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Dec 31, 2023
Philip Morris Q4 2023 Earnings Report
Philip Morris International reported strong Q4 2023 results, with smoke-free products reaching nearly 40% of total net revenues.
Key Takeaways
Philip Morris International (PMI) reported a strong finish to 2023, with smoke-free products accounting for 39.3% of total net revenues. Adjusted diluted EPS was $1.36, representing a 12.2% increase excluding currency impacts.
Smoke-free products accounted for 39.3% of total net revenues.
Adjusted in-market sales volume for HTUs increased by an estimated 13.9%.
Total IQOS users at quarter-end increased by 1.2 million versus September 2023.
ZYN nicotine pouch shipment volume in the U.S. was 116.3 million cans, representing growth of 78.2% versus fourth-quarter 2022 Swedish Match shipments of 65.3 million cans.
Philip Morris
Philip Morris
Forward Guidance
PMI expects another year of excellent performance in 2024, underpinned by an acceleration in organic smoke-free net revenue and profit growth.
Positive Outlook
- An estimated total international industry volume decline for cigarettes and HTUs, excluding China and the U.S., of -2% to flat.
- Total cigarette, HTU and oral smoke-free product shipment volume growth for PMI of flat to +1% driven by smoke-free products.
- 14% to 16% adjusted in-market sales volume growth for HTUs, including an approximate 2 billion units adverse impact from consumer adjustment to the EU characterizing flavor ban, and essentially no growth in Russia, resulting in HTU shipment volumes of more than 140 billion units.
- Nicotine pouch shipment volume in the U.S. of approximately 520 million cans.
- Net revenue growth of 6.5% to 8% on an organic basis.
Challenges Ahead
- Organic operating income growth of 8% to 9.5%.
- Broadly unchanged net revenue and adjusted operating loss in Wellness and Healthcare segment.
- Full-year amortization of acquired intangibles of $0.42 per share, which includes an estimate of amortization of IQOS commercialization rights in the U.S. following the closing of the agreement to end our commercial relationship with Altria Group, Inc. covering IQOS in the U.S. effective May 1, 2024.
- We currently estimate that the incremental increase in amortization expense in 2024, as a result of this transaction, will be approximately $370 million on a pre-tax basis for the remaining 8 months of the year. For full year 2025 through 2028, we currently estimate an annual impact of approximately $555 million on a pre-tax basis.
- Net financing costs of approximately $1.3 to $1.4 billion.