Philip Morris (PM) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 20, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Philip Morris International First Quarter 2023 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Philip Morris International management and the question-and-answer session.

I will now turn the call over to Mr. James Bushnell, Vice President of Investor Relations and Financial Communications. Please go ahead, sir.

James Bushnell - Vice President of Investor Relations and Financial Communications

Welcome. Thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2023 first quarter results. You may access the release on pmi.com.

A glossary of terms including the definition for smoke-free products, as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures for non-GAAP financial measures cited in this presentation and additional net revenue data are available in the exhibit to the Form 8-K published this morning and on our Investor Relations website.

Growth rates presented on an organic basis reflect currency neutral adjusted results excluding acquisitions and disposals. As such, figures and comparisons presented on an organic basis exclude Swedish Match up until November 11, 2023.

Today's remarks contain forward-looking statements and projections of future results. I direct your attention to the Forward-Looking and Cautionary Statements disclosure in today's presentation and press release for a review of the various factors that could cause actual results to differ materially from projections or forward-looking statements.

It is now my pleasure to introduce Emmanuel Babeau, Chief Financial Officer. Over to you, Emmanuel.

Emmanuel Babeau - CEO

Thank you, James, and welcome everyone.

I am pleased to report that Q1 performance exceeded our expectations, with strong underlying momentum from IQOS, ZYN and our combustible business. As mentioned at our full-year earnings in February, we expected this quarter to be the weakest of the year due to a confluence of transitory factors impacting our top- and bottom-line. In this context, our business delivered robust results and we look forward with confidence to the remainder of the year.

Smoke-free net revenues made up almost 35% of total PMI, despite the impact of adverse timing factors on HTU shipments, with an increasing number of markets crossing the 50% threshold.

IQOS continues to deliver strong share and user growth across its geographies, both with the blade version and ILUMA. Where launched, ILUMA’s excellent traction with both existing IQOS users and legal-age smokers is boosting growth, demonstrating the dynamism and importance of our ongoing innovation. ILUMA’s progress is especially notable in the first launch market of Japan, where share growth has accelerated in recent quarters.