PMI’s shipments down in 2015

| February 5, 2016

Philip Morris International’s shipment volumes during the 12 months to the end of December, at 847,270 million, were down by 1.0 percent on those of the 12 months to the end of December 2014, 855,954 million.

Volumes increased by 0.4 percent to 279.411 million in the company’s Eastern Europe, Middle East and Africa (EEMA) region, but fell in each of its other regions: by 0.1 percent to 194,589 million in the EU; by 2.4 percent to 281,350 million in Asia; and by 2.9 percent to 91,920 million in Latin America and Canada.

The 1.0 percent decline in overall volume was said to have reflected declines in Asia, mainly due to PMI’s performances in South Korea, Pakistan and the Philippines; and in Latin America & Canada, mainly due to its performances in Argentina, Brazil, Ecuador and Mexico.

‘The decrease was partly offset by total cigarette shipment volume growth in EEMA, notably Egypt, Saudi Arabia and Turkey, partially offset by Kazakhstan and Ukraine, PMI said yesterday in delivering its results for the full year 2015.

‘Total cigarette shipment volume in the EU was essentially flat, with declines in Greece, Italy and the United Kingdom largely offset by growth in France, Germany and Spain.

‘Estimated inventory movements were favorable, driven principally by a favorable comparison in Japan as a result of the 2014 correction of distributor inventory movements partly related to the VAT increase of April 2014. Excluding these estimated inventory movements, PMI’s total cigarette shipment volume decreased by 1.6%, excluding acquisitions.’

Marlboro shipments increased by 0.9 percent to 285,583 million, year-on-year; an increase that was said to reflect growth in: the EU, notably in France, Germany

and Spain, partly offset by the brand’s performance in Italy and the UK; the EEMA, notably in Saudi Arabia, and Turkey, partly offset by its performance in North Africa and Ukraine; and Asia, notably the in Philippines and Vietnam, partly offset by its performance in Japan and South Korea. Cigarette shipment volume of Marlboro decreased in the Latin America & Canada region, mainly due to its performance in Argentina, Brazil and Mexico, partly offset by that in Colombia.

L&M shipments increased by 3.9 percent to 97,884 million; Parliament shipments fell by 4.9 percent to 44,879 million; Bond Street shipments increased by 0.1 percent to 43,608 million; Chesterfield shipments fell by 1.8 percent to 41,397 million; Lark shipments rose by 12.1 percent to 35,815 million, and shipments of other brands fell by 5.7 percent to 269,276 percent.

Shipments of OTP, in cigarette equivalent units, grew by 1.0 percent, while shipments of cigarettes and OTP in cigarette equivalents were down by 1.0 percent.

Meanwhile, during the fourth quarter of last year, PMI’s cigarette shipments, at 209,769 million, were down by 2.4 percent on those of the three months to the end of December 2014, 214,892 million.

EU region shipments increased by 1.0 percent to 47,210 million; EEMA shipments were down by 3.9 percent to 69,271 million; Latin America and Canada shipments were down by 6.0 percent to 25,105 million; and Asia region shipments were down by 1.6 percent to 68,183 million.

In announcing the results, CEO André Calantzopoulos said PMI had had an excellent year in 2015.

“Against a backdrop of improving industry volume trends in many key geographies, our cigarette brand portfolio performed superbly, driven by solid market share gains – underpinned by the successful roll-out of the Marlboro 2.0 Architecture – our enhanced commercial approach, and investments made in both 2014 and 2015 to support our business,’ he said.

‘Furthermore, our underlying financial results, underpinned by robust pricing, and our strong free cash flow, were equally impressive.

“We continued to make exciting progress on the development, assessment and commercialization of our reduced-risk products. We significantly expanded the roll-out of iQOS in Japan and introduced it into several new markets. We are well positioned to accelerate deployment in additional geographies this year.

“We enter 2016 with enhanced business fundamentals and ongoing strategic initiatives that will strengthen them further. While currency headwinds endure, we fully expect to continue to grow our business and generously reward our shareholders.”

For the full year 2015, PMI reported diluted earnings per share down by 7.1 percent to $4.42 and adjusted diluted earnings per share down by 12.0 percent to $4.42.

Reported net revenues, excluding excise taxes, were down by 10.0 percent to $26.8 billion.

Reported operating companies’ income was down by 9.1 percent to $11.0 billion, and adjusted operating companies’ income was down by 12.4 percent to $11.0 billion.

Reported operating income was down by 9.2 percent to $10.6 billion.

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