NEW YORK – (BUSINESS WIRE) – Aug. June 2021–
Regulatory News:
Emmanuel Babeau, Chief Financial Officer of Philip Morris International Inc. (NYSE: PM), will address investors at the Deutsche Bank Global Consumer Conference today.
The presentation and question-and-answer session will be held in a virtual format starting at approximately 8:00 a.m. Eastern Time. A live audio call for the entire PMI session is put on hold in listen-only mode. Investors and other parties can register for the call at www.pmi.com/2021deutschebank to receive dial-in instructions and numbers. Presentation slides will be available on the same website.
An archived copy of the call is available until 5 p.m. at www.pmi.com/2021deutschebank. Eastern Time on Wednesday, July 7, 2021. The archived call can also be accessed on iOS or Android devices by downloading PMI's free Investor Relations Mobile Application at www.pmi.com/irapp.
Adjusted diluted EPS forecast for full year 2021
|
Full year |
||||||||||
|
2021 |
2020 |
Bio |
||||||||
|
Adjusted diluted EPS 1 |
$ 5.95 |
– |
$ 6.05 |
$ 5.17 |
||||||
|
currency |
(0.20) |
|||||||||
|
Adjusted diluted EPS, excluding currency |
$ 5.75 |
– |
$ 5.85 |
$ 5.17 |
11% |
– |
13% |
|
1. |
The 2021 forecast excludes asset impairment and exit costs of ($ 0.02). 2020 excludes depreciation and disposal costs of $ 0.08, a fair value adjustment for equity securities of ($ 0.04), tax items of $ 0.06, and a Brazilian indirect tax credit of $ 0.05. |
PMI reiterates its adjusted diluted EPS forecast for the full year, presented on April 20, 2021, which will be in a range of $ 5.95 to $ 6.05 at exchange rates then. On an organic basis, that forecast represents a projected increase of approximately 11% to 13% over Adjusted Diluted Earnings per Share of $ 5.17 in 2020, as shown in the table above.
Adjusted diluted earnings assumption for the second quarter of 2021
PMI continues to expect adjusted diluted earnings per share for the second quarter in a range of $ 1.50 to $ 1.55 as communicated on April 20, 2021, including a favorable currency impact at then-prevailing exchange rates of approximately 0.04 US dollars per share, specifically reflecting:
- Strong sequential and year-over-year growth in PMI units for heated tobacco and a growth in sales volume in the market driven by EU, Japan, Russia;
- Shipping volume for heated tobacco products of around 24 billion units;
- Strong organic net sales growth, driven in part by a favorable comparison from Q2 2020;
- Continuous improvement in Adjusted Operating Profit Margin on an organic basis; and
- A partial reduction in earnings of approximately $ 0.08 per share for the first quarter was related to timing of certain factors, particularly shipments in certain markets and the gradual introduction of commercial investments.
PMI is expected to release its results for the second quarter of 2021 on Tuesday, July 20, 2021.
Forecasts for the full year 2021
This forecast assumes:
- A gradual improvement in the general operating environment with potential volatility in the duration and impact of pandemic mobility impairments in PMI's key markets;
- Lack of near-term recovery in PMI's duty-free business amid uncertain prospects for global travel, with current momentum continuing through year-end;
- A limited impact of the current global semiconductor scarcity on the supply of our electronic devices to consumers;
- An estimated increase in the total volume of international industry, excluding China and the US, of approximately -3% to a halt;
- An increase in the total volume of shipping volume of cigarettes and heated tobacco for the PMI of approximately -2% to + 1%;
- Delivery volumes of 95 to 100 billion units of heated tobacco;
- Net sales growth of approx. 5 to 7% on an organic basis;
- An organic increase in adjusted operating profit margin of around 200 basis points;
- Operating cash flow of approximately $ 11 billion at current exchange rates and subject to year-end working capital requirements
- Capital expenditures of approximately $ 0.8 billion;
- An effective tax rate with no discrete tax events of around 22%;
- No share buybacks;
- A second half of 2021 that will reflect:
- The assumption that many of PMI's key markets have largely emerged from pandemic restrictions;
- Continued robust organic net sales growth;
- Incremental commercial investments compared to first half of 2021 of approximately $ 300 million to $ 400 million; and
- Lower organic expansion in adjusted operating profit margin compared to first half of 2021.
This is underpinned by the assumption that even if the pandemic-related restrictions persist, there will be no return to the depressed consumption levels of the second quarter of 2020. This assumption is consistent with the less severe impact on consumption levels seen in the second half of 2020 when COVID-19 spread across a number of markets.
This forecast excludes the impact of future acquisitions, unexpected or unquantifiable impairment losses and costs to sell, future changes in exchange rates, further developments related to the judgment in the two Québec class actions and the Companies & # 39; Creditors Arrangement Act (CCAA). Protection granted to the Canadian PMI subsidiary Rothmans, Benson & Hedges, Inc. (RBH), all unusual events, any exacerbation of the global scarcity of semiconductors and the associated effects on the delivery of our electronic devices as well as all COVID-19 related developments deviating from the assumptions of the company forecast.
The factors described in the "Forward Looking Statements and Warnings" section of this press release pose ongoing risks to these projections.
Saudi Arabia Customs Ratings
On June 1, 2021, the Customs Appeal Committee in Riyadh informed our traders in Saudi Arabia of its decision to terminate traders' appeals against the Saudi Customs Authority's assessments asking them to pay additional duties under our Form 10-Q, broadly disapprove of the filings with the Securities and Exchange Commission for the quarter ended March 31, 2021. The ratings relate to fees charged by distributors as part of their agreements with our subsidiary for exclusive rights to distribute our products in Saudi Arabia for the period 2014 to. were paid in 2018.
PMI assesses the impact of the decisions and the related amount that will be incurred. PMI currently estimates a negative impact on reported diluted earnings per share for full year 2021 of up to $ 0.18 per share. The accrued amount will be excluded from PMI's adjusted financial results for full year 2021.
Forward-looking and cautionary statements
This press release contains projections of future results and other forward-looking statements. Achieving future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize or underlying assumptions prove to be incorrect, the actual results may differ materially from those contained in such forward-looking statements. In accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI identifies important factors that, individually or collectively, could cause actual results and results to differ materially from those contained in any forward-looking statements by PMI.
PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could affect our competitiveness, affect our ability to communicate with adult consumers, or prohibit certain of our products; health concerns related to the consumption of tobacco and other nicotine-containing products and exposure to tobacco smoke in the environment; Litigation related to tobacco use and intellectual property; intense competition; the effects of global and individual economic, regulatory and political developments, natural disasters and conflicts; Changes in adult smoking behavior; lost revenue from counterfeiting, contraband and cross-border purchases; state investigations; unfavorable exchange rates and currency devaluations and restrictions on the repatriation of 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; as well as the integrity of our information systems and the effectiveness of our data protection guidelines. The future profitability of PMI can also be adversely affected if our attempts to manufacture and commercialize Reduced Risk Products ("RRPs") are unsuccessful or if regulation or taxation does not distinguish between such products and cigarettes; when we are unable to successfully launch new products, promote brand equity, enter new markets or improve our margins through higher prices and productivity gains; if we fail to expand our brand portfolio internally or through acquisitions and the establishment of strategic business relationships; or when we are unable to attract and retain the world's best talent. Future results are also subject to the lower predictability of the performance of our risk-reduced product category.
The COVID-19 pandemic has resulted in significant social and economic disruption, closing shops, factories and offices, and restricting production, sales and travel, all of which will adversely affect our business, operating results, cash flows and finances Position during the pandemic. Our business continuity plans and other safeguards may not be effective in mitigating the effects of the pandemic. Significant risks currently include our decreased ability to convert adult smokers to our MSRP, significant volume decreases in our duty free and certain other key markets, disruptions or delays in our manufacturing and supply chain, increased currency volatility and delays in certain cost savings. , Transformation and restructuring initiatives. Our business could also be affected if key employees or a significant number of employees or business partners are unavailable due to the COVID-19 outbreak. The significant negative impact of COVID-19 on economic or political conditions in the markets in which we operate could result in changes in the preferences of our adult consumers and reduced demand for our products, especially for our mid- or high-end brands . A continuation of the pandemic could disrupt our access to credit markets or increase our borrowing costs. Governments may temporarily not be able to focus on developing science-based regulatory frameworks for developing and commercializing RRP, or on enforcing or enforcing regulations that are relevant to our business. In addition, communications about the potential negative impact of using our products on COVID-19 risks can lead to increasingly restrictive regulatory measures for the sale and use of our products, negatively affect demand for our products, and affect adult consumers' willingness to switch to our EIA and our efforts to advocate the development of science-based regulatory frameworks for the development and commercialization of EIA.
The impact of these risks will also depend on factors beyond our knowledge or control, including the duration and severity of the pandemic, its recurrence in our key markets, measures taken to contain its spread and mitigate its public health impact, and eventual ones economic consequences of this.
PMI is also subject to other risks that are detailed from time to time in our publicly filed documents, including Form 10-Q for the quarter ended March 31, 2021. PMI cautions that the above list of important factors is not a complete discussion of all potentials Risks and Uncertainties. PMI undertakes no obligation to update any forward-looking statements that we may make from time to time, except as part of its disclosure obligations.
Philip Morris International: Enabling a Smoke-Free Future
Philip Morris International (PMI) is leading a transformation in the tobacco industry to create a smoke-free future and ultimately replace cigarettes with smoke-free products for the benefit of adults who would otherwise continue to smoke, society, the company, its shareholders, and its own other stakeholders. PMI is a leading international tobacco company that manufactures and sells cigarettes, as well as smoke-free products, related electronic devices and accessories, and other nicotine-containing products in markets outside the United States. In addition, PMI is supplying platform 1 versions of its IQOS device and consumables to Altria Group, Inc. for sale under license in the US, where these products are approved by the US Food and Drug Administration (FDA) as part of the premarket tobacco product -Application Path (PMTA) have received marketing authorization; The FDA has also cleared the marketing of a version of IQOS and its consumables as a Modified Risk Tobacco Product (MRTP) and has determined that an exposure change order for these products to promote public health is appropriate. PMI is building a future with a new category of smoke-free products that, while not risk-free, are a much better choice than continuing to smoke. Through multidisciplinary product development skills, state-of-the-art facilities and scientific evidence, PMI aims to ensure that its smoke-free products meet adult consumer preferences and meet stringent regulatory requirements. PMI's smoke-free product portfolio includes heat-resistant and nicotine-containing vapor products. By March 2021, PMI's smoke-free products will be available in 66 markets in major cities or across the country, and PMI estimates that around 14.0 million adults worldwide have already switched to IQOS and quit smoking. Further information is available at www.pmi.com and www.pmiscience.com.
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SOURCE: Philip Morris International
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PUB: 8/6/2021 6:59 AM / DISC: 8/6/2021 6:59 AM
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