Summary
Philip Morris International Inc. (PMI) held its 2015 Annual Meeting of Shareholders on May 5, 2015. The company highlighted strong business fundamentals and positive momentum, particularly in the lead-up to the year. A key focus was the progress and prospects of its Reduced-Risk Product (RRP) portfolio, specifically the launch and planned expansion of iQOS. Management reaffirmed the full-year 2015 reported diluted EPS forecast, while also outlining the investment required for iQOS deployment, which is expected to be weighted towards the latter half of the year. The company emphasized its commitment to returning cash to shareholders through an attractive dividend and yield, supported by prudent cash flow management.
Key Highlights
- 1PMI held its 2015 Annual Meeting of Shareholders, with presentations from Chairman Louis C. Camilleri and CEO André Calantzopoulos.
- 2The company reaffirmed its 2015 full-year reported diluted EPS forecast in the range of $4.32 to $4.42.
- 3Excluding currency impacts, reported diluted EPS are projected to increase by 9% to 11% versus adjusted diluted EPS of $5.02 in 2014.
- 4Significant investment is planned for the deployment of the Reduced-Risk Product, iQOS, with national expansion in Japan and Italy, and pilot/national launches in additional markets later in 2015.
- 5CEO André Calantzopoulos stated that iQOS is performing above expectations, driving excitement for its expansion.
- 6The company forecasts 2015 free cash flow to be broadly in line with the previous year, despite currency headwinds, to support dividends and business investment.
- 7Matters discussed at the meeting included director nominations, auditor ratification, executive compensation approval, and two shareholder proposals.
Frequently Asked Questions
Philip Morris International reaffirmed its 2015 full-year reported diluted EPS forecast to be in a range of $4.32 to $4.42. Excluding an unfavorable currency impact of approximately $1.15 per share, reported diluted EPS are projected to increase by 9% to 11% compared to the adjusted diluted EPS of $5.02 in 2014.
iQOS is PMI's first Reduced-Risk Product (RRP) and is a key strategic focus. The company reported that iQOS is performing above expectations, and significant investment is planned for its national expansion in Japan and Italy, as well as pilot or national launches in additional markets later in 2015. This product is seen as a driver of future growth.
PMI forecasts its 2015 free cash flow to be broadly in line with the previous year, despite currency challenges. This cash flow is expected to enable the company to provide an attractive dividend and yield to shareholders, while also continuing to invest in business growth.
The meeting included an address by the CEO on the company's business performance and RRP prospects, reaffirmation of the EPS forecast, and a discussion on the investment in iQOS. Key governance matters were also put to shareholders, including the election of directors, ratification of auditors, advisory approval of executive compensation, and consideration of two shareholder proposals.