PMI's Tobacco Product Shipments Flat

Source from:  Tobacco Reporter 02/21/2010

Philip Morris International's cigarette shipment volume last year, at 864.0 billion, was down by 0.7 per cent on that of the previous year. Gains in the company's Asia region, primarily driven by Indonesia and double-digit growth in Korea, and in its Latin America & Canada region, because of the acquisition of Rothmans, Canada, were more than offset by declines in the EU and its EEMA [Eastern Europe, Middle East and Africa] region, mainly due to the impact of the economic crisis, primarily in the Baltic States, Spain and Ukraine. Excluding acquisitions, PMI's cigarette shipment volume was down by 1.5 per cent. Total shipments of Marlboro cigarettes, at 302.0 billion, were down by 2.8 per cent, primarily due to market declines in the EU and EEMA, largely as a result of the effects of the economic crisis in Spain and a softening of the premium segment in Russia and Ukraine, offset by strong growth of 4.3 per cent in Asia. Total shipments of L&M cigarettes, at 90.8 billion, were down by 1.7 per cent, with growth of 8.6 per cent in the EU offset primarily by a decline in Russia. There was better news for other tobacco products (OTP), total shipments of which, in cigarette equivalent units, grew by 33.2 per cent, primarily fueled by the acquisition of Swedish Match South Africa. But excluding acquisitions, shipments of OTP were down by 8.1 per cent, primarily due to lower cigarillo volumes in Germany, where the segment has declined, and the impact in Poland of the excise tax alignment of pipe tobacco to roll-your-own products in the first quarter of 2009. Total shipments of cigarettes and OTP were essentially flat during 2009, but down by 1.6 per cent excluding acquisitions. PMI's market share performance registered a stable or growing trend in a number of markets, including Algeria, Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, the Canary Islands, the Dominican Republic, Egypt, Finland, Greece, Hungary, Japan, Korea, Mexico, the Netherlands, the Philippines, Portugal, Romania, Russia, Spain, Turkey, Ukraine and PMI Duty Free. PMI's cigarette shipment volume during the fourth quarter of 2009, at 218.2 billion, was up by 0.5 per cent, reflecting gains in the EEMA region, primarily in Algeria, driven by a higher total market and share gains, in Egypt, fuelled by market share gains, and Turkey, led by the growth of Lark; and in Asia, fueled by double-digit growth in both Indonesia and Korea. The volume gain, however, was partially offset by declines in the EU, mainly due to the economic downturn in the Baltic States and Spain, combined with the impact of tax-driven price increases, and in Latin America & Canada. Excluding acquisitions, PMI's cigarette shipments were up by 0.4 per cent, favorably impacted by the timing of shipments in Indonesia. Total shipments of Marlboro cigarettes during the fourth quarter, at 75.8 billion units were down by 3.4 per cent, primarily due to market declines in the EU, largely reflecting the impact of the economic crisis in Spain; in the EEMA region, due to a softening of the premium segment in Russia; in Asia, mainly due to a lower total market and an unfavorable comparison with the fourth-quarter 2008 related to the change in sourcing from the US in Japan, more than offsetting growth in Indonesia, Korea and the Philippines; and in Latin America & Canada, primarily due to lower total markets in Brazil and Mexico. Total shipment volume of OTP during the fourth quarter, in cigarette equivalent units, grew by 63.9 per cent, primarily fueled by the acquisition of Swedish Match South Africa. Excluding acquisitions, shipment volume of OTP was down by 19.4 per cent, primarily due to lower volume in Poland. Total shipment volume for cigarettes and OTP during the fourth quarter was up by 1.6 per cent, and up by 0.1 per cent excluding acquisitions. "Our robust fourth-quarter and annual results bear striking witness to the resiliency of our strong, broad and evolving brand portfolio and the diverse geographic scope of our business," said chairman and CEO, Louis Camilleri, announcing PMI's results on Thursday. "Our judicious pricing actions, widespread market share growth and productivity initiatives, largely offset the significant market contractions and consumer down-trading that we witnessed in those countries that suffered the most from the global economic downturn. "The fragility of the economic recovery, particularly with regard to employment levels and currency volatility, naturally warrants a cautious outlook for 2010. However, we enjoy solid momentum and remain confident that we will again post strong financial results this year. "Our new $12 billion, three-year share repurchase program underscores our optimism going forward." Net revenues for the full year, at $25.0 billion, were down by 2.6 per cent due to unfavorable currency factors amounting to $2.6 billion. Excluding currency factors, net revenues increased by 7.5 per cent, driven by favourable pricing of $2.0 billion across all business segments, and the favorable impact of the 2008 Rothmans acquisition, partly offset by unfavorable volume/mix of $620 million, primarily in the EU and EEMA Regions. Excluding currency and acquisitions, net revenues increased by 5.3 per cent. In the fourth-quarter, net revenues of $6.7 billion were up by 9.7 per cent, including favourable currency factors amounting to $111 million. Excluding currency, net revenues increased by 7.9 per cent, primarily driven by favorable pricing of $487 million across all business segments that more than offset unfavorable volume/mix of $48 million, mainly in the EU Region. Excluding currency and acquisitions, net revenues increased by 7.2 per cent. Enditem