Philip Morris International Inc (PM)

Business Description

Philip Morris International Inc. (PMI) is a leading international tobacco company committed to creating a smoke-free future by expanding its portfolio beyond traditional tobacco and nicotine products. The company primarily sells cigarettes and smoke-free products, which include heat-not-burn, e-vapor, and oral nicotine products, as well as wellness and healthcare products through its Vectura Fertin Pharma business . PMI has invested significantly in developing innovative smoke-free products, with brands like IQOS and ZYN leading their smoke-free portfolio . The company's operations are organized into several geographical segments, focusing on different regions worldwide .

Smoke-Free Products - Includes heat-not-burn, e-vapor, and oral nicotine products, with leading brands such as IQOS and ZYN driving the company's transition to a smoke-free future.
- IQOS - A heat-not-burn product designed to provide a smoke-free alternative to traditional cigarettes.
- ZYN - An oral nicotine product offering a smoke-free experience.
Wellness and Healthcare - Focuses on inhaled therapeutics and oral delivery systems through the Vectura Fertin Pharma business, expanding PMI's reach beyond traditional tobacco products.
Combustible Tobacco Products - Comprises traditional cigarettes and other tobacco products, continuing to contribute to the company's revenue.
Geographical Segments - Organized into Europe, South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa (SSEA, CIS & MEA), East Asia, Australia, and PMI Duty Free (EA, AU & PMI DF), and the Americas, allowing PMI to cater to diverse markets worldwide.

Key Metrics

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Executive Team

Name	Position	Start Date	Short Bio
Jacek Olczak	Chief Executive Officer	May 2021	Jacek Olczak is the Chief Executive Officer of Philip Morris International Inc. (PMI). He previously served as the Chief Operating Officer from January 2018 until May 2021, and as the Chief Financial Officer from August 2012 until December 31, 2017. Mr. Olczak joined PMI's Polish affiliate in 1993 .
Massimo Andolina	President, Europe Region	January 2023	Massimo Andolina is the President, Europe Region at PMI. He was previously the Senior Vice President, Operations from January 2018. He joined PMI in 2008 as Director, Operations Planning, and has held various roles within the company .
Emmanuel Babeau	Chief Financial Officer	May 2020	Emmanuel Babeau was appointed as the Chief Financial Officer of PMI in May 2020. Before joining PMI, he served as the Deputy Chief Executive Officer of Schneider Electric, responsible for Finance and Legal Affairs .
Werner Barth	President, Combustibles Category & Global Combustibles Marketing	November 2021	Werner Barth was appointed as the President, Combustibles Category & Global Combustibles Marketing at PMI in November 2021. He joined PMI in 1990 as a Marketing Trainee at Philip Morris Germany and has held various roles in marketing and general management .
Lars Dahlgren	President, Smoke-Free Oral Products & CEO of Swedish Match	January 2023	Lars Dahlgren was appointed as the President, Smoke-Free Oral Products and CEO of Swedish Match in January 2023. Before PMI's acquisition of Swedish Match, he served as the President and CEO of Swedish Match from June 2008 .
Frederic de Wilde	President, South and Southeast Asia, CIS, Middle East and Africa Regions	January 2023	Frederic de Wilde was appointed as the President, South and Southeast Asia, CIS, Middle East and Africa Regions at PMI in January 2023. He joined PMI in 1992 as a Brand Manager for L&M at Philip Morris Belgium and has held various roles in marketing, sales, and general management .
Reginaldo Dobrowolski	Vice President and Controller	August 2021	Reginaldo Dobrowolski was appointed as Vice President and Controller at PMI in August 2021. He previously served as Vice President, Corporate Financial Planning, Data & Reporting from May 2019 until August 2021 .
Yann Guérin	Senior Vice President and General Counsel	July 2023	Yann Guérin was appointed as Senior Vice President and General Counsel at PMI in July 2023. He has held various legal roles across PMI's businesses since joining the company in 2006 .
Stacey Kennedy	President, Americas Region & CEO of PMI's U.S. Business	January 2023	Stacey Kennedy was appointed as the President, Americas Region & CEO of PMI's U.S. Business in January 2023. She previously served as the President, South and Southeast Asia Region from January 2018 .
Paul Riley	President, East Asia, Australia, and PMI Duty Free Region	January 2023	Paul Riley was appointed as the President, East Asia, Australia, and PMI Duty Free Region in January 2023. He joined Philip Morris Australia in 1988 and has held various positions in Australia, Hong Kong, and Japan .
Stefano Volpetti	President, Smoke-Free Inhalable Products & Chief Consumer Officer	January 2023	Stefano Volpetti was appointed as the President, Smoke-Free Inhalable Products & Chief Consumer Officer at PMI in January 2023. He joined PMI in June 2019 as Chief Consumer Officer .

Questions to Ask Management

One of your peers highlighted that in Europe, vapor is seeing greater success in fully converting smokers than heated tobacco; what are your latest thoughts on this topic, and are you seeing an acceleration in vapor adoption as you roll out VEEV in several markets?
Regarding the illicit nicotine pouches entering the U.S. market that may infringe on your patents, could you expand on what measures you are currently taking or expect to take, and how do you think this will differ from the current environment we see in vapor in the U.S.?
Considering your increased pricing guidance of 8% to 9% and yet positive volumes in combustible cigarettes, shouldn't FY '25 also be a strong year for cigarette volumes and pricing internationally, and can you touch on any disruptive excise tax hikes expected in the next few months?
It looks like you modestly took down the top end of your potential deleveraging for this year; could you address what drove that, and with sizable maturities over 2025, are you considering pulling some of that refinancing forward into the remainder of this year, given where markets are opportunistically?
With the ongoing supply constraints for ZYN in the U.S., what measures are you taking to match consumer demand, and how confident are you in your capacity expansion plans to meet future growth?

Program Details	Program 1
Approval Date	June 11, 2021
End Date/Duration	July 21, 2024
Total additional amount	$7 billion
Remaining authorization	$6,016,847,275
Details	Program suspended on May 11, 2022, due to the acquisition of Swedish Match. No repurchases in 2023 and 2024.

Debt Maturity Schedule

Year	Amount Due (in millions)	Debt Type	Interest Rate (%)	% of Total Debt
2024	$4,833	Current portion of long-term debt	N/A	9.8% = (4,833 / 49,200) * 100
2024	$299	Swiss franc note	1.625	0.6% = (299 / 49,200) * 100
2025	$3,000	Euro credit facility borrowings	4.009 (average)	6.1% = (3,000 / 49,200) * 100
2027	$2,500	Euro credit facility borrowings	4.009 (average)	5.1% = (2,500 / 49,200) * 100
2027	$6,140	Euro credit facility borrowings (Swedish Match acquisition)	4.009 (average)	12.5% = (6,140 / 49,200) * 100
2029	$236	Swedish krona notes	1.395 to 2.710 (avg 2.016)	0.5% = (236 / 49,200) * 100
2032	$486	Other (includes bank loans and finance leases)	5.038 (average)	1.0% = (486 / 49,200) * 100
2039	$8,126	Euro notes	0.125 to 3.750 (avg 1.964)	16.5% = (8,126 / 49,200) * 100
2044	$34,082	U.S. dollar notes	0.875 to 6.375 (avg 4.572)	69.3% = (34,082 / 49,200) * 100

Competitors

Competitors mentioned in the company's latest 10K filing.

British American Tobacco plc - Competitor in the tobacco industry .
Japan Tobacco Inc. - Competitor in the tobacco industry .
Imperial Brands plc - Competitor in the tobacco industry .
New market entrants - Particularly with respect to innovative products .
Several regional and local tobacco companies - Competitors in various regions .
State-owned tobacco enterprises - Principally in Algeria, Egypt, China, Taiwan, Thailand, and Vietnam .

Customer Concentration

Customer	Relationship	Segment	Details
Europe Region Distributor	Distributor	Europe	Accounted for 12% in 2023, 13% in 2022, and 13% in 2021Of consolidated net revenues.
EA, AU & PMI DF Region Distributor	Distributor	East Asia, Australia & PMI Duty Free	Accounted for 11% in 2023, 12% in 2022, and 15% in 2021Of consolidated net revenues.

Auditor

Name	Start Date	End Date	Reason for Change
PricewaterhouseCoopers SA	2008	Present	Current auditor

Latest news

Recent developments and announcements about PM.

Financial Actions

Debt Issuance

Dec 17, 2024, 9:33 PM

Philip Morris International Inc. (PMI) has recently entered into a credit agreement for a senior unsecured revolving credit facility amounting to €1.5 billion (approximately $1.6 billion). This agreement, effective from January 29, 2025, involves several lenders with Citibank Europe PLC, UK Branch acting as the facility agent. The facility is set to expire on January 29, 2028, unless extended. The interest rates for borrowings under this facility will be based on prevailing market rates, and the funds are intended for general corporate purposes, including meeting working capital requirements .

This financial obligation could potentially impact PMI's balance sheet by increasing its liabilities due to the borrowed amount. However, as it is a revolving credit facility, PMI has the flexibility to borrow, repay, and reborrow funds as needed, which can aid in managing liquidity and financial health effectively. The agreement includes customary events of default, such as nonpayment of principal or interest, which, if triggered, could lead to the acceleration of outstanding loans and termination of lender commitments .