8-K
Philip Morris International Inc. (PM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 6, 2023
Philip Morris International Inc.
(Exact name of registrant as specified in its charter)
| Virginia | 1-33708 | 13-3435103 | |
|---|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (I.R.S. Employer<br><br>Identification No.) | |
| 677 Washington Blvd, Ste. 1100 | Stamford | Connecticut | 06901 |
| --- | --- | --- | --- |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (203) 905-2410
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||
|---|---|---|---|---|---|---|
| Common Stock, no par value | PM | New York Stock Exchange | ||||
| 3.600% Notes due 2023 | PM23A | New York Stock Exchange | 2.875% Notes due 2024 | PM24 | New York Stock Exchange | |
| --- | --- | --- | ||||
| 2.875% Notes due 2024 | PM24C | New York Stock Exchange | ||||
| 0.625% Notes due 2024 | PM24B | New York Stock Exchange | ||||
| 3.250% Notes due 2024 | PM24A | New York Stock Exchange | ||||
| 2.750% Notes due 2025 | PM25 | New York Stock Exchange | ||||
| 3.375% Notes due 2025 | PM25A | New York Stock Exchange | ||||
| 2.750% Notes due 2026 | PM26A | New York Stock Exchange | ||||
| 2.875% Notes due 2026 | PM26 | New York Stock Exchange | ||||
| 0.125% Notes due 2026 | PM26B | New York Stock Exchange | ||||
| 3.125% Notes due 2027 | PM27 | New York Stock Exchange | ||||
| 3.125% Notes due 2028 | PM28 | New York Stock Exchange | ||||
| 2.875% Notes due 2029 | PM29 | New York Stock Exchange | ||||
| 3.375% Notes due 2029 | PM29A | New York Stock Exchange | ||||
| 0.800% Notes due 2031 | PM31 | New York Stock Exchange | ||||
| 3.125% Notes due 2033 | PM33 | New York Stock Exchange | ||||
| 2.000% Notes due 2036 | PM36 | New York Stock Exchange | ||||
| 1.875% Notes due 2037 | PM37A | New York Stock Exchange | ||||
| 6.375% Notes due 2038 | PM38 | New York Stock Exchange | ||||
| 1.450% Notes due 2039 | PM39 | New York Stock Exchange | ||||
| 4.375% Notes due 2041 | PM41 | New York Stock Exchange | ||||
| 4.500% Notes due 2042 | PM42 | New York Stock Exchange | ||||
| 3.875% Notes due 2042 | PM42A | New York Stock Exchange | ||||
| 4.125% Notes due 2043 | PM43 | New York Stock Exchange | ||||
| 4.875% Notes due 2043 | PM43A | New York Stock Exchange | ||||
| 4.250% Notes due 2044 | PM44 | New York Stock Exchange | ||||
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||||||
| --- | ||||||
| Emerging growth company | ☐ | |||||
| --- | --- | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||
| --- | --- | |||||
| Item 7.01. | Regulation FD Disclosure. | |||||
| --- | --- |
On June 6, 2023, Emmanuel Babeau, Chief Financial Officer of Philip Morris International Inc. ("PMI"), will address investors and conduct a presentation and question-and-answer session at the Deutsche Bank Global Consumer Conference in Paris, France. In connection with the presentation, PMI is furnishing to the Securities and Exchange Commission the following documents attached as exhibits to this Current Report on Form 8-K and incorporated by reference to this Item 7.01: (i) the press release, dated June 6, 2023, attached as Exhibit 99.1 hereto; and (ii) the presentation slides, dated June 6, 2023, attached as Exhibit 99.2 hereto.
In accordance with General Instruction B.2 of Form 8-K, the information of this Current Report on Form 8- K, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing or document.
| Item 9.01. | Financial Statements and Exhibits. | | --- | --- || (d) | Exhibits. | | --- | --- | | 99.1 | Philip Morris International Inc. Press Release, dated June 6, 2023 (furnished pursuant to Item 7.01). | | 99.2 | Philip Morris International Inc. Presentation Slides, dated June 6, 2023 (furnished pursuant to Item 7.01). | | 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PHILIP MORRIS INTERNATIONAL INC. | |
|---|---|
| By: | /s/ DARLENE QUASHIE HENRY |
| Name: | Darlene Quashie Henry |
| Title: | Vice President, Associate General Counsel & Corporate Secretary |
Date: June 6, 2023
Document
| PRESS RELEASE | Exhibit 99.1<br><br> |
|---|---|
| Investor Relations: | Media: David Fraser |
| Stamford, CT: +1 (203) 904 2410 | Lausanne: +41 (0)58 242 4500 |
| Lausanne: +41 (0)58 242 4666 | Email: David.Fraser@pmi.com |
| Email: InvestorRelations@pmi.com |
PHILIP MORRIS INTERNATIONAL INC. (PMI) PRESENTS AT 2023 DEUTSCHE BANK GLOBAL CONSUMER CONFERENCE;
REAFFIRMS 2023 FULL-YEAR EPS FORECAST
STAMFORD, CT, June 6, 2023 – Philip Morris International Inc.’s (NYSE: PM) Chief Financial Officer, Emmanuel Babeau, will address investors today at the Deutsche Bank Global Consumer Conference in Paris.
The session will be webcast live in listen-only mode, beginning at approximately 9:15 a.m. CEST (3:15 a.m. ET), at www.pmi.com/2023deutschebank, and on the PMI Investor Relations Mobile Application (available for download at www.pmi.com/irapp). Presentation slides will also be available on the same site and the App. An archived copy of the webcast will be available until 5:00 p.m. ET on Friday, July 7, 2023, also at www.pmi.com/2023deutschebank.
"We expect strong second-quarter performance, including total shipment volume growth driven by our smoke-free portfolio," said Emmanuel Babeau, Chief Financial Officer. “Today, we are reaffirming our 2023 full-year EPS forecast, which is underpinned by the excellent outlook for IQOS and ZYN.”
2023 Full-Year Forecast
PMI reaffirms its 2023 full-year reported diluted EPS forecast, announced on April 20, 2023, of $5.88 to $6.00, at then-prevailing exchange rates. Excluding a total 2023 adjustment of $0.22 per share and an unfavorable currency impact, at then-prevailing exchange rates, of $0.30 per share, this forecast represents a projected currency-neutral increase of 7% to 9% versus adjusted diluted EPS of $5.98 in 2022, as outlined in the below table.
| Full-Year | ||||||
|---|---|---|---|---|---|---|
| 2023<br><br>Forecast | 2022 | |||||
| Reported Diluted EPS | $5.88 | - | $6.00 | 5.81 | ||
| Adjustments | ||||||
| Asset impairment and exit costs | 0.06 | ̶ | ||||
| Amortization and impairment of intangibles | 0.16 | 0.15 | ||||
| Termination of distr. arrangement in Middle East | 0.04 | ̶ | ||||
| Charges related to the war in Ukraine | ̶ | 0.08 | ||||
| Costs associated with Swedish Match AB offer | ̶ | 0.06 | ||||
| Swedish Match AB acq. accounting related item | 0.01 | 0.06 | ||||
| Tax benefit assoc. with Swedish Match AB financing | (0.05) | (0.13) | ||||
| Fair value adj. for equity security investments | ̶ | (0.02) | ||||
| Tax Items | ̶ | (0.03) | ||||
| Total Adjustments | 0.22 | 0.17 | ||||
| Adjusted Diluted EPS | $6.10 | - | $6.22 | 5.98 | ||
| Less Currency (a) | (0.30) | |||||
| Adjusted Diluted EPS, excluding currency | $6.40 | - | $6.52 | 5.98 | - | 9% |
| (a) At then-prevailing exchange rates used for the company’s April 20th forecast |
All values are in US Dollars.
The assumptions underlying this forecast remain unchanged versus those communicated by PMI in its earnings release of April 20th, with the exception of the following assumptions specific to the second quarter:
•HTU shipment volume of around 31 to 32 billion units (+25% to +29% versus the second quarter of 2022), reflecting the upper half of the company’s previous range;
•Sequential improvement in adjusted operating income margin of up to 100 basis points versus the first quarter of 2023, reflecting (i) lower gross margin headwinds and (ii) organic SG&A expense growth broadly in line with net revenue growth on the same basis; and
•Adjusted diluted EPS toward the top end of the company’s prior forecast of $1.42 to $1.47, including an unfavorable currency impact, at then-prevailing exchange rates, of $0.13 per share.
Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.
Forward-Looking & Cautionary Statements
The presentation, related discussion and this press release contain projections of future results and goals and other forward-looking statements, including statements regarding expected financial or operational performance; capital allocation plans; investment strategies; regulatory outcomes; market expectations; and business plans and strategies. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.
PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia's invasion of Ukraine; changes in adult smoker behavior; the impact of COVID-19 on PMI's business; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate 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; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; if it is unable to attract and retain the best global talent, including women or diverse candidates; or if it is unable to successfully integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also subject to the lower predictability of our reduced-risk product category's performance.
PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the year ended December 31, 2022, and the Form 10-Q for the first quarter ended March 31, 2023. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligations.
Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is a leading international tobacco company working to deliver a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company’s current product portfolio primarily consists of cigarettes and smoke-free products. Since 2008, PMI has invested more than USD 10.5 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. In November 2022, PMI acquired Swedish Match – a leader in oral nicotine delivery – creating a global smoke-free champion led by the companies’ IQOS and ZYN brands. The U.S. Food and Drug Administration (FDA) has authorized versions of PMI’s IQOS Platform 1 devices and consumables and Swedish Match’s General snus as Modified Risk Tobacco Products (MRTPs). As of March 31, 2023, PMI's smoke-free products were available for sale in 78 markets, and PMI estimates that approximately 18.5 million adults around the world had already switched to IQOS and stopped smoking. Smoke-
free products accounted for approximately 35% of PMI’s total 2023 first-quarter net revenues. With a strong foundation and significant expertise in life sciences, PMI announced in February 2021 its ambition to expand into wellness and healthcare areas and, through its Vectura Fertin Pharma business, aims to enhance life through the delivery of seamless health experiences. For more information, please visit www.pmi.com and www.pmiscience.com.
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Delivering a Smoke-Free Future Deutsche Bank Global Consumer Conference June 6, 2023 Emmanuel Babeau Chief Financial Officer Introduction • A glossary of terms, as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures for non-GAAP financial measures cited in this presentation are available under “Reports & filings” on our Investor Relations website with additional non-GAAP reconciliations available at the end of this presentation. Our definition of smoke-free products can be found in the glossary of terms 2 Exhibit 99.2
Forward-Looking and Cautionary Statements • This presentation contains projections of future results and goals and other forward-looking statements, including statements regarding business plans, expectations and strategies. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI • PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia's invasion of Ukraine; changes in adult smoker behavior; the impact of COVID-19 on PMI's business; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate 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; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; if it is unable to attract and retain the best global talent, including women or diverse candidates; or if it is unable to successfully integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also subject to the lower predictability of our reduced-risk product category's performance • PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the year ended December 31, 2022 and the Form 10-Q for the quarter ended March 31, 2023. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligations 3 4 Strong Expected Q2 Driven by Smoke-Free Success • Continued excellent growth from IQOS and ZYN, further ILUMA launches • Strong expected Q2 performance with positive shipment volumes:⎼ Includes HTU shipments of 31-32bn, upper half of previous range⎼ As expected, significant sequential improvement in adjusted OI margin of up to 100 basis points vs. Q1⎼ Adjusted diluted EPS toward top end of $1.42-$1.47 forecast • On track for strong H2 performance with year-on-year organic OI margin growth • Reaffirm full-year adjusted diluted EPS guidance(a) • Advancing towards >50% smoke-free net revenues; working to harness full potential of IQOS and ZYN (a) At then-prevailing exchange rates (April 20, 2023) Source: PMI Financials or estimates
Delivering a Smoke-Free Future Questions & Answers iOS Download Android DownloadHave you downloaded the PMI Investor Relations App? The free IR App is available to download at the Apple App Store for iOS devices and at Google Play for Android mobile devices Or go to: www.pmi.com/irapp Deutsche Bank Global Consumer Conference 6 Appendix
Note: At then-prevailing exchange rates used for the company’s April 20th forecast Source: PMI Financials or estimates 2023 Forecast 2022 Growth Reported Diluted EPS $5.88 – $6.00 $5.81 Adjustments: - Asset impairment and exit costs 0.06 – - Amortization and impairments of intangibles 0.16 0.15 - Termination of distribution arrangement in the Middle East 0.04 – - Charges related to the war in Ukraine – 0.08 - Costs associated with Swedish Match AB offer – 0.06 - Swedish Match AB acquisition accounting related item 0.01 0.06 - Tax benefit associated with Swedish Match AB financing (0.05) (0.13) - Fair value adj. for equity security investments – (0.02) - Tax items – (0.03) - Total Adjustments 0.22 0.17 Adjusted Diluted EPS $6.10 – $6.22 $5.98 - Less: Currency (0.30) Adjusted Diluted EPS, excluding currency $6.40 – $6.52 $5.98 7% – 9% 2023: EPS Guidance ($/share) 7 Full-Year Delivering a Smoke-Free Future Deutsche Bank Global Consumer Conference June 6, 2023