12 Years at Philip Morris International: A Journey of Purpose, Progress, and People

This August marks a personal and professional milestone — 12 years at Philip Morris International. It’s a moment that invites reflection, gratitude, and a renewed sense of purpose.

When LinkedIn reminded me of this anniversary, I didn’t expect the wave of support that followed. Over 75 colleagues, peers, and friends took a moment to react, comment, and share kind words. Among them was a message from Edvinas Katilius, VP Global Business Solutions at PMI:

“Congratulations Volkan! It is a real pleasure working together.”

To which I replied:

“Thank you so much Edvinas for the nice message! It truly means a lot and I appreciate the opportunity to work alongside you. Your support and leadership make a real difference — looking forward to many more milestones together!”

These interactions are more than digital gestures — they’re reminders of the relationships, trust, and shared ambition that define our work culture.

Over the past 12 years, I’ve had the privilege of growing through diverse roles, culminating in my current position as Manager, Treasury & Tax. Each chapter has brought new challenges — from navigating regulatory shifts to driving financial transformation — and each has been an opportunity to learn, lead, and contribute to PMI’s bold vision of a smoke-free future.

What makes this journey meaningful isn’t just the milestones — it’s the people. The mentors who guided me, the teams who inspired me, and the leaders who empowered me. To all of you: thank you.

As I look ahead, I remain energised by the road still to come. The transformation we’re driving at PMI is historic, and I’m proud to be part of it.

Here’s to the next chapter — and to continuing to grow, challenge, and inspire.

#12YearsAtPMI #WorkAnniversary #Leadership #TreasuryAndTax #PhilipMorrisInternational #Gratitude #CareerJourney

Fostering a Culture of Engagement and Collaboration in Global Controlling with GC Engagers

As we approach the end of 2024, it's a perfect time to reflect on our achievements and the values that have guided us. This year, our Global Controlling (GC) leadership team under Global Business Solutions announced an exciting initiative during our first webcast in 2024: the formation of the GC Engagers community. This initiative aimed to co-create engagement ideas and foster a culture where everyone feels a sense of belonging and pride in being part of our team.

Creating a Positive Impact

Our leadership team demonstrated the PMI DNA value of "We Care" by providing a platform for every member of the GC team to contribute. This initiative showed our commitment to creating a positive impact for those around us. By intentionally seeking, listening, and learning from diverse perspectives, we aimed to reach the best outcomes. This inclusive approach sparked interest among the team, leading to the formation of a community of 36 individuals from 12 different countries, each bringing unique "superpowers" to the table.

Building Connections and Collaboration

We began with a get-to-know-each-other session, aligning on our roles and responsibilities. A dedicated SharePoint site was created as a central hub for resources, discussions, and collaboration. This space allowed us to introduce ourselves to the entire GC community and foster a sense of unity.

Our Head of Global Controlling, Luis Matos, reinforced the PMI DNA value of "We are Better Together" by encouraging the GC team to reach out to Engagers with ideas to strengthen our team. His cooperative approach broke down silos and united us for a shared purpose.

Driving Engagement and Innovation

In our first team meeting, we identified improvement areas: Fun & Integration, Recognition, Wellbeing, Learning Opportunities, and Career Opportunities. These areas evolved into five focused teams, each with its own leader. Francesco Puppato became the team leader for Fun & Integration, Sabina Bytnar-Warzocha for Recognition, Leonor Almeida for Wellbeing, Jaafar Abu-Eisheh for Learning Opportunities, and Volkan Yorulmaz (me) for Career Opportunities. By working in these focused teams, we analyzed pain points and implemented quick wins to create a positive impact on GC employees.

While the GC Engagers team has been working on ideas and plans to foster a culture of belonging, employee appreciation, and a growth mindset—ultimately making GC teams feel more connected, engaged, and motivated—our GBS People & Culture Manager, Izabella Golba, has consistently shown full "trust" in us, supporting us as we "embraced challenges."

Key Achievements

• Enhanced Communication: We created dedicated MS Teams channels to improve global communication and collaboration.
• On-Site Meetings: Successfully conducted on-site meetings in Krakow and Latin America, with plans for more in 2025.
• Summer Memories Competition: Launched a fun and engaging competition to boost team morale.
• Coffee Calls: Implemented informal catch-ups to strengthen team bonds.
• Webcast Support: Provided comprehensive support for GC webcasts, achieving high satisfaction results.
• Recognition: Recognized outstanding contributions through the Colleague of the Quarter awards.
• Career Opportunities: Introduced the “My Job Opportunities” initiative to highlight internal career opportunities.

Embracing Change and Innovation

Throughout this journey, we embodied the PMI DNA value of "We are Game Changers". By taking thoughtful risks, experimenting, and learning from our mistakes, we fostered a culture of agility and resilience. For instance, while preparing for the Global Controlling FS Connect series, we practiced repeatedly before the live sessions. During these internal runs, our GC leadership team members, Christine Lee (Head of Controlling EAA & PMIDF) and Aurimas Klimas (Head of Controlling SSEA, CIS & MEA), not only observed our presentations but also provided constructive feedback. Their support and guidance helped us achieve an impressive NPS score of 9.2 for the session, which is considered a ‘promoter’ score.

Additionally, we launched the "My Job Opportunities" initiative to highlight internal career opportunities. This initiative encouraged team members to take initiative and explore new roles within the company, fostering individual growth and strengthening our team by leveraging diverse skills and experiences.

Reflecting on Our Journey

In our last GC Year-end webcast, thanks to the inclusive invite from Felix Schell, Head of Controlling Americas, the GC Leadership team provided us, the GC Engagers, with the space to share our key takeaways from 2024. We emphasized the importance of communication, feedback, and active participation in our initiatives. By working together, we can create a thriving and collaborative environment, driving for impact and celebrating our successes.

As Edvinas Katilius, our Global Business Solutions Vice President, shared in his reflections on PMI DNA, "Introducing core values by companies is not what makes them thrive; making those values lived by their people is." This sentiment was echoed during the global and local PMI DNA events, where we gathered to delve into the essence of our guiding principles. All these events were filled with open and honest conversations, leaving us energized and inspired to embed these values within GBS. Edvinas' commitment to making PMI DNA a part of our thriving culture is a powerful reminder of the impact we can achieve together.

A Personal Thank You

During my transition to a new role in 2024, my manager, Vasyliy Zakharov (Controller PMIDF), gave me the space to work as a GC Engagers leader, exemplifying the PMI DNA value of "We are Better Together". His support allowed me to collaborate effectively with our team, break down silos, and unite for a shared purpose.

Vasyliy's embodiment of the PMI DNA value "We Care" has been instrumental in my personal journey this year. His trust and encouragement have empowered me to embrace challenges, strive for excellence, and make things better for everyone in Global Controlling.

Call to Action

As we move forward, we as GC Engagers encourage all GC colleagues to:

• Communicate with Us: Reach out with any questions, suggestions, or concerns. We're here to listen and support you.
• Share Ideas & Feedback: Your insights help us improve and innovate. Don't hesitate to share your thoughts.
• Join Us: Become an active part of our initiatives. Together, we can achieve great things and make a positive impact on our Global Controlling team.

Let's continue to embody the PMI DNA values and critical behaviors, driving for impact and celebrating our collective achievements. 

A Long-Awaited Journey to PMI's Headquarters: Impressions from Lausanne

For someone like me, who is not that much curious about exploring new places and cultures, Lausanne held a special allure. It was a destination I had longed to visit, especially after hearing countless stories from colleagues who had been there. Finally, an opportunity arose in December 2023 when I was invited to attend a X-Functional Sustainability Team Workshop in Lausanne, where my company Philip Morris International's headquarter is located. The anticipation and excitement were palpable as I embarked on this journey.

 

Arrival and Exploration

Upon arriving in Lausanne, I was greeted by a pleasant surprise – the weather was milder than expected, and the city was bathed in the early morning light. Opting for a leisurely walk to my hotel, I marveled at the tranquility of the surroundings. Lausanne's charm revealed itself as I strolled past picturesque houses and gardens, with the only sound being the gentle hum of my suitcase wheels. Despite a minor hiccup with my train ticket, the journey was smooth, and I soon found myself at my hotel, ready to begin my adventure.

 

Work and Pleasure

The following days were a blend of work and leisure, as I delved into the workshop activities while also exploring the city's offerings. From experiencing the vibrant local cuisine to navigating through the bustling streets, every moment was filled with discovery. The warmth and hospitality of the colleagues made me feel right at home, easing any initial apprehensions I may have had.

 

Reflecting on the Experience

As my time in Lausanne drew to a close, I couldn't help but reflect on the profound impact of this journey. Professionally, the insights gained from interacting with stakeholders from the company were invaluable, setting the stage for future collaborations and initiatives. On a personal level, the experience left an indelible mark, igniting a desire to return with my family and immerse ourselves in the beauty of this enchanting city.

 

Conclusion

In conclusion, my journey to Lausanne was not just about reaching a destination; it was about embracing new experiences, forging meaningful connections, and cherishing moments of joy and discovery. As I boarded the plane back home, I carried with me memories that would last a lifetime, fueling my passion for exploration and adventure. And who knows, perhaps one day, my family and I will embark on this journey together, ready to create new memories and write new chapters in our lives. After all, I am thankful to my company and colleagues who contributed to reach my long-awaited journey.

For a more personal content in Turkish, you may visit: Volkan Yorulmaz: Hedefe Ulaşıldı: Lozan'dan İzlenimler

PMI'da 10 Yıl Bitti, Ya Şimdi?

1 Ağustos 2013 Perşembe günü, bundan tam 10 yıl önce Philip Morris’te işe başladım. Fabrikanın kapısından adımımı attığımda adı Philsa Philip Morris Sabancı Sigara ve Tütüncülük A.Ş. idi ve benim de ünvanım Genel Muhasebe ve Vergi Analisti’ydi. Aslından fabrikanın karşı komşusu Opel Türkiye’de (General Motors Türkiye Ltd. Şti.) çalışırken “bir gün burada çalışacağım” diye hedeflediğim Philip Morris’e girmeden önce üçer yıl PwC ve GM maceralarımda da aklım hep Philip Morris’teydi. İşe başladığım pozisyonun ilanını gördüğümde bu ilan tam da beni tarif ediyor derken o beklediğim “bir gün”ün çok yaklaştığını hissetmiştim. 2013’ün Mayıs ayında başlayan mülakat süreci, eşimin hamile olduğunu öğrenmemiz, bebeğin bereketiyle geleceğini düşündüğümüz o yaz günleri derken GM’deki ihbar süremi doldurup iple çektiğim ilk iş günüme ulaşmıştım. Yeni arkadaşlar, üretimi olan bir iş yerinde çalışmak, meşhur Philip Morris yemekleri gibi pek çok merak ettiğim şeye cevap bulduğum o ilk günün üzerinden bugün tam 10 yıl geçmiş oldu.

Şampiyon olmuşçasına yumruklarımı sıkarak sevindiğim günlerim de oldu, dayanamayıp ağladığım da… En sevdiğim, güvendiğim kişileri de burada tanıdım, keşke yollarımız kesişmeseydi dediğim iş arkadaşlarım da oldu. Hayaller kurdum, bazılarına ulaştım, bazılarına ulaşmak için çabalamaya, emek sarfetmeye devam ediyorum. Nasip olur ya da olmaz, bilemiyorum ama buradaki hikayem bittiğinde çabalamadım dememek için ben elimden geleni yapıyorum, yapmaya devam edeceğim. On yıl önce ilk adımı attığımda, belki bugün için farklı şeyler hayal ederdim ama şükredip devam etmeyi biliyorum.

Geriye dönüp baktığımda, hayatımdaki en önemli kararlardan birini de yine Philip Morris’te iken kariyerim için verdiğimi görüyorum. Pandeminin hayatımıza girdiği 2020 yılında, Kıdemli Vergi Analisti olarak çalışırken neredeyse her sabah Resmi Gazete’de yeni bir vergi düzenlemesi çıkıyordu, bunun analizini yapıp şirketimizi nasıl etkileyeceğini yönelik bilgilendirme ya da sunum hazırladığım dönemde Duty Free şirketimizde bir fırsat çıkmıştı. Hem de ulaşmayı çok istediğim “Manager” ünvanlı bir pozisyondu. Bugünkü gibi uzaktan çalışmanın hayatımızda sıradan bir uygulama olmadığı o günlerde bu pozisyonun İstanbul’da olması beni zor bir karar almaya itmişti: ya kabul edip İstanbul’a taşınacaktım ya da reddedip İzmir’de kalarak bekleyecektim. “İyi ki” dediğim kararımı alırken eşimin de desteğini almış, onu çok sevdiği İzmir’den ayırmıştım ama şükür ki İstanbul bize hep iyi yüzünü gösterdi. Hayatımızdaki en önemli değişikliklerden birini Philip Morris ile yapmış olduk. İstanbul’da çok sevdiğim insanlar listesini geliştirmek de en büyük kazançlarımdan biri oldu.

Dediğim gibi, şimdilerde hayal etmeye ve o hayallere ulaşmak için çalışmaya ve kariyer yolculuğumu yönetmeye devam ediyorum. Bakalım bu yolculuk beni nereye götürecek? Nelere ulaşabileceğim? Yoksa hayal bile edemeyeceğim yerler kısmet olacak mı? Her şeyin hayırlısı… İlerlemeye devam…

Celebrating a Decade at Philip Morris International: Reflections and Gratitude

Exactly 10 years ago on Thursday, August 1, 2013, my journey with Philip Morris International (PMI) began. When I stepped through the factory's doors, it was called Philsa Philip Morris Sabancı Sigara ve Tütüncülük A.Ş. at that time, and my title was General Ledger and Tax Analyst. Even before joining PMI, while working at Opel Turkey (officially called General Motors Türkiye Ltd. Şti.), our factory's neighbor, I always had my mind set on working here, thinking, 'One day, I will work at Philip Morris.' Prior to that, I spent three years at PwC and GM, but my thoughts were always on Philip Morris. When I saw the job posting for the position I eventually started, I felt like the job description perfectly fit me, and that awaited 'one day' was drawing near. The interview process, which started in May 2013, my wife's pregnancy, the days of that summer when we thought about the blessing that the baby would bring, and the anticipation of my first day at work after eagerly waiting for the end of my notice period at GM, all led me to that moment. On that first day, I met new colleagues, experienced working in a production company, and got answers to many things I had wondered about, such as the famous Philip Morris meals. Time flies and today marks exactly 10 years since that day.

There were days when I celebrated with clenched fists as if I had won a championship and days when I couldn't resist but cry. I met people here whom I loved and trusted, as well as colleagues whose paths I wish had never crossed. I dreamed, achieved some of those dreams, and continue to strive and work hard to reach others. Whether they will be granted or not, I cannot know, but I am doing my best and will continue to do so to avoid saying 'I didn't try' when my story at this place comes to an end. When I took that first step ten years ago, perhaps I imagined different things for today, but I know how to be grateful and keep going.

Looking back, I see that I made one of the most important decisions in my life during my Philip Morris journey. In the year 2020, when the pandemic entered our lives, while working as a Senior Tax Analyst, almost every morning, new tax regulations were published in the Official Gazette, and during that time, an opportunity emerged at our Duty-Free affiliate for a position with the title 'Manager,' which I had desired to reach for so long. In those days when remote work was not a common practice as it is today, the fact that this position was in Istanbul made me face a tough decision: either accept and move to Istanbul or reject it and stay in Izmir, wait for another opportunity. When I made the decision that I now say 'Thank goodness' for, I had my wife's support, but I had to separate her from Izmir, a city she loved dearly. Thankfully, Istanbul has always been kind to us. We made one of the most significant changes in our lives with PMI. Building a list of beloved people in Istanbul has been one of the greatest gains.

As I celebrate 10 years at Philip Morris International, I'm filled with gratitude for the opportunities, connections, and growth it has brought into my life. This journey has been a testament to the power of dreams, resilience, and embracing change. I am eager to continue my career journey with enthusiasm, determination, and an open heart. Here's to the next chapter and the endless possibilities that lie ahead. Let's keep moving forward together.

Capture PMI's Transformation Journey towards Sustainability

Sustainability sits at the core of our transformation, we see it as a fundamental opportunity for innovation, growth, and purpose-led, impact-driven, long term value creation. We work hard to integrate sustainability into every aspect of our business and activities. In this post, you will find some of the recent initiatives towards sustainability in Philip Morris International (PMI) and PMI Istanbul HQ Office.

This is the green view of our balcony in Istanbul HQ Office. This balcony is the place where I have my coffee breaks, catch up with my colleagues and even brainstorm with my project team. This time I am alone in this green balcony and I have things to read: PMI’s sustainability achievements and objectives. Through sustainability reporting, companies communicate their performance and impacts on a wide range of sustainability topics, spanning environmental, social and governance parameters. PMI is very transparent in terms of sustainability reporting and acts responsibly towards a sustainable world.

 

In Philip Morris Turkey offices, employees can easily find so many recycling bins. Recycling is crucial to lessen the carbon footprint and contribute toward a healthy environment and sustainability. We have an eco-friendly waste management system that protects the environment and secures the community’s wellbeing. Materials such as plastics, paper, glass, and aluminum can be recycled and reused over and over again.

Animal welfare is our passion. We believe that all animals, from the domestic to the exotic, deserve the right to be protected and to live happy and healthy lives. Even our offices are places where animals live in a safe habitat and we live in harmony together. 

All the world is a stage for sustainability. In this photo, you see the “Stage”. It is a meeting room in our green garden of Istanbul HQ Office. It is just like an office room in the middle of a forest. The stage is one of the continuous improvements towards reducing the environmental impacts of the office work. It facilitates activities that promote sustainable lifestyles. The atmosphere in Stage inspires employees to get involved and adopt environmentally-friendly habits. Come in, Stage is yours, just act towards sustainability!

 

Sustainable development relates to all humans and involves all aspects of our lives; learning must therefore be part of a lifelong process. In PMI, we have lifelong learning opportunities that proactively respond to our expressed needs and objectives, such as learning, development or capacity building programmes for soft and hard skills. We have tools like Fuse, Udemy and Rosetta Stone. This picture shows a scene from my live tutoring session on English. I have a dream to work in a foreign country and I invest to excel my communication skills. Having such an opportunity in PMI not only contributes to my development but also opens the way for a sustainable future for lifelong and self-motivated learning.

 

Creating a sustainable office environment strengthens our core smoke-free vision with an ever-developing approach to sustainability. Our office in Istanbul is a living, breathing ecosystem set within an urban environment. Our workplace has plenty of space with trees and plants. They make our environment healthier and more productive. Placing plants around the office helps us to clean the air and promote natural climate control. Our trees in the garden where we get afternoon sun significantly reduce our air conditioning costs. Also, trees help to block cold winter winds, so planting coniferous keep our winter heating costs down. Simply, we implement go-green ideas in a full-green environment.

We have an inclusive and equal working environment with opportunities for everyone. As an employee of PMI, I see my company focuses on eliminating gender disparities in work environment and ensuring equal access to all levels of development for the vulnerable, including persons with disabilities. That is one of the drivers how we achieve full and productive employment and decent work for all women and men, including for persons with disabilities, and equal pay for work of equal value.

 

In PM Turkey Istanbul office, we are aware that cleaning wastewater of any kind first requires understanding its composition and particle-size distribution. From there, wastewater treatment can identify the right mix of mechanical processes, chemical water treatment and biological solutions. For sure, removing contaminants is not enough. For a truly sustainable approach, there are many ways to future-proof water treatment processes, and we are happy to share our experience in Turkey.

Sport has the power to change the world; it is a fundamental right and a powerful tool to strengthen social ties and promote sustainable development and peace, as well as solidarity and respect for all. In PM Turkiye offices we have gym where we can exercise for a healthy and sustainable life. It is open not only office days but also weekends. So we enjoy everyday as a new game day!

One of the most sustainable things people can do is to increase the physical activity for a more active life. The battle to tackle physical inactivity starts by keeping yourself fit for the action. And we have a great gym for those who want a healthier and ultimately happier planet.

In PMI, we have wide variety of learning opportunities for Sustainability. These learning plans provide a comprehensive knowledge highlighting the wide range of skills and processes that are needed to support the constructive collaboration and action required for addressing complex issues. Udemy Business is one of these tools provided to PMI employees to deep dive into Sustainability issues.

In PM Turkiye offices, we literally walk the talk: our garden is totally green and sustainable because we walk the green talk!

Gardening in a sustainable way is more economical as it involves using recycled materials, reducing the use of natural resources, and requires less maintenance. Creating a sustainable garden is what we have done in Turkey as we realized the importance of having backyards that are not only beautifully planted and well designed, but also work in partnership with green life in the city center and help to mitigate climate change.

We are not alone in the world, we share it with others, just like the turtle on the right side of the photo shares the pool with the turtle in the left side of the pool.

Life continues in a sustainable way – in the pool of our PMI office.

In order to decrease the number of hardcopy ledgers and printouts in the way of working, we benefit from digitalization through our transformation journey. Digitalization enables us to keep data in cloud instead of on paper, so that we decrease our carbon footprint as well.

Inside our office, we protect the nature by acting responsibly so that we save the green forests. Outside our office, we live in our green garden, enjoy our coffee and lunch breaks in a natural environment which feeds our mental well-being.

As we transform for good, we see it as a fundamental opportunity for innovation, growth, and purpose-led, impact-driven, long-term value creation. Accordingly, we work hard to integrate sustainability into every aspect of our business and activities. And we periodically report on sustainability and inform our investors and stakeholders.

As one of the winners of PMI’s World Clean Up Challenge 2022, our company gifted me 2 special gifts; one for individual success and one for team success. My gift was two trees for the planet. Every tree is geolocated and photographed – I can follow its story online, that’s great to follow up its growing.

I was working for PhilSA in 2014, the year that I became a father, and that summer all employees were given one olive tree seedling. One of my friends had not had the opportunity to plant, so he handed over his seedling to me as well. I went home with two seedlings in the service bus and looked after them on the balcony until the end of the week, and at the weekend I planted them in the garden of our summer house in Seferihisar, district of Izmir. The seedlings that I gave the life water to, dreaming of getting olives in the future, hugged the soil and life tightly, loved their place, started to rise, and get stronger.

 

PMI’s 2022-Q3 Results: Strong Growth Fundamentals & Exciting Future

Philip Morris International (PMI) Third Quarter 2022 Earnings Conference Call took place on 20 October 2022. As a PMI employee, I also joined the conference to take some notes and read the press release containing detailed information on PMI’s 2022 third quarter results.

Firstly, the day that earnings conference is organized marks a historic day in PMI’s journey towards a smoke-free future, with the certainty that the company will have full control of IQOS, the world’s leading smoke-free product in the United States, the world’s largest smoke-free market from April 30, 2024.

Yeni Pozisyonum Beni Heyecanlandırıyor

Pozisyon değişikliği sonrası 1 cümle ile şirketin iç iletişim kanalına hislerimi ilettim. Hatıradır, burada bulunsun...

Leadership Award for Forward Looking

I am humbled and honored to receive the Leadership Award for Forward Looking from Philip Morris International (PMI).

This award is a result of dedication to digitalization and as a Digital Workplace Champion in PMI, I see that Philip Morris International is going through a digital transformation and wants to become a digital leader. The company has embraced technology to drive efficiency and change how it develops and markets new products.

I am glad to share that my initiative to transform the hard copy stamp tax table for contracts into digitalized contract management tool with MS List is recognized as the winner in R2R category in the Innovator’s Club by IBS Global Finance. What makes me more satisfied is that there is a plan to use my notes to share with other colleagues – which means a lot for me in terms of exercising Empowering People and Meaning Creator leadership skills.

Ooops, even Philip Morris International noticed this content after I tweeted:

Strong Underlying Momentum towards Smoke Free Future: PMI's 2022-Q2 Results

Philip Morris International stock rose 4.2% on Thursday, July 21 just after Q2 2022 results were released. In this content, I will review PMI’s 2022 second quarter results and I will share some key financials and more about their drivers to make the numbers more meaningful. Since I am an employee of PMI, I prefer to use “we”, “our” and “Emmanuel” (for our CFO Babeau) in some parts of the below content.

The data used in this content are all publicly available and it does not include any investing recommendation.

Q2 2022 results reflect the exceptional one-off events that have impacted PM this year, notably the loss of earnings from Russia and Ukraine and the sharp appreciation of the U.S. dollar. Excluding these, the underlying drivers behind PM’s businesses have remained strong, and full-year 2022 outlook has been raised on an organic basis.

Before the highlights, we need to remember the announcement that PMI intends to exit the Russian market in an orderly manner, as the complexities of continuing to operate in Russia increase, such as supply chain challenges and financial and banking sector restrictions.

PMI demonstrated strong underlying momentum in the second quarter of 2022 with another quarter of positive volume supporting better-than-expected growth. Most impressive was the continued excellent IQOS performance and strong Q2 user growth of more than 1.1 million, demonstrating further acceleration compared to Q1 as device limitation and COVID restrictions continue to ease. This reflects strong momentum in the EU region, Japan and developing markets.

The proposed addition of Swedish Match would further boost our future financial profile. This is a value-creating offer for both sets of shareholders with a compelling strategic and cultural fit, providing an additional opportunity to accelerate our smoke-free future.

During Q2 2022, PMI had good volume growth and good currency-neutral revenue growth. However, EBIT growth was weaker due to margin contraction and, including currency, both revenues and EBIT fell year-on-year.

Volume growth would have been stronger except for supply chain constraints, and the margin contraction was also due to one-off factors.

Let’s dive deep into the stories behind these numbers and ratios.

In 2021, Ukraine accounted for around 2% of PMI’s total cigarette and heated tobacco unit shipment volume and under 2% of PMI’s total net revenues.

In 2021, Russia made up almost 10% of total shipment volumes and around 6% of PMI net revenues.

Despite the impact of war in Ukraine, PMI increased its shipment volume by 1.1% compared to previous year.

Net revenues increased by 5.3% and this has mainly two drivers. The first one is the continued strong growth of IQOS and the second one is ongoing recovery of the combustible business. Here it is critical to keep in mind that the recovery is realized against a pandemic-affected comparison.

When we look at the revenue per unit, we see an increase by 4.1% in total. This increase is especially important because this year there is a delayed timing of shipments, as the company manages the cancellation of planned heated tobacco unit manufacturing in Russia and company faces disruptions in global supply chains generally.

Our operating income margin declined, and this reflected:

Firstly, the investment to further expand and match the speed of PMI's smoke-free portfolio growth, including the initial higher cost of ILUMA devices and heated tobacco units, and the replenishment of distribution channels as device constraints ease to support re-accelerating IQOS user growth;

Secondly, the impact of supply chain extra costs, notably due to the war in Ukraine; and

Thirdly, cost inflation driven by the global pandemic recovery and by the war in Ukraine, notably for certain direct materials, wages, energy and transportation costs.

Lastly, the decline also reflected a challenging prior year comparison, which included productivity savings.

When we look at the assumptions for the next two quarters;

In the third quarter, it is expected that IQOS and combustible volume trends will lead the top line growth.

There are some temporary headwinds which not only impacted PMI but also the whole World and the expectation is that these will ease in third quarter.

And in the last quarter of this year, HTU capacity problems will be better, so shipment volumes for HTU will increase as well.

One of the key updates in last quarter for PMI was its interest in Swedish Match.

Philip Morris International is in takeover talks with Swedish Match over a multibillion-dollar deal that would expand its smoke-free business.

In May, 2022, Philip Morris Holland Holdings B.V. (PMHH), an affiliate of PMI, announced a recommended public offer to the shareholders of Swedish Match to tender all shares in Swedish Match to Philip Morris Holland Holdings at a price of almost 16 billion USD in cash.

This alignment is strategic because it has the potential to create a global smoke free champion with PMI’s leading heated tobacco and Swedish Match’s oral nicotine brands. It will also open US market for PMI with nicotine pouch which has long term opportunities for smoke free categories. But the deal is not completed yet and PMI announces that the transaction is expected to close in the last quarter of this year.

To sum up:

Across H1 as a whole, total shipment growth was strong.

IQOS’ growth was helped by the new ILUMA device.

Combustible products perform well to support smoke-free transformation.

PMI is focused on its smoke free portfolio. IQOS will continue its dominance of the Heat-Not-Burn ("HNB") category, to grow strongly in Europe and remain at least stable in Japan. PMI has also launched its own e-vapor products since 2020 and has entered the nicotine pouch market with its own products on a limited scale.

Management comments reiterated their “unwavering” commitment to the dividend and hinted at the possibility of increasing it with cashflows from Swedish Match after deal close.

In conclusion, PMI provides positive updates for its investors which make the share prices increase.

Smart investors and analysts are focused on how to earn returns and how to cash out. 

Investors and analysts make decisions by asking critical Questions. That’s why I prefer to give a special part for Q&A session from the Investors’ Meeting. The key Questions are on IQOS new user momentum, Swedish Match acquisition, OI Margin decrease, menthol ban in Heat Not Burn Products and reintroducing IQOS in the US market.

The first question is about the strong IQOS new user momentum.

According to Emmanuel, our CFO, People realize all the benefits they can get by switching from combustible cigarettes to the IQOS product.

Emmanuel also states that we are enlarging the choice and that makes IQOS even more desirable and attractive.

Additionally, Emmanuel highlights that launching ILUMA is the second stage of the rocket in the various countries to sell IQOS even higher, so it brings momentum. This can also easily be seen in the above graph.

The second question is about Swedish Match transaction and other potential acquisitions.

Emmanuel highlights that we continue to expect the closing of the transaction in Q4, of course, subject to Swedish Match shareholder acceptance.

He also mentions that the priority and the focus in terms of acquisitions is on Swedish Match for the time being.

The third question is about the decrease in the margins and its relationship with the higher costs of ILUMA and HTUs and if this situation will continue or not.

Our CFO says that inflation is one of the headwinds on the margin. Also, there are costs that are coming from the disruption in the supply chain, notably coming from the war in Ukraine.

Moreover, there is a temporary acceleration of air freight charges. Emmanuel mentions that We're not going to keep air shipping on the long term.

In conclusion, inflation and other headwinds seen in Half One are temporary from PMI perspective.

The fourth question is about the full availability of devices when there is chip shortage.

Emmanuel states that it is crucial for smokers to have Access to IQOS device in order to get converted. He mentions that we see a rapid replacement of existing IQOS blade device by IQOS ILUMA in the markets where ILUMA is launched. So, the main objective is to equip the core consumer with new devices. According to Emmanuel, this temporary shortage will finalize so its temporary impact on the margin will be cleared.

The fifth question is about the impact of the proposed elimination of menthol variants in the EU for heat-not-burn products.

Emmanuel highlights the facts that this plan needs to be approved by the Parliament and by the European Council. Emmanuel reminds that it already has happened on a combustible business with almost no impact or very limited impact. So, it isn't clear that this will have a meaningful impact if it happens on our heat-not-burn business.

The sixth question is about the timing of reintroducing IQOS into the marketplace in the US.

For those who are not aware of the latest IQOS situation in the US market, in November 2021, PM USA had to remove IQOS from the market due to an import ban and (cease-and-desist) orders from the U.S. International Trade Commission (ITC). Altria, which runs Philip Morris USA, announced it “does not expect to have access to IQOS devices” in 2022, but “remains focused on returning IQOS to the market and is working on re-entry plans.” 

Emmanuel only shares with the analysts that we expect to be in a position to introduce IQOS in H1 of 2023.

The last question is about Russia, mainly exporting IQOS devices to Russia and taking cash out of Russia for dividend payments are questioned.

Our CFO shares that there is no sanction for device export to Russia. Thus, although there are some limitations coming from supply chain related problems, exportation is not impacted.

For dividend Payment, it is not exercised by PMI so Emmanuel could not provide an answer about it. On the other hand, intercompany payments and royalties are paid without any problem.

All these announcements, investments and financials support PMI’s ambition to become a majority smoke-free product company by 2025, building on its 2016 commitment to a smoke-free future.