Philip Morris International Inc. Reports 2020 Fourth-Quarter & Full-Year Results; 2020 Full-Year Reported Diluted EPS of $5.16 Versus $4.61 in 2019, Reflecting Adjusted Diluted EPS Growth of 7.0% on an Organic Basis; Provides 2021 EPS Forecast

Regulatory News:

Philip Morris International Inc. (NYSE:PM) today announces its 2020 fourth-quarter and full-year results. Comparisons presented in this press release on a "like-for-like" basis reflect pro forma 2019 results, which have been adjusted for the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019 (the date of deconsolidation). In addition, PMI's total market share has been restated for previous periods to reflect the deconsolidation. Growth rates presented in this press release on an organic basis reflect currency-neutral underlying results and "like-for-like" comparisons, where applicable. Adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures are included in the schedules to this press release.

2020 FULL-YEAR & FOURTH-QUARTER HIGHLIGHTS

2020 Full-Year

Reported diluted EPS of $5.16, up by 11.9%; up by 18.9%, excluding currency
Adjusted diluted EPS of $5.17, down by 0.4%; up by 7.0% on an organic basis
Cigarette and heated tobacco unit shipment volume down by 8.1% (reflecting cigarette shipment volume down by 11.1%, and heated tobacco unit shipment volume up by 27.6% to 76.1 billion units); down by 7.9% on a like-for-like basis
Market share for heated tobacco units in IQOS markets, excluding the U.S., up by 1.7 points to 6.1%
Net revenues down by 3.7%; down by 1.6% on an organic basis
Operating income up by 10.8%; up by 15.3%, excluding currency
Adjusted operating income up by 4.6% on an organic basis
Adjusted operating income margin of 40.8%, up by 2.4 points on an organic basis
Increased the regular quarterly dividend per share by 2.6% to an annualized rate of $4.80
Total IQOS users at year-end estimated at approximately 17.6 million, of which approximately 12.7 million have switched to IQOS and stopped smoking
On July 7, 2020, the U.S. Food and Drug Administration (FDA) authorized the marketing of a version of IQOS as a Modified Risk Tobacco Product
On December 7, 2020, the U.S. FDA authorized the sale of the IQOS 3 device in the U.S. through the issuance of a premarket tobacco marketing order

2020 Fourth-Quarter

Reported diluted EPS of $1.27, up by 22.1%; up by 26.9%, excluding currency
Adjusted diluted EPS of $1.26, up by 3.3%; up by 7.4% on an organic basis
Cigarette and heated tobacco unit shipment volume down by 8.2% (reflecting cigarette shipment volume down by 11.7%, and heated tobacco unit shipment volume up by 26.9% to 21.7 billion units)
Market share for heated tobacco units in IQOS markets, excluding the U.S., up by 1.8 points to 6.7%
Net revenues down by 3.5%; down by 3.5% on an organic basis
Operating income up by 15.9%; up by 17.8%, excluding currency
Adjusted operating income up by 1.7% on an organic basis
Adjusted operating income margin of 38.5%, up by 2.0 points on an organic basis

"In 2020, PMI delivered a robust business performance despite the unprecedented headwinds of the COVID-19 pandemic, with adjusted diluted EPS organic growth of 7.0%, supported by stronger-than-anticipated fourth quarter results," said André Calantzopoulos, Chief Executive Officer.

"We must first and foremost salute the enormous efforts of the entire PMI organization to keep our employees and their families safe, ensure business continuity, rapidly adapt our ways of working and help our local communities."

"IQOS continued to deliver impressive growth in 2020, driving significant increases in our total users, as well as both HTU shipment and in-market sales volumes. During the fourth quarter, we reported record HTU market shares in key IQOS geographies, and exited the year with double-digit national shares in ten markets."

"We enter 2021 with favorable momentum, although certain headwinds remain, notably related to Duty Free, Indonesia and the continued effects of the pandemic. For the full year, we are expecting a significant recovery, with mid-single-digit organic net revenue growth—driven by the growing contribution of IQOS—and further efforts on cost efficiencies driving an acceleration in forecasted adjusted diluted EPS growth to a range of 9% to 11% on the same basis."

2021 FULL-YEAR FORECAST

Full-Year

2021
Forecast