NEW YORK--(BUSINESS WIRE)--Sep. 29, 2016--
Regulatory News:
Philip Morris International Inc.’s (NYSE/Euronext Paris: PM) senior
management reviews the company’s business outlook and long-term growth
strategies at a two-day investor meeting starting today at its
Operations Center in Lausanne, Switzerland.
“The core components of our business model hold great promise for our
shareholders and our broader stakeholder base. We will continue to lead
the combustible product category, leveraging the great strengths of our
existing business to deliver against our current growth algorithm,” said
André Calantzopoulos, Chief Executive Officer.
“We aim to become the undisputed leader of the Reduced-Risk Product
category with the highly ambitious objective of having RRPs ultimately
replace combustible products to the benefit of adult smokers, society
and our company.”
“We are very well positioned to deliver against these two fundamental
strategic engines given our innovation pipeline, commercial, regulatory
and fiscal capabilities, manufacturing footprint and, above all, our
organizational readiness and commitment.”
Webcast Details
Presentations and Q&A sessions will be webcast live both days at www.pmi.com/2016InvestorDay
in a listen-only mode beginning on Thursday, September 29, 2016, at
approximately 9:00 a.m. CET and concluding at approximately 5:30 p.m.
CET that day. The webcast will resume on September 30, 2016, at
approximately 10:10 a.m. CET and conclude at approximately 12:00 noon
CET. A copy of the remarks and slides will be made available at the
start of each presentation at www.pmi.com/2016InvestorDay.
The audio webcast may also be accessed on iOS or Android devices by
downloading PMI’s free Investor Relations Mobile Application at www.pmi.com/irapp.
An archive of the webcast will be available until Friday, October 28,
2016.
2016 Full-Year Forecast
-
PMI revises for currency only, and narrows, its 2016 full-year
reported diluted EPS forecast to a range of $4.53 to $4.58, at
prevailing exchange rates, versus $4.42 in 2015. Excluding an
unfavorable currency impact, at prevailing exchange rates, of
approximately $0.35 for the full-year 2016, the diluted EPS range
represents a projected increase of approximately 10.5% to 11.5% versus
adjusted diluted EPS of $4.42 in 2015.
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This forecast does not include any share repurchases in 2016.
-
The adjusted diluted EPS of $4.42 in 2015 is calculated as reported
diluted EPS of $4.42, plus a $0.03 per share charge related to asset
impairment and exit costs, less a $0.03 per share benefit related to
discrete tax items.
-
This forecast excludes the impact of any future acquisitions,
unanticipated asset impairment and exit cost charges, future changes
in currency exchange rates, and any unusual events. Factors described
in the Forward-Looking and Cautionary Statements section at the end of
this release represent continuing risks to these projections.
Highlights
Presentations will be made by: André Calantzopoulos, Chief Executive
Officer; Werner Barth, Senior Vice President, Marketing & Sales; Manuel
Peitsch, Chief Scientific Officer, Reduced-Risk Products; Miroslaw
Zielinski, President, Reduced-Risk Products; Frederic de Wilde,
President, European Union Region; Drago Azinovic, President, Eastern
Europe, Middle East & Africa Region and PMI Duty Free; Martin King,
President Asia Region; Jeanne Pollès, President, Latin America & Canada
Region; and Jacek Olczak, Chief Financial Officer.
Volume:
-
For the full-year 2016, PMI forecasts a total cigarette industry
volume decline of 2.0%-2.5%, excluding China and the U.S.; and
-
For the full-year 2016, PMI anticipates its cigarette shipment volume,
excluding China and the U.S., to decline in line with its August
year-to-date decline of 3.9%.
Net Revenues, Operating Companies Income (“OCI”),
EPS and Other Financial Measures:
-
PMI expects its currency-neutral adjusted diluted EPS in the third
quarter of 2016 to be flat to slightly up versus the third quarter of
2015;
-
PMI continues to anticipate significant currency-neutral adjusted
diluted EPS growth in the fourth quarter of 2016;
-
PMI continues to anticipate a full-year 2016 pricing variance of
around 6% of 2015 net revenues;
-
Until 2018, PMI continues to target net revenues and adjusted OCI
growth, excluding currency and acquisitions, of 4%-6% and 6%-8%,
respectively, and, in the absence of share repurchases, annual
currency-neutral EPS growth modestly above its target OCI results;
-
For the full-year 2016, PMI expects its total cost base, including
RRPs, to increase by approximately 1%, excluding currency;
-
Going forward, PMI expects its total cost base, including incremental
costs related to the continued roll-out of RRPs, to increase by
approximately 1%-3%, excluding currency;
-
For the full-year 2016, PMI expects to exceed its annual adjusted OCI
growth target of 6%-8%, excluding currency;
-
PMI envisages being able to revisit its currency-neutral net revenue
and adjusted OCI growth targets once, as anticipated, RRPs become
accretive to its bottom line in 2018;
-
PMI targets Regional annual average adjusted OCI growth, excluding
currency and RRPs, over the mid to long-term of:
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Mid single-digit in the EU;
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Low double-digits in EEMA;
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High single-digit in Asia; and
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High single-digit in Latin America & Canada;
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To accelerate its RRP capacity, PMI increases its full-year 2016
anticipated capital expenditures by an $100 million to $1.2 billion
and anticipates cigarette-related capital expenditures to be at levels
generally offset by depreciation;
-
Reflecting further incremental investment behind RRP capacity, PMI
anticipates capital expenditures of approximately $1.5 billion in
2017; and
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PMI expects its free cash flow in 2016 to be modestly above the $6.9
billion level of 2015, calculated as net cash provided by operating
activities of $7.9 billion less capital expenditures of $1.0 billion.
Reduced-Risk Products:
-
PMI continues to expect RRPs to approach break-even OCI in 2017 and to
start contributing positively to OCI in 2018;
-
PMI reconfirms its target of 30 to 50 billion units in incremental
volume from RRPs, net of switching of its existing adult consumers,
which would generate additional OCI of $0.7 billion to $1.2 billion by
2020; and indicates its increasing confidence in reaching the upper
end of this range;
-
PMI announces that it is expanding its planned annual RRP production
capacity to 50 billion units, up 20 billion units from its initial
planned capacity of 30 billion units, by the end of 2017;
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PMI anticipates having approximately 7 billion units of heated tobacco
stick capacity available for commercialization in 2016 and reaching
installed annual capacity of approximately 15 billion units by the end
of the year;
-
PMI announces that the estimated national market share of HeatSticks
in Japan reached 3.3% August quarter-to-date;
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PMI confirms its plans to introduce iQOS into key cities in 20
markets by the end of 2016, and announces its expectation to be
present in key cities in 30-35 markets by the end of 2017;
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PMI remains on track to file with the U.S. FDA its Modified Risk
Tobacco Product Application by the end of 2016 and plans to file a
Premarket Tobacco Application in early 2017;
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PMI is preparing to conduct a city test of its Platform 2 RRP in early
2017 and remains on track to conduct a city test of its Platform 3 RRP
in the second half of 2017;
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PMI announces the release of its first “next-generation” Platform 4
RRP, which leverages new proprietary vaporization technology (“MESH”),
and its plan to conduct a city test in the United Kingdom at the end
of 2016; and
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PMI introduces its new RRP product brand architecture, leveraging the
leadership of iQOS to encompass all four RRP product platforms.
Key Terms
References to total international cigarette market, defined as worldwide
cigarette volume excluding the United States, total cigarette market,
total market and market shares are PMI tax-paid estimates based on the
latest available data from a number of internal and external sources and
may, in defined instances, exclude the People's Republic of China and/or
PMI's duty free business. National market share for HeatSticks in
Japan is defined as the total sales volume for HeatSticks as a
percentage of the total estimated sales volume for cigarettes and HeatSticks.
"EEMA" is defined as Eastern Europe, Middle East and Africa and includes
PMI's international duty free business. The term “net revenues” refers
to operating revenues from the sale of our products, excluding excise
taxes and net of sales and promotion incentives. Operating companies
income, or “OCI,” is defined as operating income, excluding general
corporate expenses and the amortization of intangibles, plus equity
(income)/loss in unconsolidated subsidiaries, net. PMI's management
evaluates business segment performance and allocates resources based on
OCI. Management also reviews OCI, OCI margins 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,
discrete tax items and unusual items), as well as free cash flow,
defined as net cash provided by operating activities less capital
expenditures, and net debt. PMI believes it is appropriate to disclose
these measures as they improve comparability and help investors analyze
business performance and trends. Non-GAAP measures used in this release
should be considered neither in isolation, nor as a substitute for the
financial measures prepared in accordance with U.S. GAAP. Comparisons
are to the same prior-year period unless otherwise stated. PMI’s RRPs
are in various stages of development and commercialization, and we are
conducting extensive and rigorous scientific studies to determine
whether we can support claims for such products of reduced exposure to
harmful and potentially harmful constituents in smoke, and ultimately
claims of reduced disease risk, when compared to smoking cigarettes.
Before making any such claims, we will rigorously evaluate the full set
of data from the relevant scientific studies to determine whether they
substantiate reduced exposure or risk. Any such claims may also be
subject to government review and authorization, as is the case in the
United States today. Trademarks and service marks in this press release
that are the registered property of, or licensed by, the subsidiaries of
PMI, are italicized.
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 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
June 30, 2016. PMI cautions that the foregoing list of important factors
is not a complete discussion of all potential risks and uncertainties.
PMI does not undertake to update any forward-looking statement that it
may make from time to time, except in the normal course of its public
disclosure obligations.
About Philip Morris International Inc. (“PMI”)
PMI is the world’s leading international tobacco company, with six of
the world's top 15 international brands and products sold in more than
180 markets. In addition to the manufacture and sale of cigarettes,
including Marlboro, the number one global cigarette brand, and
other tobacco products, PMI is engaged in the development and
commercialization of Reduced-Risk Products (“RRPs”). RRPs is the term
PMI uses to refer to products with the potential to reduce individual
risk and population harm in comparison to smoking cigarettes. Through
multidisciplinary capabilities in product development, state-of-the-art
facilities, and industry-leading scientific substantiation, PMI aims to
provide an RRP portfolio that meets a broad spectrum of adult smoker
preferences and rigorous regulatory requirements. For more information,
see www.pmi.com
and www.pmiscience.com.

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Source: Philip Morris International Inc.
Philip Morris International Inc.
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