Despite net revenues dropping by 2.6 per cent the operating income was up 16.3 per cent compared to the third quarter in 2019 and PMI said that the results had exceeded previous expectations. “We delivered stronger-than-anticipated results in the third quarter, despite the ongoing challenges of the pandemic, with adjusted diluted EPS growth of 5.6 per cent on an organic basis," said André Calantzopoulos, Chief Executive Officer.
In the cigarette and heated tobacco sector, PMI sold a total of 184.4 billion units worldwide during its third quarter which was 7.6 per cent less than in the third quarter of 2019. Whilst the number of cigarettes shipped decreased from 184.5 billion sticks to 165.4 billion sticks, the amount of heated tobacco units continued to increase by 18.7 per cent from 16 billion to 19 billion units.
Market share for heated tobacco units in IQOS markets (excluding the US) went up by 1.5 points to 6 per cent. "The sustained momentum of IQOS was excellent, with an estimated 16.4 million total users at the end of September and smoke-free products accounting for nearly one-fourth of our total net revenues in the quarter. Furthermore, our combustible tobacco business recorded an improved sequential performance, supported by better underlying total industry volumes across both developed and emerging markets,” said Calantzopoulos.
With regard to the ongoing coronavirus pandemic, the press release also stated, “PMI has sufficient access to the inputs for its products and is not facing any significant business continuity issues with respect to key suppliers. The large majority of PMI's manufacturing facilities globally are currently operational, including all heated tobacco unit factories. Certain cigarette production facilities—accounting for less than 5 per cent of PMI's total cigarette production capacity worldwide—are temporarily impacted by government-mandated shutdowns or production limitations.”