Philip Morris International (PM) 8-K Philip Morris International Inc. (Pmi) Reports

2009 First-Quarter Results

23 April 2009

Exhibit 99.3

Philip Morris International

2

Introduction

Introduction

Unless otherwise stated, we will be talking about

results in the first quarter 2009 and comparing them

with the same period in 2008

References to volumes are for PMI shipment data

Industry volume and market shares are sourced from

A.C. Nielsen, other third party sources and internal

estimates

Net revenues exclude excise taxes

Data tables showing adjustments to revenues and

Operating Companies Income (“OCI”) for currency

and acquisitions are at the end of this presentation

Philip Morris International

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Forward-Looking and Cautionary Statements

Forward-Looking and Cautionary Statements

This presentation and related discussion contain statements that, to

the extent they do not relate strictly to historical or current facts,

constitute “forward-looking statements”

within the meaning of the

Private Securities Litigation Reform Act of 1995. Such forward-

looking statements are based on current plans, estimates and

expectations, and are not guarantees of future performance. They

are based on management’s expectations that involve a number of

business risks and uncertainties, any of which could cause actual

results to differ materially from those expressed in or implied by the

forward-looking statements. PMI undertakes no obligation to

publicly update or revise any forward-looking statements, except in

the normal course of its public disclosure obligations. The risks and

uncertainties relating to the forward-looking statements in this

presentation include those described under Item 1A. “Risk Factors”

in PMI’s Form 10-K for the year ended December 31, 2008, filed with

the Securities and Exchange Commission.

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2009 First-Quarter Results

2009 First-Quarter Results

Strong business momentum continues

Source: PMI Financials

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2009 First-Quarter Results

2009 First-Quarter Results

Strong business momentum continues

Net revenues up 3.9% excluding acquisitions and

currency:

–

driven by pricing

Source: PMI Financials

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2009 First-Quarter Results

2009 First-Quarter Results

Strong business momentum continues

Net revenues up 3.9% excluding acquisitions and

currency

OCI up 6.2% excluding acquisitions and currency:

–

strong performances in EEMA and Asia Regions

–

2.3% decrease in EU Region, driven by Poland and Germany

Source: PMI Financials

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2009 First-Quarter Results

2009 First-Quarter Results

Strong business momentum continues

Net revenues up 3.9% excluding acquisitions and

currency

OCI up 6.2% excluding acquisitions and currency

Reported diluted EPS down 6.3% to 74 cents

Diluted EPS up 10 cents, or 12.7%, excluding currency

Source: PMI Financials

Philip Morris International

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Focus Topics

Focus Topics

Consumer trends in emerging markets

Pricing 

Currency 

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Russia

Russia

Signs of consumer down-trading due to economic

situation and price increases

Weak oil and metal prices hurting the economy

PMI volume stable and share up in Q1, 2009

Pricing driving double digit increase in local currency

profitability

Source: PMI Financials and A.C. Nielsen

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Ukraine

Ukraine

Significant economic upheaval

PMI volume up 0.7% in the first quarter

PMI share up 1.1pp to 35.8% in Q1, 2009, driven by

Parliament

and Chesterfield

Significant increase in excise taxes in May could lead

to consumer down-trading

PMI has excellent momentum and broad portfolio

Source: PMI Financials and A.C. Nielsen

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Indonesia

Indonesia

No consumer down-trading

PMI volume up 2.8% in Q1, 2009

Improved consumer confidence and stable

unemployment

Fastest growing segment is machine-made lighter-

tasting kreteks, led by PMI’s A Mild

Pricing boosting profitability

Source: PMI Financials and A.C. Nielsen

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Argentina

Argentina

Continued consumer uptrading

PMI volume increased by 1.2% in Q1, 2009

PMI share up 2.7pp to 72.2% on a 3 month moving

average basis through the end of January (latest

available)

Pricing helping to improve profitability

Minimum Excise Tax introduced in February

Source: PMI Financials and GIMS

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Pricing

Pricing

Since October 2008, PMI has increased prices notably

in:

PMI has announced to the trade plans to increase

prices in Germany in June by €0.20 across the board

Argentina

Canada

Colombia

Mexico

Australia

Indonesia

Pakistan

Philippines

Romania

Russia

Serbia

Turkey

Ukraine

Czech Rep.

Greece

Italy

Spain

UK

LA & Canada

Asia

EEMA

EU

Source: PMI

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Pricing

Pricing

Pricing variance in Q1, 2009, was $358 million

Largest quarterly pricing variance ever

Pricing variance in Q1, 2009, higher than for the full

year 2006

Source: PMI Financials

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Currency and Guidance

Currency and Guidance

First-quarter results adversely impacted by currency:

–

net revenues $700 million

–

OCI $400 million

–

EPS 15 cents

Currency environment slightly more favorable at

present but remains very volatile

If current exchange rates prevail, we anticipate to be

at the upper end of our February guidance

We are confident in achieving our 2009 constant

currency EPS targeted growth rate of 10-14%

Source: PMI Financials

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2009 First-Quarter Volume: PMI

2009 First-Quarter Volume: PMI

Volume reached 203 billion units:

–

stable versus Q1, 2008

–

down 1.1% excluding acquisitions

–

stable excluding acquisitions on a per selling day basis

Source: PMI Financials

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2009 First-Quarter Volume: EU

2009 First-Quarter Volume: EU

Volume down 3.7% driven primarily by:

–

a sharp contraction of the Polish market

–

slight share erosion in Italy, compounded by trade inventory

distortions

PMI market share in EU Region of 38.4%, down 0.3pp

Stable share trend in France, Germany and Spain

Source: PMI Financials and GIMS

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2009 First-Quarter Volume: EEMA

2009 First-Quarter Volume: EEMA

Volume was down 0.3% vs. 2008, but up 0.8% on a per

selling day basis:

–

10.5% decline in duty-free volume reflecting reduced travel

Volume and share gains notably in Algeria, Egypt and

Turkey

Market share gains also in Bulgaria, Croatia, Romania,

Russia and Ukraine

Source: PMI Financials, A.C. Nielsen and GIMS

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2009 First-Quarter Volume: Asia

2009 First-Quarter Volume: Asia

Volume up 2.2%, driven by:

–

record market share of 13.8% in Korea

–

continued volume growth in Indonesia

–

a favorable distributor inventory movement in Japan due to

the resourcing of production from the USA to Europe

PMI share of 23.9% in Japan thanks to strong

performance of Marlboro

Source: PMI Financials, Tobacco Institute of Japan and GIMS

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2009 First-Quarter Volume: LA & Canada

2009 First-Quarter Volume: LA & Canada

Volume up 4.4%, boosted by acquisition of Rothmans

Inc. in Canada

Excluding acquisitions, volume down 4.7% due to:

–

targeted inventory reductions and reduced consumer

demand in Colombia

–

impact of price increases on industry volume in Mexico

PMI share in Mexico reached 69.2%, up 2.3pp

Source: PMI Financials and GIMS

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PMI Brand Performance

PMI Brand Performance

Parliament

volume up 5.9%:

–

strong growth in Korea, Russia, Turkey and Ukraine

Source: PMI Financials 

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PMI Brand Performance

PMI Brand Performance

Parliament

volume

up

5.9%

Marlboro

volume down 2.4%:

–

lower industry volume in EU Region

–

0.4 share point decline in EU Region

–

reduced duty-free sales

–

softening of premium segment in Russia

Source: PMI Financials, A.C. Nielsen and GIMS

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Marlboro

Marlboro

Gold

Gold

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Marlboro

Marlboro

Black Menthol

Black Menthol

Source: PMI Financials and Tobacco Institute of Japan

In Q1, Marlboro

achieved a

10.4% market share in

Japan, up 0.5pp

Marlboro Black Menthol

achieved a 1.0% market

share in Japan in Q1

PMI has stabilized its share

of the growing menthol

segment in Japan at 44.9%

in Q1

Now launched in Hong

Kong and Indonesia

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PMI Brand Performance

PMI Brand Performance

Parliament

volume

up

5.9%

Marlboro

volume down 2.4%

Chesterfield

volume up 0.4%:

–

strong performance in EU Region

Source: PMI Financials 

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PMI Brand Performance

PMI Brand Performance

Parliament

volume

up

5.9%

Marlboro

volume down 2.4%

Chesterfield

volume up 0.4%

L&M

volume

down

0.5%:

–

improved performance outside Russia

–

fastest growing brand in Germany

–

# 2 brand in the EU Region behind Marlboro

Source: PMI Financials and GIMS

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PMI Brand Performance

PMI Brand Performance

Parliament

volume

up

5.9%

Marlboro

volume down 2.4%

Chesterfield

volume up 0.4%

L&M

volume

down

0.5%

Combined volume of Bond Street, Next, and Red &

White

up 1.5%

Source: PMI Financials

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2008, Q1, Volume

49%

29%

22%

PMI Volume by Price Segment

PMI Volume by Price Segment

Premium

Low

Mid

Note: Price segmentation by brand on a global basis; excludes Rothmans Inc. brands.

Source: PMI Financials

2009, Q1, Volume

Low

Mid

Premium

49%

29%

22%

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Cash Flow and Balance Sheet

Cash Flow and Balance Sheet

Free cash flow in Q1, 2009, was $1.3 billion, in line

with Q1, 2008:

–

lower capital expenditures

–

working capital requirements under control

–

unfavorable currency impact on net earnings

Balance sheet and liquidity position remain very

strong

Additional Euro 2.0 billion and CHF 0.5 billion in

bonds issued during the first quarter

Weighted average cost of long-term debt of 5.6%

Note: Free cash flow is defined as operating cash flow ($1,427 million) minus capital expenditures ($145 million)

Source: PMI Financials and PMI Treasury

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Shareholder Returns

Shareholder Returns

Willing to surpass target dividend pay-out ratio of 65%

Share repurchases totaled $1.3 billion in Q1, 2009

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Conclusions

Conclusions

Tobacco sector resilient

PMI has best brand portfolio and geographic balance

Innovation and new Marlboro

architecture

Prices increased across broad range of markets

Manageable excise tax and regulatory environment

Cost savings programs on track

Currency headwinds in the short-term

Substantial cash flows and excellent liquidity

Dividends and share repurchases

On track to achieve currency neutral targets in 2009

Questions & Answers

Philip Morris International

33

Reconciliation of Non-GAAP Measures

Reconciliation of Non-GAAP Measures

(1)  As

discussed

in

Note

1.

Background

and

Basis

of

Presentation

of

our

2008

consolidated

financial

statements

which

appears

in

our

Annual

Report

on

Form

10-K,

prior

to

2008,

certain

of

our

subsidiaries

reported

their

results

up

to

ten

days

before

the

end

of

December,

rather

than

on

December

31.

During

2008,

these

subsidiaries

moved

to

a

December

31

closing

date.

As

a

result,

certain

amounts

in

the

first

quarter

of

2008

were

revised

to

reflect

this

change.

Source: PMI Financials

For the Quarters Ended March 31,

Adjustments for the Impact of Currency and Acquisitions

(in millions)

(Unaudited)

Reported

Net

Revenues

Less

Excise

Taxes

Reported

Net

Revenues

excluding

Excise

Taxes

Less

Currency

Reported

Net

Revenues

excluding

Excise

Taxes &

Currency

Less

Acquisi-

tions

Reported

Net

Revenues

excluding

Excise

Taxes, 

Currency &

Acquisitions

Reported

Net

Revenues

Less

Excise

Taxes

Reported

Net

Revenues

excluding

Excise

Taxes

Reported

Reported

excluding

Currency

Reported

excluding

Currency &

Acquisitions

6,050

$       

(4,063)

$  

1,987

$        

(251)

$        

2,238

$        

16

$        

2,222

$        

European Union

6,697

$        

(4,451)

$  

2,246

$        

(11.5)%

(0.4)%

(1.1)%

2,831

(1,379)

1,452

(312)

1,764

-

1,764

EEMA

3,283

(1,621)

1,662

(12.6)%

6.1%

6.1%

2,857

(1,267)

1,590

(49)

1,639

-

1,639

Asia

2,976

(1,473)

1,503

5.8%

9.0%

9.0%

1,548

(980)

568

(85)

653

124

529

Latin America & Canada

1,398

(888)

510

11.4%

28.0%

3.7%

13,286

$     

(7,689)

$  

5,597

$        

(697)

$        

6,294

$        

140

$      

6,154

$        

PMI Total

14,354

$      

(8,433)

$  

5,921

$        

(5.5)%

6.3%

3.9%

Reported

Operating

Companies

Income

Less

Currency

Reported

Operating

Companies

Income

excluding

Currency

Less

Acquisi-

tions

Reported

Operating

Companies

Income

excluding

Currency &

Acqusitions

Reported

Operating

Companies

Income

Reported

Reported

excluding

Currency

Reported

excluding

Currency &

Acquisitions

967

$          

(184)

$        

1,151

$        

11

$        

1,140

$        

European Union

1,167

$        

(17.1)%

(1.4)%

(2.3)%

586

(201)

787

-

787

EEMA

680

(13.8)%

15.7%

15.7%

661

19

642

-

642

Asia

550

20.2%

16.7%

16.7%

155

(35)

190

55

135

Latin America & Canada

149

4.0%

27.5%

(9.4)%

2,369

$       

(401)

$        

2,770

$        

66

$        

2,704

$        

PMI Total

2,546

$        

(7.0)%

8.8%

6.2%

2009

2008

(1)

% Change on Reported Net Revenues

excluding Excise Taxes

2009

2008

(1)

% Change on Reported Operating

Companies Income

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34

Reconciliation of Non-GAAP Measures

Reconciliation of Non-GAAP Measures

Reconciliation of Reported Operating Companies Income to Adjusted Operating Companies Income

For the Quarters Ended March 31,

(in millions)

(Unaudited)

(1)

As

discussed

in

Note

1.

Background

and

Basis

of

Presentation

of

our

2008

consolidated

financial

statements

which

appears

in

our

Annual

Report

on

Form

10-K,

prior

to

2008,

certain

of

our

subsidiaries

reported

their

results

up

to

ten

days

before

the

end

of

December,

rather

than

on

December

31.

During

2008,

these

subsidiaries

moved

to

a

December

31

closing

date.

As

a

result,

certain

amounts

in

the

first

quarter

of

2008

were

revised

to

reflect

this

change.

Source: PMI Financials

Reported

Operating

Companies

Income

Less

Asset

Impairment

& Exit Costs

Adjusted

Operating

Companies

Income

Less

Currency

Adjusted

Operating

Companies

Income

excluding

Currency

Less

Acquisi

tions

Adjusted

Operating

Companies

Income

excluding

Currency &

Acqusitions

Reported

Operating

Companies

Income

Less

Asset

Impairment

& Exit Costs

Adjusted

Operating

Companies

Income

Adjusted

Adjusted

excluding

Currency

Adjusted

excluding

Currency &

Acquisitions

967

$         

(1)

$              

968

$         

(184)

$     

1,152

$      

11

$     

1,141

$         

European Union

1,167

$       

(8)

$             

1,175

$      

(17.6)%

(2.0)%

(2.9)%

586

-

586

(201)

787

-

787

EEMA

680

(1)

681

(14.0)%

15.6%

15.6%

661

-

661

19

642

-

642

Asia

550

(14)

564

17.2%

13.8%

13.8%

155

-

155

(35)

190

55

135

Latin America & Canada

149

-

149

4.0%

27.5%

(9.4)%

2,369

$      

(1)

$              

2,370

$      

(401)

$     

2,771

$      

66

$     

2,705

$         

PMI Total

2,546

$       

(23)

$           

2,569

$      

(7.7)%

7.9%

5.3%

2009

2008

(1)

% Change on Adjusted Operating

Companies Income

Philip Morris International

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Reconciliation of Non-GAAP Measures

Reconciliation of Non-GAAP Measures

(1)

As

discussed

in

Note

1.

Background

and

Basis

of

Presentation

of

our

2008

consolidated

financial

statements

which

appears

in

our

Annual

Report

on

Form

10-K,

prior

to

2008,

certain

of

our

subsidiaries

reported

their

results

up

to

ten

days

before

the

end

of

December,

rather

than

on

December

31.

During

2008,

these

subsidiaries

moved

to

a

December

31

closing

date.

As

a

result,

certain

amounts

in

the

first

quarter

of

2008

were

revised

to

reflect

this

change.

Source: PMI Financials

2009

2008

% Change

Reported Diluted EPS

(1)

0.74

$                   

0.79

$             

(6.3)%

Adjustments:

Asset impairment and exit costs

-

0.01

Adjusted Diluted EPS

0.74

$                   

0.80

$             

(7.5)%

Add:

Currency Impact

0.15

Adjusted Diluted EPS, Excluding Currency

0.89

$                   

0.80

$             

11.3%

Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and Adjusted Diluted EPS, Excluding Currency

For the Quarters Ended March 31,

(Unaudited)

Philip Morris International

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Reconciliation of Non-GAAP Measures

Reconciliation of Non-GAAP Measures

(1)

As

discussed

in

Note

1.

Background

and

Basis

of

Presentation

of

our

2008

consolidated

financial

statements

which

appears

in

our

Annual

Report

on

Form

10-K,

prior

to

2008,

certain

of

our

subsidiaries

reported

their

results

up

to

ten

days

before

the

end

of

December,

rather

than

on

December

31.

During

2008,

these

subsidiaries

moved

to

a

December

31

closing

date.

As

a

result,

certain

amounts

in

the

first

quarter

of

2008

were

revised

to

reflect

this

change.

Source: PMI Financials

2009

2008

% Change

Reported Diluted EPS

(1)

0.74

$                   

0.79

$             

(6.3)%

Add:

Currency Impact

0.15

Reported Diluted EPS, Excluding Currency

0.89

$                   

0.79

$             

12.7%

Reconciliation of Reported Diluted EPS to Reported Diluted EPS, Excluding Currency

For the Quarters Ended March 31,

(Unaudited)

Philip Morris International

37

$

2,524

$

2,320

Operating Income

(34)

(15)

$

2,369

155

661

586

$

967

First Quarter 2009

(13)

General corporate expenses

(9)

Amortization of intangibles

149

Latin America & Canada

$

2,546

Operating Companies Income

550

Asia

680

EEMA

$

1,167

EU

First Quarter 2008

Reconciliation of Non-GAAP Measures

Reconciliation of Non-GAAP Measures

Reconciliation of Operating Companies Income to Operating Income

For the Quarters Ended March 31

Source: PMI Financials