Philip Morris International is progressing well with its business transformation in the face of consumers rising health consciousness and stern regulations to dissuade smoking. To this end, the tobacco giant has been expanding in the reduced risk products (RRPs) or smoke-free products category, evident from the success of IQOS (a heating tobacco device) that counts amongst one of the leading RRPs in the industry.

We note that net revenues from smoke-free products formed 39.3% of the company’s total revenues in fourth-quarter 2023. The company is well placed toward becoming a majority smoke-free company by 2030. Nevertheless, the company’s combustible category presently remains its major revenue contributor.

Philip Morris manufactures and sells cigarettes, other tobacco products and other nicotine-containing products outside the United States in more than 180 countries. Also, the company ships a form of its Platform 1 device sanctioned by the FDA, to Altria Group, for sale in the United States. In fact, Philip Morris shares a licensing agreement with Altria for the sale of IQOS in United States.

In Mar 2008, Philip Morris International was spun off from the Altria Group. However, Philip Morris USA, Inc. (PM USA) continues to be a subsidiary of the Altria Group.

Philip Morris participates in the profitable premium cigarette category with its Marlboro, Parliament and Virginia Slims brands; in the mid-price category with its L&M, Lark, Merit, Muratti and Philip Morris brands. Other leading international brands include Bond Street, Chesterfield, Next and Red & White.

The company is also engaged in the development and commercialization of RRPs, which generally are less harmful than cigarette smoking. The company expects that RRPs are likely to help smokers in quitting cigarette consumption.

The company reports results based on its new regional structure (unveiled in November 2022). This includes four regions including the European region, SSEA, CIS & MEA region, EA, AU & PMI DF region and the Americas. On a product basis, Philip Morris reports results under the combustible and smoke-free products categories.