Philip Morris

How much does ZYN dominate the nicotine pouch market in the USA? $PM (+1.31%)

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 (+1.31%) left (+33.25% profit💸) and took the opportunity to open my position at $HIMS (+10.31%) 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 (+0.9%)
$BATS (+0.27%) and $IMB (-0.07%)

More information here.

The lawsuit will affect the global operating business of $PM (+1.31%) and $BATS (+0.27%) 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 (+1.31%)
$BATS (+0.27%)

Japan Tobacco $2914 (+0.51%)
re-enters the South Korean HTU market.

The Group withdrew from South Korea in 2021. The market is now controlled by $PM (+1.31%) and KT&G $033780 which have around 90% of the market share, with the remainder falling to $BATS (+0.27%) . Now JT wants to re-enter the market with ploom x (which will most likely also be the platform for $MO (+0.9%) 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 (+0.9%)
$PM (+1.31%)
$BATS (+0.27%)

Why $MO (+0.9%) 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 (+1.31%) made the numbers so good.

Philip Morris International $PM (+1.31%)
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

Philip Morris International $PM (+1.31%) will bring IQOS back to the USA this weekend.

Several events will be held in Austin Texas to connect with consumers. More information regarding the US launch is expected to be available in the Q3 Report on October 22nd.