[Intl-tobacco] Philip Morris Intl results for 2001

[Robert Weissman]

http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=MO&script=410&layout=6&item_id=253151

Philip Morris Co., Inc. reports 2001 results
January 30, 2002
(Excerpts)

INTERNATIONAL TOBACCO

Fourth-Quarter 2001 Results

In the fourth quarter, underlying operating companies income for Philip
Morris International (PMI), the company's international tobacco
business, rose 2.8% to $1.1 billion, driven by volume gains and higher
pricing, partially offset by the impact of mix and unfavorable currency.
Excluding unfavorable currency of $23 million in the quarter, PMI
operating companies income would have grown 5.0%, from a strong base in
the fourth quarter of 2000, when operating companies income increased
21.7%. Underlying shipment volume increased 3.2% to 155.8 billion units.
Fourth quarter 2001 results were affected by economic weakness in
several markets, as well as a difficult comparison, primarily due to
strong shipments in the fourth quarter of 2000.

Strong volume performance in Belgium, the Slovak Republic, Indonesia,
Israel, Italy, Japan, Korea, Mexico, the Netherlands, Romania, Russia
and the Ukraine was partially offset by lower shipments in Argentina,
Egypt, the Philippines, Turkey and worldwide duty free. Excluding these
four recessionary markets and worldwide duty free, which suffered from
the decline in worldwide travel, PMI's volume would have increased 5.0%.
In Germany, shipment volume was essentially flat.

During the quarter, PMI gained share in most of its top 25 income
markets, with share gains of nearly one point or more in Belgium,
France, Israel, Japan, Mexico, the Netherlands, Russia and the Ukraine.

Full-Year 2001 Results

For the full year, underlying operating companies income for PMI grew
2.6% to $5.4 billion, due to increased volume, higher pricing and lower
manufacturing costs, significantly offset by the impact of unfavorable
currency. Excluding unfavorable currency of $390 million, PMI operating
companies income would have grown 10.0% for the year.

PMI's underlying shipment volume increased 3.5% to 698.9 billion units,
driven by strong results in Western, Central and Eastern Europe, as well
as Asia.

PMI gained share in most of its top 25 income markets, reaching record
shares with share gains of one point or more in Belgium, France, Israel,
Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Russia, Saudi
Arabia, Singapore and the Ukraine.

In Western Europe, volume was up 1.2% in 2001 as strong increases in
Belgium, France, Italy, the Netherlands, Portugal, Spain, Sweden and the
United Kingdom were partly offset by Germany, where volume was down
5.0%, due primarily to continued growth of low-priced trade brands.
Excluding Germany, volume in Western Europe was up 3.0%. Marlboro share
was up in Belgium, France, Spain, Switzerland, the Netherlands, Portugal
and the United Kingdom. Share increases were also achieved for L&M in
Belgium, Diana in Italy, Chesterfield in Spain and Portugues in
Portugal. PMI achieved a record 38.7% market share in Western Europe, up
0.5 points from 2000.

In Central Europe, the Middle East and Africa (CEMA), volume increased
2.7% led by strong performances in Israel, Poland, Romania and Saudi
Arabia. Volume was down in Turkey due to the Turkish lira devaluation
and subsequent price increases, which led to a market contraction and
consumer down-trading. PMI's premium segment volume decline in Turkey
was mitigated by the good performance of L&M, Chesterfield and Lark in
the lower-price segments. Excluding Turkey, volume in CEMA was up 4.6%.
Strong share gains were registered by Marlboro in the Czech Republic,
Israel and Saudi Arabia; Red & White in Romania; L&M in the Czech
Republic, Poland, Turkey and Israel; Chesterfield in Poland and Turkey;
Lark in Turkey and local brands Fajrant in Poland and Callatis in
Romania.

In Eastern Europe, PMI delivered double-digit volume growth of

 14.3% in 2001, due to very strong performances in Russia and the
Ukraine, the two largest markets in the region. PMI's international
brands  in Eastern Europe, including Marlboro, L&M, Virginia Slims,
Parliament, Chesterfield and Bond Street, each performed well. Local
brands  Optima in Russia, Vatra in the Ukraine and Medeo in Kazakhstan
were also up significantly.

In Asia, PMI volume was up 6.1% in 2001, led by double-digit increases
in Indonesia and Korea, as well as solid increases in Japan, Taiwan,
Malaysia and Thailand. PMI recorded a share gain of one point or more in
Japan, Singapore, Malaysia, Korea and Indonesia. In Indonesia, Marlboro
volume doubled and L&M was launched during the year. In Japan, volume
was up 3.6%, driven by Marlboro growth of nearly 10% and the successful
launch of Lark One in May. Total share in Japan reached a record 22.5%,
up 1.1 points. In Korea, Philip Morris Superlights, Virginia Slims and
Marlboro each posted strong gains. In Thailand, strong volume growth
continued on the strength of L&M.

In Latin America, volume rose 0.7%, driven by continued good gains in
Mexico and Brazil, largely offset by a volume decline in Argentina.
PMI's share advanced in Mexico to a record 58.3%, and in Argentina its
mid-price Philip Morris brand effectively captured down-traders, driving
PMI's market share to a record 64.3%. The company expects continued
erosion of the economic climate in Argentina to negatively affect income
in 2002.