How Do They Make Money?

Philip Morris International Inc's current product portfolio primarily consists of cigarettes and smoke-free products, which include heat-not-burn, vapor, and oral nicotine products. Since 2008, they have invested $12.5 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This is pretty bold considering they are still firmly in the cigarette market space. Marlboro, the world’s best-selling international cigarette, which accounted for approximately 39% of their total 2023 cigarette shipment volume.

For 2023, smoke free product Net revenue was 36.5% of total sales. Market Share of (PMI) HTUs1, heated tobacco units, in IQOS Markets is 9.1%.

IQOS is a tobacco heating system that uses tobacco that is wrapped in a special paper to deliver nicotine to users. These so-called "heatsticks" are heated up inside the IQOS and nicotine is released with other tobacco components and flavors for users to inhale.

Total cigarette and HTU market share increased by 0.6 percentage points, to 28.3% of the international market. However, operating cash flow decreased by 14.8%, to $9.2 billion. On a currency-neutral basis, operating cash flow decreased by 2.8%, notably due to higher working capital requirements.

The company's acquisition of Swedish Match, an already leading nicotine pouch franchise in the U.S. under the ZYN brand name. The Swedish Match product portfolio is complementary to their existing smoke-free portfolio, permitting them to bring together a leading oral nicotine product with the leading heat-not-burn product. By joining forces with Swedish Match, they expect to accelerate the achievement of a smoke-free future.