TobaccoReporter logo

Tag: pmi

  • PMI Holds Virtual Annual Meeting

    PMI Holds Virtual Annual Meeting

    Image: Tobacco Reporter archive
    Jacek Olczak

     

    Andre Calantzopoulos

    Philip Morris International held its 2023 annual meeting of shareholders. Andre Calantzopoulos, executive chairman of the board, addressed shareholders and answered questions. Jacek Olczak, CEO, gave a business presentation, which included an overview of PMI’s strong performance in 2022 and encouraging start to 2023; robust business fundamentals and rapid progress on its smoke-free transformation; excellent momentum in the heat-not-burn and nicotine pouch categories; further progress on sustainability, with continued recognition by leading external stakeholders; and commitment to rewarding shareholders over time.

    “Our smoke-free transformation continued apace in 2022, with the growth of smoke-free products to nearly one-third of total net revenues for the year and the achievement of two important milestones—the acquisition of Swedish Match and the agreement to gain the full rights to commercialize IQOS in the U.S. in April 2024,” said Olczak.

    “As a global smoke-free champion with leading brands IQOS and Zyn, we are well positioned to further accelerate our transformation in the years to come to the benefit of the company, our shareholders, other stakeholders and public health,” he said.

    Approximately 81 percent of the shares entitled to vote were represented at the meeting in person or by proxy. The shareholders elected 12 nominees for director; approved, on an advisory basis, the compensation of named executive officers; approved, on an advisory basis, a one-year interval for the vote on the compensation of named executive officers; ratified the selection of PricewaterhouseCoopers SA as independent auditors; and voted against the shareholder proposal. Final voting results will be included in a Form 8-K that PMI will file with the SEC in the coming days.

    An archived copy of the webcast of the meeting will be available for approximately one year from the date of the meeting. The presentation slides and script will be available as well.

  • PMI Reports Strong Results for 2022

    PMI Reports Strong Results for 2022

    Image: Nuthawut | Adobe Stock

    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.”

  • PMI, BAT Recognized for Gender Equality

    PMI, BAT Recognized for Gender Equality

    Image: melita | Adobe Stock

    Philip Morris International and BAT were included in the 2023 Bloomberg Gender-Equality Index (GEI).

    PMI made the index for the third year running, achieving an overall score of 80.6 percent.

    “Achieving gender balance at all levels of the company is one of our top priorities, and I am delighted that our efforts are recognized again in this year’s index,” said Silke Muenster, chief diversity officer at PMI. “While we are making significant progress, we know we need to keep our foot on the acceleration pedal. An inclusive workplace that leverages the full talents of both women and men is crucial to our smoke-free vision, making our organization more innovative, resourceful and engaged.”

    In 2022, PMI achieved its target of ensuring at least 40 percent female representation in managerial roles and announced a new target to achieve 35 percent of women in senior roles by the end of 2025, among other targets.

    BAT, which participated in the index for the first time, received a score of 75 percent. BAT was recognized for creating an inclusive culture for women via its recruiting initiatives, adoption of family-friendly policies, sponsoring programs dedicated to educating women, and support of community programs. Inclusion in the index follows BAT being named as a Global Top Employer for a sixth successive year.

    “Recognition in this year’s Bloomberg Gender-Equality Index demonstrates our commitment to addressing gender diversity and highlights our concerted global efforts to provide transparent reporting,” said Hae In Kim, BAT’s director of talent, culture and inclusion. “With more than 50,000 employees worldwide, our diversity and inclusion strategy is truly global, and I continue to be incredibly proud of the collective efforts made by all our employees.”

    The GEI measures gender equality performance globally across five pillars as set by Bloomberg: leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, anti-sexual harassment policies, and external brand. The 2023 Bloomberg GEI comprises 485 companies from 45 countries and regions.

  • Study: PMI Uses Ad Loopholes in Israel

    Study: PMI Uses Ad Loopholes in Israel

    Image: piter2121 | Adobe Stock

    Philip Morris International has exploited loopholes in smoking product advertisement bans in Israel, a new study shows, reports The Jerusalem Post.

    The study, published in Tobacco Control, analyzes PMI’s advertising expenditure over four years across the general population, the ultra-Orthodox (haredi) public, Arab speakers and Russian speakers.

    “We conducted a comparison among the advertising expenditures for all Philip Morris cigarette brands and the IQOS brand (a heated-tobacco stick that entered the local market in December 2016) in light of regulatory changes that restricted the advertising of tobacco products,” said doctoral student Amal Khayat.

    Advertising restrictions led to a reduction in PMI’s marketing expenditures, but it exploited legal loopholes in the printed press, according to the study.

    “Even after the law came into effect, the company continued to spend almost NIS3 million [$872,566.93] on advertising with a focus on the printed press,” said Yael Bar-Zeev, lead researcher. “While the law restricted print advertising to one advertisement in each newspaper, 40 percent of the IQOS adverts placed were giant, two-page ads, effectively doubling the product’s advertising space while still being considered a single advert as allowed by the letter of the law.”

    PMI also used QR codes, allowing consumers to scan and view additional information. Before the law went into effect, according to the study, PMI significantly increased its advertising to the studied population groups, particularly the Haredi population, which previously had the lowest smoking rates in Israel.

    “Our data shows that since the introduction of the IQOS e-cigarettes, 216 targeted ads were published, of which 55 percent were created for the Haredi public, 6 percent for the Arab public and the rest for the Russian-speaking public,” said Bar-Zeev. For regular cigarette brands, 87 percent of advertisements were targeted at the Haredi population.

    “We expected that the company would focus on populations with the highest rates of smoking in Israel—Arab men—and not on the population that had hardly any smokers,” said Bar-Zeev.

    Following the study, the 24th Knesset decided to remove the printed press advertisement exception but deferred implementation for seven years. In the interim, coupons, QR codes and advertisements featuring cigarette packs that do not have mandatory plain packaging are banned in the printed press.

  • Swedish Match Applies for Delisting

    Swedish Match Applies for Delisting

    Image: Tobacco Reporter archive

    The board of Swedish Match said it will apply for delisting of the company’s shares from Nasdaq Stockholm, according to a press release. The last day of trading in the company’s shares on Nasdaq Stockholm will be announced as soon as the company has received confirmation from the exchange.

    Philip Morris Holland Holdings, an affiliate of Philip Morris International, declared the public offer for Swedish Match unconditional on Nov. 7, 2022. PMHH controls more than 90 percent of the shares in Swedish Match and has initiated squeeze-out proceedings in respect of the remaining shares in the company.

  • Philip Morris International to Delist Swedish Match

    Philip Morris International to Delist Swedish Match

    Photo: Tobacco Reporter archive

    Philip Morris International plans to take Swedish Match off of the stock market now that it owns a large enough share of the company to initiate a compulsory redemption of remaining shares, according to Reuters.

    “We are delighted to have obtained over 90 percent ownership of Swedish Match, allowing us to initiate a minority redemption process to acquire the remaining shares outstanding and request the delisting of the company from the stock market,” said PMI CEO Jacek Olczak in a statement.

    “This transaction marks a major milestone in accelerating our shared objective of a smoke-free future. We look forward to welcoming Swedish Match’s employees and leading oral nicotine portfolio into the PMI family to create a global smoke-free champion, notably bringing IQOS and Zyn together in both the U.S. and international markets.

    “We are very excited about the growth, value creation and progress in tobacco harm reduction that we believe can be achieved together over the coming years. Despite the increased cost of financing over recent months, we expect the combination to be low single-digit accretive to PMI’s adjusted diluted EPS in 2023, before potential revenue synergies and excluding transaction-related and one-off costs and the amortization of acquired intangibles.”

    In May, PMI submitted a $16 billion takeover bid for Swedish Match. The bid initially received pushback from Elliott Management, Framtiden and other stakeholders as they felt that it undervalued the company. PMI later raised its bid from SKK106 ($10.21) per share to SKK116 per share. Elliott Management, Framtiden and the other shareholders agreed to tender their shares after the bid was raised, and PMI secured over 83 percent approval by the end of the initial offer period.

  • PMI Releases New Integrated Report

    PMI Releases New Integrated Report

    Photo: Tobacco Reporter Archive

    Philip Morris International released its third annual Integrated Report, which includes an updated Statement of Purpose, a new environmental, social and governance (ESG) framework as well as detailed information about PMI’s strategic vision, performance, governance and value creation model. The content was informed by a formal sustainability materiality assessment conducted in 2021.

    “Sustainability and business performance are fully interrelated and mutually reinforcing. Our actions—grounded in data, science and facts—speak louder than words. PMI is committed to serving as an agent of change and advocate of positive values. We understand that our business must become a provider of effective alternatives to continued smoking for adult smokers who don’t quit. To achieve this, we are positioning ourselves at the forefront of consumer centricity, technology, science and innovation. With an eye to the long term, we are also expanding our business into areas beyond tobacco and nicotine, such as wellness and healthcare,” said Jacek Olczak, CEO of PMI, in a company press release.

    The company’s 2021 sustainability materiality assessment helped identify the ESG issues on which PMI should prioritize and focus its resources. PMI subsequently redesigned its ESG framework, recognizing two distinct topic areas: those related to PMI’s products and those related to its business operations. This distinction forms the basis of PMI’s new approach to sustainability, which consists of eight clear impact-driven strategies that aim to address its most material ESG topics. These eight strategies—four aimed to address the impact of PMI’s products and four aimed to address the company’s operational impact—are accompanied by a robust framework of nine governance-related factors.

    “I’m proud to be able to say that our executive compensation program now reflects our commitment to put sustainability at the core of our corporate strategy,” said Emmanuel Babeau, chief financial officer at PMI. “PMI’s Sustainability Index aligns us even further with the interests of shareholders and other stakeholders, forming a strong link between our executive compensation practices and the company’s short-[term] and long-term ESG performance.”

  • PMI Reaches Gender Balance Goal

    PMI Reaches Gender Balance Goal

    Photo: Tobacco Reporter Archive

    Philip Morris International has reached its global company-wide target to improve gender balance, ensuring at least 40 percent female representation in managerial roles by 2022, according to a company press release.

    Jacek Olczak, CEO at PMI, commented, “I am immensely proud of PMI’s vision, commitment and achievement in ensuring equal opportunities are given to all in the workplace, irrespective of gender. Meeting this target demonstrates that our inclusion and diversity strategy is working. Diverse profiles, backgrounds and perspectives allow us to make better and more considered decisions as well as contribute to better and more sustainable performance. I firmly believe that a culture of fairness, inclusion and diversity [is] crucial to PMI’s progress in achieving a smoke-free future and will continue to benefit the company as we become more reflective of our consumer base.”

    “What gets measured really does get done,” said Silke Muenster, chief diversity officer. “This was a whole company effort requiring everyone to take responsibility. I am delighted that we have met our target on time but recognize that we still have a long way to go on our diversity, equity and inclusion journey. With this in mind, we have our next gender representation target: 35 percent of women in senior roles by 2025.

    “Having a truly diverse workforce is an essential part of our goal to achieve a smoke-free future. I am very proud of the progress we have made to date, and I am confident about achieving more in the future.”

    PMI has also been recertified as a global EQUAL-SALARY organization for the second time since 2019 by the independent EQUAL-SALARY Foundation. The recertification verifies that PMI continues to pay female and male employees equally for equal work in the more than 90 markets where PMI operates.

    The EQUAL-SALARY Foundation is an independent, nonprofit organization based in Switzerland. The EQUAL-SALARY certification verifies that organizations have sustainable policies and practices to ensure that they pay their male and female employees equally for equal work.

  • PMI Suspends Operations in Ukraine

    PMI Suspends Operations in Ukraine

    Philip Morris International is suspending operations in Ukraine, including its factory in Kharkiv, following the invasion of Russian forces into the country, according to The Wall Street Journal.

    “The safety and security of our colleagues and their families is our primary concern, and we have, therefore, temporarily suspended our operations in Ukraine,” said PMI CEO Jacek Olczak. “Our employees are advised to stay at home or in any safe place and follow instructions from local authorities.”

    PMI has more than 1,300 employees in Ukraine. The country accounted for about 2 percent of PMI’s total cigarette and heated-tobacco shipment volume in 2021.

    PMI has stated that it has contingency plans in place to restart operations once conditions are safe.