Summary
Philip Morris International Inc. (PM) for the fiscal year ended December 31, 2009, reported strong performance in markets outside the United States, driven by its premium brand portfolio led by Marlboro. The company's strategy focused on selective acquisitions to strengthen its brand portfolio and geographic reach. Significant acquisitions in 2009 included Swedish Match South Africa and the agreement to purchase Protabaco Ltda. in Colombia. Despite facing increasing regulatory scrutiny and excise taxes globally, PM maintained a dominant market share in many regions, demonstrating resilience in its core business. Financially, PM continued to emphasize shareholder returns through its share repurchase program, authorizing a new $12 billion program to follow its existing $13 billion program. The company operates across four key geographic segments: European Union, Eastern Europe, Middle East and Africa (EEMA), Asia, and Latin America & Canada, with the EU and EEMA regions contributing the largest portions of operating companies income. The report also details ongoing litigation, primarily related to tobacco products, though the company notes historical success in defending against such claims.
Financial Highlights
56 data points| Revenue | $62.08B |
| Cost of Revenue | $9.02B |
| Gross Profit | $16.01B |
| R&D Expenses | $335.00M |
| Operating Income | $10.04B |
| Interest Expense | $905.00M |
| Net Income | $6.34B |
| EPS (Basic) | $3.25 |
| EPS (Diluted) | $3.24 |
| Shares Outstanding (Basic) | 1.94B |
| Shares Outstanding (Diluted) | 1.95B |
Key Highlights
- 1Philip Morris International (PM) operates in approximately 160 countries outside the U.S., with a strong portfolio of international and local brands, led by Marlboro, which constituted 35% of total 2009 shipment volume.
- 2The company completed strategic acquisitions in 2009, including Swedish Match South Africa and Petterøes tobacco business, and entered into an agreement to acquire Productora Tabacalera de Colombia, indicating an ongoing strategy of growth through acquisitions.
- 3PM maintained a significant share of the international cigarette market, estimated at 15.4% (or 26.0% excluding China), demonstrating its competitive strength in a mature and regulated industry.
- 4The company continued its commitment to shareholder returns with a robust share repurchase program, announcing a new $12 billion program to commence in May 2010.
- 5Operating income contribution by segment shows the EU as the largest contributor (43.9% in 2009), followed by EEMA (25.9%), Asia (23.7%), and Latin America & Canada (6.5%).
- 6PMI's R&D efforts are focused on understanding smoking-related diseases and developing potentially reduced-risk products, alongside support for conventional products and exploration of alternative tobacco uses.
- 7The company faces significant risks, including increasing excise taxes, stringent government regulations, ongoing litigation, currency fluctuations, and competition, yet has historically managed these challenges effectively.