Tag: Switzerland

  • Plugging into the future

    Plugging into the future

    Plug and Play, a global leader in technology incubators, is partnering with Japan Tobacco International to run Vapetech, a program aimed at bringing together innovators and data experts to develop technology that improves the experience and health benefits of vaping.

    In a note posted on its website, JTI said this global program would operate from Silicon Valley and launch with a first batch of selected start-ups on March 11, 2019.

    “At Plug and Play we are always interested to support innovation in new industries,” Saeed Amidi, the founder and CEO of Plug and Play was quoted as saying. “We believe vaping has the potential to reduce the health risks from smoking. Our goal is to identify the next generation of products and services, and by connecting them with JTI and others, we will continue to push forward innovation in this industry.”

    The JTI note said that, through a global application and sourcing process, Plug and Play, supported by JTI, would each year select about 20 start-ups who would ‘develop ideas and solutions for a more enhanced vaping experience’. ‘Start-ups with new devices or technology applicable to IoT (Internet of Things), Biometrics, Data, and Lifestyle will enter a three-month program to develop their product and services and have access to investment and corporate partnerships,’ the note said.

    Daniel Torras, JTI’s senior vice president, reduced-risk products, said that with the rapid rise of vaping products, the dynamics of innovation in the industry had changed drastically. “In addition to our own R&D, Vapetech will allow us to explore and develop consumer relevant features for the next generation of products and services,” he said. “It will also extend our network to new sets of entrepreneurs offering disruptive ideas to empower a future of choice in the vaping sector.”

  • Proceeding with caution

    Proceeding with caution

    Philip Morris International has revised its full-year 2019 reported diluted earnings per share forecast following the publication of a Canadian appeals-court judgment in respect of two class-actions in Quebec.

    In a statement posted on its website, PMI said that on March 1, 2019, the Court of Appeal of Québec in Montreal had issued its judgment in two class action lawsuits against Rothmans, Benson & Hedges (RBH), a subsidiary of PMI, as well as Imperial Tobacco Canada (a British American Tobacco subsidiary), and JTI-Macdonald. PMI was not a party to the cases.

    ‘In 2015, the trial court ruled in favor of plaintiffs and found that the estimated class members’ damages totaled approximately C$15.6 billion including interest,’ the statement said. ‘In its decision, the Court of Appeal largely affirmed the total amount of compensatory and punitive damages including the trial court’s order for the defendants to deposit a portion of the damages, approximately C$1.1 billion, into trust accounts within 60 days. RBH’s share of the deposit is approximately C$257 million. RBH previously deposited C$226 million as security with the Court of Appeal. RBH will seek leave to appeal this judgment to the Supreme Court of Canada…

    ‘As a result of this decision against RBH, PMI will incur in its consolidated results a pre-tax charge of approximately $194 million, representing approximately $142 million net of tax, in the first quarter of 2019, recorded as tobacco litigation-related expenses. The charge reflects PMI’s assessment of the portion of the judgment that it believes is probable and estimable at this time and corresponds to the trust account deposit required by the court.

    ‘The company is monitoring developments in these proceedings and further assessing the situation, as there is a significant lack of clarity with respect to several factors, including the actual number of claimants, the associated administrative process for verification of their applications, further proceedings, and actions by parties to these proceedings. Therefore, the ultimate liability may differ significantly from this amount.

    ‘As a result of this charge, PMI today revises its full-year 2019 reported diluted earnings per share forecast to be at least $5.28 at the exchange rates prevailing at the time of PMI’s earnings release of February 7, 2019.  Excluding the impact of this charge of approximately $0.09 per share and an unfavorable currency impact, at the then prevailing exchange rates, of approximately $0.14 per share, this forecast represents a projected increase of at least 8.0 percent versus adjusted diluted earnings per share of $5.10 in 2018 (calculated as reported diluted EPS of $5.08, plus tax items of $0.02 per share primarily related to the implementation of the Tax Cuts and Jobs Act).’

  • PMI’s volumes robust

    PMI’s volumes robust

    Philip Morris International’s cigarette shipment volume during the 12 months to the end of December, at 740,315 million, was down by 2.8 percent on that of the 12 months to the end of December 2017, 761,926 million.

    Cigarette volume was up by 4.0 percent from 171,600 million to 178,469 million in the company’s South and Southeast Asia region, but down in its other regions: by 4.1 percent from 187,293 million to 179,622 million in its EU region; by 8.9 percent from 119,398 million to 108,718 million in its Eastern Europe region; by 0.1 percent from 136,759 million to 136,605 million in its Middle East and Africa region; by 10.4 percent from 62,653 million to 56,163 million in its East Asia and Australia region; and by 4.1 percent from 84,223 million to 80,738 million in its Latin America and Canada region.

    The company said that the fall in its cigarette shipment volume had partly reflected the impact of out-switching to heated tobacco units, largely from premium and mid-price cigarette brands. Marlboro shipments were down by 2.2 percent from 270,336 million to 264,423 million.

    Heated tobacco unit shipment volume during the 12 months to the end of December, at 41,372 million was increased by 14.2 percent on that of the previous 12 months, 36,226 million. Heated tobacco unit volume was down by 17.9 percent from 32,729 million to 26,866 million in the company’s East Asia and Australia region, but increased by more than 100 percent in each of its other regions where these products are available: from 1,889 million to 5,977 million in the EU region; from 674 million to 4,979 million in its Eastern Europe region; from 907 million to 3,403 million in its Middle East and Africa region; and from 27 million to 147 million in its Latin America and Canada region.

    Cigarette and heated tobacco unit shipment volume during the 12 months to the end of December, at 781,687 million, was down by 2.1 percent on that of the previous 12 months, 798,152 million. Combined shipments were increased by 4.0 percent from 171,600 million to 178,469 million in the company’s South and Southeast Asia region and by 1.7 percent from 137,666 million to 140,008 million in its Middle East and Africa region. But they were down by 1.9 percent from 189,182 million to 185,599 million in its EU region; by 5.3 percent from 120,072 million to 113,697 million in its Eastern Europe region; by 13.0 percent from 95,382 million to 83,029 million in its East Asia and Australia region; and by 4.0 percent from 84,250 million to 80,885 million in its Latin America and Canada region.

    PMI said that, ‘excluding the net impact of estimated distributor inventory movements of approximately 16.6 billion units, due primarily to heated tobacco unit inventories in Japan, reflecting unfavorable cigarette and heated tobacco unit inventory movements of approximately 0.4 billion and 16.2 billion units, respectively, PMI’s total shipment volume was flat.

    In announcing the results, CEO André Calantzopoulos said PMI had closed out a challenging year with a robust financial and strategic performance across the business. “Excluding inventory movements largely associated with heated tobacco unit volume in Japan, our total volume variance was flat – our best annual performance since 2012 – underpinned by a near doubling of global in-market sales of heated tobacco units,” he said.

    “We grew our international market share by 0.5 points to reach 28.4 percent, and maintained a stable share of the cigarette category, highlighting our ability to successfully manage our transition to reduced-risk products.

    “Our total net revenues were driven by an exceptional cigarette pricing variance of 7.6 percent and a strong contribution of more than $4 billion from our smoke-free products, despite the impact of the inventory adjustments. Our operating income was essentially flat, excluding currency, primarily reflecting increased investment behind our reduced-risk product portfolio. Our robust, currency-neutral double-digit adjusted EPS performance was assisted by a lower effective tax rate and interest expense.

    “Thanks to the tremendous efforts of our employees around the world, and significant investments in portfolio development and organizational capabilities, including a state-of-the-art digital infrastructure to fuel our expansion, we believe we have laid the foundation for an even better performance in 2019. The underlying strength of our combustible tobacco business remains intact and our reduced-risk products are the catalysts to accelerate our business growth and secure the long-term future of our company and the sustainability of our earnings and dividend growth.”

  • The impact of climate change

    The impact of climate change

    Philip Morris International estimates that climate change could save the company millions of dollars, according to a blog by Kyla Mandel published at Think Progress.

    In a newly-released corporate disclosure document, PMI said the higher temperatures and increased rainfall that came with climate change would save the company millions of dollars.

    Thousands of corporate disclosures were published by UK-based non-profit CDP (formerly known as the Carbon Disclosure Project) detailing how companies are preparing for a warmer world and how they expect climate change will impact their bottom lines.

    ‘According to its disclosure, Philip Morris International expects heavier rains will save the company an estimated $10 million,’ said Mandel. ‘This is because steady rainfall is the ideal environment for growing tobacco; the longer the soil is moist, the longer tobacco’s life cycle. In turn, the company says it would be able to increase production and potentially improve the quality of its cigarettes.

    ‘Meanwhile, the tobacco giant expects higher temperatures – which will help with drying out, or curing, the tobacco leaves – will save the company an additional $1 million each year since it won’t have to use as much firewood to dry the leaves.

    ‘Extreme rainfall and drought could also negatively impact tobacco production in several ways, the company notes in its disclosure, from the need to pump excess water to disruptions to its distribution.’

    PMI reportedly told CDP that, to help combat climate change, the company was working on reducing its carbon footprint by cutting energy usage and greenhouse gas emissions.

    And it said that by advertising its sustainability initiatives it might gain better consumer recognition, enhance its brand image, and increase the company’s competitive advantage.

    CDP gave PMI an ‘A’ grade for its efforts on climate change.

  • PMI to webcast results

    PMI to webcast results

    Philip Morris International is due to host a live audio webcast at www.pmi.com/2018Q4earnings from 13.00 Eastern Time on February 7 to discuss its 2018 fourth-quarter and full-year results, which will be issued about 09.15 the same day.

    During the webcast, which will be in listen-only mode, CEO André Calantzopoulos will discuss the results, the outlook for 2019 and, with CFO Martin King, answer questions from the investment community and news media.

    The audio webcast can be accessed also on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application at www.pmi.com/irapp.

    An archived copy of the webcast will be available until 17.00 on March 8 at www.pmi.com/2018Q4earnings.

  • A for climate change

    A for climate change

    Philip Morris International says it has been highlighted as a global leader on corporate climate action by the environmental-impact non-profit organization CDP [formerly the Carbon Disclosure Project], achieving a place on the CDP Climate Change A List for the fifth consecutive year.

    In a note posted on its website yesterday, the company said it was the only tobacco company to have scored an A and that it had been recognized for cutting emissions, mitigating climate risks and developing the low-carbon economy, based on its 2018 disclosure to CDP.

    “Climate change is one of [the] major concerns for humanity, and companies can make a difference,” said PMI CEO André Calantzopoulos. “Just like we are leading our industry’s transformation toward a smoke-free future, we are focused on bettering every part of our business and supply chain to become a leader in sustainable business practices.”

    The company said its efforts to reduce the environmental footprint of its operations were focused on sustainable design in new facilities, energy efficiency in manufacturing processes, greener purchasing of electricity and fuels ‘as well as greening of our fleet’. ‘Additionally, the environmental efforts go beyond the factory gates: Most GHG [greenhouse gas] emissions related to the tobacco supply chain come from the curing process for Virginia flue-cured tobacco, one of the main tobacco types the company purchases,’ it said. ‘PMI aims to lower GHG emissions in the curing process by 70 percent by 2020 (vs. 2010). To achieve this, PMI works with contracted farmers and leaf tobacco suppliers to improve curing-barn efficiency (combustion efficiency, ventilation and controls), as well as eliminate the use of coal and non-sustainable wood. The CDP A-list recognition underscores that the company is on track to achieve its target.’

    Meanwhile, Paul Simpson, the CEO of CDP offered congratulations to all the companies that made it onto the A List this year. “As the severity of environmental risks to business becomes ever more apparent, these are the companies that are positioning themselves to provide solutions, seize new market opportunities and thrive in the transition to a sustainable economy,” he was quoted as saying.

    “We need to urgently scale up environmental action at all levels in order to meet the goals of the Paris Agreement and the Sustainable Development Goals. It’s clear that the business world is an essential player in this transition, and the A List companies are set to make a substantial contribution to those goals.”

    More information about PMI’s sustainable practices are available here.

  • Joint approach to health

    Joint approach to health

    With the right discussion and oversight, corporations can be reliable partners in helping governments deal with some of today’s public health issues, according to a note posted on Philip Morris International’s website.

    The company says that it has looked at the dynamics between consumers, corporations and authorities across a range of global public health issues through the lens of a new report, Public Health—Much Harder than Rocket Science, which is based on a recent global survey conducted by IPSOS.

    ‘Consumers all over the world want their governments to do better at solving major public health issues, according to the IPSOS survey of 31,000 respondents across 31 countries commissioned by PMI,’ the note says.

    ‘In the survey, respondents were asked how important they believed it is for governments to dedicate time and resources to nine global health issues: air pollution, mental health, STDs [sexually-transmitted diseases], healthier food products, opioid abuse, smoking and alcohol abuse, unwanted pregnancies and obesity.

    ‘When asked about the role of technology and innovation in addressing these issues, 91 per cent of respondents believed technology and innovation had an important role to play. ‘However, respondents did not evaluate government performance highly; … 56 per cent believed the authorities had done a poor job of ensuring access to the latest innovations and advancements that can improve public health.

    ‘Introduced by PMI in Davos, Public Health—Much Harder than Rocket Science, reviews further the discussions surrounding these important public health issues and the interplays between public vs. private impact and human behavior. It concludes that a collaborative approach is possible: Corporations themselves may well be able to help address some of the public health issues relating to their products. And, authorities would be well advised to tap into corporate resources and use their ingenuity and self-interest to create compelling solutions. With the right discussion and oversight, corporations can be reliable partners in helping governments deal with some of today’s public health issues.’

    “Given the scale of these public health challenges, it’s unrealistic to expect advice and exhortations from health authorities alone to make the difference,” argues Marian Salzman, senior vice president, global communications at PMI. “To truly help large numbers of people make the changes they want and need will take a combination of evidence-based public policy initiatives, new technologies and new products.

    “The public deserve – and are asking – to hear about better possibilities, regardless of where they have come from.”

    More information is at: PMI.com.

    All the data can be viewed at: https://www.pmi.com/media-center/news/public-supports-alternatives-to-cigarettes.

  • Equal salary certification

    Equal salary certification

    Japan Tobacco International’s headquarters is the first Geneva-based multinational headquarters to be certified as an equal salary employer by the EQUAL-SALARY Foundation, a Swiss non-profit organization specialized in equal pay among women and men, according to a note posted on JTI’s website.

    “We are delighted that our commitment to pay all our employees fairly is now recognized and endorsed by the independent EQUAL-SALARY Foundation,” said Guergana Andreeva, global talent management vice president.

    “Gender pay equity is essential to us. It establishes a culture of trust within our organization, and is a key asset in the recruitment of future talent.

    “We strongly believe in the importance of embedding diversity and inclusion in our practices, of which equal pay is only one component.”

    ‘The Foundation’s EQUAL-SALARY methodology was designed to allow companies to address any gaps and ensure all employees are paid equivalently for the same work,’ JTI said in its note.

    ‘This certification follows an independent audit process, which occurs in several stages, including a review of employee pay data, the company’s remuneration strategy, as well as focus groups and surveys amongst randomly selected employees.’

  • PMI to webcast presentation

    PMI to webcast presentation

    Philip Morris International is due to host at www.pmi.com/2018morganstanley a live audio webcast of a presentation and question-and-answer session by CFO Martin King at the Morgan Stanley Global Consumer and Retail Conference, starting about 09.20 Eastern Time on November 13.
    The webcast, which will be in listen-only mode, will provide live audio of the entire PMI session.
    The webcast may be accessed also on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application at www.pmi.com/irapp.
    An archived copy of the webcast will be available until 17.00 on December 12 at www.pmi.com/2018morganstanley.
    Presentation slides will be available at the same site.

  • PMI’s 3Q volumes down

    PMI’s 3Q volumes down

    Philip Morris International’s cigarette shipment volume during the third quarter (July-September), at 195,068 million was down by 1.7 percent on that of the third quarter of 2017, 198,465 million.
    Shipments were increased by 2.5 percent to 45,840 million in its South and Southeast Asia region and by 0.9 percent to 37,406 billion in its Middle East and Africa region. But shipments were down in each of its other regions: by 1.8 percent to 48,223 million in the EU; by 6.1 percent to 29,801 million in Eastern Europe; by 7.5 percent to 14,186 million in East Asia and Australia; and by 4.1 percent to 19,612 million in Latin America and Canada.
    Shipments of heated-tobacco units were down by 11 percent from 9,725 million during the third quarter of 2017 to 8,652 million during the third quarter of 2018.
    Heated-tobacco unit shipments increased by more than 100 percent in four of the company’s regions: from 464 million to 1,730 million in the EU; from 180 million to 1,152 million in Eastern Europe; from 247 million to 1,152 million in the Middle East and Africa; and from eight million to 43 million in Latin America and Canada. But shipments fell by 48.2 percent in the East Asia and Australia region, from 8,826 million to 4,575 million. There were no recorded heated-tobacco unit sales in the South and Southeast Asia region, in either the third quarter of this year or last year.
    Taken together, shipments of cigarettes and heated-tobacco units during the third quarter of 2018, at 203,720 million, were down by 2.1 percent on those of the third quarter of 2017, 208,190 million.
    Total shipments were increased in three regions: by 0.8 percent to 49,953 million in the EU; by 3.3 percent to 38,558 million in the Middle East and Africa; and by 2.5 percent to 45,840 million in South and Southeast Asia. Total shipments were down in the other three regions: by 3.1 percent to 30,953 million in Eastern Europe; by 22.3 percent to 18,761 million in East Asia and Australia; and by 3.9 percent to 19,655 million in Latin America and Canada.
    PMI’s reported and adjusted diluted earnings per share (EPS) during the third quarter of 2018, at $1.44, were increased by $0.17 on those of the third quarter of 2017.
    Net revenues, at $7.504 billion, were up from $7.473 billion.
    Operating income, at $3.156 billion, was up from $3.088 million.
    In announcing PMI’s third-quarter and year-to-date results, CEO André Calantzopoulos said the company’s third-quarter demonstrated that its underlying business performance was in good shape. “Excluding distributor inventory movements, our total shipment volume was up in the quarter and year-to-date, reflecting the continued growth of our heat-not-burn products as well as the solid performance of our combustible products,” he said.
    “Our total market share was up by 0.5 and 0.6 points in the quarter and year-to-date, respectively.
    “In addition, supported by our leading brand portfolio, pricing was strong. As a result, we continue to forecast currency-neutral EPS growth for the full year of 8-9 percent.
    “We remain focused on our smoke-free transformation and are very encouraged by the continued progress of our smoke-free products and initiatives, especially across the EU and Russia.
    “As previously announced, this quarter existing IQOS device and consumable inventories were rightsized in Japan ahead of the upcoming global launch of our new IQOS 3 and IQOS 3 Multi devices.
    “Importantly, our worldwide in-market sales of heated tobacco units this year remain set to almost double and we continue to anticipate shipments of approximately 41-42 billion units.”
    “Overall, as we stated recently at our Investor Day, our business is showing great momentum.  As we enter this year’s final quarter, I am confident that the strategies and initiatives we have put in place set the stage for an even better business performance in 2019.”