Philip Morris Q4 2021 Earnings Report
Key Takeaways
Philip Morris International Inc. reported a strong performance in Q4 2021, marked by a reacceleration of business momentum. The company saw growth in total volume, high single-digit organic net revenue growth, and double-digit adjusted diluted EPS growth. There was also a step-up in sequential IQOS user growth and outstanding initial performance of IQOS ILUMA.
Reported diluted EPS increased by 5.5%, and adjusted diluted EPS grew by 7.1%.
Cigarette and heated tobacco unit shipment volume increased by 4.2%, with heated tobacco unit volume up by 17.0% to 25.4 billion units.
Net revenues increased by 8.9%, with net revenues from smoke-free products accounting for 30.7% of total net revenues.
Operating income increased by 1.4%, and adjusted operating income grew by 8.3% on an organic basis.
Philip Morris
Philip Morris
Philip Morris Revenue by Segment
Philip Morris Revenue by Geographic Location
Forward Guidance
Philip Morris International forecasts organic top-line growth of 4% to 6% and currency-neutral adjusted diluted EPS growth of 8% to 11% for the full year 2022.
Positive Outlook
- Continuing uncertainty over the pace of the ongoing recovery from pandemic-related effects on the operating environment
- An improving IQOS device supply situation, with a gradual return to an unconstrained IQOS user quarterly growth progression, albeit with a lack of full visibility over the year
- A continued gradual improvement in PMI's duty-free business outside Asia, with no meaningful recovery in Asia
- Adjusted net revenue growth of approximately 4% to 6% on an organic basis
- An increase in adjusted operating income margin of 50 to 150 basis points on an organic basis, mainly driven by the continued favorable product mix shift from cigarettes to smoke-free products, coupled with the benefit of further operating leverage and accelerated operating efficiencies
Challenges Ahead
- The expectation of a moderately lower gross margin primarily due to temporary factors, such as the higher initial cost of IQOS ILUMA devices and initial weight and cost of TEREA consumables
- Higher logistics costs, including costs related to the use of air freight to support the strong up-take of IQOS ILUMA and TEREA consumables in Japan
- Investments to grow capacity across PMI's smoke-free platforms
- Some inflation for certain supply chain elements
- Continued commercial reinvestment to support our growing portfolio of smoke-free alternatives
Revenue & Expenses
Visualization of income flow from segment revenue to net income