PMI Reports Strong Results for 2022

Philip Morris International announced its 2022 fourth-quarter and full-year results. Given the impact of the war in Ukraine on the company’s operations in Russia and Ukraine in 2022, PMI also provided 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 included both Ukraine and Russia in its 2023 forecast and adjusted reporting.

For the full year, net revenues from smoke-free products accounted for 32.1 percent of total net revenues, or 31.3 percent excluding Russia and Ukraine. Following the acquisition of Swedish Match, PMI defines “smoke-free products” to include all Swedish Match products other than Swedish Match’s combustible tobacco products in addition to PMI’s heat-not-burn, e-vapor, oral nicotine and wellness and healthcare products. Market share for heated-tobacco units (HTUs) in IQOS markets were up by 1.1 points to 8 percent, or by 1.4 points to 7.9 percent excluding Russia and Ukraine. The company increased regular quarterly dividend by 1.6 percent to $1.27 per share, or an annualized rate of $5.08 per share.

For the fourth quarter, net revenues from smoke-free products accounted for 36 percent of total net revenues, or 35.6 percent excluding Russia and Ukraine. Market share for HTUs in IQOS markets was up by 1.4 points to 8.5 percent, or up by 1.8 points to 8.5 percent excluding Russia and Ukraine. Total IQOS users at quarter end were estimated at approximately 24.9 million, of which approximately 17.8 million had switched to IQOS and stopped smoking (approximately 20.3 million and 14.2 million, respectively, excluding Russia and Ukraine).

“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, PMI CEO.

“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 percent to 8.5 percent and currency-neutral adjusted diluted EPS growth of 7 percent to 9 percent 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.”