#1IQOS THIS CHANGES EVERYTHING REDUCED RISK PRODUCTS RRP#2RRP Vision THE TIMES James Ashton October 23 2016, 12:01am, The Sunday Times INTERVIEW One day I hope we won't sell cigarettes, says Marlboro boss Philip Morris chief André Calantzopoulos is puffing up his 'reduced-risk' product. But will the public health lobby listen? André Calantzopoulos, pictured at Philip Morris's HQ overlooking Lake Geneva in Lausanne, Switzerland: "I know what a smoker goes through TOM STOCKILL REDUCED RISK PRODUCTS JOIN NOW LOG IN ,,I believe that there will come a moment in time where we have sufficient adoption of this alternative product and sufficient awareness to start envisaging - together with governments - a phase-out period for cigarettes." André Calantzopoulos RRP 2#3Reduced-Risk Products ("RRPs") refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continued smoking. We have a range of RRPs in various stages of development, scientific assessment and commercialization. Because our RRPS do not burn tobacco, they produce far lower quantities of harmful and potentially harmful compounds than found in cigarette smoke. REDUCED RISK PRODUCTS RRP 3#4RRP Platforms* P1 Inos SOD IQOS P2 P3 P4 Includes an electronic holder and a tobacco product • Maintaining tobacco temperature below combustion . Gold platinum and ceramic heat blade • Rechargeable Lithium-ion battery Exclusively designed tobacco heatsticks HEETS FROM MARLBORO and HEETS • Tobacco blends and flavor systems developed to suit lower operating temperature REDUCED RISK PRODUCTS • Carbon heated tobacco • No device • Single use disposable product Closest to the combustible cigarette ritual Similar aerosol properties as P1 • • Alternative way to deliver nicotine Aerosol formed by chemical reaction with nicotine • No tobacco • No exhaled smoke • Disposable Consumables • E-vapor product that generates nicotine- containing aerosols without combustion • Does not contain tobacco, but a battery-powered devices that vaporizes nicotine liquid to create an inhalable aerosol. RRP 4 *The Board of Directors of Philip Morris ČR a.s. will assess and decide which of the remaining platforms should be launched in the Czech Republic and the executives of Philip Morris Slovakia s.r.o. will assess and decide which of the remaining platforms should be launched in Slovakia on the basis of consumer demand and market developments concerning the RRPS on these markets.#5Launch of IQOS in the Czech Republic and in Slovakia Philip Morris ČR a.s. intends to launch HEETS FROM MARLBORO and IQOS in the Czech Republic and Philip Morris Slovakia s.r.o. intends to launch HEETS and IQOS in Slovakia in the second half of 2017. REDUCED RISK PRODUCTS RRP 5#6IQOSHEETS FROM MARLBORO R sobi REDUCED RISK PRODUCTS ....- 1009 sobi HEETS FROM MARLBORO Tento tabákový výro Vašemu zdraví a je r HEETS FROM MARLBORO Tento tabákový výrobe Vašemu zdraví a je náv HEETS FROM MARLBORO Tento tabákový výrobek škodí Vašemu zdraví a je návykový. RRP 6#7• • IQOS benefits IQOS heats tobacco instead of burning it and produces a tobacco based aerosol that provides real tobacco taste and satisfaction while reducing the levels of harmful and potentially harmful chemicals generated on average by 90 - 95% compared to the smoke of a standard reference cigarette, designed for scientific research purposes.* Based on the scientific evidence so far, switching completely to IQOS is likely to present less risk of harm than continuing to smoke cigarettes and, therefore, it is a better choice than smoking cigarettes. Important information: this does not mean that IQOS is risk-free. Please log on to www.pmi.com or www.pmiscience.com to find more information on IQOS and also on www.svetbezkoure.cz, which is coming soon. * Average of the reductions in the concentrations (weight per stick) of individual HPHCs measured in the IQOS aerosol compared to the smoke from a standard 9.4 mg 'tar' reference cigarette (3R4F). Aerosol and smoke collections performed under the Health Canada Intense machine- smoking regime (55 mL puff volume, 2 second puff duration, 30 second interval puff). Reduction calculations exclude nicotine. REDUCED RISK PRODUCTS RRP 7#8IQOS - Regulatory environment . IQOS notification Notification to launch HEETS FROM MARLBORO and IQOS has been submitted to the competent Czech authorities and notification to launch HEETS and IQOS has been submitted to the competent Slovak authorities in accordance with applicable legislation. HEETS FROM MARLBORO and HEETS will be launched as smokeless tobacco products: - HW size: 30% - HW text:,,This tobacco product damages your health and is addictive." REDUCED RISK PRODUCTS RRP 8#9IQOS - Excise tax • . Czech Republic HEETS FROM MARLBORO are not subject to excise tax under Act no. 353/2003 Coll. on excise taxes, as amended (the product cannot be smoked as is) Ministry of Finance is working on the draft amendment to the Excise Tax Act, which would tax heated tobacco products. We expect the legislative process to start in autumn 2017. Slovakia As of 1 May 2017 HEETS are subject to excise tax as a smokeless tobacco product under Act no. 106/2004 Coll. on Tobacco Excise Tax, as amended • Excise tax per weight 76.70 EUR/kg tobacco in a smokeless tobacco product RRP 9 REDUCED RISK PRODUCTS#10IQOS THIS CHANGES EVERYTHING REDUCED RISK PRODUCTS RRP 10