Philip Morris International Inc. Hosts 2021 Investor Day

Rhea-AI Summary

Philip Morris International (NYSE:PM) presented its growth strategy in a virtual investor meeting, reaffirming its 2021 diluted EPS forecast between $5.90 and $6.00, a projected 14% to 16% increase from 2020. The company set ambitious targets for 2021-2023, aiming for over 5% organic growth in net revenue and over 9% in adjusted diluted EPS. Upcoming product launches include IQOS ILUMA and IQOS VEEV. PMI expects smoke-free products to surpass 50% of net revenues by 2025 and aims for $1 billion in revenues from beyond nicotine products by the same year.

Positive

• Reaffirms 2021 diluted EPS forecast of $5.90 to $6.00, up 14% to 16% from 2020.
• Targets 5% organic growth in net revenue and 9% in adjusted diluted EPS for 2021-2023.
• Launch of IQOS ILUMA in H2 2021 and IQOS VEEV in over 20 markets.
• Increased smoke-free product revenue target to over 50% of total by 2025.
• Aiming for $1 billion in net revenue from beyond nicotine products by 2025.

Negative

• None.

Regulatory News:

Philip Morris International Inc.’s (NYSE:PM) senior management will present the company’s business strategies and growth outlook today at a virtual investor meeting, broadcast from the company’s Operations Center in Lausanne, Switzerland.

Investor Day Highlights

The company:

• Reaffirms its 2021 full-year reported diluted EPS forecast, provided on February 4^th, to be in a range of $5.90 to $6.00, at the then prevailing exchange rates, representing a projected increase of approximately 14% to 16% versus reported diluted EPS of $5.16 in 2020;
• Provides 2021 to 2023 targets, including net revenue and adjusted diluted EPS compound annual organic growth of more than 5% and 9%, respectively, and 2023 heated tobacco unit shipment volume of 140 to 160 billion units;
• Announces the planned launch of IQOS ILUMA, the next generation of its IQOS heat-not-burn product featuring internal heating based on Smartcore™ induction technology, in the second half of 2021;
• Plans to launch IQOS VEEV, its MESH technology e-vapor product, in over 20 markets this year;
• Expects to commercialize IQOS in a total of 100 markets by the end of 2025, from 64 markets at the end of 2020;
• Increases its 2025 ambition for the contribution of its smoke-free products to total net revenues to more than 50%, compared to a range of 38% to 42%, previously;
• Announces its target of at least $1 billion in net revenues from ‘beyond nicotine’ products in 2025; and
• Believes that with the right regulatory frameworks, dialogue and support from civil society, cigarette sales can end within 10 to 15 years in many countries.

“In just five years, we have thoroughly transformed our company, building IQOS into a top-5 global nicotine brand— with nearly $7 billion in net revenues and over 17 million users across 64 markets—while maintaining our leadership position in the international cigarette category," said André Calantzopoulos, Chief Executive Officer.

“We are now embarking on our next growth phase, further shifting to a better, more sustainable business by driving the development of the smoke-free category and leveraging our leading commercial model, which places the consumer at the core, to switch more adult smokers to our smoke-free products.”

“This next growth phase is underpinned by our unmatched portfolio of innovative products. We are very excited to announce the planned launch of IQOS ILUMA—the next generation of our IQOS heat-not-burn product featuring a new internal heating induction technology—during the second half of this year.”

“As outlined today, we are well positioned to deliver excellent top- and bottom-line growth, as well as strong shareholder returns. We now aim to be a majority smoke-free product company by 2025, an important milestone toward our ambition to deliver a smoke-free future, to the benefit of adults who would otherwise continue to smoke, society, the company and our shareholders.”

Webcast Details

The presentations and Q&A session will be webcast live from approximately 8:30 a.m. ET to approximately 1:30 p.m. ET, and may be accessed at www.pmi.com/2021InvestorDay. A copy of the slides, full transcript and glossary of key terms and definitions will be made available on the same webpage. The webcast may also be accessed on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application. An archive of the webcast will be available until 5:00 p.m. ET on Thursday, March 11, 2021.

2021 Full-Year Forecast & Assumptions

PMI reaffirms its 2021 full-year reported diluted EPS forecast, provided on February 4^th, to be in a range of $5.90 to $6.00, at the then prevailing exchange rates, representing a projected increase of approximately 14% to 16% versus reported diluted EPS of $5.16 in 2020. On an organic basis, this forecast represents a projected increase of around 9% to 11% versus adjusted diluted EPS of $5.17 in 2020.¹

The assumptions underlying this forecast remain unchanged versus those communicated by PMI in its earnings release of February 4^th.

This forecast excludes the impact of any future acquisitions, unanticipated or unquantifiable asset impairment and exit cost charges, future changes in currency exchange rates, further developments pertaining to the judgment in the two Québec Class Action lawsuits and the Companies’ Creditors Arrangement Act (CCAA) protection granted to PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc., any unusual events, and any COVID-19-related developments different from the assumptions set forth in the company's forecast.

Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.

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1 The 2021 forecast excludes a favorable currency impact, at the then prevailing exchange rates, of

FAQ

What is Philip Morris International's EPS forecast for 2021?

PMI's EPS forecast for 2021 is between $5.90 and $6.00, representing a 14% to 16% increase from 2020.

What are PMI's growth targets for 2021 to 2023?

PMI targets over 5% organic growth in net revenue and over 9% in adjusted diluted EPS for the period.

When will IQOS ILUMA be launched?

The launch of IQOS ILUMA is planned for the second half of 2021.

What percentage of PMI's revenues are expected to come from smoke-free products by 2025?

PMI expects over 50% of its net revenues to come from smoke-free products by 2025.

What is PMI's revenue target from beyond nicotine products by 2025?

PMI aims for at least $1 billion in net revenues from beyond nicotine products by 2025.