We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Philip Morris International Inc | NYSE:PM | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.95 | 0.99% | 97.00 | 97.15 | 95.88 | 96.30 | 1,216,523 | 18:00:50 |
2022 Full-Year Reported Diluted EPS of $5.81, Adjusted Diluted EPS of $5.98 and Adjusted Diluted EPS Excluding Russia and Ukraine of $5.34,
Representing Currency-Neutral Growth of 11.9%;
Provides 2023 EPS Forecast
Regulatory News:
Philip Morris International Inc. (NYSE: PM) today announces its 2022 fourth-quarter and full-year results. Growth rates presented in this press release on an organic basis reflect adjusted results, excluding currency, acquisitions and disposals. Given the impact of the War in Ukraine on the company’s operations in Russia and Ukraine in 2022, PMI is also providing figures and comparisons excluding the company’s operations in these two markets for all historical periods. To provide more clarity on the full extent of the company's business in 2023, PMI will include both Ukraine and Russia in its 2023 forecast and adjusted reporting. A glossary of key terms, definitions and explanatory notes is included at the end of this press release. Adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures are included in the schedules to this press release.
2022 FULL-YEAR & FOURTH-QUARTER HIGHLIGHTS
Fourth-Quarter
Full-Year
Reported
Adjusted ex-RU/UA
Reported
Adjusted Ex-RU/UA
Total Shipment Volume Growth
1.2%
2.6%
1.6%
3.2%
HTU Shipment Volume (units billion)
32.0
26.7
109.2
89.3
- Growth
26.1%
37.5%
14.9%
21.5%
Net Revenue Growth
0.6%
7.9%
(a)
1.1%
7.7%
(a)
Operating Income Growth (Decline)
(0.8)%
10.3%
(a)
(5.6)%
6.2%
(a)
OI Margin Increase (Decrease)
(0.5)pp
0.8 pp
(a)
(2.7)pp
(0.6) pp
(a)
Diluted Earnings per Share
$1.54
$1.23
$5.81
$5.34
- Growth (Decline)
14.9%
20.8%
(b)
(0.3)%
11.9%
(b)
(a) On an organic basis (b) Excluding currency Note: "RU" stands for Russia; "UA" stands for Ukraine
Full-Year
Fourth-Quarter
"Despite the challenging operating environment in 2022, due to the war in Ukraine, as well as supply-chain and global inflationary pressures, we delivered very strong full-year adjusted results led by the continued growth of IQOS and a robust performance in the combustible tobacco category," said Jacek Olczak, Chief Executive Officer.
"We are well on our way to becoming a majority smoke-free company, with smoke-free products accounting for almost one-third of our total net revenues for the year. With the acquisition of Swedish Match and the agreement to take full control of IQOS in the U.S. in April 2024, we achieved two important milestones in our smoke-free transformation in 2022 and are well positioned to accelerate this journey."
"We enter 2023 as a truly global smoke-free champion, with two of the industry's leading smoke-free brands, IQOS and ZYN, and continued innovation across our broader smoke-free product portfolio. For the year, we forecast organic top-line growth of 7% to 8.5% and currency-neutral adjusted diluted EPS growth of 7% to 9%, despite inflationary pressures and transitory impacts related to ILUMA deployment."
"For Swedish Match, we expect continued strong growth from the business in 2023, following a very strong finish to the year, led by ZYN in the U.S."
2022 FULL-YEAR SUMMARY
Unless otherwise noted, all references to performance in this section exclude Russia and Ukraine
Adjusted net revenues increased by 7.7% in organic terms, primarily driven by total shipment volume growth of 3.2% (marking the second consecutive year of growth), the continued favorable mix shift from cigarettes to smoke-free products, and a favorable total pricing variance.
Smoke-free product net revenues increased by 18.0% on an organic basis, mainly driven by HTU shipment volume growth of 21.5%, partly offset by lower device revenues.
Combustible tobacco product adjusted net revenues increased by 3.7% on an organic basis, driven by a favorable pricing variance of approximately 4% and a cigarette shipment volume increase of 0.8%. International cigarette category share increased by 0.3 points to 24.9% despite the impact of IQOS cannibalization, including a 0.2 point increase for Marlboro.
Adjusted operating income margin declined by 0.6 points on an organic basis, primarily reflecting lower gross margins due mainly to: (i) inflationary pressures on cost of sales, (ii) the adverse profitability impact of accelerated switching to ILUMA devices, (iii) the higher initial cost of ILUMA devices and related HTUs; and (iv) higher air freight costs due to supply chain disruptions related to the war in Ukraine. The pressures at the gross margin level were partly offset by the favorable product mix impact of growing HTU volume at higher unit margins, as well as pricing and productivities. The benefits of operating cost efficiencies and operating leverage further offset the gross margin headwinds.
Adjusted diluted EPS of $5.34 increased by 11.9%, excluding currency. Including Russia and Ukraine, adjusted diluted EPS of $5.98 increased by 10.1% on a currency-neutral basis.
Years Ended December 31,
2022
2021
Currency
Var. excl. Currency
Reported Diluted EPS
$ 5.81
$ 5.83
$ (0.77)
12.9%
Adjusting Items (a)
0.17
0.30
Adjusted Diluted EPS
$ 5.98
$ 6.13
$ (0.77)
10.1%
Less: Net earnings attributable to Russia and Ukraine
0.64
0.60
0.08
Adjusted Diluted EPS excl. Russia and Ukraine
$ 5.34
$ 5.53
$ (0.85)
11.9%
(a) See Schedule 2 for list of adjusting items.
2023 FULL-YEAR FORECAST
Full-Year
2023 Forecast
2022
Growth
Reported Diluted EPS
$6.09
-
$6.21
$ 5.81
Adjustments:
Amortization and impairment of intangibles
0.16
0.15
Costs associated with Swedish Match AB offer
—
0.06
Swedish Match AB acquisition accounting related item
—
0.06
(1)
Tax benefit associated with Swedish Match AB financing
—
(0.13)
(1)
Charges related to the war in Ukraine
—
0.08
Fair value adj. for equity security investments
—
(0.02)
(1)
Tax items
—
(0.03)
Total Adjustments
0.16
0.17
Adjusted Diluted EPS
$6.25
-
$6.37
$ 5.98
Less: Currency
(0.15)
Adjusted Diluted EPS, ex-currency
$6.40
-
$6.52
$ 5.98
7%
-
9%
1) See "Financial" section of "Key Terms, Definitions and Explanatory Notes" on page 36 for additional information.
Reported diluted EPS is forecast to be in a range of $6.09 to $6.21, at prevailing exchange rates, versus reported diluted EPS of $5.81 in 2022. Excluding a total 2023 adjustment of $0.16 per share and an adverse currency impact, at prevailing exchange rates, of $0.15 per share, this forecast represents a projected increase of 7% to 9% versus adjusted diluted EPS of $5.98 in 2022, as outlined in the above table.
2023 Full-Year Forecast Assumptions
This forecast assumes:
Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.
Swedish Match AB Acquisition
On November 11, 2022, Philip Morris Holland Holdings B.V. (“PMHH”), a wholly owned subsidiary of PMI, acquired a controlling interest of 85.87% of the total issued and outstanding shares in Swedish Match. Swedish Match's operating results beginning on November 11, 2022, through December 31, 2022, are included in PMI's consolidated statement of earnings and disclosed as a separate segment.
On November 28, 2022, PMHH announced that it had acquired 93.11% of the shares in Swedish Match and intended to: (i) initiate compulsory redemption under the Swedish Companies Act to acquire all remaining shares in the company; and (ii) request delisting of Swedish Match’s shares from Nasdaq Stockholm.
On December 16, 2022, Swedish Match announced that the compulsory redemption process had been initiated. On December 30, 2022, the shares of Swedish Match were delisted from Nasdaq Stockholm, by which time PMHH had become the owner of 94.81% of the company's shares.
New Regional Structure
In November 2022, PMI announced a change in the company’s regional structure -- to four regions, from six -- to further support the growth of its smoke-free business, reinforce consumer centricity, and increase the speed of innovation and deployment, all in alignment with its ambition of becoming a majority smoke-free business by net revenues by 2025. The change to its regional operations was completed in January 2023.
PMI will report its financial results based on the new regional structure as of the first quarter of 2023. In March 2023, the company plans to disclose select historical financial information for the 2020 to 2022 period based on the new regional structure.
KT&G Agreements
On January 30, 2023, PMI announced a long-term collaboration with KT&G, South Korea’s leading tobacco and nicotine manufacturer, to continue to commercialize KT&G’s innovative smoke-free devices and consumables on an exclusive, worldwide basis (excluding South Korea).
The agreement covers fifteen years, to January 29, 2038, with performance-review cycles and associated commitments, based on volume, to be confirmed for each three-year period, to allow flexibility for evolving market conditions.
The agreement gives PMI continued exclusive access to KT&G’s smoke-free brands and product-innovation pipeline, including offerings for low- and middle-income markets, that will enhance PMI’s existing portfolio of smoke-free products.
Products sold under the agreement will be subject to assessment to ensure they meet the regulatory requirements in the markets where they are launched, as well as PMI’s high standards of quality and scientific substantiation. PMI and KT&G will seek any necessary regulatory approvals that may be required on a market-by-market basis.
War in Ukraine
Since the onset of the war in Ukraine, PMI's main priority has been the safety and security of its more than 1,300 employees and their families in the country. The company has helped to evacuate more than 1,000 people from Ukraine and relocate over 2,700 others from conflict zones to locations in the country away from the heaviest fighting; provided critical aid to employees who cannot leave or who decide to remain in Ukraine; and provided those who have left the country with a range of support in neighboring countries. The company is continuing to pay salaries to all its Ukrainian employees and is also providing substantial in-kind support to them and their families. In addition, PMI has contributed approximately $10 million in funds and donated essential items across the country.
On February 25, 2022, in order to preserve the safety of its employees, PMI announced the temporary suspension of its commercial and manufacturing operations in Ukraine, including at its factory, in Kharkiv. The company subsequently resumed some retail activities where safety allowed, in order to provide product availability and service to adult consumers, and began to supply the market from production centers outside Ukraine, as well as through a contract manufacturing arrangement. Production at the company's factory in Kharkiv remains suspended.
As of December 31, 2022, PMI's Ukrainian operations have approximately $0.4 billion in total assets, excluding intercompany balances.
On March 24, 2022, PMI announced the concrete steps it had taken to suspend planned investments and scale down its manufacturing operations in Russia.
PMI is continuously assessing the evolving situation in Russia, including: recent regulatory constraints in the market that entail very complex terms and conditions that must be met for any divestment transaction to be granted approval by the authorities; and restrictions resulting from international regulations.
As of December 31, 2022, PMI's Russian operations have approximately $2.5 billion in total assets, excluding intercompany balances, of which approximately $0.6 billion consisted of cash and equivalents held mostly in local currency (Russian rubles).
PMI recorded pre-tax charges related to the war in Ukraine of approximately $23 million in the fourth quarter of 2022 and approximately $151 million in the full year (including humanitarian efforts). This includes charges in Russia related to the cancellation of the planned launch of ILUMA and the planned production of related HTUs.
Conference Call
A conference call, hosted by Jacek Olczak, Chief Executive Officer, and Emmanuel Babeau, Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on February 9, 2023. Access the call at www.pmi.com/2022Q4earnings.
TOTAL MARKET, CONSOLIDATED SHIPMENT VOLUME & MARKET SHARE
Total Market
Full-year estimated international industry cigarette and heated tobacco unit volume (excluding China and the U.S.) of 2.6 trillion, increased by 0.2%, driven by the EU, South & Southeast Asia and Americas Regions, partly offset by the Eastern Europe, Middle East & Africa and East Asia & Australia Regions, as described in the Regional sections.
Excluding Russia and Ukraine, full-year estimated international industry volume increased by 0.9%.
Consolidated Shipment Volume
PMI Shipment Volume by Region
Fourth-Quarter
Full-Year
(million units)
2022
2021
Change
2022
2021
Change
Cigarettes
European Union
35,425
37,605
(5.8)%
153,890
157,843
(2.5)%
Eastern Europe
19,766
20,927
(5.5)%
81,460
88,698
(8.2)%
Middle East & Africa
35,759
34,756
2.9%
134,110
127,911
4.8%
South & Southeast Asia
34,591
36,136
(4.3)%
143,982
141,923
1.5%
East Asia & Australia
10,053
10,463
(3.9)%
42,493
43,913
(3.2)%
Americas
18,432
18,495
(0.3)%
65,973
64,587
2.1%
Total PMI
154,026
158,382
(2.8)%
621,908
624,875
(0.5)%
Heated Tobacco Units
European Union
11,385
7,803
45.9%
39,515
28,208
40.1%
Eastern Europe
6,531
7,056
(7.4)%
24,806
25,650
(3.3)%
Middle East & Africa
1,383
655
+100%
4,456
2,140
+100%
South & Southeast Asia
154
89
73.0%
469
240
95.4%
East Asia & Australia
12,375
9,684
27.8%
39,391
38,162
3.2%
Americas
193
110
75.5%
532
576
(7.6)%
Total PMI
32,021
25,397
26.1%
109,169
94,976
14.9%
Cigarettes and Heated Tobacco Units
European Union
46,810
45,408
3.1%
193,405
186,051
4.0%
Eastern Europe
26,297
27,983
(6.0)%
106,266
114,348
(7.1)%
Middle East & Africa
37,142
35,411
4.9%
138,566
130,051
6.5%
South & Southeast Asia
34,745
36,225
(4.1)%
144,451
142,163
1.6%
East Asia & Australia
22,428
20,147
11.3%
81,884
82,075
(0.2)%
Americas
18,625
18,605
0.1%
66,505
65,163
2.1%
Total PMI
186,047
183,779
1.2%
731,077
719,851
1.6%
Full-Year
Shipment Volume
PMI's total shipment volume increased by 1.6%, driven by an increase of 14.9% for HTUs, partly offset by a 0.5% decline for cigarettes.
Excluding Russia and Ukraine, PMI's total shipment volume increased by 3.2%, as detailed in Appendix 3, reflecting increases of 21.5% and 0.8% for HTUs and cigarettes, respectively. PMI's total shipment volume in the Eastern Europe Region increased by 2.7%, on the same basis, as shown in Appendix 4.
For additional detail on PMI's shipment volume performance by Region, please refer to the "Total Market, PMI Shipment & Market Share Commentaries" sections for PMI's regional operating segments.
Impact of Inventory Movements
The net unfavorable impact of estimated distributor inventory movements was immaterial in the year, with PMI’s total in-market sales increasing by 1.7%, or by 3.2% excluding Russia and Ukraine -- both essentially in-line with the respective shipment volumes.
PMI's total HTU in-market sales volume for the year was 106.9 billion units, or 86.4 billion units excluding Russia and Ukraine, representing growth of 15.6% and 21.4%, respectively.
Fourth-Quarter
PMI's total shipment volume increased by 1.2%, driven by a 26.1% increase in HTU shipments, partly offset by a 2.8% decline in cigarette shipments.
Excluding Russia and Ukraine, PMI's total shipment volume increased by 2.6%, as detailed in Appendix 3, reflecting a 37.5% increase for HTUs, partly offset by a 2.2% decrease for cigarettes. PMI's total shipment volume in the Eastern Europe Region increased by 3.2%, on the same basis, as shown in Appendix 4.
For additional detail on PMI's shipment volume performance by Region, please refer to the "Total Market, PMI Shipment & Market Share Commentaries" sections for PMI's regional operating segments.
Impact of Inventory Movements
The net unfavorable impact of estimated distributor inventory movements was immaterial in the quarter, with PMI’s total in-market sales increasing by 1.5%, or by 2.7% excluding Russia and Ukraine -- both essentially in-line with the respective shipment volumes.
PMI's total HTU in-market sales volume in the quarter was 28.4 billion units, or 23.2 billion units excluding Russia and Ukraine, representing growth of 20.3% and 28.1%, respectively.
PMI Shipment Volume by Brand
PMI Shipment Volume by Brand
Fourth-Quarter
Full-Year
(million units)
2022
2021
Change
2022
2021
Change
Cigarettes
Marlboro
60,672
62,619
(3.1)%
244,649
239,905
2.0%
L&M
20,331
20,314
0.1%
82,588
84,342
(2.1)%
Chesterfield
16,994
15,780
7.7%
67,054
58,800
14.0%
Parliament
11,998
11,085
8.2%
43,999
41,621
5.7%
Philip Morris
9,295
10,514
(11.6)%
39,620
42,395
(6.5)%
Others
34,736
38,070
(8.8)%
143,998
157,812
(8.8)%
Total Cigarettes
154,026
158,382
(2.8)%
621,908
624,875
(0.5)%
Heated Tobacco Units
32,021
25,397
26.1%
109,169
94,976
14.9%
Total PMI
186,047
183,779
1.2%
731,077
719,851
1.6%
Note: Philip Morris includes Philip Morris/Dubliss.
Full-Year
Shipment volume for PMI's HTU brands increased, primarily driven by the EU, Middle East & Africa and East Asia & Australia Regions, partly offset by the Eastern Europe Region.
PMI's cigarette shipment volume of the following international brands increased:
PMI's cigarette shipment volume of the following international brands decreased:
The cigarette shipment volume decline for "Others" was mainly due to: Bond Street (primarily Eastern Europe) and Lark (mainly Japan and Turkey), partly offset by Dji Sam Soe (Indonesia).
Excluding Russia and Ukraine, PMI's cigarette shipment volume increased by 1.8% for Marlboro, 5.6% for Chesterfield, 10.3% for Parliament and 6.3% for Philip Morris, and decreased by 0.3% for L&M.
Fourth-Quarter
Shipment volume for PMI's HTU brands increased, primarily driven by the EU, Middle East & Africa and East Asia & Australia Regions, partly offset by the Eastern Europe Region.
PMI's cigarette shipment volume of the following international brands increased:
PMI's cigarette shipment volume of the following international brands decreased:
The cigarette shipment volume decline for "Others" was mainly due to: Bond Street (primarily Eastern Europe), Lark (mainly Japan and Turkey) and Sampoerna A (Indonesia).
Excluding Russia and Ukraine, PMI's cigarette shipment volume increased by 2.4% for L&M, 2.3% for Chesterfield and 12.8% for Parliament, and decreased by 2.6% for Marlboro and 9.5% for Philip Morris.
International Share of Market
Fourth-Quarter
Full Year
2022
2021
Change (pp)
2022
2021
Change (pp)
Total International Market Share (1)
28.0%
27.3%
0.7
27.6%
27.2%
0.4
Cigarettes
23.7%
23.8%
(0.1)
23.6%
23.7%
(0.1)
HTU
4.3%
3.5%
0.8
4.1%
3.5%
0.6
Cigarette over Cigarette Market Share (2)
25.1%
24.9%
0.2
24.9%
24.8%
0.1
(1) Defined as PMI's cigarette and heated tobacco unit in-market sales volume as a percentage of total industry cigarette and heated tobacco unit sales volume, excluding China and the U.S., including cigarillos in Japan
(2) Defined as PMI's cigarette in-market sales volume as a percentage of total industry cigarette sales volume, excluding China and the U.S., including cigarillos in Japan
Note: Sum of share of market by product categories might not foot to total due to roundings
International Share of Market, Excluding Russia and Ukraine
Fourth-Quarter
Full Year
2022
2021
Change (pp)
2022
2021
Change (pp)
Total International Market Share (1)
27.6%
26.7%
0.9
27.3%
26.7%
0.6
Cigarettes
23.7%
23.8%
(0.1)
23.7%
23.7%
—
HTU
3.9%
3.0%
0.9
3.6%
3.0%
0.6
Cigarette over Cigarette Market Share (2)
25.0%
24.7%
0.3
24.9%
24.6%
0.3
(1) Defined as PMI's cigarette and heated tobacco unit in-market sales volume as a percentage of total industry cigarette and heated tobacco unit sales volume, excluding China and the U.S., including cigarillos in Japan
(2) Defined as PMI's cigarette in-market sales volume as a percentage of total industry cigarette sales volume, excluding China and the U.S., including cigarillos in Japan
Note: Sum of share of market by product categories might not foot to total due to roundings
CONSOLIDATED FINANCIAL SUMMARY
Full-Year
Financial Summary -
Years Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
31,762
$
31,405
1.1
%
8.0
%
357
(2,656
)
515
528
1,719
251
Saudi Arabia Customs Assessments
—
(246
)
+100
%
+100
%
246
—
—
—
—
246
Adjusted Net Revenues
$
31,762
$
31,651
0.4
%
7.1
%
111
(2,656
)
515
528
1,719
5
Net Revenues (1)
$
31,762
$
31,405
1.1
%
8.0
%
357
(2,656
)
515
528
1,719
251
Cost of Sales
(11,402
)
(10,030
)
(13.7
) %
(16.5
)%
(1,372
)
695
(414
)
—
(1,089
)
(564
)
Marketing, Administration and Research Costs
(8,114
)
(8,400
)
3.4
%
0.3
%
286
454
(197
)
—
—
29
Operating Income
$
12,246
$
12,975
(5.6
) %
6.7
%
(729
)
(1,507
)
(96
)
528
630
(284
)
Asset Impairment & Exit Costs (2)
—
(216
)
+100
%
+100
%
216
—
—
—
—
216
Amortization and Impairment of Intangibles (3)
(271
)
(96
)
-(100
)%
-(100
)%
(175
)
—
(70
)
—
—
(105
)
Charges related to the war in Ukraine (4)
(151
)
—
—
%
—
%
(151
)
—
—
—
—
(151
)
Costs associated with Swedish Match AB offer (2)
(115
)
—
—
%
—
%
(115
)
—
—
—
—
(115
)
Swedish Match AB acquisition accounting related item (5)
(125
)
—
—
%
—
%
(125
)
—
(125
)
—
—
—
Saudi Arabia Customs Assessments (6)
—
(246
)
+100
%
+100
%
246
—
—
—
—
246
Asset Acquisition Cost (2)
—
(51
)
+100
%
+100
%
51
—
—
—
—
51
Adjusted Operating Income
$
12,908
$
13,584
(5.0
) %
5.4
%
(676
)
(1,507
)
99
528
630
(426
)
Adjusted Operating Income Margin
40.6
%
42.9
%
(2.3
)pp
(0.7
)pp
(1) Favorable Cost/Other variance includes a reduction in net revenues of $246 million in 2021 related to the Saudi Arabia customs assessments.
(2) Included in Marketing, Administration and Research Costs above.
(3) 2022 amount includes an impairment charge of $112 million, which is included in cost of sales above.
(4) Included in Cost of Sales ($62 million) and Marketing, Administration and Research Costs ($89 million) above.
(5) Included in Cost of Sales above.
(6) Included in Net Revenues above.
Net revenues increased by 8.0%, excluding currency and acquisitions, mainly reflecting: favorable volume/mix, primarily driven by higher HTU volume and device volume, partly offset by lower cigarette volume and unfavorable device mix, cigarette mix and HTU mix; a favorable pricing variance, driven by higher combustible tobacco pricing, partly offset by lower device pricing and lower HTU (net) pricing; and a favorable comparison related to the Saudi Arabia customs assessments of $246 million in 2021, shown in "Cost/Other". Adjusted net revenues increased by 7.1% on an organic basis.
For the year, Russia and Ukraine accounted for around 8% of PMI's total net revenues. Excluding Russia and Ukraine, adjusted net revenues increased by 7.7% on an organic basis, as detailed in Schedule 11.
Operating income increased by 6.7%, excluding currency and acquisitions. Adjusted operating income increased by 5.4% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by higher HTU volume, partly offset by lower cigarette volume, unfavorable cigarette mix, HTU mix and device mix, and the unfavorable impact on profitability of higher device volume; and a favorable pricing variance; partially offset by higher manufacturing costs (primarily due to higher logistics costs and other inflationary impacts, partly offset by productivity); and higher marketing, administration and research costs. Adjusted operating income margin decreased by 0.7 points on an organic basis.
Excluding Russia and Ukraine, adjusted operating income increased by 6.2% on an organic basis, while adjusted operating income margin decreased by 0.6 points, on the same basis, as detailed in Schedule 11.
Fourth-Quarter
Financial Summary -
Quarters Ended
December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
8,152
$
8,104
0.6
%
7.5
%
48
(878
)
316
62
576
(28
)
Cost of Sales
(3,211
)
(2,807
)
(14.4
) %
(14.7
) %
(404
)
256
(247
)
—
(321
)
(92
)
Marketing, Administration and Research Costs
(2,017
)
(2,350
)
14.2
%
9.2
%
333
207
(91
)
—
—
217
Operating Income
$
2,924
$
2,947
(0.8
) %
14.0
%
(23
)
(415
)
(22
)
62
255
97
Asset Impairment & Exit Costs (1)
—
(46
)
+100
%
+100
%
46
—
—
—
—
46
Amortization and Impairment of Intangibles
(58
)
(41
)
(41.5
) %
22.0
%
(17
)
—
(26
)
—
—
9
Charges related to the war in Ukraine (2)
(23
)
—
—
%
—
%
(23
)
—
—
—
—
(23
)
Costs associated with Swedish Match AB offer (1)
154
—
—
%
—
%
154
—
—
—
—
154
Swedish Match AB acquisition accounting related item (3)
(125
)
—
—
%
—
%
(125
)
—
(125
)
—
—
—
Adjusted Operating Income
$
2,976
$
3,034
(1.9
) %
7.5
%
(58
)
(415
)
129
62
255
(89
)
Adjusted Operating Income Margin
36.5
%
37.4
%
(0.9
)pp
—
pp
(1) Included in Marketing, Administration and Research Costs above.
(2) Included in Cost of Sales ($16 million) and Marketing, Administration and Research Costs ($7 million) above.
(3) Included in Cost of Sales above.
Net revenues increased by 7.5% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by higher HTU volume and higher device volume, partly offset by lower cigarette volume and unfavorable HTU mix; and a favorable pricing variance, driven by higher combustible tobacco pricing, partly offset by lower HTU (net) pricing and lower device pricing.
For the quarter, Russia and Ukraine accounted for nearly 9% of PMI's total net revenues. Excluding Russia and Ukraine, net revenues increased by 7.9% on an organic basis, as detailed in Schedule 11.
Operating income increased by 14.0%, excluding currency and acquisitions, partly reflecting the impact of 2022 items associated with the Swedish Match AB offer.
Adjusted operating income increased by 7.5% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by higher HTU volume, partly offset by lower cigarette volume, unfavorable HTU mix and unfavorable cigarette mix; and a favorable pricing variance; partially offset by higher manufacturing costs (mainly due to higher logistics costs and other inflationary impacts, partly offset by productivity); and higher marketing, administration and research costs. Adjusted operating income margin was stable on an organic basis.
Excluding Russia and Ukraine, adjusted operating income increased by 10.3% on an organic basis, while adjusted operating income margin increased by 0.8 point, on the same basis, as detailed in Schedule 11.
EUROPEAN UNION REGION
Full-Year
Financial Summary -
Years Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
12,119
$
12,275
(1.3
) %
10.6
%
(156
)
(1,472
)
10
(127
)
1,433
—
Operating Income
$
5,788
$
6,119
(5.4
) %
10.5
%
(331
)
(972
)
(2
)
(127
)
977
(207
)
Asset Impairment & Exit Costs
—
(68
)
+100
%
+100
%
68
—
—
—
—
68
Amortization and Impairment of Intangibles
(37
)
(35
)
(5.7
) %
(5.7
) %
(2
)
—
—
—
—
(2
)
Costs associated with Swedish Match AB offer
(51
)
—
—
%
—
%
(51
)
—
—
—
—
(51
)
Adjusted Operating Income
$
5,876
$
6,222
(5.6
) %
10.1
%
(346
)
(972
)
(2
)
(127
)
977
(222
)
Adjusted Operating Income Margin
48.5
%
50.7
%
(2.2
)pp
(0.3
)pp
Net revenues increased by 10.6% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher HTU volume and device volume, partly offset by lower cigarette volume, unfavorable HTU mix, and unfavorable cigarette mix; partially offset by an unfavorable pricing variance, mainly due to lower HTU (net) pricing and lower device pricing, partly offset by higher combustible tobacco pricing.
Operating income increased by 10.5%, excluding currency and acquisitions. Adjusted operating income increased by 10.1% on an organic basis, primarily reflecting: favorable volume/mix, mainly driven by higher HTU volume, partly offset by lower cigarette volume, unfavorable HTU mix, unfavorable cigarette mix and the unfavorable impact on profitability of higher device volume; partially offset by an unfavorable pricing variance; higher manufacturing costs; and higher marketing, administration and research costs. Adjusted operating income margin decreased by 0.3 points on an organic basis.
Fourth-Quarter
Financial Summary -
Quarters Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
2,890
$
3,025
(4.5
) %
11.2
%
(135
)
(474
)
—
(89
)
428
—
Operating Income
$
1,347
$
1,308
3.0
%
23.2
%
39
(264
)
—
(89
)
302
90
Asset Impairment & Exit Costs
—
(12
)
+100
%
+100
%
12
—
—
—
—
12
Amortization and Impairment of Intangibles
(10
)
(9
)
(11.1
) %
(11.1
) %
(1
)
—
—
—
—
(1
)
Costs associated with Swedish Match AB offer
68
—
—
%
—
%
68
—
—
—
—
68
Adjusted Operating Income
$
1,289
$
1,329
(3.0
) %
16.9
%
(40
)
(264
)
—
(89
)
302
11
Adjusted Operating Income Margin
44.6
%
43.9
%
0.7
pp
2.3
pp
Net revenues increased by 11.2% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher HTU volume and higher device volume, partly offset by lower cigarette volume; partially offset by an unfavorable pricing variance, primarily due to lower HTU (net) pricing, partly offset by higher combustible tobacco pricing.
Operating income increased by 23.2%, excluding currency and acquisitions. Adjusted operating income increased by 16.9% on an organic basis, primarily reflecting: favorable volume/mix, mainly driven by higher HTU volume, partly offset by lower cigarette volume; and lower marketing, administration and research costs; partially offset by an unfavorable pricing variance; and higher manufacturing costs. Adjusted operating income margin increased by 2.3 points on an organic basis.
Total Market, PMI Shipment & Market Share Commentaries
European Union Key Data
Fourth-Quarter
Full-Year
Change
Change
2022
2021
% / pp
2022
2021
% / pp
Total Market (billion units)
115.4
117.9
(2.2)%
484.3
478.9
1.1%
PMI Shipment Volume (million units)
Cigarettes
35,425
37,605
(5.8)%
153,890
157,843
(2.5)%
Heated Tobacco Units
11,385
7,803
45.9%
39,515
28,208
40.1%
Total EU
46,810
45,408
3.1%
193,405
186,051
4.0%
PMI Market Share
Marlboro
15.7%
16.2%
(0.5)
15.9%
16.6%
(0.7)
L&M
5.3%
5.3%
—
5.3%
5.6%
(0.3)
Chesterfield
5.4%
5.4%
—
5.5%
5.5%
—
Philip Morris
2.1%
2.2%
(0.1)
2.1%
2.2%
(0.1)
Heated Tobacco Units
8.8%
6.4%
2.4
7.7%
5.7%
2.0
Others
2.9%
3.0%
(0.1)
3.0%
3.0%
—
Total EU
40.2%
38.5%
1.7
39.5%
38.6%
0.9
Note: Sum may not foot due to roundings.
Full-Year
The estimated total market in the EU increased by 1.1% to 484.3 billion units, primarily driven by:
partly offset by
PMI's Regional market share increased by 0.9 points to 39.5%, with gains in Germany, Italy and Poland, partly offset by declines in France and Spain.
PMI's total shipment volume increased by 4.0% to 193.4 billion units, mainly driven by:
partly offset by
Fourth-Quarter
The estimated total market in the EU decreased by 2.2% to 115.4 billion units, mainly due to:
partly offset by
PMI's total shipment volume increased by 3.1% to 46.8 billion units, mainly driven by:
partly offset by
EASTERN EUROPE REGION
Full-Year
Financial Summary -
Years Ended
December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
3,725
$
3,544
5.1
%
3.7
%
181
51
—
334
(204
)
—
Operating Income
$
1,166
$
1,213
(3.9
) %
(13.9
) %
(47
)
122
—
334
(212
)
(291
)
Asset Impairment & Exit Costs
—
(14
)
+100
%
+100
%
14
—
—
—
—
14
Amortization and Impairment of Intangibles
(2
)
(2
)
—
%
—
%
—
—
—
—
—
—
Charges related to the war in Ukraine
(151
)
—
—
%
—
%
(151
)
—
—
—
—
(151
)
Costs associated with Swedish Match AB offer
(12
)
—
—
%
—
%
(12
)
—
—
—
—
(12
)
Adjusted Operating Income
$
1,331
$
1,229
8.3
%
(1.6
)%
102
122
—
334
(212
)
(142
)
Adjusted Operating Income Margin
35.7
%
34.7
%
1.0
pp
(1.8
)pp
Net revenues increased by 3.7% on an organic basis, reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing; partly offset by unfavorable volume/mix, mainly due to lower cigarette volume, lower HTU volume and unfavorable cigarette mix.
For the year, Russia and Ukraine accounted for around 70% of PMI's total net revenues in the Region. Excluding Russia and Ukraine, net revenues increased by 12.4% on an organic basis, as detailed in Schedule 11.
Operating income decreased by 13.9%, excluding currency and acquisitions, notably reflecting the impact of 2022 charges related to the war in Ukraine.
Adjusted operating income decreased by 1.6% on an organic basis, primarily reflecting: unfavorable volume/mix, mainly due to the same factors as for net revenues; higher manufacturing costs (notably related to Ukraine); and higher marketing, administration and research costs; partly offset by a favorable pricing variance. Adjusted operating income margin decreased by 1.8 points on an organic basis.
Excluding Russia and Ukraine, adjusted operating income and adjusted operating income margin increased by 15.0% and 0.9 points on an organic basis, respectively, as detailed in Schedule 11.
Fourth-Quarter
Financial Summary -
Quarters Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
992
$
912
8.8
%
5.9
%
80
26
—
90
(36
)
—
Operating Income
$
306
$
300
2.0
%
(15.3
)%
6
52
—
90
(65
)
(71
)
Asset Impairment & Exit Costs
—
(3
)
+100
%
+100
%
3
—
—
—
—
3
Amortization and Impairment of Intangibles
(1
)
(1
)
—
%
—
%
—
—
—
—
—
—
Charges related to the war in Ukraine
(23
)
—
—
%
—
%
(23
)
—
—
—
—
(23
)
Costs associated with Swedish Match AB offer
17
—
—
%
—
%
17
—
—
—
—
17
Adjusted Operating Income
$
313
$
304
3.0
%
(14.1
)%
9
52
—
90
(65
)
(68
)
Adjusted Operating Income Margin
31.6
%
33.3
%
(1.7
)pp
(6.3
)pp
Net revenues increased by 5.9% on an organic basis, reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing; partly offset by unfavorable volume/mix, mainly due to lower HTU volume and unfavorable cigarette volume/mix.
For the quarter, Russia and Ukraine accounted for around 72% of PMI's total net revenues in the Region. Excluding Russia and Ukraine, net revenues increased by 12.0% on an organic basis, as detailed in Schedule 11.
Operating income decreased by 15.3%, excluding currency and acquisitions. Adjusted operating income decreased by 14.1% on an organic basis, mainly reflecting: unfavorable volume/mix, primarily due to the same factors as for net revenues; higher marketing, administration and research costs; and higher manufacturing costs; partly offset by a favorable pricing variance. Adjusted operating income margin decreased by 6.3 points on an organic basis.
Excluding Russia and Ukraine, adjusted operating income increased by 12.0% on an organic basis, while adjusted operating income margin was stable, on the same basis, as detailed in Schedule 11.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume
Fourth-Quarter
Full-Year
(million units)
2022
2021
Change
2022
2021
Change
Cigarettes
19,766
20,927
(5.5)%
81,460
88,698
(8.2)%
Heated Tobacco Units
6,531
7,056
(7.4)%
24,806
25,650
(3.3)%
Total Eastern Europe
26,297
27,983
(6.0)%
106,266
114,348
(7.1)%
Full-Year
The estimated total market in Eastern Europe decreased by 4.4% to 358.0 billion units, primarily due to:
The estimated total market in Eastern Europe, excluding Russia and Ukraine, was essentially stable at 113.3 billion units.
PMI's Regional market share decreased by 0.8 points to 29.8%. Excluding Russia and Ukraine, Regional market share increased by 0.4 points to 26.7%.
PMI's total shipment volume decreased by 7.1% to 106.3 billion units, primarily due to:
During the year, Russia and Ukraine accounted for around 71% of PMI's total shipment volume in the Region. Excluding Russia and Ukraine, total shipment volume increased by 2.7%, as detailed in Appendix 4.
Fourth-Quarter
The estimated total market in Eastern Europe decreased, mainly due to:
The estimated total market in Eastern Europe, excluding Russia and Ukraine, also decreased.
PMI's total shipment volume decreased by 6.0% to 26.3 billion units, mainly due to:
During the quarter, Russia and Ukraine accounted for around 71% of PMI's total shipment volume in the Region. Excluding Russia and Ukraine, total shipment volume increased by 3.2%, as detailed in Appendix 4.
MIDDLE EAST & AFRICA REGION
Full-Year
Financial Summary -
Years Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
3,901
$
3,293
18.5
%
29.0
%
608
(348
)
—
200
503
253
Saudi Arabia Customs Assessments
—
(246
)
+100
%
+100
%
246
—
—
—
—
246
Adjusted Net Revenues
$
3,901
$
3,539
10.2
%
20.1
%
362
(348
)
—
200
503
7
Net Revenues
$
3,901
$
3,293
18.5
%
29.0
%
608
(348
)
—
200
503
253
Operating Income
$
1,758
$
1,146
53.4
%
67.6
%
612
(163
)
—
200
364
211
Asset Impairment & Exit Costs
—
(17
)
+100
%
+100
%
17
—
—
—
—
17
Amortization and Impairment of Intangibles
(8
)
(8
)
—
%
—
%
—
—
—
—
—
—
Saudi Arabia Customs Assessments
—
(246
)
+100
%
+100
%
246
—
—
—
—
246
Costs associated with Swedish Match AB offer
(13
)
—
—
%
—
%
(13
)
—
—
—
—
(13
)
Adjusted Operating Income
$
1,779
$
1,417
25.5
%
37.1
%
362
(163
)
—
200
364
(39
)
Adjusted Operating Income Margin
45.6
%
40.0
%
5.6
pp
5.7
pp
Net revenues increased by 29.0%, excluding currency and acquisitions, partly reflecting a favorable comparison related to the Saudi Arabia customs assessments of $246 million in 2021, shown in "Cost/Other".
Adjusted net revenues increased by 20.1% on an organic basis, as detailed above, mainly reflecting: favorable volume/mix, primarily driven by higher cigarette volume and higher HTU volume; and a favorable pricing variance, mainly driven by combustible tobacco pricing.
Operating income increased by 67.6%, excluding currency and acquisitions. This notably included a favorable comparison related to the Saudi Arabia customs assessments in 2021 (as noted above for net revenues).
Adjusted operating income increased by 37.1% on an organic basis, mainly reflecting: favorable volume/mix, primarily driven by the same factors as for net revenues; a favorable pricing variance; and lower marketing, administration and research costs; partly offset by higher manufacturing costs. Adjusted operating income margin increased by 5.7 points on an organic basis.
Fourth-Quarter
Financial Summary -
Quarters Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
924
$
987
(6.4
)%
3.4
%
(63
)
(97
)
—
(5
)
63
(24
)
Operating Income
$
307
$
407
(24.6
)%
(14.3
)%
(100
)
(42
)
—
(5
)
11
(64
)
Asset Impairment & Exit Costs
—
(4
)
+100
%
+100
%
4
—
—
—
—
4
Amortization and Impairment of Intangibles
(2
)
(2
)
—
%
—
%
—
—
—
—
—
—
Costs associated with Swedish Match AB offer
17
—
—
%
—
%
17
—
—
—
—
17
Adjusted Operating Income
$
292
$
413
(29.3
)%
(19.1
)%
(121
)
(42
)
—
(5
)
11
(85
)
Adjusted Operating Income Margin
31.6
%
41.8
%
(10.2
)pp
(9.1
)pp
Net revenues increased by 3.4% on an organic basis, primarily reflecting: favorable volume/mix, mainly driven by higher HTU volume; partly offset by lower fees for certain distribution rights billed to customers in certain markets, shown in "Cost/Other".
Operating income decreased by 14.3%, excluding currency and acquisitions. Adjusted operating income decreased by 19.1% on an organic basis, primarily reflecting unfavorable "Cost/Other," mainly due to higher manufacturing costs, lower fees for certain distribution rights (as for net revenues noted above) and higher marketing, administration and research costs. Adjusted operating income margin decreased by 9.1 points on an organic basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume
Fourth-Quarter
Full-Year
(million units)
2022
2021
Change
2022
2021
Change
Cigarettes
35,759
34,756
2.9%
134,110
127,911
4.8%
Heated Tobacco Units
1,383
655
+100%
4,456
2,140
+100%
Total Middle East & Africa
37,142
35,411
4.9%
138,566
130,051
6.5%
Full-Year
The estimated total market in the Middle East & Africa decreased by 0.8% to 557.2 billion units, mainly due to:
partly offset by
PMI's Regional market share increased by 1.6 points to 24.7%.
PMI's total shipment volume increased by 6.5% to 138.6 billion units, mainly driven by:
Fourth-Quarter
The estimated total market in the Middle East & Africa decreased, mainly due to:
partly offset by
PMI's total shipment volume increased by 4.9% to 37.1 billion units, mainly driven by:
SOUTH & SOUTHEAST ASIA REGION
Full-Year
Financial Summary -
Years Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
4,395
$
4,396
—
%
6.2
%
(1
)
(274
)
—
45
228
—
Operating Income
$
1,459
$
1,506
(3.1
) %
5.7
%
(47
)
(133
)
—
45
(16
)
57
Asset Impairment & Exit Costs
—
(21
)
+100
%
+100
%
21
—
—
—
—
21
Amortization and Impairment of Intangibles
(16
)
(21
)
23.8
%
23.8
%
5
—
—
—
—
5
Costs associated with Swedish Match AB offer
(13
)
—
—
%
—
%
(13
)
—
—
—
—
(13
)
Adjusted Operating Income
$
1,488
$
1,548
(3.9
) %
4.7
%
(60
)
(133
)
—
45
(16
)
44
Adjusted Operating Income Margin
33.9
%
35.2
%
(1.3
)pp
(0.5
)pp
Net revenues increased by 6.2% on an organic basis, reflecting: favorable volume/mix, primarily driven by higher cigarette volume and favorable cigarette mix; and a favorable pricing variance, mainly due to combustible tobacco pricing.
Operating income increased by 5.7%, excluding currency and acquisitions. Adjusted operating income increased by 4.7% on an organic basis, primarily reflecting: lower marketing, administration and research costs; and a favorable pricing variance; partly offset by unfavorable volume/mix, mainly due to lower cigarette mix. Adjusted operating income margin decreased by 0.5 points on an organic basis.
Fourth-Quarter
Financial Summary -
Quarters Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
1,100
$
1,112
(1.1
) %
9.4
%
(12
)
(116
)
—
105
(1
)
—
Operating Income
$
324
$
298
8.7
%
27.2
%
26
(55
)
—
105
(62
)
38
Asset Impairment & Exit Costs
—
(4
)
+100
%
+100
%
4
—
—
—
—
4
Amortization and Impairment of Intangibles
(3
)
(8
)
62.5
%
62.5
%
5
—
—
—
5
Costs associated with Swedish Match AB offer
16
—
—
%
—
%
16
—
—
—
16
Adjusted Operating Income
$
311
$
310
0.3
%
18.1
%
1
(55
)
—
105
(62
)
13
Adjusted Operating Income Margin
28.3
%
27.9
%
0.4
pp
2.2
pp
Net revenues increased by 9.4% on an organic basis, reflecting: a favorable pricing variance, driven by combustible tobacco pricing. Volume/mix was slightly unfavorable, primarily due to lower cigarette volume, largely offset by favorable cigarette mix.
Operating income increased by 27.2%, excluding currency and acquisitions. Adjusted operating income increased by 18.1% on an organic basis, primarily reflecting: a favorable pricing variance; and lower marketing, administration and research costs; partly offset by unfavorable volume/mix, mainly due to lower cigarette volume. Adjusted operating income margin increased by 2.2 points on an organic basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume
Fourth-Quarter
Full-Year
(million units)
2022
2021
Change
2022
2021
Change
Cigarettes
34,591
36,136
(4.3)%
143,982
141,923
1.5%
Heated Tobacco Units
154
89
73.0%
469
240
95.4%
Total South & Southeast Asia
34,745
36,225
(4.1)%
144,451
142,163
1.6%
Full-Year
The estimated total market in South & Southeast Asia increased by 2.9% to 743.3 billion units, mainly driven by:
partly offset by
PMI's Regional market share decreased by 0.3 points to 19.4%.
PMI's total shipment volume increased by 1.6% to 144.5 billion units, mainly driven by:
partly offset by
Fourth-Quarter
The estimated total market in South & Southeast Asia decreased, mainly due to:
partly offset by
PMI's total shipment volume decreased by 4.1% to 34.7 billion units, mainly due to:
EAST ASIA & AUSTRALIA REGION
Full-Year
Financial Summary -
Years Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
5,132
$
5,953
(13.8
) %
(3.9
) %
(821
)
(587
)
—
(16
)
(218
)
—
Operating Income
$
1,919
$
2,556
(24.9
) %
(10.9
) %
(637
)
(358
)
—
(16
)
(477
)
214
Asset Impairment & Exit Costs
—
(88
)
+100
%
+100
%
88
—
—
—
—
88
Amortization and Impairment of Intangibles
(2
)
(3
)
33.3
%
33.3
%
1
—
—
—
—
1
Costs associated with Swedish Match AB offer
(21
)
—
—
%
—
%
(21
)
—
—
—
—
(21
)
Adjusted Operating Income
$
1,942
$
2,647
(26.6
) %
(13.1
)%
(705
)
(358
)
—
(16
)
(477
)
146
Adjusted Operating Income Margin
37.8
%
44.5
%
(6.7
)pp
(4.3
)pp
Net revenues decreased by 3.9% on an organic basis, primarily reflecting: unfavorable volume/mix, mainly due to unfavorable device mix, lower cigarette volume and unfavorable cigarette mix, partly offset by higher HTU volume and higher device volume; and an unfavorable pricing comparison.
Operating income decreased by 10.9%, excluding currency and acquisitions. Adjusted operating income decreased by 13.1% on an organic basis, mainly reflecting: unfavorable volume/mix, primarily due to unfavorable HTU mix, lower cigarette volume, unfavorable cigarette mix and unfavorable device mix; and higher manufacturing costs; partly offset by lower marketing, administration and research costs.
Adjusted operating income margin decreased by 4.3 points on an organic basis. The margin decline was primarily due to the impact of higher device sales; the growth of ILUMA within the Region's smoke-free product portfolio mix, with its higher initial unit cost of devices and consumables; and higher logistics costs, including costs related to the use of air freight to Japan.
Fourth-Quarter
Financial Summary -
Quarters Ended December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
1,322
$
1,444
(8.4
) %
6.0
%
(122
)
(208
)
—
(47
)
133
—
Operating Income
$
604
$
515
17.3
%
36.1
%
89
(97
)
—
(47
)
70
163
Asset Impairment & Exit Costs
—
(21
)
+100
%
+100
%
21
—
—
—
—
21
Amortization and Impairment of Intangibles
—
(1
)
+100
%
+100
%
1
—
—
—
—
1
Costs associated with Swedish Match AB offer
28
—
—
%
—
%
28
—
—
—
—
28
Adjusted Operating Income
$
576
$
537
7.3
%
25.3
%
39
(97
)
—
(47
)
70
113
Adjusted Operating Income Margin
43.6
%
37.2
%
6.4
pp
6.8
pp
Net revenues increased by 6.0% on an organic basis, reflecting: favorable volume/mix, driven by higher HTU volume, partly offset by unfavorable HTU mix, unfavorable device mix (primarily due to ILUMA ONE) and lower cigarette volume; partly offset by an unfavorable pricing variance, mainly due to lower HTU (net) pricing and lower device pricing, partly offset by higher combustible tobacco pricing.
Operating income increased by 36.1%, excluding currency and acquisitions. Adjusted operating income increased by 25.3% on an organic basis, mainly reflecting: lower marketing, administration and research costs (due to a favorable comparison versus the fourth quarter of 2021, which included higher commercial investments behind the launch of ILUMA); and favorable volume/mix, primarily driven by higher HTU volume, partly offset by unfavorable HTU mix and lower cigarette volume; partially offset by an unfavorable pricing variance. Adjusted operating income margin increased by 6.8 points on an organic basis.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume
Fourth-Quarter
Full-Year
(million units)
2022
2021
Change
2022
2021
Change
Cigarettes
10,053
10,463
(3.9)%
42,493
43,913
(3.2)%
Heated Tobacco Units
12,375
9,684
27.8%
39,391
38,162
3.2%
Total East Asia & Australia
22,428
20,147
11.3%
81,884
82,075
(0.2)%
Full-Year
The estimated total market in East Asia & Australia, excluding China, decreased by 0.9% to 292.8 billion units, mainly due to:
PMI's Regional market share, excluding China, increased by 0.8 points to 27.3%.
PMI's total shipment volume decreased by 0.2% to 81.9 billion units, mainly due to:
partly offset by
Excluding the net unfavorable impact of estimated distributor inventory movements, PMI's total in-market sales volume increased by 1.9%.
Fourth-Quarter
The estimated total market in East Asia & Australia, excluding China, increased, mainly driven by:
PMI's total shipment volume increased by 11.3% to 22.4 billion units, mainly due to:
AMERICAS REGION
Full-Year
Financial Summary -
Years Ended
December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
1,903
$
1,843
3.3
%
4.1
%
60
(15
)
—
102
(23
)
(4
)
Operating Income
$
436
$
487
(10.5
) %
(8.2
) %
(51
)
(11
)
—
102
(6
)
(136
)
Asset Impairment & Exit Costs
—
(8
)
+100
%
+100
%
8
—
—
—
—
8
Amortization and Impairment of Intangibles
(9
)
(9
)
—
%
—
%
—
—
—
—
—
—
Costs associated with Swedish Match AB offer
(5
)
—
—
%
—
%
(5
)
—
—
—
—
(5
)
Adjusted Operating Income
$
450
$
504
(10.7
)%
(8.5
)%
(54
)
(11
)
—
102
(6
)
(139
)
Adjusted Operating Income Margin
23.6
%
27.3
%
(3.7
)pp
(3.3
)pp
Net revenues increased by 4.1% on an organic basis, primarily reflecting: a favorable pricing variance, driven by combustible tobacco pricing; partly offset by unfavorable volume/mix, mainly due to unfavorable cigarette mix.
Operating income decreased by 8.2%, excluding currency and acquisitions. Adjusted operating income decreased by 8.5% on an organic basis, mainly reflecting: higher marketing, administration and research costs; and higher manufacturing costs; partly offset by a favorable pricing variance. Volume/mix was slightly unfavorable, mainly due to unfavorable cigarette mix, largely offset by higher cigarette volume. Adjusted operating income margin decreased by 3.3 points on an organic basis. The margin decline was notably due to incremental investments in the U.S. market, including expenses related to domestic manufacturing.
Fourth-Quarter
Financial Summary -
Quarters Ended
December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
536
$
523
2.5
%
2.3
%
13
1
—
29
(11
)
(6
)
Operating Income
$
100
$
120
(16.7
) %
(4.2
) %
(20
)
(15
)
—
29
(1
)
(33
)
Asset Impairment & Exit Costs
—
(2
)
+100
%
+100
%
2
—
—
—
—
2
Amortization and Impairment of Intangibles
(3
)
(2
)
(50.0
) %
(50.0
) %
(1
)
—
—
—
—
(1
)
Costs associated with Swedish Match AB offer
8
—
—
%
—
%
8
—
—
—
—
8
Adjusted Operating Income
$
95
$
124
(23.4
)%
(11.3
)%
(29
)
(15
)
—
29
(1
)
(42
)
Adjusted Operating Income Margin
17.7
%
23.7
%
(6.0
)pp
(3.1
)pp
Net revenues increased by 2.3% on an organic basis, primarily reflecting: a favorable pricing variance, driven by combustible tobacco pricing; partly offset by unfavorable volume/mix, mainly due to lower cigarette volume and unfavorable cigarette mix.
Operating income decreased by 4.2%, excluding currency and acquisitions. Adjusted operating income decreased by 11.3% on an organic basis, mainly reflecting: higher marketing, administration and research costs; partly offset by a favorable pricing variance. Adjusted operating income margin decreased by 3.1 points on an organic basis. The margin decline was notably due to incremental investments in the U.S. market, including expenses related to domestic manufacturing.
Total Market, PMI Shipment & Market Share Commentaries
PMI Shipment Volume
Fourth-Quarter
Full-Year
(million units)
2022
2021
Change
2022
2021
Change
Cigarettes
18,432
18,495
(0.3)%
65,973
64,587
2.1%
Heated Tobacco Units
193
110
75.5%
532
576
(7.6)%
Total Americas
18,625
18,605
0.1%
66,505
65,163
2.1%
Full-Year
The estimated total market in the Americas, excluding the U.S., increased by 1.7% to 190.8 billion units, primarily driven by:
partly offset by
PMI's Regional market share, excluding the U.S., increased by 0.3 points to 34.8%.
PMI's total shipment volume increased by 2.1% to 66.5 billion units, mainly driven by:
partly offset by
Fourth-Quarter
The estimated total market in the Americas, excluding the U.S., increased, primarily driven by:
partly offset by
PMI's total shipment volume increased by 0.1% to 18.6 billion units, mainly driven by:
partly offset by
SWEDISH MATCH
PMI's results for the Swedish Match operating segment for the full-year and fourth-quarter periods include Swedish Match's results beginning on November 11, 2022, when PMI became the owner of a majority position in the company, through December 31, 2022.
Full-Year and Fourth-Quarter
Financial Summary -
Years Ended
December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
316
$
—
—
%
—
%
316
—
316
—
—
—
Operating Income / (Loss)
$
(22
)
$
—
—
%
—
%
(22
)
—
(22
)
—
—
—
Amortization and Impairment of Intangibles
(26
)
—
—
%
—
%
(26
)
—
(26
)
—
—
—
Swedish Match AB acquisition accounting related item
(125
)
—
—
%
—
%
(125
)
—
(125
)
—
—
—
Adjusted Operating Income
$
129
$
—
—
%
—
%
129
—
129
—
—
—
Adjusted Operating Income Margin
40.8
%
n/a
—
pp
—
pp
PMI recorded net revenues of $316 million in the Swedish Match segment for the full-year and fourth-quarter periods, with an operating loss of $22 million, primarily reflecting acquisition accounting-related items and the amortization of acquired intangibles.
PMI recorded adjusted operating income of $129 million in the segment, reflecting an adjusted operating margin of 40.8%.
WELLNESS AND HEALTHCARE
In the third quarter of 2021, PMI acquired Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc. On March 31, 2022, PMI launched a new Wellness and Healthcare business -- Vectura Fertin Pharma -- consolidating these entities. The operating results of this business are reported in the Wellness and Healthcare segment.
Full-Year
Financial Summary -
Years Ended
December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
271
$
101
+100
%
(7.9
) %
170
(11
)
189
(10
)
—
2
Operating Income / (Loss)
$
(258
)
$
(52
)
-(100
)%
-(100
)%
(206
)
8
(72
)
(10
)
—
(132
)
Asset Acquisition Cost
—
(51
)
+100
%
+100
%
51
—
—
—
—
51
Amortization and Impairment of Intangibles
(171
)
(18
)
-(100
)%
-(100
)%
(153
)
—
(44
)
—
—
(109
)
Adjusted Operating Income / (Loss)
$
(87
)
$
17
-(100
)%
-(100
)%
(104
)
8
(28
)
(10
)
—
(74
)
Adjusted Operating Income / (Loss) Margin
(32.1
) %
16.8
%
(48.9
)pp
(88.8
)pp
Net revenues decreased by 7.9% on an organic basis, primarily reflecting lower product supply revenues and lower royalties.
The adjusted operating loss of $87 million mainly reflected investments in research and development, as well as expenses related to employee retention programs. Adjusted operating loss margin for the year was 32.1%.
Fourth-Quarter
Financial Summary -
Quarters Ended
December 31,
Change Fav./(Unfav.)
Variance Fav./(Unfav.)
2022
2021
Total
Excl. Curr. & Acquis.
Total
Cur- rency
Acqui- sitions
Price
Vol/ Mix
Cost/ Other
(in millions)
Net Revenues
$
72
$
101
(28.7
) %
(18.8
) %
(29
)
(10
)
—
(21
)
—
2
Operating Income / (Loss)
$
(42
)
$
(1
)
-(100
)%
-(100
)%
(41
)
6
—
(21
)
—
(26
)
Asset Acquisition Cost
—
—
—
%
—
%
—
—
—
—
—
—
Amortization and Impairment of Intangibles
(13
)
(18
)
27.8
%
27.8
%
5
—
—
—
—
5
Adjusted Operating Income / (Loss)
$
(29
)
$
17
-(100
)%
-(100
)%
(46
)
6
—
(21
)
—
(31
)
Adjusted Operating Income / (Loss) Margin
(40.3
) %
16.8
%
(57.1
)pp
(59.5
)pp
Net revenues decreased by 18.8% on an organic basis, notably reflecting an unfavorable comparison versus the fourth quarter of 2021, during which approximately two weeks of results from the third quarter (net revenues of approximately $12 million) were included in the period due to acquisition timing.
The adjusted operating loss of $29 million primarily reflected investments in research and development. Adjusted operating loss margin in the quarter was 40.3%.
Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is a leading international tobacco company working to deliver a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company’s current product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, vapor, and oral nicotine products. Since 2008, PMI has invested more than USD 10.5 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. In November 2022, PMI acquired Swedish Match – a leader in oral nicotine delivery – creating a global smoke-free champion led by the companies’ IQOS and ZYN brands. The U.S. Food and Drug Administration (FDA) has authorized versions of PMI’s IQOS Platform 1 devices and consumables and Swedish Match’s General snus as Modified Risk Tobacco Products (MRTPs). As of December 31, 2022, PMI's smoke-free products were available for sale in 73 markets, and PMI estimates that approximately 17.8 million adults around the world had already switched to IQOS and stopped smoking. Smoke-free products accounted for approximately 32% of PMI’s total full-year 2022 net revenues. With a strong foundation and significant expertise in life sciences, PMI announced in February 2021 its ambition to expand into wellness and healthcare areas and, through its Vectura Fertin Pharma subsidiary, aims to enhance life through the delivery of seamless health experiences. For more information, please visit www.pmi.com and www.pmiscience.com.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and goals and other forward-looking statements, including statements regarding business plans and strategies. 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; the impact and consequences of Russia's invasion of Ukraine; changes in adult smoker behavior; the impact of COVID-19 on PMI's business; 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; if it is unable to attract and retain the best global talent, including women or diverse candidates; or if it is unable to successfully integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also subject to the lower predictability of our reduced-risk product category's performance.
PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2021, the Form 10-Q for the quarter ended September 30, 2022, and the Form 10-K for the fourth quarter and year ended December 31, 2022, which will be filed in the coming days. 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.
Key Terms, Definitions and Explanatory Notes
General
Financial
Smoke-Free Products
The estimated number of adults who have "switched to IQOS and stopped smoking" reflects:
Note: The above IQOS user metrics reflect PMI estimates, which are based on consumer claims and sample-based statistical assessments with an average margin of error of +/-5% at a 95% Confidence Interval in key volume markets. The accuracy and reliability of IQOS user metrics may vary based on individual market maturity and availability of information.
As of December 2020, PMI heat-not-burn products and HTUs include licensed KT&G heat-not-burn products and HTUs, respectively.
Appendix 1
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Key Market Data
Quarters Ended December 31,
Market
Total Market, bio units
PMI Shipments, bio units
PMI Market Share, % (1)
Total
Cigarette
HTU
Total
HTU
2022
2021
% Change
2022
2021
% Change
2022
2021
% Change
2022
2021
% Change
2022
2021
pp Change
2022
2021
pp Change
Total (2)
661.7
667.4
(0.9)
186.0
183.8
1.2
154.0
158.4
(2.8)
32.0
25.4
26.1
28.0
27.3
0.7
4.3
3.5
0.8
European Union
France
7.7
8.0
(4.1)
3.2
3.6
(10.3)
3.1
3.5
(11.1)
0.1
—
—
43.6
44.3
(0.7)
0.8
0.8
—
Germany
16.0
17.6
(9.0)
7.1
7.0
1.1
5.8
6.4
(8.9)
1.3
0.6
+100
44.0
39.6
4.4
7.9
3.5
4.4
Italy
17.8
17.5
1.9
10.2
9.7
5.0
6.4
7.3
(11.8)
3.8
2.4
55.3
54.3
53.3
1.0
15.4
12.7
2.7
Poland
12.8
12.1
5.7
5.1
4.5
13.0
4.1
3.6
13.9
1.0
0.9
9.6
39.6
37.0
2.6
7.7
7.4
0.3
Spain
10.6
10.5
1.0
3.0
3.0
1.4
2.8
2.8
—
0.2
0.2
27.5
29.1
29.9
(0.8)
1.9
1.3
0.6
Eastern Europe
Russia
52.1
52.9
(1.3)
16.1
16.8
(4.3)
12.0
12.1
(1.5)
4.1
4.6
(11.6)
31.8
32.1
(0.3)
7.8
8.0
(0.2)
Middle East & Africa
Egypt
24.6
23.1
6.6
5.9
4.7
23.5
5.4
4.6
17.1
0.5
0.1
+100
22.2
20.8
1.4
0.9
0.5
0.4
Turkey
31.6
33.9
(6.8)
15.7
15.2
3.0
15.7
15.2
3.0
—
—
—
49.7
44.8
4.9
—
—
—
South & Southeast Asia
Indonesia
74.8
78.8
(5.1)
21.2
22.0
(3.7)
21.2
22.0
(3.7)
—
—
—
28.3
27.9
0.4
—
—
—
Philippines
12.7
14.2
(10.8)
7.7
8.7
(11.6)
7.6
8.7
(12.0)
0.1
—
—
61.0
61.5
(0.5)
0.6
0.3
0.3
East Asia & Australia
Australia
2.3
2.6
(11.5)
0.8
0.8
(9.6)
0.8
0.8
(9.6)
—
—
—
32.9
32.2
0.7
—
—
—
Japan (2)
37.8
33.8
11.9
16.1
13.7
17.8
5.0
5.3
(5.4)
11.1
8.4
32.4
38.0
36.3
1.7
24.3
21.7
2.6
South Korea
17.6
17.6
—
3.3
3.4
(2.6)
2.1
2.2
(2.6)
1.2
1.2
(2.5)
19.1
19.5
(0.4)
6.7
6.8
(0.1)
Americas
Argentina
7.8
8.2
(5.5)
4.9
5.3
(7.3)
4.9
5.3
(7.3)
—
—
—
63.4
64.7
(1.3)
—
—
—
Mexico
9.7
9.4
2.9
6.5
6.3
2.2
6.4
6.3
1.8
—
—
—
67.0
67.5
(0.5)
0.5
0.3
0.2
(1) Market share estimates are calculated using IMS data
(2) Total market and market share estimates include cigarillos in Japan
Appendix 2
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Key Market Data
Years Ended December 31,
Market
Total Market, bio units
PMI Shipments, bio units
PMI Market Share, % (1)
Total
Cigarette
HTU
Total
HTU
2022
2021
% Change
2022
2021
% Change
2022
2021
% Change
2022
2021
% Change
2022
2021
pp Change
2022
2021
pp Change
Total (2)
2,626.4
2,620.5
0.2
731.1
719.9
1.6
621.9
624.9
(0.5)
109.2
95.0
14.9
27.6
27.2
0.4
4.1
3.5
0.6
European Union
France
32.5
34.3
(5.3)
14.0
15.2
(8.1)
13.7
15.0
(8.2)
0.2
0.2
1.1
43.6
43.9
(0.3)
0.7
0.7
—
Germany
70.3
74.1
(5.1)
28.2
28.6
(1.6)
24.8
26.3
(5.9)
3.4
2.3
47.9
40.1
38.6
1.5
4.8
3.1
1.7
Italy
72.8
70.4
3.4
40.8
38.6
5.8
28.6
29.7
(3.7)
12.3
8.9
37.7
54.1
53.0
1.1
14.6
11.5
3.1
Poland
55.7
49.3
13.0
21.7
18.4
17.6
17.1
15.3
11.8
4.5
3.1
46.6
38.9
37.3
1.6
8.2
6.3
1.9
Spain
44.6
42.7
4.5
13.6
13.2
3.2
12.7
12.6
0.7
0.9
0.5
65.6
30.0
31.1
(1.1)
1.7
1.2
0.5
Eastern Europe
Russia
208.9
216.8
(3.6)
64.7
68.8
(6.0)
49.3
52.5
(6.1)
15.4
16.3
(5.6)
31.1
31.7
(0.6)
7.6
7.4
0.2
Middle East & Africa
Egypt
93.6
93.4
0.3
21.0
19.5
8.2
20.0
19.2
4.2
1.0
0.2
+100
22.2
20.7
1.5
0.8
0.2
0.6
Turkey
117.2
125.1
(6.3)
56.1
55.7
0.7
56.1
55.7
0.7
—
—
—
47.9
44.5
3.4
—
—
—
South & Southeast Asia
Indonesia
309.6
296.2
4.5
86.8
82.8
4.8
86.8
82.8
4.8
—
—
—
28.0
28.0
—
—
—
—
Philippines
51.8
55.2
(6.1)
32.2
34.4
(6.3)
32.0
34.2
(6.5)
0.2
0.2
47.8
62.1
62.3
(0.2)
0.4
0.3
0.1
East Asia & Australia
Australia
8.9
9.7
(8.2)
3.0
3.1
(5.1)
3.0
3.1
(5.1)
—
—
—
33.4
32.3
1.1
—
—
—
Japan (2)
148.3
150.5
(1.5)
55.5
55.2
0.6
21.1
22.1
(4.6)
34.4
33.1
4.0
37.6
35.7
1.9
23.6
21.3
2.3
South Korea
72.6
71.7
1.3
13.9
14.1
(1.6)
9.4
9.4
(0.5)
4.5
4.7
(3.6)
19.2
19.7
(0.5)
6.2
6.5
(0.3)
Americas
Argentina
30.3
30.0
1.0
19.3
19.9
(2.8)
19.3
19.9
(2.8)
—
—
—
63.8
66.3
(2.5)
—
—
—
Mexico
32.2
31.9
1.0
21.0
20.5
2.5
20.8
20.4
2.3
0.1
0.1
45.8
65.1
64.1
1.0
0.4
0.3
0.1
(1) Market share estimates are calculated using IMS data
(2) Total market and market share estimates include cigarillos in Japan
Appendix 3
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
PMI Shipment Volume Adjusted for the Impact of Russia and Ukraine
(in million units) / (Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
% Change
2022
2021
% Change
Cigarettes
154,026
158,382
(2.8)%
Shipment Volume
621,908
624,875
(0.5)%
11,966
12,145
Russia
49,300
52,499
1,431
2,503
Ukraine
6,601
10,669
140,629
143,735
(2.2)%
Shipment Volume excl. Russia and Ukraine
566,007
561,707
0.8%
Heated Tobacco Units
32,021
25,397
26.1%
Shipment Volume
109,169
94,976
14.9%
4,111
4,648
Russia
15,393
16,309
1,172
1,303
Ukraine
4,470
5,168
26,739
19,446
37.5%
Shipment Volume excl. Russia and Ukraine
89,306
73,499
21.5%
Cigarettes & HTU
186,047
183,779
1.2%
Shipment Volume
731,077
719,851
1.6%
16,077
16,792
Russia
64,693
68,807
2,603
3,805
Ukraine
11,071
15,838
167,368
163,181
2.6%
Shipment Volume excl. Russia and Ukraine
655,313
635,206
3.2%
Note: Sum of product categories might not foot to total due to roundings.
Appendix 4
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Eastern Europe Shipment Volume Adjusted for the Impact of Russia and Ukraine
(in million units) / (Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
% Change
2022
2021
% Change
Cigarettes
19,766
20,927
(5.5)%
Shipment Volume
81,460
88,698
(8.2)%
11,966
12,145
Russia
49,300
52,499
1,431
2,503
Ukraine
6,601
10,669
6,369
6,280
1.4%
Shipment Volume excl. Russia and Ukraine
25,559
25,530
0.1%
Heated Tobacco Units
6,531
7,056
(7.4)%
Shipment Volume
24,806
25,650
(3.3)%
4,111
4,648
Russia
15,393
16,309
1,172
1,303
Ukraine
4,470
5,168
1,249
1,105
13.0%
Shipment Volume excl. Russia and Ukraine
4,943
4,173
18.5%
Cigarettes & HTU
26,297
27,983
(6.0)%
Shipment Volume
106,266
114,348
(7.1)%
16,077
16,792
Russia
64,693
68,807
2,603
3,805
Ukraine
11,071
15,838
7,618
7,385
3.2%
Shipment Volume excl. Russia and Ukraine
30,502
29,703
2.7%
Note: Sum of product categories might not foot to total due to roundings.
Schedule 1
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Diluted Earnings Per Share (EPS)
($ in millions, except per share data) / (Unaudited)
Quarters Ended
Diluted EPS
Years Ended
December 31,
December 31,
$
1.54
2022 Diluted Earnings Per Share (1)
$
5.81
$
1.34
2021 Diluted Earnings Per Share (1)
$
5.83
$
0.20
Change
$
(0.02
)
14.9
%
% Change
(0.3
)%
Reconciliation:
$
1.34
2021 Diluted Earnings Per Share (1)
$
5.83
0.02
2021 Asset impairment and exit costs
0.12
0.02
2021 Amortization and impairment of intangibles
0.05
—
2021 Asset acquisition cost
0.03
(0.01
)
2021 Equity investee ownership dilution
(0.04
)
—
2021 Saudi Arabia customs assessments
0.14
(0.03
)
2022 Amortization and impairment of intangibles
(0.15
)
0.07
2022 Costs associated with Swedish Match AB offer
(0.06
)
(0.06
)
2022 Swedish Match AB acquisition accounting related item
(0.06
)
0.13
2022 Tax benefit associated with Swedish Match AB financing
0.13
(0.01
)
2022 Charges related to the war in Ukraine
(0.08
)
0.05
2022 Fair value adjustment for equity security investments
0.02
—
2022 Tax Items
0.03
(0.19
)
Currency
(0.77
)
(0.01
)
Interest
0.02
0.01
Change in tax rate
0.03
0.21
Operations (2)
0.57
$
1.54
2022 Diluted Earnings Per Share (1)
$
5.81
(1) Basic and diluted EPS were calculated using the following (in millions):
Quarters Ended
Years Ended
December 31,
December 31,
2022
2021
2022
2021
$
2,397
$
2,093
Net Earnings attributable to PMI
$
9,048
$
9,109
6
5
Less: Distributed and undistributed earnings
attributable to share-based payment awards
24
26
$
2,391
$
2,088
Net Earnings for basic and diluted EPS
$
9,024
$
9,083
1,550
1,556
Weighted-average shares for basic EPS
1,550
1,558
2
1
Plus Contingently Issuable Performance Stock Units
2
1
1,552
1,557
Weighted-average shares for diluted EPS
1,552
1,559
(2) Includes the impact of shares outstanding and share-based payments
Schedule 2
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency,
and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency
(Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
% Change
2022
2021
% Change
$
1.54
$
1.34
14.9
%
Reported Diluted EPS
$
5.81
$
5.83
(0.3
)%
(0.19
)
Less: Currency
(0.77
)
$
1.73
$
1.34
29.1
%
Reported Diluted EPS, excluding Currency
$
6.58
$
5.83
12.9
%
Quarters Ended December 31,
Years Ended December 31,
2022
2021
% Change
2022
2021
% Change
$
1.54
$
1.34
14.9
%
Reported Diluted EPS
$
5.81
$
5.83
(0.3
)%
—
0.02
Asset impairment and exit costs
—
0.12
0.03
0.02
Amortization and impairment of intangibles
0.15
0.05
—
—
Saudi Arabia customs assessments
—
0.14
—
(0.01
)
Equity investee ownership dilution
—
(0.04
)
—
—
Asset acquisition cost
—
0.03
(0.07
)
—
Costs associated with Swedish Match AB offer
0.06
—
0.06
—
Swedish Match AB acquisition accounting related item
0.06
—
(0.13
)
—
Tax benefit associated with Swedish Match AB financing
(0.13
)
—
0.01
—
Charges related to the war in Ukraine
0.08
—
(0.05
)
—
Fair value adjustment for equity security investments
(0.02
)
—
—
—
Tax items
(0.03
)
—
$
1.39
$
1.37
1.5
%
Adjusted Diluted EPS
$
5.98
$
6.13
(2.4
)%
(0.19
)
Less: Currency
(0.77
)
$
1.58
$
1.37
15.3
%
Adjusted Diluted EPS, excluding Currency
$
6.75
$
6.13
10.1
%
Schedule 3
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions
($ in millions) / (Unaudited)
Net Revenues (1)
Currency
Net Revenues excluding Currency
Acqui- sitions
Net Revenues excl. Currency & Acquisitions
Quarters Ended December 31,
Net Revenues (1)
Total
Excluding Currency
Excl. Currency &
Acquisitions
2022
Combustible Tobacco
2021
% Change
$
1,587
$
(263
)
$
1,850
$
—
$
1,850
European Union
$
1,928
(17.7)%
(4.1
)%
(4.1)%
636
11
624
—
624
Eastern Europe
559
13.7%
11.7
%
11.7%
826
(77
)
904
—
904
Middle East & Africa
930
(11.1)%
(2.8
) %
(2.8)%
1,093
(115
)
1,208
—
1,208
South & Southeast Asia
1,108
(1.4)%
9.0
%
9.0%
495
(65
)
559
—
559
East Asia & Australia
564
(12.3)%
(0.8
) %
(0.8)%
508
2
506
—
506
Americas
490
3.6%
3.3
%
3.3%
70
—
70
70
—
Swedish Match
—
—%
—
%
—%
$
5,214
$
(508
)
$
5,722
$
70
$
5,652
Total Combustible Tobacco
$
5,579
(6.6)%
2.6
%
1.3%
2022
Smoke-free excl. W&H
2021
% Change
$
1,303
$
(211
)
$
1,514
$
—
$
1,514
European Union
$
1,097
18.8%
38.0
%
38.0%
356
15
342
—
342
Eastern Europe
353
0.9%
(3.3
)%
(3.3) %
98
(20
)
117
—
117
Middle East & Africa
57
71.2%
+100%
+100%
7
(1
)
8
—
8
South & Southeast Asia
4
84.1%
+100%
+100%
827
(143
)
971
—
971
East Asia & Australia
880
(6.0)%
10.3
%
10.3%
28
(1
)
29
—
29
Americas
33
(14.4)%
(12.1
)%
(12.1) %
246
—
246
246
—
Swedish Match
—
—%
—
%
—%
$
2,866
$
(360
)
$
3,226
$
246
$
2,980
Total Smoke-free excl. W&H
$
2,424
18.3%
33.1
%
23.0%
2022
Wellness and Healthcare
2021
% Change
$
72
$
(10
)
$
82
$
—
$
82
Wellness and Healthcare
$
101
(28.7) %
(18.8
)%
(18.8) %
2022
Smoke-free incl. W&H
2021
% Change
$
2,938
$
(370
)
$
3,308
$
246
$
3,062
Smoke-free incl. W&H
$
2,525
16.4%
31.0
%
21.3%
2022
PMI
2021
% Change
$
2,890
$
(474
)
$
3,364
$
—
$
3,364
European Union
$
3,025
(4.5)%
11.2
%
11.2%
992
26
966
—
966
Eastern Europe
912
8.8%
5.9
%
5.9%
924
(97
)
1,021
—
1,021
Middle East & Africa
987
(6.4)%
3.4
%
3.4%
1,100
(116
)
1,216
—
1,216
South & Southeast Asia
1,112
(1.1)%
9.4
%
9.4%
1,322
(208
)
1,530
—
1,530
East Asia & Australia
1,444
(8.4)%
6.0
%
6.0%
536
1
535
—
535
Americas
523
2.5%
2.3
%
2.3%
316
—
316
316
—
Swedish Match
—
—%
—
%
—%
72
(10
)
82
—
82
Wellness and Healthcare
101
(28.7)%
(18.8
) %
(18.8) %
$
8,152
$
(878
)
$
9,030
$
316
$
8,714
Total PMI
$
8,104
0.6%
11.4
%
7.5%
(1) Following the Swedish Match acquisition, PMI reclassified certain of its own products previously reported under its combustible tobacco category to the newly created smoke-free product category to better reflect the characteristics of these products. The impact of the reclassification was immaterial for all periods.
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million
Schedule 4
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions
($ in millions) / (Unaudited)
Net Revenues (1)
Currency
Net Revenues excluding Currency
Acqui- sitions
Net Revenues excl. Currency & Acquisitions
Years Ended December 31,
Net Revenues (1)
Total
Excluding Currency
Excluding Currency & Acquisitions
2022
Combustible Tobacco
2021
% Change
$ 7,212
$ (864)
$ 8,076
$ —
$ 8,076
European Union
$ 8,211
(12.2)%
(1.6)%
(1.6)%
2,410
26
2,383
—
2,383
Eastern Europe
2,240
7.6%
6.4%
6.4%
3,567
(316)
3,882
—
3,882
Middle East & Africa
3,110
(2)
14.7%
24.8%
24.8%
4,372
(273)
4,644
—
4,644
South & Southeast Asia
4,385
(0.3)%
5.9%
5.9%
2,138
(203)
2,341
—
2,341
East Asia & Australia
2,414
(11.4)%
(3.0)%
(3.0)%
1,804
(13)
1,818
—
1,818
Americas
1,706
5.8%
6.5%
6.5%
70
—
70
70
—
Swedish Match
—
—%
—%
—%
$ 21,572
$ (1,643)
$ 23,214
$70
$ 23,144
Total Combustible Tobacco
$ 22,067
(2.2) %
5.2%
4.9%
2022
Smoke-free excl. W&H
2021
% Change
$ 4,907
$ (608)
$ 5,515
$ 10
$ 5,505
European Union
$ 4,064
20.7%
35.7%
35.5%
1,315
25
1,291
—
1,291
Eastern Europe
1,304
0.9%
(1.0)%
(1.0)%
334
(32)
367
—
367
Middle East & Africa
183
83.1%
+100%
+100%
23
(1)
25
—
25
South & Southeast Asia
11
+100%
+100%
+100%
2,994
(384)
3,378
—
3,378
East Asia & Australia
3,539
(15.4)%
(4.6)%
(4.6)%
99
(2)
100
—
100
Americas
137
(28.0)%
(26.8)%
(26.8)%
246
—
246
246
—
Swedish Match
—
—%
—%
—%
$ 9,919
$ (1,002)
$ 10,922
$256
$ 10,666
Total Smoke-free excl. W&H
$ 9,237
7.4%
18.2%
15.5%
2022
Wellness and Healthcare
2021
% Change
$ 271
$ (11)
$282
$189
$ 93
Wellness and Healthcare
$ 101
+100%
+100%
(7.9)%
2022
Smoke-free incl. W&H
2021
% Change
$ 10,190
$ (1,013)
$ 11,204
$ 445
$ 10,759
Smoke-free incl. W&H
$ 9,338
9.1 %
20.0 %
15.2 %
2022
PMI
2021
% Change
$ 12,119
$ (1,472)
$ 13,591
$ 10
$ 13,581
European Union
$ 12,275
(1.3)%
10.7%
10.6%
3,725
51
3,674
—
3,674
Eastern Europe
3,544
5.1%
3.7%
3.7%
3,901
(348)
4,249
—
4,249
Middle East & Africa
3,293
(2)
18.5%
29.0%
29.0%
4,395
(274)
4,669
—
4,669
South & Southeast Asia
4,396
—%
6.2%
6.2%
5,132
(587)
5,719
—
5,719
East Asia & Australia
5,953
(13.8)%
(3.9)%
(3.9)%
1,903
(15)
1,918
—
1,918
Americas
1,843
3.3%
4.1%
4.1%
316
—
316
316
—
Swedish Match
—
—%
— %
—%
271
(11)
282
189
93
Wellness and Healthcare
101
+100%
+100%
(7.9)%
$ 31,762
$ (2,656)
$ 34,418
$515
$ 33,903
Total PMI
$ 31,405
1.1 %
9.6%
8.0%
(1) Following the Swedish Match acquisition, PMI reclassified certain of its own products previously reported under its combustible tobacco category to the newly created smoke-free product category to better reflect the characteristics of these products. The impact of the reclassification was immaterial for all periods.
(2) Includes a reduction in net revenues of $246 million related to the Saudi Arabia customs assessment
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million
Schedule 5
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Net Revenues to Adjusted Net Revenues, excluding Currency and Acquisitions
($ in millions) / (Unaudited)
Net Revenues
Special Items
Adjusted Net Revenues
Currency
Adjusted Net Revenues excluding Currency
Acqui- sitions
Adjusted Net Revenues excluding Currency & Acqui- sitions
Net Revenues
Special Items
Adjusted Net Revenues
Total
Excluding Currency
Excluding Currency
& Acqui- sitions
2022
Quarters Ended
December 31,
2021
% Change
$ 2,890
$ —
$ 2,890
$ (474)
$ 3,364
$ —
$ 3,364
European Union
$ 3,025
$ —
$ 3,025
(4.5)%
11.2%
11.2%
992
—
992
26
966
—
966
Eastern Europe
912
—
912
8.8%
5.9%
5.9%
924
—
924
(97)
1,021
—
1,021
Middle East & Africa
987
—
987
(6.4)%
3.4%
3.4%
1,100
—
1,100
(116)
1,216
—
1,216
South & Southeast Asia
1,112
—
1,112
(1.1)%
9.4%
9.4%
1,322
—
1,322
(208)
1,530
—
1,530
East Asia & Australia
1,444
—
1,444
(8.4)%
6.0%
6.0%
536
—
536
1
535
—
535
Americas
523
—
523
2.5%
2.3%
2.3%
316
—
316
—
316
316
—
Swedish Match
—
—
—
—%
—%
—%
72
—
72
(10)
82
—
82
Wellness and Healthcare
101
—
101
(28.7)%
(18.8)%
(18.8)%
$ 8,152
$ —
$ 8,152
$ (878)
$ 9,030
$ 316
$ 8,714
Total PMI
$ 8,104
$ —
$ 8,104
0.6%
11.4%
7.5%
2022
Years Ended
December 31,
2021
% Change
$ 12,119
$ —
$ 12,119
$ (1,472)
$ 13,591
$ 10
$ 13,581
European Union
$ 12,275
$ —
$ 12,275
(1.3)%
10.7%
10.6%
3,725
—
3,725
51
3,674
—
3,674
Eastern Europe
3,544
—
3,544
5.1%
3.7%
3.7%
3,901
—
3,901
(348)
4,249
—
4,249
Middle East & Africa
3,293
(246)
(1)
3,539
10.2%
20.1%
20.1%
4,395
—
4,395
(274)
4,669
—
4,669
South & Southeast Asia
4,396
—
4,396
—%
6.2%
6.2%
5,132
—
5,132
(587)
5,719
—
5,719
East Asia & Australia
5,953
—
5,953
(13.8)%
(3.9)%
(3.9)%
1,903
—
1,903
(15)
1,918
—
1,918
Americas
1,843
—
1,843
3.3%
4.1%
4.1%
316
—
316
—
316
316
—
Swedish Match
—
—
—
—%
—%
—%
271
—
271
(11)
282
189
93
Wellness and Healthcare
101
—
101
+100%
+100%
(7.9)%
$ 31,762
$ —
$ 31,762
$ (2,656)
$ 34,418
$ 515
$ 33,903
Total PMI
$ 31,405
$ (246)
$ 31,651
0.4%
8.7%
7.1%
(1) Represents the Saudi Arabia customs assessments
Schedule 6
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments of Operating Income for the Impact of Currency and Acquisitions
($ in millions) / (Unaudited)
Operating Income
Currency
Operating Income excluding Currency
Acqui- sitions
Operating Income excluding Currency & Acquisitions
Operating Income
Total
Excluding Currency
Excluding Currency & Acquisitions
2022
Quarters Ended
December 31,
2021
% Change
$ 1,347
$ (264)
$ 1,611
$ —
$ 1,611
European Union
$ 1,308
3.0%
23.2%
23.2%
306
52
254
—
254
Eastern Europe
300
2.0%
(15.3)%
(15.3)%
307
(42)
349
—
349
Middle East & Africa
407
(24.6)%
(14.3)%
(14.3)%
324
(55)
379
—
379
South & Southeast Asia
298
8.7%
27.2%
27.2%
604
(97)
701
—
701
East Asia & Australia
515
17.3%
36.1%
36.1%
100
(15)
115
—
115
Americas
120
(16.7)%
(4.2)%
(4.2)%
(22)
—
(22)
(22)
—
Swedish Match
—
—%
—%
—%
(42)
6
(48)
—
(48)
Wellness and Healthcare
(1)
-(100)%
-(100)%
-(100)%
$ 2,924
$ (415)
$ 3,339
$ (22)
$ 3,361
Total PMI
$ 2,947
(0.8)%
13.3%
14.0%
2022
Years Ended
December 31,
2021
% Change
$ 5,788
$ (972)
$ 6,760
$ (2)
$ 6,762
European Union
$ 6,119
(5.4)%
10.5%
10.5%
1,166
122
1,044
—
1,044
Eastern Europe
1,213
(3.9)%
(13.9)%
(13.9)%
1,758
(163)
1,921
—
1,921
Middle East & Africa
1,146
53.4%
67.6%
67.6%
1,459
(133)
1,592
—
1,592
South & Southeast Asia
1,506
(3.1)%
5.7%
5.7%
1,919
(358)
2,277
—
2,277
East Asia & Australia
2,556
(24.9)%
(10.9)%
(10.9)%
436
(11)
447
—
447
Americas
487
(10.5)%
(8.2)%
(8.2)%
(22)
—
(22)
(22)
—
Swedish Match
—
—%
—%
—%
(258)
8
(266)
(72)
(194)
Wellness and Healthcare
(52)
-(100)%
-(100)%
-(100)%
$ 12,246
$ (1,507)
$ 13,753
$ (96)
$ 13,849
Total PMI
$ 12,975
(5.6)%
6.0%
6.7%
Schedule 7
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions
($ in millions) / (Unaudited)
Operating Income
Asset Impairment & Exit Costs and Others (1)
Adjusted Operating Income
Currency
Adjusted Operating Income excluding Currency
Acqui- sitions
Adjusted Operating Income excluding Currency & Acqui sitions
Operating Income
Asset Impairment & Exit Costs and Others (2)
Adjusted Operating Income
Total
Excluding Currency
Excluding Currency & Acqui- sitions
2022
Quarters Ended
December 31,
2021
% Change
$ 1,347
$ 58
$ 1,289
$ (264)
$ 1,553
$ —
$ 1,553
European Union
$ 1,308
$ (21)
$ 1,329
(3.0)%
16.9%
16.9%
306
(7)
313
52
261
—
261
Eastern Europe
300
(4)
304
3.0%
(14.1)%
(14.1)%
307
15
292
(42)
334
—
334
Middle East & Africa
407
(6)
413
(29.3)%
(19.1)%
(19.1)%
324
13
311
(55)
366
—
366
South & Southeast Asia
298
(12)
310
0.3%
18.1%
18.1%
604
28
576
(97)
673
—
673
East Asia & Australia
515
(22)
537
7.3%
25.3%
25.3%
100
5
95
(15)
110
—
110
Americas
120
(4)
124
(23.4)%
(11.3)%
(11.3)%
(22)
(151)
129
—
129
129
—
Swedish Match
—
—
—
—%
—%
—%
(42)
(13)
(29)
6
(35)
—
(35)
Wellness and Healthcare
(1)
(18)
17
-(100)%
-(100)%
-(100)%
$ 2,924
$ (52)
$ 2,976
$ (415)
$ 3,391
$ 129
$ 3,262
Total PMI
$ 2,947
$ (87)
$ 3,034
(1.9)%
11.8%
7.5%
2022
Years Ended
December 31,
2021
% Change
$ 5,788
$ (88)
$ 5,876
$ (972)
$ 6,848
$ (2)
$ 6,850
European Union
$ 6,119
$ (103)
$ 6,222
(5.6)%
10.1%
10.1%
1,166
(165)
1,331
122
1,209
—
1,209
Eastern Europe
1,213
(16)
1,229
8.3%
(1.6)%
(1.6)%
1,758
(21)
1,779
(163)
1,942
—
1,942
Middle East & Africa
1,146
(271)
1,417
25.5%
37.1%
37.1%
1,459
(29)
1,488
(133)
1,621
—
1,621
South & Southeast Asia
1,506
(42)
1,548
(3.9)%
4.7%
4.7%
1,919
(23)
1,942
(358)
2,300
—
2,300
East Asia & Australia
2,556
(91)
2,647
(26.6)%
(13.1)%
(13.1)%
436
(14)
450
(11)
461
—
461
Americas
487
(17)
504
(10.7 %
(8.5)%
(8.5)%
(22)
(151)
129
—
129
129
—
Swedish Match
—
—
—
—%
—%
—%
(258)
(171)
(87)
8
(95)
(28)
(67)
Wellness and Healthcare
(52)
(69)
17
-(100)%
-(100)%
-(100)%
$ 12,246
$ (662)
$ 12,908
$ (1,507)
$ 14,415
$ 99
$ 14,316
Total PMI
$ 12,975
$ (609)
$ 13,584
(5.0)%
6.1%
5.4%
(1) Fourth-quarter 2022: charges related to the war in Ukraine ($23 million), amortization and impairment of intangibles ($58 million), Swedish Match AB acquisition accounting related item ($125 million), partly offset by adjustment of cost associated with Swedish Match AB offer ($154 million). Full-year 2022: charges related to the war in Ukraine ($151 million), amortization and impairment of intangibles ($271 million), Swedish Match AB acquisition accounting related item ($125 million) and cost associated with Swedish Match AB offer ($115 million).
(2) Fourth-quarter 2021: asset impairment and exit costs ($46 million) and amortization and impairment of intangibles ($41 million). Full-year 2021: asset impairment and exit costs ($216 million), amortization and impairment of intangibles ($96 million), asset acquisition cost ($51 million) and Saudi Arabia customs assessment ($246 million).
Schedule 8
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions
($ in millions) / (Unaudited)
Adjusted Operating Income (1)
Adjusted Net Revenues
(2)
Adjusted Operating Income Margin
Adjusted Operating Income excluding Currency (1)
Adjusted Net Revenues excluding Currency (2)
Adjusted Operating Income Margin excluding Currency
Adjusted Operating Income excluding Currency & Acqui- sitions
(1)
Adjusted Net Revenues excluding Currency & Acqui- sitions
(2)
Adjusted Operating Income Margin excluding Currency & Acqui- sitions
Adjusted Operating Income (1)
Adjusted Net Revenues (2)
Adjusted Operating Income Margin
Adjusted Operating Income Margin
Adjusted Operating Income Margin excluding Currency
Adjusted Operating Income Margin excluding Currency & Acqui- sitions
2022
Quarters Ended
December 31,
2021
% Points Change
$ 1,289
$ 2,890
44.6%
$ 1,553
$ 3,364
46.2%
$ 1,553
$ 3,364
46.2%
European Union
$ 1,329
$ 3,025
43.9%
0.7
2.3
2.3
313
992
31.6%
261
966
27.0%
261
966
27.0%
Eastern Europe
304
912
33.3%
(1.7)
(6.3)
(6.3)
292
924
31.6%
334
1,021
32.7%
334
1,021
32.7%
Middle East & Africa
413
987
41.8%
(10.2)
(9.1)
(9.1)
311
1,100
28.3%
366
1,216
30.1%
366
1,216
30.1%
South & Southeast Asia
310
1,112
27.9%
0.4
2.2
2.2
576
1,322
43.6%
673
1,530
44.0%
673
1,530
44.0%
East Asia & Australia
537
1,444
37.2%
6.4
6.8
6.8
95
536
17.7%
110
535
20.6%
110
535
20.6%
Americas
124
523
23.7%
(6.0)
(3.1)
(3.1)
129
316
40.8%
129
316
40.8%
—
—
—%
Swedish Match
—
—
—%
—
—
—
(29)
72
(40.3)%
(35)
82
(42.7)%
(35)
82
(42.7)%
Wellness and Healthcare
17
101
16.8%
(57.1)
(59.5)
(59.5)
$ 2,976
$ 8,152
36.5%
$ 3,391
$ 9,030
37.6%
$ 3,262
$ 8,714
37.4%
Total PMI
$ 3,034
$ 8,104
37.4%
(0.9)
0.2
—
2022
Years Ended
December 31,
2021
% Points Change
$ 5,876
$ 12,119
48.5 %
$ 6,848
$ 13,591
50.4%
$ 6,850
$ 13,581
50.4%
European Union
$ 6,222
$ 12,275
50.7%
(2.2)
(0.3)
(0.3)
1,331
3,725
35.7 %
1,209
3,674
32.9%
1,209
3,674
32.9%
Eastern Europe
1,229
3,544
34.7%
1.0
(1.8)
(1.8)
1,779
3,901
45.6 %
1,942
4,249
45.7%
1,942
4,249
45.7%
Middle East & Africa
1,417
3,539
40.0%
5.6
5.7
5.7
1,488
4,395
33.9 %
1,621
4,669
34.7%
1,621
4,669
34.7%
South & Southeast Asia
1,548
4,396
35.2%
(1.3)
(0.5)
(0.5)
1,942
5,132
37.8 %
2,300
5,719
40.2%
2,300
5,719
40.2%
East Asia & Australia
2,647
5,953
44.5%
(6.7)
(4.3)
(4.3)
450
1,903
23.6 %
461
1,918
24.0%
461
1,918
24.0%
Americas
504
1,843
27.3%
(3.7)
(3.3)
(3.3)
129
316
40.8 %
129
316
40.8%
—
—
—%
Swedish Match
—
—
—%
—
—
—
(87)
271
(32.1) %
(95)
282
(33.7)%
(67)
93
(71.6)%
Wellness and Healthcare
17
101
16.8%
(48.9)
(50.5)
(88.8)
$ 12,908
$ 31,762
40.6 %
$ 14,415
$ 34,418
41.9%
$ 14,316
$ 33,903
42.2%
Total PMI
$ 13,584
$ 31,651
42.9%
(2.3)
(1.0)
(0.7)
(1) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to Schedule 7
(2) For the calculation of Adjusted Net Revenues excluding currency and acquisitions refer to Schedule 5
Schedule 9
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Statements of Earnings
($ in millions, except per share data) / (Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
Change Fav./(Unfav.)
2022
2021
Change lFav./(Unfav.)
$ 20,031
$ 20,830
(3.8)%
Revenues including Excise Taxes
$ 80,669
$ 82,223
(1.9)%
11,879
12,726
6.7%
Excise Taxes on products
48,907
50,818
3.8 %
8,152
8,104
0.6%
Net Revenues
31,762
31,405
1.1%
3,211
2,807
(14.4)%
Cost of sales
11,402
10,030
(13.7)%
4,941
5,297
(6.7)%
Gross profit
20,360
21,375
(4.7)%
2,017
2,350
14.2%
Marketing, administration and research costs
8,114
8,400
3.4%
2,924
2,947
(0.8)%
Operating Income
12,246
12,975
(5.6)%
170
146
(16.4)%
Interest expense, net
588
628
6.4%
8
33
75.8%
Pension and other employee benefit costs
24
115
79.1%
2,746
2,768
(0.8)%
Earnings before income taxes
11,634
12,232
(4.9)%
409
593
31.0%
Provision for income taxes
2,244
2,671
16.0%
(157)
(54)
100.0%
Equity investments and securities (income)/loss, net
(137)
(149)
(8.1)%
2,494
2,229
11.9%
Net Earnings
9,527
9,710
(1.9)%
97
136
(28.7)%
Net Earnings attributable to noncontrolling interests
479
601
(20.3)%
$ 2,397
$ 2,093
14.5%
Net Earnings attributable to PMI
$ 9,048
$ 9,109
(0.7)%
Per share data: (1)
$ 1.54
$ 1.34
14.9%
Basic Earnings Per Share
$ 5.82
$ 5.83
(0.2)%
$ 1.54
$ 1.34
14.9%
Diluted Earnings Per Share
$ 5.81
$ 5.83
(0.3)%
(1) Net Earnings and weighted-average shares used in the basic and diluted Earnings Per Share computations for the quarters and for the years ended December 31, 2022 and 2021 are shown on Schedule 1, Footnote 1
Schedule 10
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments for the Impact of Russia and Ukraine, excluding Currency
(Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
Currency
Variance excluding Currency
2022
2021
Currency
Variance excluding Currency
$ 1.39
$ 1.37
$ (0.19)
15.3%
Adjusted Diluted EPS (1)
$ 5.98
$ 6.13
$ (0.77)
10.1%
0.16
0.17
0.03
Net Earnings attributable to Russia and Ukraine
0.64
0.60
0.08
$ 1.23
$ 1.20
$ (0.22)
20.8%
Adjusted Diluted EPS excl. Russia and Ukraine
$ 5.34
$ 5.53
$ (0.85)
11.9%
(1) For the calculation of Adjusted Diluted EPS, see Schedule 2
Schedule 11
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
PMI & EE Region - Adjustments for the Impact of Russia and Ukraine, excluding Currency and Acquisitions
($ in millions) / (Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
Currency
Acqui- sitions
Variance excluding Currency & Acqui- sition
2022
2021
Currency
Acqui- sitions
Variance excluding Currency & Acqui- sitions
PMI
$ 8,152
$ 8,104
$ (878)
$ 316
7.5%
Adjusted Net Revenues (1)
$ 31,762
$ 31,651
$ (2,656)
$ 515
7.1%
717
645
50
—
Net Revenues attributable to Russia and Ukraine
2,591
2,471
123
—
$ 7,435
$ 7,459
$ (928)
$ 316
7.9%
Adjusted Net Revenues excl. Russia and Ukraine
$ 29,171
$ 29,180
$ (2,779)
$ 515
7.7%
$ 2,976
$ 3,034
$ (415)
$ 129
7.5%
Adjusted Operating Income (2)
$ 12,908
$ 13,584
$ (1,507)
$ 99
5.4%
300
296
58
—
Operating Income attributable to Russia and Ukraine
1,170
1,068
145
—
$ 2,676
$ 2,738
$ (473)
$ 129
10.3%
Adjusted Operating Income excl. Russia and Ukraine
$ 11,738
$ 12,516
$ (1,652)
$ 99
6.2%
36.5%
37.4%
(1.1) pp
0.2 pp
— pp
Adjusted Operating Income Margin
40.6%
42.9%
(1.3) pp
(0.3) pp
(0.7) pp
0.5 pp
0.7 pp
Adjusted OI margin attributable to Russia and Ukraine
0.4 pp
— pp
36.0%
36.7%
(1.7) pp
0.2 pp
0.8pp
Adjusted Operating Income Margin excl. Russia and Ukraine
40.2%
42.9%
(1.7) pp
(0.4) pp
(0.6)pp
Eastern Europe
$ 992
$ 912
$ 26
$ —
5.9%
Adjusted Net Revenues (1)
$ 3,725
$ 3,544
$ 51
$ —
3.7%
717
645
50
—
Net Revenues attributable to Russia and Ukraine
2,591
2,471
123
—
$ 275
$ 267
$ (24)
$ —
12.0%
Adjusted Net Revenues excl. Russia and Ukraine
$ 1,134
$ 1,073
$ (72)
$ —
12.4%
$ 313
$ 304
$ 52
$ —
(14.1)%
Adjusted Operating Income (2)
$ 1,331
$ 1,229
$ 122
$ —
(1.6)%
300
296
58
—
Operating Income attributable to Russia and Ukraine
1,170
1,068
145
—
(61)
(67)
4
—
Corporate expenses apportioned to Russia and Ukraine
(256)
(233)
13
—
$ 74
$ 75
$ (10)
$ —
12.0%
Adjusted Operating Income excl. Russia and Ukraine
$ 417
$ 394
$ (36)
$ —
15.0%
31.6%
33.3%
4.6pp
—pp
(6.3)pp
Adjusted Operating Income Margin
35.7%
34.7%
2.8pp
—pp
(1.8)pp
4.7pp
5.2pp
Adjusted OI margin attributable to Russia and Ukraine (3)
(1.1)pp
(2.0)pp
26.9%
28.1%
(1.2)pp
—pp
—pp
Adjusted Operating Income Margin excl. Russia and Ukraine
36.8%
36.7%
(0.8)pp
—pp
0.9pp
(1) For the calculation of Adjusted Net Revenues, see Schedule 5
(2) For the calculation of Adjusted Operating Income, see Schedule 7
(3) Includes also impact of corporate expenses apportioned to Russia and Ukraine
Note: Sum might not foot to Total due to roundings, which could impact variance %
Schedule 12
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Net Revenues by Product Category and Adjustments for the Impact of Russia and Ukraine, excluding Currency and Acquisitions
($ in millions) / (Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
Currency
Acqui- sitions
Variance excluding Currency & Acqui- sitions
2022
2021
Currency
Acqui-sitions
Variance excluding Currency & Acqui- sitions
Combustible Tobacco (1)
$ 5,213
$ 5,580
$ (508)
$ 70
1.3%
Adjusted Net Revenues
$ 21,572
$ 22,313
$ (1,643)
$ 70
3.7%
423
351
30
—
Net Revenues attributable to Russia and Ukraine
1,542
1,399
80
—
$ 4,790
$ 5,228
$ (538)
$ 70
0.6%
Adjusted Net Revenues excl. Russia and Ukraine
$ 20,029
$ 20,914
$ (1,722)
$ 70
3.7%
Smoke-free excl. W&H (1)
$ 2,866
$ 2,424
$ (360)
$ 246
23.0%
Adjusted Net Revenues
$ 9,919
$ 9,237
$ (1,002)
$ 256
15.5%
294
294
20
—
Net Revenues attributable to Russia and Ukraine
1,049
1,072
43
—
$ 2,572
$ 2,130
$ (380)
$ 246
27.0%
Adjusted Net Revenues excl. Russia and Ukraine
$ 8,871
$ 8,165
$ (1,046)
$ 256
18.3%
Wellness and Healthcare
$ 72
$ 101
$ (10)
$ —
(18.8)%
Adjusted Net Revenues
$ 271
$ 101
$ (11)
$ 189
(7.9)%
—
—
—
—
Net Revenues attributable to Russia and Ukraine
—
—
—
—
$ 72
$ 101
$ (10)
$ —
(18.8)%
Adjusted Net Revenues excl. Russia and Ukraine
$ 271
$ 101
$ (11)
$ 189
(7.9)%
PMI
$ 8,152
$ 8,104
$ (878)
$ 316
7.5%
Adjusted Net Revenues (2)
$ 31,762
$ 31,651
$ (2,656)
$ 515
7.1%
717
645
50
—
Net Revenues attributable to Russia and Ukraine
2,591
2,471
123
—
$ 7,435
$ 7,459
$ (928)
$ 316
7.9%
Adjusted Net Revenues excl. Russia and Ukraine
$ 29,171
$ 29,180
$ (2,779)
$ 515
7.7%
(1) Following the Swedish Match acquisition, PMI reclassified certain of its own products previously reported under its combustible tobacco category to the newly created smoke-free product category to better reflect the characteristics of these products. The impact of the reclassification was immaterial for all periods.
(2) For the calculation of Adjusted Net Revenues, see Schedule 5
Note: Sum of product categories might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million
Schedule 13
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Balance Sheets
($ in millions) / (Unaudited)
December 31,
December 31,
2022
2021
Assets
Cash and cash equivalents
$
3,207
$
4,496
All other current assets
16,412
13,221
Property, plant and equipment, net
6,710
6,168
Goodwill
19,655
6,680
Other intangible assets, net
6,732
2,818
Equity investments
4,431
4,463
Other assets
4,534
3,444
Total assets
$
61,681
$
41,290
Liabilities and Stockholders' (Deficit) Equity
Short-term borrowings
$
5,637
$
225
Current portion of long-term debt
2,611
2,798
All other current liabilities
19,088
16,232
Long-term debt
34,875
24,783
Deferred income taxes
1,956
726
Other long-term liabilities
3,825
4,734
Total liabilities
67,992
49,498
Total PMI stockholders' deficit
(8,957
)
(10,106
)
Noncontrolling interests
2,646
1,898
Total stockholders' (deficit) equity
(6,311
)
(8,208
)
Total liabilities and stockholders' (deficit) equity
$
61,681
$
41,290
Schedule 14
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios
($ in millions, except ratios) / (Unaudited)
Year Ended December 31, 2022
Year Ended December 31, 2021
Net Earnings
$
9,527
$
9,710
Equity investments and securities (income)/loss, net
(137
)
(149
)
Provision for income taxes
2,244
2,671
Interest expense, net
588
628
Depreciation, amortization and impairment of intangibles
1,189
998
Asset impairment and exit costs and Others (1)
391
513
Adjusted EBITDA
$
13,802
$
14,371
December 31,
December 31,
2022
2021
Short-term borrowings
$
5,637
$
225
Current portion of long-term debt
2,611
2,798
Long-term debt
34,875
24,783
Total Debt
$
43,123
$
27,806
Cash and cash equivalents
3,207
4,496
Net Debt
$
39,916
$
23,310
Ratios:
Total Debt to Adjusted EBITDA
3.12
1.93
Net Debt to Adjusted EBITDA
2.89
1.62
(1) For year ended December 31, 2022 "Others" includes $151 million of charges related to the war in Ukraine, $115 million of costs associated with Swedish Match AB offer and $125 million for Swedish Match AB acquisition accounting related item. For the year ended December 31, 2021 "Others" includes a reduction in net revenues of $246 million related to the Saudi Arabia customs assessments and $51 million related to asset acquisition cost.
Schedule 15
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency
($ in millions) / (Unaudited)
Quarters Ended December 31,
Years Ended December 31,
2022
2021
% Change
2022
2021
% Change
$ 3,093
$ 4,032
(23.3)%
Net cash provided by operating activities (1)
$ 10,803
$ 11,967
(9.7)%
(787)
Less: Currency
(1,524)
$ 3,880
$ 4,032
(3.8)%
Net cash provided by operating activities,
excluding currency
$ 12,327
$ 11,967
3.0%
(1) Operating cash flow
View source version on businesswire.com: https://www.businesswire.com/news/home/20230208005953/en/
Investor Relations: Stamford, CT: +1 (203) 904 2410 Lausanne: +41 (0)58 242 4666 Email: InvestorRelations@pmi.com
Media: Lausanne: +41 (0)58 242 4500 Email: David.Fraser@pmi.com
1 Year Philip Morris Chart |
1 Month Philip Morris Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions