 |
|
(84 |
) |
Asset Impairment & Exit Costs (1) |
|
(12 |
) |
— |
|
|
— |
% |
— |
% |
|
(12 |
) |
— |
|
— |
|
— |
|
— |
|
(12 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
6.5 |
% |
1.6 |
% |
|
104 |
|
79 |
|
— |
|
(5 |
) |
102 |
|
(72 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
53.0 |
% |
53.8 |
% |
|
(0.8 |
)pp |
(1.2 |
)pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 3.8% on an organic basis, as detailed in Schedule 5, reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume (notably in
Operating income increased by 0.8%, excluding currency, primarily reflecting: favorable volume/mix, driven by the same factors as for net revenues noted above; and lower manufacturing costs; partly offset by higher marketing, administration and research costs.
Adjusted operating income increased by 1.6% on an organic basis. Adjusted operating income margin decreased by 1.1 points on the same basis, as detailed in Schedule 8.
Nine Months Year-to-Date
Financial Summary - Nine Months Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
16.2 |
% |
8.0 |
% |
|
1,290 |
|
651 |
|
2 |
|
67 |
|
570 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
22.6 |
% |
12.1 |
% |
|
887 |
|
413 |
|
— |
|
67 |
|
507 |
|
(100 |
) |
Asset Impairment & Exit Costs (1) |
|
(56 |
) |
(27 |
) |
|
-(100 |
)% |
-(100 |
)% |
|
(29 |
) |
— |
|
— |
|
— |
|
— |
|
(29 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
23.2 |
% |
12.7 |
% |
|
916 |
|
413 |
|
— |
|
67 |
|
507 |
|
(71 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
52.6 |
% |
49.6 |
% |
|
3.0 |
pp |
2.2 |
pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 8.0% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume (notably in
Operating income increased by 12.1%, excluding currency, primarily reflecting: favorable volume/mix, driven by the same factors 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 (including higher asset impairment and exit costs, mainly related to organizational design optimization).
Adjusted operating income increased by 12.7% on an organic basis. Adjusted operating income margin increased by 2.2 points on the same basis, as detailed in Schedule 8.
Total Market, PMI Shipment & Market Share Commentaries
European Union Key Data |
Third-Quarter |
Nine Months Year-to-Date |
||||||||||||
|
|
|
Change |
|
|
Change |
||||||||
|
2021 |
2020 |
% / pp |
2021 |
2020 |
% / pp |
||||||||
Total Market (billion units) |
132.4 |
132.6 |
(0.1 |
)% |
360.5 |
358.1 |
0.7 |
% |
||||||
|
|
|
|
|
|
|
||||||||
PMI Shipment Volume (million units) |
|
|
|
|
|
|
||||||||
Cigarettes |
41,965 |
45,179 |
(7.1 |
)% |
120,238 |
126,142 |
(4.7 |
)% |
||||||
Heated Tobacco Units |
7,058 |
5,181 |
36.2 |
% |
20,405 |
14,069 |
45.0 |
% |
||||||
Total EU |
49,023 |
50,360 |
(2.7 |
)% |
140,643 |
140,211 |
0.3 |
% |
||||||
|
|
|
|
|
|
|
||||||||
PMI Market Share |
|
|
|
|
|
|
||||||||
|
16.5% |
17.5% |
(1.0 |
) |
16.7% |
17.6% |
(0.9 |
) |
||||||
L&M |
5.6% |
6.0% |
(0.4 |
) |
5.7% |
6.3% |
(0.6 |
) |
||||||
Chesterfield |
5.5% |
5.5% |
— |
|
5.5% |
5.6% |
(0.1 |
) |
||||||
Philip Morris |
2.2% |
2.5% |
(0.3 |
) |
2.2% |
2.5% |
(0.3 |
) |
||||||
HEETS |
5.3% |
3.9% |
1.4 |
|
5.5% |
3.9% |
1.6 |
|
||||||
Others |
3.1% |
3.0% |
0.1 |
|
3.0% |
3.0% |
— |
|
||||||
Total EU |
38.2% |
38.4% |
(0.2 |
) |
38.6% |
38.9% |
(0.3 |
) |
||||||
Note: HEETS includes HEETS Dimensions. |
Third-Quarter
The estimated total market in the EU decreased by 0.1% to 132.4 billion units, mainly due to:
Czech Republic , down by 9.0%, primarily reflecting the impact of excise tax-driven price increases; andFrance , down by 8.0%, mainly reflecting the impact of excise tax-driven price increases and higher cross-border (non-domestic) purchases due to the easing of pandemic-related measures;
partly offset by
Poland , up by 3.4%, primarily reflecting the impact on adult smoker average daily consumption and border sales of the easing of pandemic-related measures; andRomania , up by 7.1%, mainly reflecting the impact on adult smoker average daily consumption of the easing of pandemic-related measures, as well as increased in-bound travel.
PMI's total shipment volume decreased by 2.7% to 49.0 billion units, primarily due to:
Czech Republic , down by 9.5%, mainly reflecting the lower total market;France , down by 10.8%, primarily reflecting the lower total market and a lower market share of cigarettes;Italy , down by 3.1%. Excluding the net unfavorable impact of estimated distributor inventory movements, total in-market sales volume increased by 3.6%, reflecting a higher total market and a higher market share driven by heated tobacco units; andSpain , down by 9.1%. Excluding the net unfavorable impact of estimated distributor inventory movements, total in-market sales volume increased by 3.0%, mainly reflecting a higher total market;
partly offset by
Poland , up by 3.8%, mainly reflecting the higher total market.
Excluding the net unfavorable impact of estimated distributor inventory movements, PMI's total in-market sales volume decreased by 0.5%.
Nine Months Year-to-Date
The estimated total market in the EU increased by 0.7% to 360.5 billion units, primarily driven by:
Italy , up by 4.2%, notably reflecting the impact on adult smoker average daily consumption of the easing of pandemic-related measures; andPoland , up by 6.4%, primarily reflecting the impact on adult smoker average daily consumption and border sales of the easing of pandemic-related measures, as well as a lower prevalence of illicit trade;
partly offset by
Czech Republic , down by 10.1%, mainly reflecting the impact of excise tax-driven price increases and the impact, in the first quarter of 2021, of lower border sales due to pandemic-related lockdown measures; andFrance , down by 6.1%, primarily reflecting the same factors as in the quarter.
PMI's total shipment volume increased by 0.3% to 140.6 billion units, primarily driven by:
Italy , up by 8.1%, mainly reflecting the higher total market and a higher market share driven by heated tobacco units;
partly offset by
Czech Republic , down by 12.2%, mainly reflecting the same factor as in the quarter; andFrance , down by 8.3%, mainly reflecting the same factors as in the quarter.
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume was essentially stable.
Third-Quarter
Financial Summary - Quarters Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
4.7 |
% |
6.1 |
% |
|
42 |
|
(13 |
) |
— |
|
22 |
|
33 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
38.0 |
% |
25.7 |
% |
|
93 |
|
30 |
|
— |
|
22 |
|
27 |
|
14 |
|
Asset Impairment & Exit Costs (1) |
|
(2 |
) |
— |
|
|
— |
% |
— |
% |
|
(2 |
) |
— |
|
— |
|
— |
|
— |
|
(2 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
38.8 |
% |
26.5 |
% |
|
95 |
|
30 |
|
— |
|
22 |
|
27 |
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
36.1 |
% |
27.3 |
% |
|
8.8 |
pp |
5.2 |
pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 6.1% on an organic basis, reflecting: favorable volume/mix, driven by higher heated tobacco unit volume (primarily in
Operating income increased by 25.7%, excluding currency, primarily reflecting: favorable volume/mix, driven by the same factors as for net revenues noted above; a favorable pricing variance; and lower manufacturing costs (primarily related to reduced-risk products, mainly in
Adjusted operating income increased by 26.5% on an organic basis. Adjusted operating income margin increased by 5.2 points on the same basis, as detailed in Schedule 8.
Nine Months Year-to-Date
Financial Summary - Nine Months Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
6.6 |
% |
9.6 |
% |
|
162 |
|
(74 |
) |
— |
|
68 |
|
168 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
49.7 |
% |
50.0 |
% |
|
303 |
|
(2 |
) |
— |
|
68 |
|
140 |
|
97 |
|
Asset Impairment & Exit Costs (1) |
|
(11 |
) |
(7 |
) |
|
(57.1 |
)% |
(57.1 |
)% |
|
(4 |
) |
— |
|
— |
|
— |
|
— |
|
(4 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
49.8 |
% |
50.1 |
% |
|
307 |
|
(2 |
) |
— |
|
68 |
|
140 |
|
101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
35.1 |
% |
25.0 |
% |
|
10.1 |
pp |
9.2 |
pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 9.6% on an organic basis, reflecting: favorable volume/mix, driven by higher heated tobacco unit volume (mainly in
Operating income increased by 50.0%, excluding currency, primarily reflecting: favorable volume/mix, driven by the same factors as for net revenues noted above; lower manufacturing costs (mainly related to reduced-risk products, primarily in
Adjusted operating income increased by 50.1% on an organic basis. Adjusted operating income margin increased by 9.2 points on the same basis, as detailed in Schedule 8.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Third-Quarter |
Nine Months Year-to-Date |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
25,020 |
25,661 |
(2.5)% |
67,771 |
70,737 |
(4.2)% |
||||||
Heated Tobacco Units |
6,119 |
4,882 |
25.3% |
18,594 |
14,374 |
29.4% |
||||||
Total |
31,139 |
30,543 |
2.0% |
86,365 |
85,111 |
1.5% |
Third-Quarter
The estimated total market in
Russia , down by 0.9%, or by 2.5% excluding the net favorable impact of estimated distributor inventory movements, primarily reflecting the impact of excise tax-driven price increases and a higher prevalence of illicit trade; andUkraine , down by 9.6%, mainly reflecting the impact of excise tax-driven price increases and a higher prevalence of illicit trade.
PMI's total shipment volume increased by 2.0% to 31.1 billion units, notably driven by:
Russia , up by 0.7%. Excluding the net favorable impact of estimated distributor inventory movements, PMI's in-market sales decreased by 0.3%, reflecting the lower total market, partly offset by a higher market share driven by heated tobacco units; andSoutheast Europe , up by 15.5%, primarily reflecting a higher total market and a higher market share, driven by heated tobacco units and cigarettes,
partly offset by
Ukraine , down by 3.2%, mainly reflecting the lower total market, partly offset by a higher market share driven by heated tobacco units.
Nine Months Year-to-Date
The estimated total market in
Ukraine , down by 9.6%, mainly reflecting the impact of excise tax-driven price increases and a higher prevalence of illicit trade.
PMI's total shipment volume increased by 1.5% to 86.4 billion units, notably driven by:
Russia , up by 0.9%. Excluding the net favorable impact of estimated distributor inventory movements, PMI’s total in-market sales volume was down by 2.1%, mainly reflecting a lower market share (due to cigarettes, partly offset by heated tobacco units); andSoutheast Europe , up by 8.0%, primarily reflecting a higher market share (driven by heated tobacco units and cigarettes) and a higher total market;
partly offset by
Ukraine , down by 2.0%, mainly reflecting the lower total market, partly offset by a higher market share driven by heated tobacco units.
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume decreased by 0.5%.
Third-Quarter
Financial Summary - Quarters Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
23.0 |
% |
26.6 |
% |
|
177 |
|
(27 |
) |
— |
|
64 |
|
169 |
|
(29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
48.7 |
% |
59.8 |
% |
|
127 |
|
(29 |
) |
— |
|
64 |
|
135 |
|
(43 |
) |
Asset Impairment & Exit Costs (1) |
|
(3 |
) |
— |
|
|
— |
% |
— |
% |
|
(3 |
) |
— |
|
— |
|
— |
|
— |
|
(3 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
49.8 |
% |
60.9 |
% |
|
130 |
|
(29 |
) |
— |
|
64 |
|
135 |
|
(40 |
) |
Adjusted Operating Income Margin |
|
41.4 |
% |
34.0 |
% |
|
7.4 |
pp |
9.2 |
pp |
|
|
|
|
|
|
|
||||||
(1) Included in Marketing, Administration and Research Costs above. |
Net revenues increased by 26.6% on an organic basis, primarily reflecting: favorable volume/mix, mainly driven by higher cigarette volume (primarily in PMI Duty Free and
Operating income increased by 59.8%, excluding currency, mainly reflecting: favorable volume/mix, mainly driven by the same factors as for net revenues noted above; a favorable pricing variance; and lower manufacturing costs; partly offset by lower fees for certain distribution rights, as noted above for net revenues; and higher marketing, administration and research costs.
Adjusted operating income increased by 60.9% on an organic basis. Adjusted operating income margin increased by 9.2 points on the same basis, as detailed in Schedule 8.
Nine Months Year-to-Date
Financial Summary - Nine Months Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
(1.8 |
)% |
1.0 |
% |
|
(42 |
) |
(66 |
) |
— |
|
191 |
|
110 |
|
(277 |
) |
Saudi Arabia Customs Assessments |
|
(246 |
) |
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
|
— |
|
— |
|
(246 |
) |
Adjusted Net Revenues |
|
|
|
|
|
|
8.7 |
% |
11.5 |
% |
|
204 |
|
(66 |
) |
— |
|
191 |
|
110 |
|
(31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Revenues (1) |
|
|
|
|
|
|
(1.8 |
)% |
1.0 |
% |
|
(42 |
) |
(66 |
) |
— |
|
191 |
|
110 |
|
(277 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
(9.8 |
)% |
(0.7 |
)% |
|
(80 |
) |
(74 |
) |
— |
|
191 |
|
70 |
|
(267 |
) |
Asset Impairment & Exit Costs (2) |
|
(13 |
) |
(9 |
) |
|
(44.4 |
)% |
(44.4 |
)% |
|
(4 |
) |
— |
|
— |
|
— |
|
— |
|
(4 |
) |
Saudi Arabia Customs Assessments (3) |
|
(246 |
) |
— |
|
|
— |
% |
— |
% |
|
(246 |
) |
— |
|
— |
|
— |
|
— |
|
(246 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
20.5 |
% |
29.5 |
% |
|
170 |
|
(74 |
) |
— |
|
191 |
|
70 |
|
(17 |
) |
Adjusted Operating Income Margin |
|
39.1 |
% |
35.3 |
% |
|
3.8 |
pp |
5.6 |
pp |
|
|
|
|
|
|
|
||||||
(1) Cost/Other variance includes a reduction in net revenues of |
|||||||||||||||||||||||
(2) Included in Marketing, Administration and Research Costs above. |
|||||||||||||||||||||||
(3) Included in Net Revenues above. |
Net revenues increased by 1.0%, excluding currency, despite the unfavorable impact of the
Adjusted net revenues increased by 11.5% on an organic basis, as detailed above and in Schedule 5, primarily reflecting: a favorable pricing variance, mainly driven by combustible pricing (mainly in
Operating income decreased by 0.7%, excluding currency, predominantly due to the unfavorable impact of the
Adjusted operating income increased by 29.5% on an organic basis, mainly reflecting: a favorable pricing variance; favorable volume/mix, driven by the same factors as for net revenues noted above; and lower manufacturing costs (primarily related to combustible products); partly offset by lower fees for certain distribution rights, as noted above for net revenues; and higher marketing, administration and research costs.
Adjusted operating income margin increased by 5.6 points on an organic basis, as detailed in Schedule 8.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Third-Quarter |
Nine Months Year-to-Date |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
35,166 |
30,903 |
13.8% |
93,155 |
88,087 |
5.8% |
||||||
Heated Tobacco Units |
577 |
179 |
+100% |
1,485 |
834 |
78.1% |
||||||
Total |
35,743 |
31,082 |
15.0% |
94,640 |
88,921 |
6.4% |
Third-Quarter
The estimated total market in the
- International Duty Free, up by 15.4%, reflecting the impact of reduced government travel restrictions and increased passenger traffic in certain geographies; and
Turkey , up by 12.5%, mainly reflecting the impact on adult smoker average daily consumption of the easing of pandemic-related measures, coupled with increased in-bound tourism (particularly by Turkish expatriates);
partly offset by
Tunisia , down by 30.1%, primarily reflecting an increased prevalence of illicit trade (mainly due to market disruptions impacting product availability and the impact of price increases inJuly 2021 ).
PMI's total shipment volume increased by 15.0% to 35.7 billion units, notably driven by:
- PMI Duty Free, up by +100%, or by 43.8% excluding the net favorable impact of estimated distributor inventory movements, reflecting a higher market share and the higher total market; and
Turkey , up by 18.4%, primarily reflecting the higher total market and a higher market share, driven by adult smoker up-trading (mainly benefitingMarlboro andParliament );
partly offset by
Egypt , down by 12.4%, primarily reflecting a lower market share mainly due to adult smoker down-trading to products in the low-tax tier.
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 8.5%.
Nine Months Year-to-Date
The estimated total market in the
Egypt , up by 14.3%, primarily reflecting a favorable comparison due to pandemic-related supply chain shortages for competitors' products in 2020, as well as the favorable impact of adult smoker in-switching to cigarettes (mainly in the low-tax tier) from other combustible tobacco products;South Africa , up by 26.9%, mainly reflecting a favorable comparison versus the second and third quarters of 2020, in which the total market was impacted by the pandemic-related ban on all tobacco sales fromMarch 27th through August 17th , partly offset by a higher estimated prevalence of illicit trade stemming from the ban; andTurkey , up by 6.6%, primarily reflecting the same factors as for the quarter, partly offset by a higher estimated prevalence of illicit trade;
partly offset by
- International Duty Free, down by 17.2%, primarily reflecting the impact of government travel restrictions and reduced passenger traffic since the start of the pandemic in
March 2020 .
PMI's total shipment volume increased by 6.4% to 94.6 billion units, notably driven by:
- PMI Duty Free, up by 25.1%. Excluding the net favorable impact of estimated distributor inventory movements (principally due to cigarettes), PMI in-market sales volume was down by 3.6%, primarily reflecting the lower total market, partly offset by a higher market share driven by
Marlboro ; and Turkey , up by 14.6%, mainly reflecting the same factors as in the quarter;
partly offset by
Egypt , down by 6.5%, mainly reflecting a lower market share (due primarily to the same factor as in the quarter), partly offset by the higher total market.
SOUTH &
Third-Quarter
Financial Summary - Quarters Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
(0.6 |
)% |
(1.1 |
)% |
|
(6 |
) |
6 |
|
— |
|
14 |
|
(26 |
) |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
(13.4 |
)% |
(14.4 |
)% |
|
(54 |
) |
4 |
|
— |
|
14 |
|
(42 |
) |
(30 |
) |
Asset Impairment & Exit Costs (1) |
|
(4 |
) |
— |
|
|
— |
% |
— |
% |
|
(4 |
) |
— |
|
— |
|
— |
|
— |
|
(4 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
(12.4 |
)% |
(13.4 |
)% |
|
(50 |
) |
4 |
|
— |
|
14 |
|
(42 |
) |
(26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
33.1 |
% |
37.5 |
% |
|
(4.4 |
)pp |
(4.6 |
)pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues decreased by 1.1% on an organic basis, reflecting: unfavorable volume/mix, due to lower cigarette volume (primarily in
Operating income decreased by 14.4%, excluding currency, primarily reflecting: unfavorable volume/mix, due to the same factors as for net revenues noted above; and higher manufacturing costs; partly offset by a favorable pricing variance.
Adjusted operating income decreased by 13.4% on an organic basis. Adjusted operating income margin decreased by 4.6 points on the same basis, as detailed in Schedule 8.
Nine Months Year-to-Date
Financial Summary - Nine Months Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
2.3 |
% |
(0.9 |
)% |
|
73 |
|
102 |
|
— |
|
(4 |
) |
(25 |
) |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
(6.4 |
)% |
(9.1 |
)% |
|
(82 |
) |
36 |
|
— |
|
(4 |
) |
(81 |
) |
(33 |
) |
Asset Impairment & Exit Costs (1) |
|
(17 |
) |
(11 |
) |
|
(54.5 |
)% |
(54.5 |
)% |
|
(6 |
) |
— |
|
— |
|
— |
|
— |
|
(6 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
(5.8 |
)% |
(8.6 |
)% |
|
(76 |
) |
36 |
|
— |
|
(4 |
) |
(81 |
) |
(27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
37.3 |
% |
40.5 |
% |
|
(3.2 |
)pp |
(3.1 |
)pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues decreased by 0.9% on an organic basis, reflecting: unfavorable volume/mix, mainly due to lower cigarette volume (primarily
Operating income decreased by 9.1%, excluding currency, primarily reflecting: unfavorable volume/mix, due to the same factors as for net revenues noted above; and higher marketing, administration and research costs.
Adjusted operating income decreased by 8.6% on an organic basis. Adjusted operating income margin decreased by 3.1 points on the same basis, as detailed in Schedule 8.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Third-Quarter |
Nine Months Year-to-Date |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
35,578 |
37,238 |
(4.5)% |
105,787 |
108,179 |
(2.2)% |
||||||
Heated Tobacco Units |
79 |
10 |
+100% |
151 |
10 |
+100% |
||||||
Total South & |
35,657 |
37,248 |
(4.3)% |
105,938 |
108,189 |
(2.1)% |
Third-Quarter
The estimated total market in South &
Bangladesh , up by 29.9%, primarily reflecting a favorable comparison versus the third quarter of 2020, during which pandemic-related restrictions impacted tobacco product availability;India , up by 8.3%, mainly reflecting a favorable comparison versus the third quarter of 2020, during which pandemic-related restrictions impacted the movement of certain products, including tobacco;Indonesia , up by 6.0%, primarily reflecting the growth of the tax-advantaged 'below tier one' segment and the impact on adult smoker consumption of the easing of pandemic-related measures compared to the prior year period; andPakistan , up by 29.3%, or by 14.1% excluding the net favorable impact of estimated trade inventory movements, notably reflecting a lower prevalence of illicit trade (partly due to pandemic-related supply disruptions for illicit products);
partly offset by
the Philippines , down by 17.7%, or by 8.7% excluding the net unfavorable impact of estimated trade inventory movements, primarily reflecting the impact of industry-wide price increases in the fourth quarter of 2020.
PMI's total shipment volume decreased by 4.3% to 35.7 billion units, mainly due to:
the Philippines , down by 23.8%, primarily reflecting the lower total market and a lower market share (mainly due to mid-price Fortune, reflecting the impact of price increases in the fourth quarter of 2020, partly offset byMarlboro );
partly offset by
Indonesia , up by 5.1%, primarily reflecting the higher total market.
Nine Months Year-to-Date
The estimated total market in South &
Bangladesh , up by 13.6%, primarily reflecting the same factor as in the quarter;India , up by 13.8%, mainly reflecting the same factor as in the quarter;Indonesia , up by 7.9%, primarily reflecting the same factors as in the quarter;Pakistan , up by 18.9%, notably reflecting the same factor as in the quarter; andVietnam , up by 7.2%, mainly reflecting a lower prevalence of illicit trade due to pandemic-related supply disruptions for illicit products;
partly offset by:
the Philippines , down by 12.3%, primarily reflecting the same factor as in the quarter.
PMI's total shipment volume decreased by 2.1% to 105.9 billion units, notably due to:
the Philippines , down by 20.3%, mainly reflecting the same factors as in the quarter;
partly offset by:
Indonesia , up by 4.3%, primarily reflecting the higher total market, partly offset by a lower market share (mainly due to adult smoker down-trading to the 'below tier one' segment as a result of significantly lower retail prices, partly offset by share growth for PMI's premium and hand-rolled portfolio); andPakistan , up by 14.2%, mainly reflecting the higher total market, partly offset by a lower market share.
Third-Quarter
Financial Summary - Quarters Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
12.2 |
% |
12.7 |
% |
|
165 |
|
(7 |
) |
— |
|
47 |
|
125 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
(0.9 |
)% |
2.7 |
% |
|
(6 |
) |
(23 |
) |
— |
|
47 |
|
3 |
|
(33 |
) |
Asset Impairment & Exit Costs (1) |
|
(21 |
) |
— |
|
|
— |
% |
— |
% |
|
(21 |
) |
— |
|
— |
|
— |
|
— |
|
(21 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
2.4 |
% |
6.0 |
% |
|
15 |
|
(23 |
) |
— |
|
47 |
|
3 |
|
(12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
42.8 |
% |
46.9 |
% |
|
(4.1 |
)pp |
(2.8 |
)pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 12.7% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher heated tobacco unit volume and favorable device volume/mix (predominantly in
Operating income increased by 2.7%, excluding currency, mainly reflecting: a favorable pricing variance; and lower manufacturing costs (primarily related to reduced-risk products in
Adjusted operating income increased by 6.0% on an organic basis. Adjusted operating income margin decreased by 2.8 points on the same basis, as detailed in Schedule 8.
Nine Months Year-to-Date
Financial Summary - Nine Months Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. Curr. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
11.5 |
% |
9.0 |
% |
|
464 |
|
101 |
|
— |
|
240 |
|
123 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
13.9 |
% |
14.2 |
% |
|
249 |
|
(6 |
) |
— |
|
240 |
|
21 |
|
(6 |
) |
Asset Impairment & Exit Costs (1) |
|
(67 |
) |
(13 |
) |
|
-(100 |
)% |
-(100 |
)% |
|
(54 |
) |
— |
|
— |
|
— |
|
— |
|
(54 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
16.8 |
% |
17.1 |
% |
|
303 |
|
(6 |
) |
— |
|
240 |
|
21 |
|
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
46.8 |
% |
44.6 |
% |
|
2.2 |
pp |
3.4 |
pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 9.0% on an organic basis, mainly reflecting: a favorable pricing variance, primarily driven by higher heated tobacco and combustible pricing in
Operating income increased by 14.2%, excluding currency, mainly reflecting: a favorable pricing variance; lower manufacturing costs (primarily related to reduced-risk products in
Adjusted operating income increased by 17.1%, on an organic basis. Adjusted operating income margin increased by 3.4 points on the same basis, as detailed in Schedule 8.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Third-Quarter |
Nine Months Year-to-Date |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
11,120 |
10,784 |
3.1% |
33,450 |
35,154 |
(4.8)% |
||||||
Heated Tobacco Units |
9,435 |
8,601 |
9.7% |
28,478 |
24,799 |
14.8% |
||||||
Total |
20,555 |
19,385 |
6.0% |
61,928 |
59,953 |
3.3% |
Third-Quarter
The estimated total market in
Australia , down by 28.0%, or by 18.3% excluding the net unfavorable impact of estimated trade inventory movements, mainly reflecting the impact of the ending of the pandemic-related wage subsidy by the government, coupled with the impact of pandemic-related restrictions in the quarter;Japan , down by 2.8%, primarily reflecting the impact of theOctober 2020 excise tax-driven price increases;South Korea , down by 5.2%, or by 0.9% excluding the net unfavorable impact of estimated trade inventory movements, mainly reflecting the structural market trend; andTaiwan , down by 10.8%, primarily reflecting impact of pandemic-related restrictions in the quarter.
PMI's total shipment volume increased by 6.0% to 20.6 billion units, mainly driven by:
Japan , up by 14.6%, or by 1.0% excluding the net favorable impact of estimated distributor inventory movements, primarily reflecting a higher market share (driven by heated tobacco units), partly offset by the lower total market;
partly offset by
South Korea , down by 5.9%, mainly reflecting the lower total market and a lower market share (due to cigarettes).
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume declined by 1.7%.
Nine Months Year-to-Date
The estimated total market in
Australia , down by 14.5%, primarily reflecting the same factors as in the quarter;Japan , down by 3.7%, mainly reflecting the same factor as in the quarter; andSouth Korea , down by 1.4%, primarily reflecting the same factor as in the quarter, partly offset by the impact of pandemic-related subsidies on adult smoker average daily consumption.
PMI's total shipment volume increased by 3.3% to 61.9 billion units, mainly driven by:
Japan , up by 7.2%, or by 1.3% excluding the net favorable impact of estimated distributor inventory movements, primarily reflecting the same factors as in the quarter;
partly offset by
South Korea , down by 5.3%, mainly reflecting the same factors as in the quarter.
Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales volume declined by 0.6%.
Third-Quarter
Financial Summary - Quarters Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
14.0 |
% |
9.0 |
% |
|
56 |
|
20 |
|
— |
|
16 |
|
21 |
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
10.0 |
% |
6.4 |
% |
|
11 |
|
4 |
|
— |
|
16 |
|
3 |
|
(12 |
) |
Asset Impairment & Exit Costs (1) |
|
(1 |
) |
— |
|
|
— |
% |
— |
% |
|
(1 |
) |
— |
|
— |
|
— |
|
— |
|
(1 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
10.9 |
% |
7.3 |
% |
|
12 |
|
4 |
|
— |
|
16 |
|
3 |
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
26.8 |
% |
27.5 |
% |
|
(0.7 |
)pp |
(0.4 |
)pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 9.0% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher cigarette volume (primarily in
Operating income increased by 6.4%, excluding currency, primarily reflecting: a favorable pricing variance; partly offset by higher manufacturing costs; and higher marketing, administration and research costs.
Adjusted operating income increased by 7.3% on an organic basis. Adjusted operating income margin decreased by 0.4 points on the same basis, as detailed in Schedule 8.
Nine Months Year-to-Date
Financial Summary - Nine Months Ended |
|
|
|
|
Change Fav./(Unfav.) |
|
Variance Fav./(Unfav.) |
||||||||||||||||
|
2021 |
2020 |
|
Total |
Excl. |
|
Total |
Cur- |
Acqui- |
Price |
Vol/ |
Cost/ |
|||||||||||
(in millions) |
|
|
|
||||||||||||||||||||
Net Revenues |
|
|
|
|
|
|
8.6 |
% |
5.4 |
% |
|
104 |
|
38 |
|
— |
|
28 |
|
37 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income |
|
|
|
|
|
|
11.9 |
% |
8.2 |
% |
|
39 |
|
12 |
|
— |
|
28 |
|
(3 |
) |
2 |
|
Asset Impairment & Exit Costs (1) |
|
(6 |
) |
(4 |
) |
|
(50.0 |
)% |
(50.0 |
)% |
|
(2 |
) |
— |
|
— |
|
— |
|
— |
|
(2 |
) |
Adjusted Operating Income |
|
|
|
|
|
|
12.3 |
% |
8.7 |
% |
|
41 |
|
12 |
|
— |
|
28 |
|
(3 |
) |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Operating Income Margin |
|
28.3 |
% |
27.3 |
% |
|
1.0 |
pp |
0.9 |
pp |
|
|
|
|
|
|
|
||||||
(1) Included in marketing, administration and research costs at the consolidated operating income level. |
Net revenues increased by 5.4% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by higher cigarette volume (mainly in
Operating income increased by 8.2%, excluding currency, primarily reflecting: a favorable pricing variance; and lower marketing, administration and research costs; partly offset by higher manufacturing costs.
Adjusted operating income increased by 8.7% on an organic basis. Adjusted operating income margin increased by 0.9 points on the same basis, as detailed in Schedule 8.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume |
Third-Quarter |
Nine Months Year-to-Date |
||||||||||
(million units) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
Cigarettes |
15,994 |
15,699 |
1.9% |
46,092 |
45,542 |
1.2% |
||||||
Heated Tobacco Units |
221 |
114 |
93.9% |
466 |
316 |
47.5% |
||||||
Total |
16,215 |
15,813 |
2.5% |
46,558 |
45,858 |
1.5% |
Third-Quarter
The estimated total market in
Argentina , down by 2.1%, primarily reflecting the impact of price increases;Canada , down by 12.7%, notably reflecting the impact of price increases and out-switching from cigarettes to e-vapor products;
partly offset by
Colombia , up by 13.4%, primarily reflecting the impact on adult smoker average daily consumption of the easing of pandemic-related measures.
PMI's total shipment volume increased by 2.5% to 16.2 billion units, notably driven by:
Colombia , up by 11.0%, primarily reflecting the higher total market; andMexico , up by 3.9%, mainly reflecting a higher market share driven byMarlboro ;
partly offset by
Argentina , down by 2.5%, primarily reflecting the lower total market.
Nine Months Year-to-Date
The estimated total market in
Argentina , up by 7.5%, primarily reflecting a lower estimated prevalence of illicit trade and a favorable comparison related to retail out-of-stock in the second quarter of 2020 (due to temporary factory shutdowns related to the pandemic), partly offset by the impact of price increases;Brazil , up by 5.4%, mainly reflecting a lower estimated prevalence of illicit trade due to: reduced price gaps with legal products and the impact of border restrictions imposed as a result of the pandemic; andMexico , up by 3.0%, primarily reflecting the impact on adult smoker average daily consumption of the easing of pandemic-related measures coupled with the impact of increased in-bound tourism;
partly offset by
Canada , down by 8.5%, mainly reflecting the same factors as in the quarter.
PMI's total shipment volume increased by 1.5% to 46.6 billion units, primarily driven by:
Brazil , up by 6.4%, mainly reflecting the higher total market and a higher market share driven by Chesterfield; andMexico , up by 3.9%, primarily reflecting the higher total market and a higher market share driven byMarlboro ;
partly offset by
Argentina , down by 2.4%, mainly reflecting a lower market share (primarily due to adult smoker down-trading to ultra-low-price brands produced by local manufacturers).
OTHER
Third-Quarter and Nine Months Year-to-Date
Following the acquisitions of
Due to the timing of the Fertin Pharma and Vectura acquisitions, the company did not record the immaterial results of operations from these two acquisitions in its consolidated statements of earnings from the acquisition dates through
PMI accounted for the OtiTopic transaction as an asset acquisition since the in-process research and development of the dry power inhalation aspirin treatment represented substantially all of the fair value of the gross assets acquired and had no alternative future use. As a result, PMI recorded a pre-tax charge of
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. 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
The COVID-19 pandemic has created significant societal and economic disruption, and resulted in closures of stores, factories and offices, and restrictions on manufacturing, distribution and travel, all of which will adversely impact our business, results of operations, cash flows and financial position during the continuation of the pandemic. Our business continuity plans and other safeguards may not be effective to mitigate the 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 on COVID-19 risks may lead to increasingly restrictive regulatory measures on the sale and use of our products, negatively impact demand for our products, the willingness of adult consumers to switch to our 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
Key Terms, Definitions and Explanatory Notes
General
- "PMI" refers to
Philip Morris International Inc. and its subsidiaries. Trademarks and service marks that are the registered property of, or licensed by, the subsidiaries of PMI, are italicized. - Comparisons are made to the same prior-year period unless otherwise stated.
- References to total industry, total market, PMI shipment volume and PMI market share performance reflect cigarettes and heated tobacco units, unless otherwise stated.
- References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the
U.S. , total industry, total market and market shares are PMI estimates for tax-paid products based on the latest available data from a number of internal and external sources and may, in defined instances, excludethe People's Republic of China and/or PMI's duty free business. - 2020 and 2021 estimates for total industry volume and market share in certain geographies reflect limitations on the availability and accuracy of industry data during pandemic-related restrictions.
- "Combustible products" is the term PMI uses to refer to cigarettes and OTP, combined.
- In-market sales, or "IMS," is defined as sales to the retail channel, depending on the market and distribution model.
- "Total shipment volume" is defined as the combined total of cigarette shipment volume and heated tobacco unit shipment volume.
- "
Americas " refers to the formerLatin America &Canada segment, which was renamed as theAmericas segment as of the third quarter of 2021. - "
North Africa " is defined asAlgeria ,Egypt ,Libya ,Morocco andTunisia . - "The GCC" (
Gulf Cooperation Council ) is defined asBahrain ,Kuwait ,Oman ,Qatar ,Saudi Arabia and theUnited Arab Emirates (UAE ). - "
Southeast Europe " is defined asAlbania ,Bosnia & Herzegovina ,Kosovo ,Montenegro ,North Macedonia andSerbia . - 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 evaluated separately from the geographical operating segments. - Following the deconsolidation of PMI's Canadian subsidiary,
Rothmans, Benson & Hedges, Inc. (RBH) onMarch 22, 2019 , PMI continues to report the volume of brands sold by RBH for which other PMI subsidiaries are the trademark owner. These include HEETS, Next, Philip Morris and Rooftop. - From time to time, PMI’s shipment volumes are subject to the impact of distributor inventory movements, and estimated total industry/market volumes are subject to the impact of inventory movements in various trade channels that include estimated trade inventory movements of PMI’s competitors arising from market-specific factors that significantly distort reported volume disclosures. Such factors may include changes to the manufacturing supply chain, shipment methods, consumer demand, timing of excise tax increases or other influences that may affect the timing of sales to customers. In such instances, in addition to reviewing PMI shipment volumes and certain estimated total industry/market volumes on a reported basis, management reviews these measures on an adjusted basis that excludes the impact of distributor and/or estimated trade inventory movements. Management also believes that disclosing PMI shipment volumes and estimated total industry/market volumes in such circumstances on a basis that excludes the impact of distributor and/or estimated trade inventory movements, such as on an IMS basis, improves the comparability of performance and trends for these measures over different reporting periods.
Financial
- Net revenues related to combustible products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods.
- Net revenues related to RRPs represent the sale of heated tobacco units, heat-not-burn devices and related accessories, and other nicotine-containing products, primarily e-vapor and oral nicotine products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods.
- Adjusted net revenues exclude the impact related to the
Saudi Arabia customs assessments. - "Cost of sales" consists principally of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of devices produced by third-party electronics manufacturing service providers. Estimated costs associated with device warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.
- "Marketing, administration and research costs" include the costs of marketing and selling our products, other costs generally not related to the manufacture of our products (including general corporate expenses), and costs incurred to develop new products. The most significant components of our marketing, administration and research costs are marketing and sales expenses and general and administrative expenses.
- "Cost/Other" in the Consolidated Financial Summary table of total PMI and the six geographical segments of this release reflects the currency-neutral variances of: cost of sales (excluding the volume/mix cost component); marketing, administration and research costs (including asset impairment and exit costs); and amortization of intangibles. “Cost/Other” also includes the currency-neutral net revenue variance, unrelated to volume/mix and price components, attributable to: fees for certain distribution rights billed to customers in certain markets in the
ME&A Region and theSaudi Arabia customs assessment net revenue adjustment. - "Adjusted Operating Income Margin" is calculated as adjusted operating income, divided by adjusted net revenues.
- "Adjusted EBITDA" is defined as earnings before interest, taxes, depreciation, amortization and equity (income)/loss in unconsolidated subsidiaries, excluding asset impairment and exit costs, and unusual items.
- "Net debt" is defined as total debt, less cash and cash equivalents.
- Growth rates presented on an organic basis reflect currency-neutral underlying results.
- Management reviews net revenues, operating income, operating income margin, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, asset impairment and exit costs, tax items and other special items. Organic growth rates reflect the way management views underlying performance for these measures. PMI believes that such measures provide useful insight into underlying business trends and results.
- Management reviews these measures because they exclude changes in currency exchange rates and other factors that may distort underlying business trends, thereby improving the comparability of PMI’s business performance between reporting periods. Furthermore, PMI uses several of these measures in its management compensation program to promote internal fairness and a disciplined assessment of performance against company targets. PMI discloses these measures to enable investors to view the business through the eyes of management.
- Non-GAAP measures used in this release should neither be considered in isolation nor as a substitute for the financial measures prepared in accordance with
U.S. GAAP. For a reconciliation of non-GAAP measures to the most directly comparableU.S. GAAP measures, see the relevant schedules provided with this press release. U.S. GAAP Treatment ofArgentina as a Highly Inflationary Economy. Following the categorization ofArgentina by theInternational Practices Task Force of theCenter for Audit Quality as a country with a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance withU.S. GAAP. Consequently, PMI began to account for the operations of its Argentinian affiliates as highly inflationary, and to treat theU.S. dollar as the functional currency of the affiliates, effectiveJuly 1, 2018 .- "Fair value adjustment for equity security investments" reflects the adjustment resulting from share price movements in passive investments for publicly traded entities that are not controlled or influenced by PMI. Under
U.S. GAAP, such adjustments are required, sinceJanuary 1, 2018 , to be reflected directly in the income statement.
Reduced-Risk Products
- Reduced-risk products (“RRPs”) is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continuing smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. PMI's RRPs are smoke-free products that contain and/or generate far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke.
- "Heated tobacco units," or "HTUs," is the term PMI uses to refer to heated tobacco consumables, which include the company's HEETS, HEETS Creations, HEETS Dimensions, HEETS Marlboro and HEETS FROM
MARLBORO (defined collectively as HEETS),Marlboro Dimensions,Marlboro HeatSticks, Parliament HeatSticks and TEREA, as well as the KT&G-licensed brands, Fiit and Miix (outside ofKorea ). - Market share for HTUs is defined as the total sales volume for HTUs as a percentage of the total estimated sales volume for cigarettes and HTUs.
- Unless otherwise stated, all references to IQOS are to PMI's Platform 1 IQOS devices and heated tobacco consumables.
- The IQOS heat-not-burn device is a precisely controlled heating device into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol.
- "PMI heat-not-burn products" include licensed KT&G heat-not-burn products.
- "PMI HTUs" include licensed KT&G HTUs.
- “Total IQOS users” is defined as the estimated number of Legal Age (minimum 18 years) users of PMI heat-not-burn products for which PMI HTUs represented at least 5% of their daily tobacco consumption over the past seven days. Note: as of
December 2020 , PMI heat-not-burn products and HTUs include licensed KT&G heat-not-burn products and HTUs, respectively. - The estimated number of adults who have "switched to IQOS and stopped smoking" reflects:
- for markets where there are no heat-not-burn products other than PMI heat-not-burn products: daily individual consumption of PMI HTUs represents the totality of their daily tobacco consumption in the past seven days;
- for markets where PMI heat-not-burn products are among other heat-not-burn products: daily individual consumption of HTUs represents the totality of their daily tobacco consumption in the past seven days, of which at least 70% is PMI HTUs.
Note: as of
IQOS in
- On
April 30, 2019 , theU.S. Food and Drug Administration (FDA) announced that the marketing of a version of PMI's Platform 1 product, namely, IQOS 2.4, together with its heated tobacco units (the term PMI uses to refer to heated tobacco consumables), is appropriate for the protection of public health and authorized it for sale in theU.S. The FDA’s decision followed its comprehensive assessment of PMI’s premarket tobacco product applications (PMTAs) submitted to the Agency in 2017. - In the third quarter of 2019, PMI brought IQOS 2.4 and three variants of its heated tobacco units to the
U.S. through its license with Altria Group, Inc., whose subsidiary,Philip Morris USA Inc. , is responsible for marketing the product and complying with the provisions set forth in theFDA's marketing orders. - On
July 7, 2020 , the FDA authorized the marketing of a version of PMI's Platform 1 product, namely, IQOS 2.4, together with its heated tobacco units, as a Modified Risk Tobacco Product (MRTP). In doing so, the agency found that an IQOS exposure modification order is appropriate to promote the public health. The decision followed a review of the extensive scientific evidence package PMI submitted to the FDA inDecember 2016 to support its MRTP applications. - On
December 7, 2020 , the FDA confirmed that the marketing of a version of PMI's Platform 1 product, namely, IQOS 3, is appropriate for the protection of public health and authorized it for sale in theU.S. The FDA’s decision followed an assessment of a PMI's PMTA filed with the agency inMarch 2020 . - Shipment volume of heated tobacco units to the
U.S. is included in the heated tobacco unit shipment volume of theAmericas segment. Revenues from shipments of Platform 1 devices, heated tobacco units and accessories to Altria Group, Inc. for sale under license in theU.S. are included in Net Revenues of theAmericas . - In
April 2020 , affiliates of British American Tobacco plc (BAT) filed a complaint against PMI,Philip Morris Products S.A. , Altria Group, Inc., and its subsidiaries before theInternational Trade Commission (ITC). OnMay 14, 2021 , the administrative law judge issued an Initial and Recommended Determination (ID/RD) finding that the IQOS Platform 1 product commercialized in theU.S. infringes two of the three patents asserted by Plaintiffs, recommending that the ITC issue a Limited Exclusion Order (LEO) against infringing products and recommending against a cease-and-desist order (CDO), as well as recommending against a bond pending Presidential review of the ITC's Final Determination (FD). OnSeptember 29, 2021 , the ITC issued its FD, in which it upheld the finding of infringement in the ID and found a subsequent violation. The ITC issued a LEO prohibiting the importation of infringing tobacco heating articles and components thereof and CDOs againstPhilip Morris USA, Inc. andAltria Client Services, LLC . The case is now in a 60-day Presidential Review Period. PMI will appeal the patent and statutory issues at the appropriate time and has contingency plans underway, including domestic production. Furthermore, BAT lawsuits based on the same patent families have repeatedly and universally failed in European courts and theEuropean Patent Office . The decision has no bearing outsidethe United States .
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Appendix 1 |
|||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||
Key Market Data |
|||||||||||||||||||||||||||||||||||||||||||
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||||||||||||||||||
Quarters Ended |
|||||||||||||||||||||||||||||||||||||||||||
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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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
|
679.6 |
|
674.3 |
|
0.8 |
|
|
188.3 |
|
184.4 |
|
2.1 |
|
|
164.8 |
|
165.5 |
|
(0.4 |
) |
|
23.5 |
|
19.0 |
|
23.8 |
|
|
28.0 |
|
28.0 |
|
— |
|
|
3.6 |
|
3.0 |
|
0.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
9.0 |
|
9.8 |
|
(8.0 |
) |
|
3.7 |
|
4.2 |
|
(10.8 |
) |
|
3.6 |
|
4.1 |
|
(11.7 |
) |
|
0.1 |
|
— |
|
— |
|
|
44.0 |
|
45.3 |
|
(1.3 |
) |
|
0.6 |
|
0.5 |
|
0.1 |
|
|
|
|
20.5 |
|
20.4 |
|
0.7 |
|
|
7.3 |
|
7.4 |
|
(1.1 |
) |
|
6.8 |
|
7.0 |
|
(3.8 |
) |
|
0.6 |
|
0.4 |
|
50.0 |
|
|
35.8 |
|
36.4 |
|
(0.6 |
) |
|
2.8 |
|
1.9 |
|
0.9 |
|
|
|
|
19.2 |
|
18.8 |
|
2.1 |
|
|
9.4 |
|
9.7 |
|
(3.1 |
) |
|
7.3 |
|
8.2 |
|
(11.1 |
) |
|
2.1 |
|
1.5 |
|
41.0 |
|
|
52.9 |
|
52.1 |
|
0.8 |
|
|
10.8 |
|
7.8 |
|
3.0 |
|
|
|
|
14.0 |
|
13.5 |
|
3.4 |
|
|
5.3 |
|
5.1 |
|
3.8 |
|
|
4.5 |
|
4.5 |
|
(0.3 |
) |
|
0.8 |
|
0.6 |
|
32.7 |
|
|
38.0 |
|
37.8 |
|
0.2 |
|
|
6.0 |
|
4.7 |
|
1.3 |
|
|
|
|
12.1 |
|
11.7 |
|
3.1 |
|
|
3.4 |
|
3.7 |
|
(9.1 |
) |
|
3.2 |
|
3.6 |
|
(10.1 |
) |
|
0.1 |
|
0.1 |
|
25.3 |
|
|
32.1 |
|
32.2 |
|
(0.1 |
) |
|
1.1 |
|
0.9 |
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||||||||||||
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|
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|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
59.3 |
|
59.8 |
|
(0.9 |
) |
|
18.8 |
|
18.6 |
|
0.7 |
|
|
15.0 |
|
15.5 |
|
(3.8 |
) |
|
3.8 |
|
3.1 |
|
23.3 |
|
|
32.0 |
|
31.8 |
|
0.2 |
|
|
6.9 |
|
5.8 |
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
5.4 |
|
5.5 |
|
(1.6 |
) |
|
2.3 |
|
2.4 |
|
(4.2 |
) |
|
2.3 |
|
2.4 |
|
(5.0 |
) |
|
— |
|
— |
|
— |
|
|
40.8 |
|
36.9 |
|
3.9 |
|
|
1.1 |
|
0.4 |
|
0.7 |
|
|
|
|
|
36.1 |
|
32.1 |
|
12.5 |
|
|
16.0 |
|
13.5 |
|
18.4 |
|
|
16.0 |
|
13.5 |
|
18.4 |
|
|
— |
|
— |
|
— |
|
|
44.2 |
|
42.0 |
|
2.2 |
|
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
|
||||||||||||||||||
South & |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
74.3 |
|
70.1 |
|
6.0 |
|
|
20.8 |
|
19.8 |
|
5.1 |
|
|
20.8 |
|
19.8 |
|
5.1 |
|
|
— |
|
— |
|
— |
|
|
28.0 |
|
28.2 |
|
(0.2 |
) |
|
— |
|
— |
|
— |
|
|
|
|
14.4 |
|
17.5 |
|
(17.7 |
) |
|
8.9 |
|
11.7 |
|
(23.8 |
) |
|
8.9 |
|
11.7 |
|
(24.1 |
) |
|
— |
|
— |
|
— |
|
|
61.9 |
|
66.8 |
|
(4.9 |
) |
|
0.3 |
|
— |
|
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
2.3 |
|
3.2 |
|
(28.0 |
) |
|
0.8 |
|
1.0 |
|
(19.0 |
) |
|
0.8 |
|
1.0 |
|
(19.0 |
) |
|
— |
|
— |
|
— |
|
|
33.7 |
|
29.8 |
|
3.9 |
|
|
— |
|
— |
|
— |
|
|
|
|
39.7 |
|
40.8 |
|
(2.8 |
) |
|
13.6 |
|
11.9 |
|
14.6 |
|
|
5.4 |
|
4.6 |
|
18.4 |
|
|
8.2 |
|
7.3 |
|
12.2 |
|
|
38.3 |
|
36.9 |
|
1.4 |
|
|
22.9 |
|
20.4 |
|
2.5 |
|
|
|
|
19.2 |
|
20.2 |
|
(5.2 |
) |
|
3.7 |
|
3.9 |
|
(5.9 |
) |
|
2.5 |
|
2.7 |
|
(7.1 |
) |
|
1.2 |
|
1.2 |
|
(3.2 |
) |
|
19.2 |
|
19.5 |
|
(0.3 |
) |
|
6.1 |
|
6.0 |
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
||||||||||||||||||
|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
8.4 |
|
8.6 |
|
(2.1 |
) |
|
4.8 |
|
4.9 |
|
(2.5 |
) |
|
4.8 |
|
4.9 |
|
(2.5 |
) |
|
— |
|
— |
|
— |
|
|
56.6 |
|
56.8 |
|
(0.2 |
) |
|
— |
|
— |
|
— |
|
|
|
|
7.8 |
|
7.7 |
|
0.8 |
|
|
5.0 |
|
4.8 |
|
3.9 |
|
|
5.0 |
|
4.8 |
|
3.8 |
|
|
— |
|
— |
|
— |
|
|
64.6 |
|
62.7 |
|
1.9 |
|
|
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% |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Appendix 2 |
|||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||
Key Market Data |
|||||||||||||||||||||||||||||||||||||||||||
|
|
|
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|
|
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|
|
|
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|
|
|
|
|
|
||||||||||||||||||
Nine Months Ended |
|||||||||||||||||||||||||||||||||||||||||||
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 |
|
1,946.1 |
|
1,897.3 |
|
2.6 |
|
|
536.1 |
|
528.2 |
|
1.5 |
|
|
466.5 |
|
473.8 |
|
(1.6 |
) |
|
69.6 |
|
54.4 |
|
27.9 |
|
|
27.3 |
|
27.9 |
|
(0.6 |
) |
|
3.5 |
|
2.9 |
|
0.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
26.3 |
|
28.0 |
|
(6.1 |
) |
|
11.6 |
|
12.7 |
|
(8.3 |
) |
|
11.4 |
|
12.5 |
|
(8.8 |
) |
|
0.2 |
|
0.1 |
|
36.9 |
|
|
43.7 |
|
44.9 |
|
(1.2 |
) |
|
0.6 |
|
0.5 |
|
0.1 |
|
|
|
|
56.5 |
|
56.4 |
|
0.1 |
|
|
21.6 |
|
22.0 |
|
(1.4 |
) |
|
20.0 |
|
20.8 |
|
(4.0 |
) |
|
1.7 |
|
1.2 |
|
44.2 |
|
|
38.3 |
|
38.9 |
|
(0.6 |
) |
|
3.0 |
|
2.1 |
|
0.9 |
|
|
|
|
53.0 |
|
50.8 |
|
4.2 |
|
|
28.9 |
|
26.7 |
|
8.1 |
|
|
22.4 |
|
22.8 |
|
(1.5 |
) |
|
6.5 |
|
4.0 |
|
62.8 |
|
|
52.9 |
|
52.0 |
|
0.9 |
|
|
11.1 |
|
7.6 |
|
3.5 |
|
|
|
|
37.2 |
|
35.0 |
|
6.4 |
|
|
13.9 |
|
13.6 |
|
2.3 |
|
|
11.7 |
|
12.1 |
|
(2.7 |
) |
|
2.2 |
|
1.6 |
|
40.9 |
|
|
37.4 |
|
38.9 |
|
(1.5 |
) |
|
5.9 |
|
4.5 |
|
1.4 |
|
|
|
|
32.2 |
|
31.7 |
|
1.4 |
|
|
10.2 |
|
10.1 |
|
1.1 |
|
|
9.8 |
|
9.8 |
|
0.5 |
|
|
0.4 |
|
0.3 |
|
18.0 |
|
|
31.5 |
|
31.5 |
|
— |
|
|
1.2 |
|
1.0 |
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
163.7 |
|
163.4 |
|
0.2 |
|
|
52.0 |
|
51.6 |
|
0.9 |
|
|
40.4 |
|
42.3 |
|
(4.5 |
) |
|
11.7 |
|
9.3 |
|
25.3 |
|
|
31.5 |
|
32.3 |
|
(0.8 |
) |
|
7.2 |
|
6.1 |
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
16.2 |
|
15.8 |
|
2.0 |
|
|
6.6 |
|
6.2 |
|
5.3 |
|
|
6.4 |
|
6.2 |
|
3.5 |
|
|
0.2 |
|
— |
|
— |
|
|
41.5 |
|
38.5 |
|
3.0 |
|
|
0.9 |
|
0.2 |
|
0.7 |
|
|
|
|
|
92.1 |
|
86.4 |
|
6.6 |
|
|
40.4 |
|
35.3 |
|
14.6 |
|
|
40.4 |
|
35.3 |
|
14.6 |
|
|
— |
|
— |
|
— |
|
|
43.9 |
|
40.8 |
|
3.1 |
|
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
South & |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
217.4 |
|
201.4 |
|
7.9 |
|
|
60.8 |
|
58.3 |
|
4.3 |
|
|
60.8 |
|
58.3 |
|
4.3 |
|
|
— |
|
— |
|
— |
|
|
28.0 |
|
28.9 |
|
(0.9 |
) |
|
— |
|
— |
|
— |
|
|
|
|
41.2 |
|
47.0 |
|
(12.3 |
) |
|
25.6 |
|
32.1 |
|
(20.3 |
) |
|
25.5 |
|
32.1 |
|
(20.6 |
) |
|
0.1 |
|
— |
|
— |
|
|
62.2 |
|
68.4 |
|
(6.2 |
) |
|
0.3 |
|
— |
|
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
7.1 |
|
8.3 |
|
(14.5 |
) |
|
2.3 |
|
2.5 |
|
(6.4 |
) |
|
2.3 |
|
2.5 |
|
(6.4 |
) |
|
— |
|
— |
|
— |
|
|
32.4 |
|
29.6 |
|
2.8 |
|
|
— |
|
— |
|
— |
|
|
|
|
107.3 |
|
111.4 |
|
(3.7 |
) |
|
41.6 |
|
38.8 |
|
7.2 |
|
|
16.8 |
|
17.7 |
|
(4.9 |
) |
|
24.7 |
|
21.1 |
|
17.3 |
|
|
38.6 |
|
36.7 |
|
1.9 |
|
|
23.0 |
|
20.0 |
|
3.0 |
|
|
|
|
54.1 |
|
54.8 |
|
(1.4 |
) |
|
10.7 |
|
11.3 |
|
(5.3 |
) |
|
7.2 |
|
7.8 |
|
(7.6 |
) |
|
3.5 |
|
3.5 |
|
(0.3 |
) |
|
19.7 |
|
20.7 |
|
(1.0 |
) |
|
6.4 |
|
6.4 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
26.1 |
|
24.3 |
|
7.5 |
|
|
14.6 |
|
14.9 |
|
(2.4 |
) |
|
14.6 |
|
14.9 |
|
(2.4 |
) |
|
— |
|
— |
|
— |
|
|
55.8 |
|
61.5 |
|
(5.7 |
) |
|
— |
|
— |
|
— |
|
|
|
|
22.6 |
|
21.9 |
|
3.0 |
|
|
14.1 |
|
13.6 |
|
3.9 |
|
|
14.1 |
|
13.6 |
|
3.7 |
|
|
0.1 |
|
— |
|
— |
|
|
62.5 |
|
62.0 |
|
0.5 |
|
|
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 |
||||||
|
||||||||||
Diluted Earnings Per Share (EPS) |
||||||||||
($ in millions, except per share data) / (Unaudited) |
||||||||||
|
|
|
|
|
|
|
||||
Quarters Ended |
Diluted EPS |
Nine Months Ended |
||||||||
|
|
|||||||||
$ |
1.55 |
|
2021 Diluted Earnings Per Share (1) |
$ |
4.48 |
|
|
|||
$ |
1.48 |
|
2020 Diluted Earnings Per Share (1) |
$ |
3.90 |
|
|
|||
$ |
0.07 |
|
Change |
$ |
0.58 |
|
|
|||
4.7 |
% |
% Change |
14.9 |
% |
|
|||||
|
|
|
|
|||||||
|
Reconciliation: |
|
|
|||||||
$ |
1.48 |
|
2020 Diluted Earnings Per Share (1) |
$ |
3.90 |
|
|
|||
— |
|
2020 Asset impairment and exit costs |
0.04 |
|
|
|||||
— |
|
2020 Fair value adjustment for equity security investments |
0.04 |
|
|
|||||
(0.06 |
) |
2020 Tax items |
(0.06 |
) |
|
|||||
(0.02 |
) |
2021 Asset impairment and exit costs |
(0.09 |
) |
|
|||||
— |
|
2021 Saudi Arabia customs assessments |
(0.14 |
) |
|
|||||
(0.03 |
) |
2021 Asset acquisition cost |
(0.03 |
) |
|
|||||
0.02 |
|
2021 Equity investee ownership dilution |
0.02 |
|
|
|||||
— |
|
2021 Tax items |
— |
|
|
|||||
0.04 |
|
Currency |
0.18 |
|
|
|||||
0.01 |
|
Interest |
(0.01 |
) |
|
|||||
0.04 |
|
Change in tax rate |
0.07 |
|
|
|||||
0.07 |
|
Operations (2) |
0.56 |
|
|
|||||
$ |
1.55 |
|
2021 Diluted Earnings Per Share (1) |
$ |
4.48 |
|
|
|||
|
|
|
|
|
|
|
||||
(1) Basic and diluted EPS were calculated using the following (in millions): |
||||||||||
|
|
|
|
|
|
|
||||
Quarters Ended |
|
Nine Months Ended |
||||||||
|
|
|
||||||||
2021 |
2020 |
|
2021 |
2020 |
||||||
|
|
Net Earnings attributable to PMI |
|
|
||||||
7 |
5 |
Less: Distributed and undistributed earnings |
21 |
15 |
||||||
|
|
Net Earnings for basic and diluted EPS |
|
|
||||||
|
|
|
|
|
||||||
1,558 |
1,558 |
Weighted-average shares for basic EPS |
1,558 |