Excluding the impact of currency, adjusted operating companies income margin declined by 0.5 percentage points to 49.5%, as detailed on Schedule 15, primarily as a result of the aforementioned higher manufacturing and marketing costs.
The total cigarette market in the EU declined by 6.3% to 520 billion units, due primarily to tax-driven price increases, the unfavorable economic and employment environment, particularly in southern Europe, the growth of the OTP category, and the increased prevalence of illicit trade.
PMI’s cigarette shipment volume in the EU declined by 6.4%, due principally to a lower total market across the Region. Shipment volume of Marlboro decreased by 4.6%, mainly due to a lower total market, partially offset by higher share. Shipment volume of L&M was down by 4.1%. Shipment volume of Chesterfield was up by 4.7%.
PMI’s market share in the EU was essentially flat at 38.1% as gains, notably in Belgium, Greece, Finland, Hungary and Poland were offset by declines, primarily in the Czech Republic, France and Portugal. Marlboro’s share was up by 0.3 points to 18.3%, its first year-on-year share gain since 2002, reflecting a higher share mainly in Belgium, Greece, Hungary, Italy and Poland, which more than offset lower share mainly in France, the Netherlands, Portugal and Spain. L&M’s market share was flat at 6.6%, with gains in Finland, Germany, Poland and the Slovak Republic offset by declines notably in Greece and Portugal. Chesterfield’s market share was up by 0.4 points to 3.7%, driven notably by gains in Austria, the Czech Republic, France, Hungary, Poland, Portugal, Spain and the United Kingdom. Philip Morris’ market share was up by 0.1 point to 2.1%, with gains, notably in the Czech Republic and Italy, partly offset by a decline in Portugal and Spain.PMI’s shipments of OTP, in cigarette equivalent units, grew by 16.1%, reflecting a higher total market and share. PMI’s OTP total market share was 12.2%, up by 1.1 points, driven by gains in the fine cut category, notably in Belgium, up by 3.2 points to 16.3%, France, up by 0.9 points to 25.2%, Germany, up by 0.7 points to 14.7%, Greece, up by 4.7 points to 12.8%, Italy, up by 16.0 points to 27.9% and Spain, up by 1.1 points to 11.7%.