Philip Morris International Inc

Switzerland

OWNERSHIP

Publicly Traded

RANK

(out of 15)

FINAL SCORE

3.69

(out of 5)

Operating Environment

Philip Morris International Inc (PMI) operates in all four Index Regions, and in 32 of the 36 Index Countries. Its top five countries by Volume Sales are Indonesia, Russia, Japan, Turkey and Italy.

PMI operates across HMICs (23 Index Countries) and LMICs (nine Index Countries).

PMI’s product portfolio consists of cigarettes, heated tobacco, fine cut tobacco, cigarillos, pipe tobacco, moist snuff, closed system vaping products, snus, non-tobacco nicotine pouches and cigars.

Publicly Stated Position on Tobacco Harm Reduction

“We can make an important contribution to accelerating the end of smoking. To achieve this objective, we are dedicating the vast majority of our resources to commercializing our smoke-free products. Everyone within our organization—regardless of business function—plays a crucial role in delivering on this purpose.”
(Jacek Olczak, CEO, Integrated Report 2021)

Change Since 2020 Index

PMI’s Strategy and Management category score increased as it clarified its commitment to “purposefully phase out cigarettes”.

PMI’s Capital Allocation and Expenditure category score increased as R&D spend on RRPs increased from 98% in 2019 to 99% in 2021.

PMI’s Product Offer category score increased as PMI added Shiro non-tobacco nicotine pouches and Kapten snus to its portfolio, through the acquisition of AG Snus in May 2021.

Category Scores

Strategy & Management

PMI publicly acknowledges its role in, and has made a formal commitment to reducing, tobacco-related death and disease as part of its “Vision For a Smoke-Free Future.”

PMI has an objective related to tobacco harm reduction, and the objective is time-bound and measurable (RRPs to generate more than 50% of its total revenue by 2025).

Product Sales

PMI has the third-highest Volume Sales of HRPs (2021: 659.8 billion stick equivalents.

With 12.8% of its total volumes coming from RRPs, PMI has the fourth-highest score for Ratio of Volume Sales (RRPs versus HRPs).

Capital Allocation & Expenditure

At 99%, PMI’s allocation of R&D Expenditure on RRPs (versus its total R&D expenditure) is the highest of the Index Companies.

At 70%, PMI’s allocation of Capital Expenditure (RRPs versus HRPs) ranks it in second place.

Product Offer

PMI offers HRPs (cigarettes, fine cut tobacco, cigarillos, pipe tobacco, cigars) in 32 Index Countries, and RRPs (heated tobacco, moist snuff, non-tobacco nicotine pouches, closed system vaping products, snus) in 19 Index Countries.

In terms of product categories, PMI has five HRPs, compared to five RRPs, in its portfolio.

Marketing Policy & Compliance

PMI’s Youth Access Prevention Policy (“Combusted Tobacco Products solely for Adult Smokers” principle) is outlined in its Marketing Codes for Combusted and Non-Combusted Alternatives, which is published on PMI’s corporate website.

PMI publicly discloses numbers and details of reported violations and established breaches of its Youth Access Prevention Policy.

Lobbying & Advocacy

PMI discloses its policy positions related to tobacco harm reduction on a specific section of its corporate website (“Our Views and Standards”).

PMI does not disclose specific lobbying activities and memberships in all jurisdictions in which it operates.

Net Value Sales

In 2021

High-Risk Products

72.0%

Reduced-Risk Products

28.0%

Products Offered

In 2021

High-Risk Products

Reduced-Risk Products

Capital Allocation & Expenditure

In 2021

High-Risk Products

20.0%

Reduced-Risk Products

80.0%

ppts = Difference in percentage between 2021 and 2019