EU shines glimmer of light on PMI’s gloomy volumes
Philip Morris International’s shipment volumes during the 12 months to the end of December, at 855,954 million, were down by 2.8 percent on those of the 12 months to the end of December 2013, 880,169 million.
Volumes were increased by 0.1 percent to 185,197 million in its EU region, but fell in each of its other regions: by 2.7 percent to 94,706 million in Latin America and Canada; by 2.9 percent to 287,923 million in Eastern Europe, Middle East and Africa (EEMA); and by 4.4 percent to 288,128 in Asia.
Overall, the 2.8 percent decline in volumes, which excludes acquisitions, was said to have been caused principally by: in the EEMA region, market performances in Kazakhstan, Russia and Ukraine, partially offset by those in Algeria and Turkey: in Asia, a lower total market, lower market share and the unfavorable impact of an adjustment in distributor inventories in Japan, as well as market performances in Australia, Indonesia and Pakistan; and in the Latin America and Canada region by market performances in Canada and Mexico.
The overall decline was partially offset by the positive impact of market share growth in the EU, EEMA and Latin America and Canada regions, and by the slight shipment growth in the EU.
Total shipments of Marlboro cigarettes of 283.0 billion were down by 2.8 percent, due primarily to declines in: the EU, notably in France, Italy and Poland, partly offset by gains in the Czech Republic and Spain; the EEMA, mainly in Egypt, Russia and Ukraine, partly offset by gains in Algeria and Saudi Arabia; in Asia, due almost entirely to Japan, partly offset by the Philippines; and in Latin America and Canada, due prominently to Mexico. The overall decline in Marlboro shipments was partially offset by the positive impact of market share growth in the EU and EEMA regions. Marlboro’s market share was flat in Asia, and in Latin America and Canada.
Total Parliament shipments were increased by 5.6 percent to 47.2 billion, total Chesterfield shipments were up by 22.6 percent to 42.1 billion, total L&M shipments of 94.2 billion were down by 0.9 percent, total Bond Street shipments of 43.6 billion were down by 2.9 percent, total Philip Morris shipments decreased by 8.7 percent to 31.9 billion, and total Lark shipments decreased by 1.3 percent to 28.5 billion.
Total shipments of OTP, in cigarette equivalent units, grew by 3.4 percent, mainly reflecting growth in fine-cut, notably in Belgium, the Czech Republic, Hungary and Poland, partly offset by performances in France and Germany.
Total shipments of cigarettes and OTP in cigarette equivalents were down by 2.5 percent.
Meanwhile, during the fourth quarter of last year, PMI’s cigarette shipments, at 214,892 million, were down by 3.7 percent on those of the three months to the end of December 2013, 223,199 million.
EU region shipments were down by 0.2 percent to 44,370 million; EEMA shipments were down by 2.5 percent to 74,495 million; Latin America and Canada shipments were down by 2.9 percent to 26,705 million; and Asia region shipments were down by 7.3 percent to 69,322 million.
In announcing the results, CEO André Calantzopoulos, said PMI had delivered a solid currency-neutral performance during 2014, reflecting robust pricing, strong market share gains, notably in the EU region, and very substantial progress in addressing the specific market challenges that it had outlined at the beginning of the year.
“We successfully executed on our key strategic initiatives, including the pilot launches of our reduced-risk product, iQOS, the roll-out of the Marlboro 2.0 architecture and the optimization of our manufacturing footprint,” he said.
“Despite a historically high adverse currency headwind, we enter 2015 with strong business momentum that underpins our target annual growth rates, excluding currency and acquisitions, of four percent to six percent for net revenues, six percent to eight percent for adjusted operating companies’ income and eight percent to 10 percent for adjusted diluted earnings per share.”
“We remain steadfast in our aim to return around 100 percent of our free cash flow to our shareholders. However, given the recent extreme currency volatility, we are focused on managing our cash flow prudently and on maintaining our financial flexibility for business development opportunities. Consequently, our full-year guidance does not currently envisage any share repurchases in 2015, although we will revisit the potential for such purchases as the year unfolds depending on the currency environment.”
For the full year 2014, PMI reported diluted earnings per share down by 9.5 percent to $4.76 and adjusted diluted earnings per share down by 7.0 percent to $5.02.
Reported net revenues, excluding excise taxes, were down by 4.6 per to $29.8 billion.
Reported operating companies’ income was down by 12.4 percent to $12.1 billion, and adjusted operating companies’ income was down by 10.5 percent to $12.6 billion.
Reported operating income was down by 13.4 percent to $11.7 billion.
