PMI's 30% of Net Revenues Now Smoke-Free

Philip Morris reported strong fourth-quarter 2021 results, wherein both the top and the bottom line improved year over year. The company benefited from improved IQOS user growth, a better market share for cigarettes, portfolio enhancement efforts and reduced pandemic-led problems in several markets.

In 2021, total shipment volumes increased by 4.2% in Q4, and by 2.2% for the full-year. Instead of focusing the numbers and percentages, I want to highlight the key take aways from 2022 outlook:

We expect the total industry volume of cigarettes and heated tobacco units, excluding the U.S. and China, to decline between -1% and -2%. Given our leadership in smoke-free products, the structural growth of the category and its growing proportion in our business, we expect to gain share and target broadly stable total PMI shipment volumes, within a range of -1% and +1%.

In 2022, PMI still expects continued uncertainty with regard to the recovery pace from the pandemic-led operating landscape. PMI Management expects continued gradual recovery in the duty-free business outside Asia and no meaningful recovery in Asia.

Related with this year’s outlook, PMI CEO Jacek Olczak mentioned that with an improving outlook for device supply, and the initial success of ILUMA, we look forward to 2022 with excitement.

Update on IQOS in USA

In Nov 2021, an importation ban was imposed by the U.S. International Trade Commission (ITC) concerning IQOS products. These include consumables and infringing components. Consequently, IQOS is currently not available for sale in the United States. PM announced that we have contingency plans under action (such as domestic production) and expect to be able to restart the supply in the United States in the first half of 2023.

By the way, this International Trade Commission decision has no bearing outside the U.S.