Académique Documents
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Agenda
EEMA Overview and PMI Results
Growth Opportunities
Regional Strategic Priorities
Closing Remarks
Questions & Answers
94 markets
1.8 billion people
1.1 trillion cigarettes(a)
12,000+ PMI employees
PMI results (2013):
- Volume: 296.5 billion units
- Share: 24.2%(a)
- Adjusted OCI: $4.0 billion
(a) Excluding duty free
Source: Global Insight, PMI estimates and PMI Financials
1,172
1,180
2010
2011
2012
(3.9)%
1,134
2013
1,172
1,180
Premium
189
198
213
Mid
325
331
329
Low
666
643
2010
2011
Note: Excluding duty free. Premium includes above premium, Low includes super-Low
Source: PMI estimates
CAGR
(2010-2013):
1,134
210
3.6 %
322
(0.3)%
638
602
(3.3)%
2012
2013
PMI Total
22.8
23.2
Premium
Brands
7.9
8.6
2010
2011
Variance
(2013 vs. 2010):
24.0
24.2
+1.4pp
9.0
9.4
+1.5pp
2012
2013
Other
Brands
Average
2010-2013:
767
605
527
466
271
2010
2011
2012
2013
+2pp
EEMA Industry
Net Revenue Gain (2010-2013)
35
33
PMI
46%
2010
2013
Note: Based on 26 markets, covering 81% of EEMA 2013 volume, excluding duty free
Source: PMI Financials and PMI estimates
Net Revenues
Adjusted OCI
(units billion)
($ million)
($ million)
(%)
CAGR: +0.8%
CAGR: +5.8%
CAGR: +7.8% (ex-currency)
CAGR: +8.7%
CAGR: +12.3% (ex-currency)
Change: +3.6pp
Change: +5.6pp (ex-currency)
289.3
8,766
296.5
46.1
4,043
42.5
7,409
3,152
2010
2013
2010
2013
2010
2013
2010
2013
10
34%
Net Revenues
28%
Adjusted OCI
29%
11
Net Revenues
Adjusted OCI
(units billion)
($ million)
($ million)
(%)
-7.2%
-3.0% (ex-inv. movements)(a)
-1.7%
+4.5% (ex-currency)
-0.9%
+7.7% (ex-currency)
+0.3pp
+1.4pp (ex-currency)
66.8
2,043
Q1, 2013
2,009
935
927
Q1, 2014
Q1, 2013
Q1, 2014
45.8
46.1
Q1, 2013
Q1, 2014
62.0
Q1, 2013
Q1, 2014
(a) ex-inv. movements stands for excluding the unfavorable impact of estimated inventory movements
Source: PMI Financials
12
Population Forecast
CAGR 2013-2020
CAGR 2013-2020
0.2%
3.7%
2.2%
4.6%
1.1%
0.5%
Note: Emerging Europe includes Turkey. CIS stands for Commonwealth of Independent States. Detailed market lists are available in the glossary
Source: Global Insight
3.5%
2.4%
13
14
760
(40)
(18)
(8)
2010
Russia
Ukraine
Other
694
2013
15
Pricing opportunities
Up-trading environment
PMI organic share momentum
driven by premium brands
PMI Total
27.4
Premium
Brands
7.3
+1.3pp
28.7
+1.1pp
8.4
Other
Brands
2010
Note: Excluding duty free. Premium includes above premium
Source: PMI estimates
2013
16
Pricing opportunities
Up-trading environment
PMI organic share momentum
driven by premium brands
One market share point gain
estimated to yield incremental net
revenues of:
- $275 million (premium)
- $125 million (non-premium)
PMI Total
27.4
Premium
Brands
7.3
28.7
+1.1pp
8.4
Other
Brands
2010
Note: Excluding duty free. Premium includes above premium
Source: PMI estimates
+1.3pp
2013
17
18
440
CAGR
(2013 vs. 2008)
402
85
6.4%
123
0.8%
1.0%
Premium
63
Mid
118
Low
221
232
2008
2013
19
PMI
13.0
International
Competitors
46.1
Local
Competitors
40.9
37.8
2008
2013
+4.2pp
17.2
45.0
20
2008
2013
21
22
23
Marlboro # 1 in segment
Parliament # 3 and fastest growing in
segment
L&M # 2 brand in segment
Chesterfield # 4 brand
23
56
Low
36
Premium
Mid
Mid
PMI
Low
Competitors
24
6.8
6.4
Line
Extensions
0.8
7.0
1.0
Growth
(Q1, 2014 vs. 2010)
7.1
1.0
7.3
0.9pp
1.1
0.4pp
0.7
0.5pp
Core
2010
Source: PMI estimates
2011
2012
2013
Q1, 2014
26
21.9
21.8
19.3
March
2012
Source: PMI estimates
March
2013
March
2014
27
Gold 100s
Advance XL
2012
Note: Translation from Serbian: "Less Odor"
Source: PMI Market Research and PMI estimates
2013
28
34.4
18.2
2010
Note: Translation from French: How about you finally express yourself? Music, fashion, art, technology: become an expert in one of your passions!"
Source: PMI estimates
2013
29
30
31
+0.9pp
Competition
+0.7pp
+0.4pp
7.1
+0.2pp
+0.2pp
+0.8pp
3.7
2.8
Parliament
Marlboro
Kent
1.1
1.1
Dunhill
Davidoff
32
Kazakhstan
Russia
GCC
+2.8pp
+3.9pp
+0.6pp
+1.3pp
10.0
7.9
7.2
4.0
2.8
3.4
1.8
0.5
2010
2013
2010
2013
2010
2013
2010
2013
33
Note: Translation from Russian: "Quality evolution - Famous Recessed Filter from the Makers of Parliament"
43.7
44.2
2010
2011
2012
2013
35
13.1
8.8
2010
2013
36
37
1.8
1.5
January
March
_
May
July
September
November
2013
Source: PMI estimates
38
0.5
October
2013
Source: PMI estimates
April
2014
39
40
Ukraine
Serbia
Russia
+5.1pp
+1.6pp
+2.9pp
+0.9pp
22.5
17.4
8.8
8.4
7.2
5.6
5.5
2010
2013
2010
2013
2010
2013
2010
6.5
2013
41
42
100.0
100.0
69.4
68.0
67.7
35.9
13.7
2.1
Kazak.
S.Afr.
Algeria
Russia
Note: Data are as of April 2014. Kazak. is Kazakhstan and S.Afr. is South Africa
Source: PMI estimates
Romania
Ukraine
Serbia
Egypt
Turkey
43
Regional initiatives:
- Expanding resources
44
(6.7)%
+0.5pp
71.7
26.2
26.7
Q1, 2013
Q1, 2014
66.9
Q1, 2013
Q1, 2014
45
31.0%
+0.2pp
n
North
Moscow
25.6%
27.2%
+1.0pp
+0.2pp
Center
23.8%
+0.3pp
South
25.9%
East
n
+1.2pp
Source: Nielsen
46
Source: Nielsen
38.1
23.6
26.2
Parliament
12.7
11.9
Marlboro
Q1, 2013
Q1, 2014
47
2.5
Jan
2012
Note: Translation from Russian: "Quality evolution - Famous Recessed Filter from the Makers of Parliament"
Source: Nielsen
Jan
2013
Jan Mar
2014
48
6.2
-
6.5
-
6.5
0.2
1.0
Compact
5.6
Other
2010
Source: Nielsen
2011
2012
2013
Q1, 2014
49
Long-term sustainability of
distribution
Attractive financial return
Increased coverage in rural areas
More efficient route to market
50
2014
2015
2016
45%
20%
25%
8.5%
9.0%
9.5%
51
52
10.5
8.4
March
2012
Note: mm stands for months moving
Source: Nielsen
March
2013
March
2014
53
2.2
0.1
May
Jun
Jul
Aug
Sept
2013
Source: Nielsen
Oct
Nov
Dec
Jan
Feb
Mar
2014
54
CAGR: 1.0%
CAGR: 15.8%
132
139
37
18
2008
2013
2008
2013
55
22.6
18.8
20.1
9.1
L&M
15.3
Marlboro
7.6
6.5
7.5
9.1
2010
11.9
13.2
2011
2012
2013
56
80
31
23%
14
12
18%
15%
8%
41%
Other
7%
Opportunity is substantial
23%
Local
Competitors
82%
77%
Morocco
Tunisia
70%
36%
Egypt
Algeria
57
26
45%
47%
29
46%
PMI
47%
Other
2010
2011
2012
2013
58
57.4
57.1
55.9
57.6
3.8
60.4
4.3
Other
Parliament
Marlboro
0.9
1.4
2.3
48.5
48.8
47.6
48.7
51.8
2010
2011
2012
2013
Q1, 2014
59
21.8
20.5
2010
Note: Translation from Arabic: "On average, the commute home offers the same old view. Defy Average."
Source: PMI estimates
2013
60
Note: Reduced-Risk Products ("RRPs") is the term we use to refer to products that have the potential to reduce individual risk and population harm
61
62