Summary
Philip Morris International Inc. (PM) presents its 2013 annual report, detailing a global business focused on manufacturing and selling cigarettes and other tobacco products in markets outside the United States. The company boasts a strong portfolio of international and local brands, led by Marlboro, which accounts for a significant portion of its shipment volume. PM operates across four key geographic segments: the European Union, Eastern Europe, Middle East & Africa, Asia, and Latin America & Canada, with Asia and the EU being the largest contributors to operating companies income. Strategic initiatives during 2013 included restructuring its Egyptian business for enhanced profitability, entering into a strategic framework with Altria for the commercialization of e-cigarettes and reduced-risk tobacco products, and acquiring significant stakes in distributors and joint ventures in Russia and Algeria to strengthen market presence. The company also achieved full ownership of its Mexican tobacco business. A key strategic priority highlighted is the development of Reduced-Risk Products (RRPs), with a significant investment in a new manufacturing facility in Italy to produce these next-generation products. Despite a slight decrease in total cigarette shipments, PM maintains a substantial share of the international market, underscoring its established global footprint.
Financial Highlights
55 data points| Revenue | $80.03B |
| Cost of Revenue | $10.41B |
| Gross Profit | $20.81B |
| R&D Expenses | $449.00M |
| Operating Income | $13.52B |
| Interest Expense | $1.10B |
| Net Income | $8.58B |
| EPS (Basic) | $5.26 |
| EPS (Diluted) | $5.26 |
| Shares Outstanding (Basic) | 1.62B |
| Shares Outstanding (Diluted) | 1.62B |
Key Highlights
- 1Philip Morris International (PM) operates exclusively outside the U.S., selling in over 180 markets with leading market share positions in many.
- 2The company's brand portfolio is led by Marlboro, contributing approximately 33% of total 2013 shipment volume, supported by other premium and mid-price brands.
- 3PMI's business is structured into four geographic segments: EU, EEMA, Asia, and Latin America & Canada, with Asia and the EU being the largest contributors to operating income.
- 4Key strategic transactions in 2013 included a business restructuring in Egypt, a commercialization agreement with Altria for e-cigarettes and reduced-risk products (RRPs), and strategic investments in its Russian distributor and Algerian joint venture.
- 5A significant focus is placed on developing Reduced-Risk Products (RRPs), with plans to invest €500 million in a new Italian manufacturing facility for RRPs, targeting commercialization by 2016.
- 6Total cigarette shipments decreased by 5.1% in 2013, and PM's estimated international market share was 15.7%, down slightly from previous years.
- 7The company faces substantial risks including increasing cigarette taxes, stringent governmental regulations, intense competition, litigation, currency fluctuations, and the challenges of developing and commercializing RRPs.