July 31st, 2018

// Strides towards a smokeless world continue to drive positive performance for PMI but competition remains fierce, says GlobalData

Strides towards a smokeless world continue to drive positive performance for PMI but competition remains fierce, says GlobalData

Following Friday’s (27 July) announcement of Philip Morris International Inc. 2018 second quarter results, Ryan Choi, Consumer Analyst at GlobalData, a leading data and analytics company, offers his view on the company’s current progress:

“Philip Morris International Inc.’s (PMI) continued focus on their strategy to deliver a ‘smokeless world’ has led to positive second quarter results. Although competition within the heated tobacco products market is growing rapidly, PMI has a significant advantage through its well-known IQOS system and is likely to maintain it. Cigarette performance continues its downwards trajectory with overall shipment volumes in this quarter down by 1.5%.

“Despite successful strides with their leading Heated Tobacco product, IQOS, across key markets like Japan, growth has slowed down as new competitors enter the market such as Japan Tobacco with Ploom, as well as existing competition such as BAT’s Glo making positive strides as well. Forecasts remain positive for Heated Tobacco units as PMI forecasts significant growth in their in-market heated tobacco sales volume.

“Entry to the US is currently still awaiting approval from the FDA before they are able to launch IQOS into the market. On June 8th 2018, PMI submitted further research results to the FDA claiming that IQOS helps to reduce the risk of smoking related diseases and hopes that this will help them gain approval. The CEO of PMI has said that the results are encouraging. However, scepticism remains over the research methodology with some scientists claiming that it is skewed and biased.

“Cigarette shipping volume remains poor in the second quarter with the largest declines occurring within Eastern Europe, Latin America and Canada. This is partially offset by volume increases in North Africa and South East Asia, but overall worldwide shipping volume has declined. This is likely to continue in the future as PMI continues to pursue value with their Heated Tobacco products and steer away cigarettes and other smoking products.”


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