Philip Morris

Here is some historical data on $BATS (-0.24%)
$PM (+0.48%)
$MO (+0.78%) and what I expect for 2024.

As BAT only has an HY report, the egg estimate for 2024 is somewhat inaccurate.

I find it interesting that BAT's alternative products have been ignored for years, even though they have been solidly positioned since 2018.

Mind you, this is about volume and not sales in general.

The losses at Altria and BAT in cigarettes are due to the generally declining US market. In the case of Philip Morris, I am even assuming stable volumes with a good probability of growth.

BAT at HP will stagnate if not shrink unless something fundamental changes in HY2. With HILO, if the attack on the premium segment succeeds, the volume should increase again. Phillip Morris is very likely to make substantial gains again.

At BAT, I expect some stagnation in the vapor segment; the big problem here is also the US market, where the unregulated segment continues to eat into market share. Altria can scale NJOY better due to its low market share and should end the year satisfactorily.

In the modern oral segment, Philip Morris and BAT should be particularly convincing. How much Altria ultimately grows depends on how much it can maintain the market share it has gained now that ZYN no longer has supply problems.

Due to the strong volume growth,

Philip Morris to increase RRP's revenue share from 13% in 2018 to >35% in 2024,

BAT from 3.7% to >13%,

Altria (with Copenhagen) 8.9% to 11% (without Copenhagen) <4%.

The main catalysts for volume growth in the future are the IQOS USA launch, VEEV launch in Europe, global ZYN launch, HILO launch, Velo product innovations, action against unregulated vapes, Ploom and SWIC USA launch.

These catalysts should all be in full swing by the end of 2025 and show success in 2026.

How much does ZYN dominate the nicotine pouch market in the USA? $PM (+0.48%)

Now we have an answer in the form of another moronic lawsuit. Swedish Match North America is now accused of having created a monopoly in the nicotine pouch market. According to the court, SMNA has an 80% market share.

Still had a small part in $PM (+0.48%) left (+33.25% profit💸) and took the opportunity to open my position at $HIMS (-1.68%) I wanted to open my position months ago but never had the capital... the savings plan will start on Monday. 🚀

Let's see what happens?

It was an honor for me (over 40% plus). Slowly but surely I am reducing tobacco from my portfolio as an individual position. I still have $MO (+0.78%)
$BATS (-0.24%) and $IMB (+0.56%)

More information here.

The lawsuit will affect the global operating business of $PM (+0.48%) and $BATS (-0.24%) hardly or not at all.

• The settlement must be paid off by the Canadian Cigarette Subsidiaries.
• The SFB in Canada will not be affected.
• The cigarette business outside Canada will also not be affected.

The nice thing about this is that the Canadian cigarette business is already practically "worthless". So it has no impact on long term growth anyway.

https://www.fitchratings.com/research/corporate-finance/fitch-ratings-neutral-impact-for-pmi-bat-from-canadian-lawsuit-proposed-settlement-24-10-2024

The United Kingdom bans disposable vapes.

Deadline for suppliers is June 1, 2025.

https://www.bbc.co.uk/newsround/articles/c079ej42y07o#:~:text=The%20sale%20and%20use%20of,children's%20health%20and%20the%20environment.

France has also recently introduced a ban on disposable vapes, which will come into force on January 1, 2025.

$PM (+0.48%)
$BATS (-0.24%)

Japan Tobacco $2914 (-0.67%)
re-enters the South Korean HTU market.

The Group withdrew from South Korea in 2021. The market is now controlled by $PM (+0.48%) and KT&G $033780 which have around 90% of the market share, with the remainder falling to $BATS (-0.24%) . Now JT wants to re-enter the market with ploom x (which will most likely also be the platform for $MO (+0.78%) in the USA) to re-enter the market.

This should be quite interesting as it will test brand loyalty. It is not yet clear whether loyalty to HTU products is as high as for cigarettes.

The FDA has seized 3 million illegal vapes worth about 76 million dollars.

https://www.fda.gov/news-events/press-announcements/76-million-illegal-e-cigarettes-seized-joint-federal-operation

I hope that many more seizures will follow.

$MO (+0.78%)
$PM (+0.48%)
$BATS (-0.24%)

Why $MO (+0.78%) is now also rising is a mystery to me.

• No exposure to the stabilizing / slightly growing international cigarette market.
• No exposure to the growing international HTU market.
• No exposure to the growing international nicotine pouch market.
• No exposure to emerging markets.

So no exposure to what made the $PM (+0.48%) made the numbers so good.

Philip Morris International $PM (+0.48%)
Q3 Earnings 2024

Volume in billion

Total: 203 units +2.9%

HTU: 35.3 sticks +8.9%

Oral: 4.4 pouches +22.2%

Cigarettes: 163.2 sticks +1.2%

Volume Oral in Mln Cans

Nicotine pouches: 164.6 +43.6% (3 months) +55.8% (9 months)

Snus: 61.3 +1.6% +1.7%

Moist snuff: 34.1 +2.6% +0.1%

Sales Q3 in Mln

Total: 9900$ +8.4% reported +11.6% organic

SFB: 3800$ +14.2% +16.8%

Combustibles: 6100$ +5.2% +8.6%

Proportional

SFB: 38%

Combustibles: 62%

Gross Profit

Total: 6500$ +9.5% +13%

SFB: 2600$ +15.9% +20.2%

Combustibles: 3900& +5.7% +8.7%

Proportionate

SFB: 40%

Combustibles: 60%

Operating income

Total: 3700$ +8.4% + 13.8%

EPS

Reported: 1.97$ +49%

Adjusted: 1,91$ +14,4%

Adjusted ex currency: 1.97$ +18%

Total industry volume (HTU & cigarettes) shows an increase of 1.3% (3 months) 1.2% (9 months). The international market appears to be not only stabilizing but also growing slightly.

HTU

IQOS is now the second largest nicotine brand in the world and continues to expand its market share.

E-Vapor

Veev has sold around 1.3 billion sticks (1ml = 10 sticks) since the beginning of the year.

Oral

The supply problems seem to be easing and sales are normalizing. Outside the USA, the volume has even increased by 70%. Zyn is now active in 30 markets.

Combustibles

Marlboro has the highest market share since the spin-off in 2008.

I am more than satisfied with the results. It's nice to see how profitable SFB is (70% gross profit margin). I am sure that Q4 will be similarly good.

PM now stands for Printing Money