HQ
Switzerland
OWNERSHIP
Publicly Traded
RANK
2
(out of 15)
FINAL SCORE
2.36
(out of 5)

Company Overview

PMI is the largest tobacco manufacturer outside of China, with products available in over 180 markets. In addition, the company is the largest player in heated tobacco, with sales in 52 markets by the end of 2019. PMI’s reduced-risk portfolio includes cartridges as well, but the product is only available in a limited number of markets. The company’s capital allocation ratio has rapidly shifted toward the company’s reduced-risk products. Significant investments were made in building up heated tobacco manufacturing capacity while R&D expenditure supports the development of three new reduced-risk product platforms in cartridges, heated tobacco, and nicotine salts.

Stance on Harm Reduction

PMI’s commitment to tobacco harm reduction states: “We’re devoted to innovative smoke-free products, and we want to lead the way in making cigarettes history.” This is supported by performance targets for reduced-risk products to account for 45% of volume shipments by 2025. However, the company also states: “For as long as significant legitimate demand for combustible tobacco exists, PMI will continue to sell such products responsibly and seek to maintain our leadership position internationally.”

Notable Performance

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Strategy and Management

PMI has made a commitment to tobacco harm reduction, sets timebound targets for the growth of reduced-risk and the reduction of high-risk products, and specifies how senior leadership performance incentives are dependent on harm reduction performance.
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Product Sales

PMI maintains its position as the second largest cigarette manufacturer worldwide and its sales balance is still heavily weighted towards cigarettes despite rapid sales growth in heated tobacco.
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Capital Allocation

PMI’s capital expenditure and R&D investments are currently almost entirely focused on supporting the company’s reduced-risk products.
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Product Offer

Even with the international reach of its heated tobacco products, PMI’s portfolio is still dominated by high-risk products which have a much lower price point compared to its reduced- risk offer.
0

Marketing

PMI has established detailed marketing principles and publicly reports violations against both internal guidelines and regulations.
0

Lobbying and Advocacy

PMI discloses its main policy positions and has a code of conduct regarding anti-bribery and lobbying regulations worldwide. However, it does not publish details of all its public policy interactions.

Net Value Sales

In 2019
High-Risk Products
81.3%
Reduced-Risk Products
18.7%

Products Offered

In 2019
High-Risk Products
6
Reduced-Risk Products
4

Capital and R&D Investment

Over 2017-2019
High-Risk Products
10.5%
Reduced-Risk Products
89.5%

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