Philip Morris Q4 2022 Earnings Report
Key Takeaways
Philip Morris International (PMI) reported its Q4 and Full Year 2022 results, demonstrating growth in key areas despite a challenging operating environment. The company's focus on smoke-free products is paying off, with this category now accounting for a significant portion of total net revenues. Strategic acquisitions, such as Swedish Match, are expected to further drive the company's transformation.
Total shipment volume increased by 1.2%, driven by a 26.1% increase in HTU shipments.
Net revenues from smoke-free products accounted for 36.0% of total net revenues.
Total IQOS users at quarter-end estimated at approximately 24.9 million.
PMI announced a long-term collaboration with KT&G to commercialize KT&G’s innovative smoke-free devices and consumables on an exclusive, worldwide basis (excluding South Korea).
Philip Morris
Philip Morris
Philip Morris Revenue by Geographic Location
Forward Guidance
PMI forecasts for the full year 2023, including an expected organic top-line growth and currency-neutral adjusted diluted EPS growth, despite inflationary pressures and transitory impacts related to ILUMA deployment.
Positive Outlook
- Organic top-line growth of 7% to 8.5%.
- Currency-neutral adjusted diluted EPS growth of 7% to 9%.
- Continued strong growth from Swedish Match’s existing operations, underpinned by strong shipment volume growth for ZYN in the U.S.
- HTU shipment volume of 125 to 130 billion units, reflecting an acceleration in growth versus 2022 on a total PMI basis.
- Wellness and Healthcare segment net revenues of around $300 million.
Challenges Ahead
- Continued global inflationary pressures, primarily impacting cost of sales for the combustible tobacco business.
- The continued transitory impacts associated with the ILUMA roll-out, including the margin impact of accelerated device replacements and higher initial costs of devices and consumables.
- Incremental investments to drive future growth, including the commercialization of ILUMA and around $150 million with a broadly even split between the U.S. and the wellness and healthcare segment.
- Adjusted operating income margin decline of 50 to 150 basis points on an organic basis.
- Wellness and Healthcare segment with an adjusted operating loss of around $150 million, primarily due to investments in research and development.
Revenue & Expenses
Visualization of income flow from segment revenue to net income