Philip Morris International Inc. (“PMI”) (NYSE / Euronext Paris: PM) announced today that as part of its initiative to enhance profitability and growth in North African and Middle Eastern markets, it has decided to restructure its business in Egypt.
The new business model entails a new contract manufacturing agreement with our long-standing, strategic business partner, Eastern Company S.A.E., the creation of a new PMI affiliate in Egypt and a new distribution agreement with Trans Business for Trading and Distribution LLC.
To accomplish this restructuring and to ensure a smooth transition to the new model, PMI will record, in the fourth quarter of 2013, a charge to its 2013 full-year reported diluted earnings per share of approximately $0.10 to reflect the discontinuation of existing contractual arrangements.“Today’s announcement marks the next stage in the highly successful evolution of our business in Egypt, which could not have been achieved without the significant contribution of our long-established partner, Al Mansour International Distribution Company S.A.E.,” said Miroslaw Zielinski, PMI’s President, Eastern Europe, Middle East & Africa Region and PMI Duty Free. “PMI’s new operational model will ensure business continuity in this dynamic market, where PMI achieved currency-neutral, double-digit earnings growth and strong share gains in 2013. Furthermore, going forward, the new model will assure the continued expansion of our market presence and an increase in our share of the profit pool,” continued Mr. Zielinski. PMI’s Business in Egypt PMI is the leading international tobacco company in Egypt, with an estimated market share of 22.9% in 2013, up 4.7 points versus 2012, driven by premium Marlboro, up by 1.1 points to an estimated 7.3%, and mid-price L&M, up by 3.3 points to an estimated 13.1%. The total market in Egypt in 2013 was approximately 80 billion units, up by an estimated 2.8% versus 2012. In 2013, the retail pack price of Marlboro, which enjoys close to a 75% share of the premium segment, was EGP 15.50 (approximately $2.25). PMI’s products are contract manufactured in Egypt by Eastern Company S.A.E. Philip Morris International Inc . Philip Morris International Inc. (PMI) is the leading international tobacco company, with seven of the world’s top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in more than 180 markets. In 2012, the company held an estimated 16.3% share of the total international cigarette market outside of the U.S., or 28.8% excluding the People’s Republic of China and the U.S. For more information, see www.pmi.com.