Performance metrics overview

Notes: In the fourth quarter of 2022, we acquired Swedish Match, a market leader in oral nicotine delivery with a significant presence in the United States market. The Swedish Match acquisition is a key milestone in PMI’s transformation to becoming a smoke-free company. PMI consolidated statements of earnings for the year ended December 31, 2022, include the results of operations of Swedish Match from November 11, 2022 (acquisition date) to December 31, 2022, as presented in the Form 10-K for the fourth quarter and year ended December 31, 2022.

Following the Swedish Match acquisition and a review of PMI and Swedish Match’s combined product portfolio, PMI reclassified certain of its own products previously reported under its combustible tobacco product category to the newly created smoke-free product category to better reflect the characteristics of these products. Where applicable, prior years' KPIs have been recalculated to reflect the reclassification on a comparative basis. Impacted metrics are marked with (†).

In 2023, we plan to evaluate our published aspirations to ensure they remain ambitious, reasonable, and achievable in the context of a dynamic and evolving smoke-free industry, and impacts of our recent acquisitions.

¹ Figures pertain to total IQOS users, for definition see see pages 205-209 of PMI Integrated Report 2022.
² For definition of net revenues related to smoke-free products, see see pages 205-209 of PMI Integrated Report 2022. 2022 figure includes Swedish Match net revenues from November 11, 2022 (acquisition date) to December 31, 2022. 2021 exclude the impact related to the Saudi Arabia customs assessments
³ For definition of net revenues related to wellness and healthcare, see see pages 205-209 of PMI Integrated Report 2022. 2021 figure includes portion of net revenues reported after acquisition of Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc. that took place in the third quarter of 2021.
⁴ Including Swedish Match. For definition of available for sale, see pages 205-209 of PMI Integrated Report 2022.
⁵ Excluding PMI Duty Free. World Bank report issued in July 2022 is used on a comparative basis for income level classification. For definition of low- and middle-income markets, see pages 205-209 of PMI Integrated Report 2022.
⁶ These indicators are calculated based on millions of units. For definition of smoke-free products and combustible tobacco products, see pages 205-209 of PMI Integrated Report 2022. Smoke-free products shipment volume includes volume of smoke-free products that can be converted into cigarette equivalent units, such as heat-not-burn, e-vapor, and oral nicotine. Total shipment volume includes the listed smoke-free products as well as combustible tobacco products: cigarettes and other tobacco products expressed in cigarette equivalent units. Data does not include Swedish Match and wellness & healthcare products.
⁷ Adjusted R&D expenditure excludes asset acquisition cost related to OtiTopic, Inc. in 2021. Total reported R&D expenditure in 2021 including these items amounted to USD 617 million.
⁸ Direct spend focuses on materials used in the manufacture of our products; it includes tobacco leaf, direct materials, and electronic devices and accessories. Data excludes Swedish Match, Vectura Fertin Pharma.
⁹ Data reflects the number of factories operated and owned by PMI at the end of the respective year, including Swedish Match and Vectura Fertin Pharma. 2022 factories include 8 facilities producing heated tobacco units, 2 producing other smoke-free consumables and 14 Swedish Match owned facilities, primarily engaged in the production of smoke-free products.

In the fourth quarter of 2022, we acquired Swedish Match, a market leader in oral nicotine delivery with a significant presence in the United States market. The Swedish Match acquisition is a key milestone in PMI’s transformation to becoming a smoke-free company. PMI consolidated statements of earnings for the year ended December 31, 2022, include the results of operations of Swedish Match from November 11, 2022 (acquisition date) to December 31, 2022, as presented in the Form 10-K for the fourth quarter and year ended December 31, 2022.

Following the Swedish Match acquisition and a review of PMI and Swedish Match’s combined product portfolio, PMI reclassified certain of its own products previously reported under its combustible tobacco product category to the newly created smoke-free product category to better reflect the characteristics of these products. Where applicable, prior years' KPIs have been recalculated to reflect the reclassification on a comparative basis. Impacted metrics are marked with (†)." In 2023, we plan to evaluate our published 2025 aspirations to ensure they remain ambitious, reasonable, and achievable in the context of a dynamic and evolving smoke-free industry, and impacts of our recent acquisitions.

¹ Figures pertain to total IQOS users, for definition see pages 205-209 of PMI Integrated Report 2022.
² Including Swedish Match. For definition of available for sale, see pages 205-209 of PMI Integrated Report 2022.
³ Excluding PMI Duty Free. World Bank report issued in July 2022 is used on a comparative basis for income level classification. For definition of low- and middle-income markets, see pages 205-209 of PMI Integrated Report 2022.
⁴ Investments reflect research, product and commercial development, production capacity, scientific substantiation, and studies on adult smoker.
⁵ Data reflects the number of factories operated and owned by PMI at the end of the respective year, including Swedish Match and Vectura Fertin Pharma. 2022 factories include 8 facilities producing heated tobacco units, 2 producing other smoke-free consumables and 14 Swedish Match owned facilities, primarily engaged in the production of smoke-free products.
⁶ Direct spend focuses on materials used in the manufacture of our products; it includes tobacco leaf, direct materials, and electronic devices and accessories. Data excludes Swedish Match, Vectura Fertin Pharma.
⁷ Adjusted R&D expenditure excludes asset acquisition cost related to OtiTopic, Inc. in 2021. Total reported R&D expenditure in 2021 including these items amounted to USD 617 million.
⁸ R&D positions include scientists, engineers, technicians, and support staff. Comparable data for years prior to 2018 are not available as the scope of R&D positions changed following company organizational changes. Data includes Swedish Match, Vectura Fertin Pharma FTE.
⁹ IP5 jurisdictions are Europe (patents granted by the European Patent Office), China, South Korea, Japan, and the U.S.
¹⁰ Indicator introduced in 2021, replacing the indicator “number of compliance training sessions conducted on PMI’s Marketing Code,” following the release of new Marketing Codes.
¹¹ Total shipment volume includes cigarettes, OTPs, and smoke-free product consumables, See PMI's ESG KPI Protocol 2022 for further details.

In the fourth quarter of 2022, we acquired Swedish Match, a market leader in oral nicotine delivery with a significant presence in the United States market. The Swedish Match acquisition is a key milestone in PMI’s transformation to becoming a smoke-free company. PMI consolidated statements of earnings for the year ended December 31, 2022, include the results of operations of Swedish Match from November 11, 2022 (acquisition date) to December 31, 2022, as presented in the Form 10-K for the fourth quarter and year ended December 31, 2022.

Following the Swedish Match acquisition and a review of PMI and Swedish Match’s combined product portfolio, PMI reclassified certain of its own products previously reported under its combustible tobacco product category to the newly created smoke-free product category to better reflect the characteristics of these products. Where applicable, prior years' KPIs have been recalculated to reflect the reclassification on a comparative basis. Impacted metrics are marked with (†). In 2023, we plan to evaluate our published aspirations to ensure they remain ambitious, reasonable, and achievable in the context of a dynamic and evolving smoke-free industry, and impacts of our recent acquisitions.

¹ These indicators are calculated based on millions of units. For definition of smoke-free products and combustible tobacco products, see pages 205-209 of PMI Integrated Report 2022. Smoke-free products shipment volume includes volume of smoke-free products that can be converted into cigarette equivalent units, such as heat-not-burn, e-vapor, and oral nicotine. Total shipment volume includes the listed smoke-free products as well as combustible tobacco products: cigarettes and other tobacco products expressed in cigarette equivalent units. Data does not include Swedish Match and wellness & healthcare products.
² For definition of net revenues related to smoke-free products, see pages 205-209 of PMI Integrated Report 2022. 2022 figure includes Swedish Match net revenues from November 11, 2022 (acquisition date) to December 31, 2022. 2021 adjusted net revenues exclude the impact related to the Saudi Arabia customs assessments.

¹ For definition of net revenues related to wellness and healthcare, see pages 205-209 of PMI Integrated Report 2022. 2021 figure includes portion of net revenues reported after acquisition of Vectura Fertin Pharma that took place in the third quarter of 2021.

¹ For further details on the criteria used to determine if a market has a anti-littering program in place, please see PMI's ESG KPI Protocol 2022.
² In 2022 we redefined the minimum criteria which must be met by each market to be considered as having a take-back program in place. Shipment volume includes heated tobacco units, e-vapor cartridges, and e-vapor disposables. For more details please see the PMI’s ESG KPI Protocol 2022.
³ To meet our 2025 aspiration, we may consider either a type 1 or type 2 and/or type 3 product environmental statements as defined by ISO 14020:2022, as constituting an “eco-certification”. For further details please see PMI’s ESG KPI Protocol 2022.
⁴ For the definition of refreshed or repaired devices, please refer to PMI’s ESG KPI Protocol 2022.
⁵ Excludes disposable products and non-PMI designed devices. The effective recycling rate is calculated based on the proportion of devices sales volume from the markets covered by the CIRCLE program multiplied by the actual recycling rate of devices at the active CIRCLE hubs (weighted average), which includes actual recycling and energy recovery. Russia CIRCLE hub was discontinued in 2022 and is therefore excluded from the reported recycling numbers of 2022.
⁶ Recycling rate: percentage of the weight of each device that is recycled, weighted-average depending on device type and processing facility (includes 80% recycling, 6% incineration with energy recovery). 2022 data cover CIRCLE hubs in Hungary and Japan.
⁷ Prior years data has been restated to take in account more accurate computation of packaging material usage.

¹ Incorporating Vectura Fertin Pharma, as well as the 2022 acquisition of Swedish Match, PMI employed approximately 79,800 people worldwide at year-end 2022.
² For further details on how we measure progress on this KPI, please see PMI's ESG KPI Protocol 2022.
³ 2022 data based on a total of 58,190 employees maintained in PMI’s central HR system for a key date of November 1st.
⁴ We measure the engagement of our workforce using the employee Net Promoter Score (eNPS), following a methodology similar to that which we use to measure consumer engagement. The score can range from -100 to +100. The 2022 data excludes Russia as we didn't carry out the survey in Russia during 2022 (2021 and 2020 data excluding Russia would be 34 and 32, respectively)
⁵ For definition of contracted employee and contractor, see pages 205-209 of PMI Integrated Report 2022.
⁶ PMI employees and contracted employees: zero fatalities in 2022; contractors: 3 fatalities in 2022.
⁷ The indicator represents the percentage of employees who responded “good” or “very good” to the question “How would you rate your current psychological or emotional well-being at present?” in our regular employee listening survey.
⁸ Scope covers PMI’s working tool cars (representing 75% of PMI’s total fleet).
⁹ Scope covers manufacturing facilities producing more than 3 billion cigarette equivalents annually. 2022 data excludes Russia, due to sanctions applied to the country.
¹⁰ Our diversity and inclusion data cover around 94% of PMI’s total workforce, as they exclude fixed-term employees and those on salary continuation.
¹¹ For definitions of management positions, managers, directors, senior roles, and senior leaders see pages 205-209 of PMI Integrated Report 2022.
¹² For further details on how we measure progress on this KPI, please see PMI’s ESG KPI Protocol 2022.
¹³ Data as of March 11, 2023 (25 Company Management members, of whom 4 were women). See PMI Annual Report 2022 for further details.
¹⁴ Data as of March 23, 2022 (3 members of PMI’s Board of Directors, of whom 12 were women). See PMI 2023 Proxy Statement for further details.
¹⁵ The mean gender pay gap is calculated as the percentage difference between the sum of annual base salary, bonus, and stock options.
¹⁶ This figure is an estimate based on the total headcount within functions where the primary skills required for employees in their daily responsibilities related to science, technology, engineering, or mathematics. Historical data has been re-stated remove fixed term employees and those on salary continuation, aligned to other diversity & inclusion metrics.
¹⁷ Employees holding management roles in revenue-generating functions (i.e., functions responsible for core business objectives or profit and loss).
¹⁸ For the purposes of measuring progress against this indicator, PMI uses the nationality data of employees recorded in our HR systems. The determination of Asian nationalities is based on the regional groupings as listed by the United Nations and we consider the following regions; Central and Southern Asia, Eastern and South-Eastern Asia.
¹⁹ Considers Managing Directors and their direct reports within PMI markets & clusters who have local nationality registered in PMI HR systems. Excludes countries where employee national identity is not collected in PMI HR systems.

¹ Data excludes Switzerland and China. For further details on how we calculate the proportion of farmers making a living income please see PMI's ESG KPI Protocol 2022.
² For further details on how we calculate the prevalence of child labor in PMI's tobacco supply chain please see PMI’s ESG KPI Protocol 2022.
³ Includes children of any age found to be involved in hazardous work.
⁴ Includes light work only.
⁵ Estimated based on surveys that indicate whether the farmer has an improved drinking water source within 1 km or 30 minutes round trip. Data excludes China.
⁶ Scope is limited to farmers that provide accommodation to workers (approximately 2 percent of the total farmer base in 2022).

¹ Intensity is measured per million cigarette equivalent sold.
² Excludes electricity consumption from fleet.
³ Emissions from PMI-operated IQOS stores are partially excluded from scope 1+2 emissions, as de minimis. In 2022 a portion of PMI‘s retail stores (representing approx. 10% of total retail surface area) have been included in the scope 1+2 emissions.
⁴ 2022 figure includes carbon offsetting certificates purchased in our factories in Czech Republic, Lithuania, Mexico, Portugal, Switzerland, and our 2022 figure includes carbon credit certificates retired in the name of our factories in Argentina, Brazil, Czech Republic, Greece, Indonesia (3 sites, differentiated between 6 reporting entities for certifications purposes), Lithuania, Mexico, Pakistan, Portugal, Senegal, and Switzerland—in total 13 manufacturing sites—as well as our Operations Center in Switzerland and our Mexico market.
⁵ For further details on Scope 3 calculation please refer to the PMI Value Chain Methodology. In 2022, we further improved our carbon footprint model and data accuracy; improvements relate to, for example, increased coverage of primary data collected from direct materials suppliers and integration of emissions related to fleet purchase. This lead to previous years’ being restated accordingly.

¹ For definitions, please see PMI’s Zero Deforestation Manifesto and PMI's ESG KPI Protocol 2022.
² Indicator is based on the World Resources Institute’s volumetric benefit accounting methodology and is verified by an external third party.
³ Blue water refers to water used for irrigation, excluding rainfall.
⁴ Refers to amount of freshwater withdrawn from Municipal sources.
⁵ Water intensity is measured in cubic meters per million cigarettes produced equivalent. In 2021, we updated our methodology to account for the conversion factor of heated tobacco units to conventional cigarettes of 5:1 and have restated historical data accordingly.
⁶ Aspiration pertains to priority manufacturing facilities identified based on site overall risk in relation to the watershed, water withdrawal, water consumption, product portfolio, and 13 other strategic considerations.
⁷ Disposal to landfill includes sanitary waste, canteen waste, and waste mandated by authorities to be disposed of in landfill.
⁸ Scope: Manufacturing facilities producing more than three billion cigarette equivalents annually.
⁹ Fines above USD 10,000 (or equivalent in converted currency).

¹ In 2021 we adjusted our methodology to account for employees as of year end.

¹ Our assessment prioritize countries which are assessed as highest risks from a human rights standpoint. They are determined based on key parameters such as PMI’s footprint and the country’s human rights risk profile, as determined by internationally recognized organizations. For further details please see PMI's ESG KPI Protocol 2022.

¹ Suppliers refer to tier 1 suppliers (parent companies).
² Total supply chain spend includes procurement spend and tobacco leaf sourcing spend.
³ Sustainable sourcing is determined based on a minimum threshold score of 45 out of 100 in EcoVadis (direct materials) or 125 out of 200 in RBA with no open priority issues (electronics). All tobacco purchased by contracted farmers, thereby covered by PMI’s integrated production system, is considered sustainable.
⁴ Procurement spend excludes tobacco leaf sourcing.
⁵ Suppliers’ criticality is evaluated considering spend segmentation and nature of component, as well as supply flexibility (single-source/not easily substitutable) as relevant. 2022 figure includes tier 1 suppliers of direct materials and electronics, tier 2 directly managed electronic suppliers, and tobacco leaf suppliers.
⁶ EcoVadis score ranges from 0 to 100, with a minimum threshold score of 45 demonstrating satisfactory sustainability performance.
⁷ This figure includes 27 out of 28 of our electronic critical suppliers.
⁸ This figure includes 42 out of 46 of our electronic critical suppliers sites.
⁹ Following the introduction in 2022 of PMI's sustainable supply chain model, data on tobacco farmers contracted by PMI tobacco suppliers is not available.
¹⁰ Tobacco farmers whose tobacco is included in PMI packed products.
¹¹ Data refer to parent companies.