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| Statement |
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| So if you consider that this ambition again, back to where we started, it's about a 15, 16 years period, which again the very strong -- very strong and successful transformation |
| And last slide from us side, on the combustibles, yes, there is a pressure, but we said that we'll not give up the share of the combustibles, not only over the last two years, we demonstrate we can hold the share of a combustible but we think this whole thing, we are -- we maintained the leadership and the strong performance of Marlboro, the flagship brand |
| We want to accelerate on operating income growth organically 8% to 10%, which clearly is signaling the ambition to expand margin over the next 3 years |
| I mentioned Tokyo 50% very importantly, our IMS, which you see on the right-hand side of the slide, has accelerated to 40% last year |
| And now when we look at '24, '26, well, we simply want to continue to deliver this fast growth, this very successful financial performance, and we even want to accelerate on a few parameters |
| We've been growing volume, revenue and operating income, growing north of 7% and adjusted diluted EPS growing excluding currency, at 12% |
| But this product are also coming with a very powerful positive mix |
| So this is a very strong performance, which we have in Japan |
| And I repeat, our objective is to deliver strong growth in dollar terms in '24 and beyond |
| And because of the success of ZYN today and tomorrow of IQOS we believe that this percentage is going to grow nicely and fast |
| You see the very strong growth rate in all those different examples of the capital cities in the middle income countries |
| We have also observed as well, as I said earlier, more than 33 million adult smokers who could now move and they enjoy better products |
| And again, another year of margin expansion for smoke-free products and very strong growth of gross profit, therefore |
| For smoke-free product, we expect another year of strong growth of volume, of course, an acceleration on the growth of the revenue |
| Returns are attractive over time |
| The thing is in a perfect trajectory to join 1 day, the club of $10 billion or more Marlboro $10 billion more of IQOS -- I think ZYN could be a very powerful brand going forward in the oral space |
| With the very strong share of our category, about the 73% at the end of the last quarter, shipment volume growing about 60% |
| is still the largest group of the people coming -- users coming to nicotine pouches, very strong sourcing from a vape and cigarettes, and we expected over a period of time |
| And we continue to grab and that's something which came better than we ever have expected in planning our transformation that despite being that long in the market and having obviously the lion’s share of the segment above the 70%, then we can continue to capture the growth of the segment above our underlying segment share |
| It's reconfirming what we have said before, the most important is we are confident in achieving our '24 '26 target |
| I have seven minutes, a bit less to be honest versus what I thought I would have to share with you are we going to translate this successful journey to become a smoke-free company into great financial performance |
| And I believe that the strength of our smoke-free portfolio and the very powerful impact on our P&L is reflected in the three pie charts that you have here |
| So that strategy which we needed some time to do it, but that we're delivering on that strategy that will hold these top brands in our portfolio, which obviously, as you know, over a period of time leads to the pricing power leads to the better relations with the trade leads to the better loyalty with the consumers, et cetera |
| Now it's been an exciting time for Philip Morris as the company continues to make strong progress on its smoke-free transformation with over 35% of its revenues now coming from reduced risk products despite a challenging consumer and geopolitical environment, PMs, twin engines of growth, IQOS and ZYN continue to gain traction, fueled by the enormous compounding effect of new user acquisition, strong innovation and a powerful digital marketing model that really does continue to set Philip Morris apart from their peers |
| We believe that today, the growth that we can generate on our smoke-free portfolio is able to more than offset the decrease that we're going to see on our combustible business |
| Strong commercial performance, strong financial model that has been enabling us to deliver strong performance over the last 3 years, '21, '23, actually above what we said we would be targeting to deliver back in the first days of 2021 |
| Second, the very positive mix that is coming from our smoke-free portfolio |
| And that's going to enable us to generate both strong top line growth and strong bottom line performance and investing and rewarding our shareholders in the coming years |
| Third, of course, very strong pricing power |
| Obviously, we built that over 10 years, we have built an extremely robust product development, but also scientific capability and commercial infrastructures that very few have realized with this product when the relations with the consumers are very key in order to help them switching from the cigarettes |
| Statement |
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| Clearly, the growth of the smoke-free product is putting pressure, very significant pressure on the cigarette volumes |
| This is presumably the most challenging category from also when it comes from the penetration of illicit rate, very challenging, wobbly regulatory environment, perceptions about youth, et cetera |
| So we'll be losing the competitiveness in the marketplace |
| That has been clearly limiting our performance |
| Japan deserves a slide on its own because we also have -- nobody has done the smoke-free before, right? So this is a little bit of a challenging thing because you're going first and some people expect that you have an answer to all of these questions, and you can predict the future |
| And one of the challenges we're receiving a challenging statements we're receiving is the IQOS is going to perform in the market, which are penetrated by e-vape or other categories |
| Our cigarette volumes have been lowered by about 33% |
| Now when we look at 2024, we believe that for combustible it's going to be a year with lower headwind when it comes to steel inflation on the cost of the leaf and also the new single-use plastic tax in the EU that is going to impact us negatively |
| dollar versus most currency worldwide with, in addition, a few emerging country currency that face specific difficulty and decrease |
| The problem which we are confronted with that we have too much politics |
| market for the 10 years according to the last year or the latest data available from the CDC has triggered the usage of underage people of about 1.5%, which is the lowest from nicotine products |
| It's not the nicotine, which has this extremely negative harmful impact on the smokers |
| Well, if you look at the Japan and you may remember a few years ago, we had a little bit of a slower growth rate, and we had to regroup talk and learn how to talk to the consumers differently |
| And I would volunteer the statement that definitely, over the last 10 years, the smoke-free industry didn't enjoy or haven't enjoyed the strong tailwind of regulations |
| And it's very difficult to find what more of the science we need to produce in order to demonstrate the 2x 2 is 4 |
| Critically important for us is that during that period when we have not triggered the youth problem |
| I think it's very difficult to find the comparison in any other category and one product is being replaced by it's vastly better reversion without regulatory help that by the consumer, the demand, you will have such a fast transition |
| But again, it's not the nicotine which causes the harm |
| So illogical actions which are happening in some places in this place is essentially slow so the price view from the growth |
| And by the way, it's the lowest for any other substances, which unfortunately, the younger people are experimenting they're using with |
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