Total shipment volume for cigarettes and OTP combined was down by 0.9% and up by 2.1%, excluding acquisitions, for the quarter and June year-to-date, respectively. Total shipment volume for cigarettes and OTP combined was up by 1.7% and 3.5%, excluding acquisitions and the aforementioned Japan hurdle, for the quarter and June year-to-date, respectively.
PMI’s June year-to-date market share performance was stable, or registered growth, in a number of key markets, including Argentina, Australia, Austria, Belgium, Germany, Indonesia, Kazakhstan, Korea, Mexico, Poland, Russia, Thailand, Turkey, the United Kingdom and Ukraine.
EUROPEAN UNION REGION (EU)
In the EU, net revenues decreased by 8.5% to $2.3 billion in the quarter, including unfavorable currency of $195 million. Excluding currency, net revenues decreased by 0.7%, mainly reflecting unfavorable volume/mix of $186 million, predominantly due to lower total markets across the Region, particularly in southern Europe. The decrease was partly offset by favorable pricing of $169 million, driven by France, Germany, Italy, the Netherlands, Poland, Spain and Switzerland. June year-to-date, net revenues, excluding currency, were up by 2.0%, driven by higher pricing of $275 million, partially offset by unfavorable volume/mix of $186 million.Operating companies income decreased by 12.7% to $1.1 billion in the quarter, including unfavorable currency of $130 million. Excluding the unfavorable impact of currency, operating companies income decreased by 2.6%, as higher pricing was more than offset by: an unfavorable volume/mix of $159 million; higher manufacturing costs, mainly related to the mandated implementation of reduced cigarette ignition propensity standards which began in the fourth quarter of 2011; and higher marketing costs, principally reflecting marketing investment behind Marlboro in Germany and Switzerland. June year-to-date, operating companies income, excluding currency, was up by 0.7%. Adjusted operating companies income decreased by 12.8% in the quarter, as shown in the table below and detailed on Schedule 11. Adjusted operating companies income, excluding currency, decreased by 2.7% in the quarter and was up by 0.2% June year-to-date.
|EU Operating Companies Income ($ Millions)|
|Second-Quarter||Six Months Year-To-Date|
|Asset impairment & exit costs||0||(1||)||0||(12||)|
|Adjusted OCI Margin*||48.9%||51.3%||(2.4) p.p.||49.5%||51.1%||(1.6) p.p.|
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