Philip Morris: Shares Down 3% After CFO Comments at Barclays Conference (Substack Exclusive)
Company Update (PM US) (Buy)
Summary: $PM -3% after CFO at conference. Bad news in ILUMA roll-out delay & lower 2021 HTU volume due to chip shortage. No change to FY21 EPS or 2021-23 HTU targets. Buybacks "on top" of >9% EPS CAGR outlook. Vapor launches planned in 7-8 markets in coming months. ITC ruling on $BATS IQOS IP claim is due 29-Sep.
Participants: Emmanuel Babeau (PM CFO), Gaurav Jain (Barclays analyst)
Prepared Remarks
Strong Performance Expected for Q3 & FY
On track for “very strong performance” for both Q3 and FY
Total volume (incl. IQOS) to grow in 2021, first time in 10 years
“Very strong demand” for both IQOS devices and consumables
Good ILUMA launch in Japan - 12% of ILUMA buyers are new to IQOS
Good combustibles market - still targeting q/q market share improvement
IQOS Devices Affected By Chip Shortage
Semiconductor shortage has not improved; seen “more tension”
This means “tighter” availability in IQOS devices in “some” markets
If shortages continue, will impact IQOS user acquisition rate in H2