PMI(US:PM)2024-04-23 11:03Financial Performance - Adjusted net revenues for the first quarter of 2024 reflect a significant impact from the termination of a distribution arrangement in the Middle East in 2023 [7]. - Total net revenues for Q1 2024 reached $8,793 million, a 9.7% increase compared to $8,019 million in Q1 2023 [22]. - Net revenues for the first quarter reached $8,793 million, reflecting an 8.6% increase compared to $8,019 million in the same period last year [25]. - Adjusted net revenues excluding currency and acquisitions were $8,987 million, representing an 11.0% increase from $8,099 million in the previous year [25]. - The company reported a currency impact of $(194) million on total revenues for Q1 2024 [22]. - Net revenues from combustible tobacco amounted to $5,407 million, reflecting a 3.5% growth year-over-year [22]. - Total smoke-free product revenues, excluding W&H, were $3,296 million, showing a 21.6% increase from $2,710 million in Q1 2023 [22]. - The company experienced a 30.8% increase in revenues from EA, AU & PMI DF, reaching $1,087 million in Q1 2024 [22]. - Revenues from the Americas region decreased by 5.6% to $534 million in Q1 2024 compared to $566 million in Q1 2023 [22]. - The company reported a 14.7% increase in net revenues from the Americas, reaching $996 million compared to $868 million in the same period last year [25]. - The total adjusted net revenues excluding currency for Europe were $3,531 million, reflecting a 2.3% increase from $3,451 million in Q1 2023 [28]. Earnings and Profitability - Reported diluted EPS for Q1 2024 was $1.38, representing a 7.8% increase from $1.28 in Q1 2023 [20]. - Adjusted diluted EPS, excluding currency effects, was $1.70 for Q1 2024, up 23.2% from $1.38 in Q1 2023 [20]. - Gross profit for the quarter was $5,614 million, up 10.1% from $5,101 million in Q1 2023 [28]. - Operating income for the quarter was $1,456 million, a 19.8% increase compared to $1,215 million in Q1 2023 [31]. - Reported Operating Income for the quarter ended March 31, 2024, was $3,045 million, an increase of 11.5% compared to $2,731 million in the same quarter of 2023 [36]. - Adjusted Operating Income for the same period was $3,360 million, reflecting an 11.3% increase from $3,019 million year-over-year [36]. - The overall Adjusted Operating Income Margin for the company was 38.2%, up from 37.3% in the same quarter of 2023 [41]. - The company anticipates continued growth in adjusted operating income, driven by market expansion and new product development initiatives [36]. Debt and Financial Stability - PMI's net debt position is closely monitored, with total debt less cash and cash equivalents being a key focus for financial stability [8]. - Total debt increased to $50,387 million, compared to $47,909 million at the end of December 2023 [47]. - The company reported a total debt to adjusted EBITDA ratio of 3.46, up from 3.38 in December 2023 [47]. - Cash and cash equivalents increased to $3,968 million, compared to $3,060 million at the end of December 2023 [45]. - Net cash provided by operating activities, excluding currency effects, was $605 million, a significant recovery from a cash outflow of $955 million in Q1 2023 [49]. Strategic Initiatives and Market Position - The company continues to expand its Wellness and Healthcare segment, consolidating operations from recent acquisitions including Fertin Pharma and Vectura Group [4]. - PMI's total IQOS users are estimated to be significant, with a notable percentage having switched from traditional smoking to PMI's heat-not-burn products [14]. - The company continues to focus on expanding its smoke-free product offerings and enhancing market presence through strategic acquisitions and product innovation [27]. - PMI anticipates continued growth in its smoke-free product lines, aiming to capture a larger share of the reduced-risk product market [12]. Acquisitions and Adjustments - PMI reported a fair value step-up adjustment for inventories of $146 million related to the acquisition of Swedish Match, with $125 million recognized in cost of sales in Q4 2022 [11]. - The acquisition of Swedish Match AB contributed positively to the adjusted EPS, with an income tax impact of $0.07 in Q1 2024 [20]. - The company experienced a 100% impairment related to the termination of a distribution arrangement in the Middle East, impacting reported income [36]. - Amortization of intangibles increased by 48.1% to $120 million compared to $81 million in the previous year [36]. - The acquisition-related accounting items from Swedish Match AB contributed an additional $18 million to the reported income [36]. Regional Performance - The Americas region experienced a decline in operating income of 45.9%, dropping to $99 million from $183 million in Q1 2023 [31]. - In Europe, Reported Operating Income rose to $1,456 million, a 19.8% increase from $1,215 million in the previous year [36]. - Adjusted Operating Income in the SSEA, CIS & MEA region was $777 million, down 8.7% from $851 million in the prior year [38].