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$PM Philip Morris International – Strong Q3 2022 performance and a historic day for IQOS
“Today marks a historic day in our journey towards a smoke-free future, with the certainty that we will have full control of IQOS – the world’s leading smoke-free product – in the United States, the world’s largest smoke-free market from April 30, 2024.” (Emmanuel Babeau, Chief Financial Officer. $PM, Q3 2022 Conference call)
Source: dfni
Company Overview
Philip Morris International $PM is a leading international tobacco company which was spun off from Altria $MO in 2008.
Q3 2022 Brief Update
- On a pro-forma basis, adjusted net revenues increased by 6.9% in organic terms, primarily driven by total shipment volume growth of 2.3%
- The company’s strong adjusted net revenue growth, coupled with the positive effects from higher pricing and operating cost efficiencies, drove pro-forma adjusted diluted EPS of $1.33
Source: PMI Q3 22 Report
$PM showed robust performance in challenging environment – currency pressures, supply chains issues and inflation. The company raised the low-end of the full-year pro-forma growth outlook to 6.5% to 8% and is expecting full-year pro-forma adjusted diluted EPS growth of 10% to 12%, excluding currency adjustments.
Source: PMI Q3 22 Pres
Strategy
- IQOS in the U.S. – Stand-alone proposition for future growth - As announced in a separate press release today, $PM has reached an agreement with $MO to end the companies’ commercial relationship covering IQOS in the U.S. as of April 30, 2024.
Source: PMI Q3 22 Pres
- Major Acceleration in Transformation to Smoke-Free Company $PM further strengthened its offer today to acquire Swedish Match for a best and final price of SEK 116. Such a combination with a leader in oral nicotine with aligned smoke-free vision will establish a world-wide smoke-free enterprise.
Source: PMI May 22 Pres
Superior Performance versus Competitors:
Looking at Return on Total Capital $PM outperforms its competitors by a mile.
Source: Koyfin
Summary
I will use a sentence from Terry Smith, the founder and chief executive of Fundsmith:
“These industries have fabulous return on capital … they will never face a new competitor …”
www.pmi.com
Philip Morris International Inc. (PMI) Reports 2022 Third-Quarter and September Year-to-Date Results
Delivered 2022 Third-Quarter Reported Diluted EPS of $1.34, Adjusted Diluted EPS of $1.53 and Pro Forma (Excluding Russia and Ukraine) Adjusted Diluted EPS of $1.33, Representing Currency-Neutral Growth of 8.3%; Targets 2022 Full-Year Reported Diluted EPS of $5.47 to $5.62, Adjusted Diluted EPS of $5.81 to $5.96 and Pro Forma Adjusted Diluted EPS of $5.22 to $5.33, Representing Currency-Neutral Growth of 10% to 12%
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