PT HM Sampoerna Tbk. Holds AGMS, Reports FY 2022 and Q1 2023 Results

Creating sustainable, long-term value for our key stakeholders for 110 years and beyond

Jakarta, 9 June 2023 – PT HM Sampoerna Tbk. (Sampoerna/IDX: HMSP) announced its 2022 results, reporting Rp111.2 trillion in net sales in 2022, up by 12.5% from Rp98.9 trillion in 2021, boosted by a total sales volume of 86.8 billion units, or up by 4.8% from the previous year. The sales volume increase was driven by premium brands across key segments: Sampoerna A, Dji Sam Soe, and Marlboro.

“The combination of COVID-19 with the impact of the double-digit excise tax increases and widening excise tax gaps has resulted in major challenges for the tobacco industry but Sampoerna remained focused on creating values for its stakeholders. We evolved our strategy in a forward-looking way and delivered a robust topline performance in 2022 with year-on-year volume growth and stabilization of market share despite the headwinds and accelerated down-trading to the lower-taxed Below Volume Tier 1 segment. We also reached a critical strategic milestone with our smoke-free products manufacturing facility in Karawang with an investment valued at more than US$186 million, which started operations in the fourth quarter of 2022 to fulfill demands both for the domestic market and Asia Pacific. This is a major step in providing scientifically substantiated, smoke-free products that, although not risk-free, represent better alternatives for adult smokers who would otherwise continue to smoke,” said Sampoerna President Director, Vassilis Gkatzelis, at the Annual General Meeting of Shareholders (9/6/2023).

“The performance in 2022 reflected our solid business fundamentals, with a strong brand portfolio in the machine-made and hand-rolled cigarette segments, robust route to market, and resilient organization. Although profitability decreased on a yearly basis and is still significantly lower versus the pre-pandemic levels, key profitability metrics improved during the second half of 2022, both sequentially versus the first half and the year before, driven by returning to net positive pricing as of the third quarter of 2022. The positive momentum continued in the first quarter of 2023 with Rp27 trillion in net revenues and Rp2.2 trillion in net profit, or up by 3.1% and by 12.8%, respectively, compared to the same period last year,” said Vassilis. In this first quarter of 2023, Sampoerna grew its market share to 28.5%, or up by 0.2 percentage points compared to Q1-2022.

Sampoerna always strives to deliver its commitment to ensuring good returns to shareholders, whence during the AGMS, the company announced a dividend payout total of more than Rp6.362 trillion of the company’s retained earnings for the financial year ended on December 31, 2022, with 100% dividend payout ratio or Rp 54.7 per share.

“We appreciate the Indonesian government’s decision to issue the multi-year Tobacco Products Excise Policy for 2023-2024 that provides business certainty. We certainly wish the government issues future policies that can support the sustainability of the tobacco industry and enable economic recovery to pre-pandemic levels,” said Vassilis.

He further added that a predictable environment is key when it comes to delivering sustainable value creation for the broader ecosystem, especially for long-standing investors in the country. “I am proud to share that early this year Sampoerna completed its investment in building a production facility for the innovative smoke-free tobacco products in Karawang, West Java. Additionally, we recently launched the latest technology and innovation of smoke-free tobacco products, namely IQOS ILUMA, through the continuation of IQOS Club with a limited launch in 10 major cities in Indonesia. These are key milestones to mark Sampoerna’s 110 years of presence in the country,” Vassilis said.

Philip Morris International (PMI), Sampoerna’s parent company, has developed a range of innovative smoke-free tobacco products, without the combustion process, to introduce better alternatives for adult smokers who decide to continue using tobacco products or other nicotine products. One of the smoke-free products introduced in Indonesia is a heated tobacco system called IQOS, with the heated tobacco sticks produced by Sampoerna. Indonesia's innovative smoke-free tobacco production facility for heated tobacco sticks is PMI’s first in Southeast Asia and the seventh globally. The realization of this investment is part of Sampoerna’s efforts to support the government's priorities in encouraging investment, increasing exports of finished goods, and the industry down-streaming.

“Sampoerna’s investment is a vote of confidence in the investment climate of Indonesia. The new factory in Karawang entails further value creation by increasing research capacity, absorbing high-skilled workers, purchasing local tobacco supplies, operating digital service centers, improving export performance, and empowering MSMEs which includes digitalization support and increasing the capacity of traditional retailers,” said Vassilis.

As a major investor, employer, and leading company in Indonesia’s tobacco industry and the broader ecosystem, this year, Sampoerna is celebrating 110 years of its operations in Indonesia. The Company has always been committed to creating sustainable, long-term value for its key stakeholders: adult consumers, employees and business partners, and society at large. This is evident with, among many others, the employment of more than 66,000 direct and indirect employees, the operations of seven owned production facilities, and 38 more production facilities in partnership with Third-Party Operators (TPO) owned by entrepreneurs and local cooperatives. Through its suppliers, Sampoerna also conducts partnership programs with 22,000 local tobacco and clove farmers to ensure high-quality materials for its production.

"Sampoerna's 110 years of operations in Indonesia adhere to the Sustainability Principles that have adopted the Environmental, Social, and Governance (ESG) framework. This framework is integrated into each of our activities through the umbrella program "Sampoerna for Indonesia" to ensure our role in environmental sustainability and programs that have real social impacts such as programs with MSMEs and partner farmers. We believe through mutual collaboration (gotong royong) among all stakeholders, we can create a sustainable future for Sampoerna and continue to play an active role in Indonesia’s development,” concluded Vassilis.


About PT HM Sampoerna Tbk. (Sampoerna)

Founded in 1913, Sampoerna –an affiliate of Philip Morris International Inc.– is the leading tobacco company in Indonesia that manufactures and trades kretek (clove) cigarettes. Sampoerna produces several well-known kretek brands such as Sampoerna A, the legendary “King of Kretek” Dji Sam Soe, and Sampoerna Kretek. Sampoerna also distributes Marlboro brand cigarettes throughout Indonesia through a long-term distribution agreement with PT Philip Morris Indonesia.

Sampoerna operates seven owned production facilities, including producing innovative smoke-free products, in Surabaya, Pasuruan, Probolinggo, Malang, and Karawang. Sampoerna also partners with 38 Third Party Operators all over Java, which employs –directly and indirectly– more than 66,000 employees, mostly in the production of hand-rolled kretek cigarettes. Sampoerna distributes the product through 109 sales and distribution offices throughout Indonesia.

Sampoerna is a publicly listed company on the Indonesia Stock Exchange. Sampoerna's stocks are traded with code “HMSP”.

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Media Contact:

Reza Juniarshah
Head of Corporate Communications
PT HM Sampoerna Tbk.