Philip Morris International advertising & marketing assignments

Profile subscribers click here for full profile

Philip Morris International (PMI) is the biggest tobacco company outside the United States and China, with a portfolio which includes global titans Marlboro and L&M - the #1 and #3 cigarette brands worldwide - as well as Chesterfield, Philip Morris, Parliament and Bond Street and numerous important local brands including Indonesia's Sampoerna and Dji Sam Soe. Operating in around 180 countries, it is the overall global #2 (after state-operated CNTC of China). Excluding the US and China (it has no operations in either country), PMI had 27.7% global share of the tobacco sector in 2020. Nevertheless, the company has vowed to work towards the gradual elimination of conventional cigarettes in favour of less harmful smoke-free alternatives. Key to this goal is the continuing roll-out of the hybrid electronic device IQOS, first launched in Japan and selected European cities in 2015, and expanded to 44 countries by the end of 2018. This claims to reduce the harmful by-products of traditional tobacco products by 95%, by heating rather than burning the dried leaf to create a nicotine vapour. IQOS uses tobacco units marketed under the Heets brand, including as Heets Marlboro. In further moves away from tobacco it agreed, in a controversial move, to acquire British inhaled medicine developer Vectura in 2021 for £1bn, and is in negotations in 2022 to purchase smokeless tobacco rival Swedish Match for as much as $16bn. PMI is now a standalone company, spun off from parent group Altria in 2008, and entirely separate from Philip Morris USA which manages Marlboro and other brands in the United States. Under the terms of its separation from Philip Morris USA, PMI is prohibited from establishing a presence in the United States. However, it can conduct business elsewhere in North America, and in 2008 agreed to acquire Rothmans of Canada, giving it more than one-third share of the tobacco market in that country. It also agreed a deal with its former sibling to license the IQOS brand to Philip Morris USA for local distribution. Net revenues (after excise) for 2020 were $28.7bn (or $76.0bn including excise tax), with net income of almost $8.1bn, a very healthy 28% profit margin. Revenues from IQOS and other so-called reduced risk products were almost $6.8bn, up 21% on the year before. The EMEA region accounts for 60% of sales, and the EU alone for over a third. Marlboro accounted for 37% of total cigarette volumes, which fell by 11% to 628.5bn units in 2020. Heated tobacco volumes rose 28% to 76bn units. André Calantzopoulos was succeeded as CEO in 2021 by Jacek Olczak.

Capsule checked 31st March 2021

Adbrands Account Assignments is a database tracking account management for the world's leading brands and companies. In other words, which advertising agency handles which accounts in which countries.

Who are the competitors of PMI? See Tobacco Sector for other companies

Advertising & promotional expenditure of PMI? See ranking of Declared Advertising Costs

See also

Recent stories from Adbrands Update:

Adbrands Update 11th May 2022: In its latest push beyond traditional tobacco products, PMI is to acquire Scandinavian rival Swedish Match for as much as $16bn including debt. The target company is a global leader in snus nicotine pouches, marketed in the US as ZYN and under a variety of different brands elsewhere. It also produces chewing tobacco, snuff and other smokeless products. Cigar brands include Garcia y Vega and Game.

Adbrands Daily Update 10th Aug 2021: The battle for inhaled medicine developer Vectura reached fever pitch after PMI raised its offer to 165p per share - or a total of £1.1bn - to trump private equity group Carlyle. The latter last week raised its own offer to 155p, a price that was initially accepted by Vectura. After some consideration, Carlyle declined to raise its own offer, but issued a warning to investors, asking them "to consider the broader context and the impact of each offer on the company and its wider stakeholders". Vectura's proposed purchase by a tobacco company will inevitably raise some concerns with some shareholders.

Adbrands Daily Update 13th Jul 2021: In an unexpected push beyond tobacco-related products, PMI agreed to buy British group Vectura, a pharma company specialising in inhaled medicines, for 150p per share, or a total of £1bn. That offer trumps an earlier bid from private equity investor Carlyle. PMI sees the purchase as a key pillar in its push into broader healthcare and wellness products. It also recently agreed to acquire Fertin Pharma, a manufacturer of nicotine gum, for $820m.

Adbrands Daily Update 25th Sep 2019: Talks between Altria and Philip Morris International to re-unite the two companies' tobacco businesses ended without agreement. According to reports, PMI withdrew from negotiations as a result of the sharp backlash in the US against vaping products in general, and especially the Juul business in which Altria has a large minority stake. PMI investors had already expressed unhappiness over getting dragged back into the highly litigious US market. Those fears were confirmed by the scale of the crackdown on vaping products over recent weeks following several deaths and hundreds of hospitalisations that have been linked to e-cigarettes. Several US cities or states have now banned flavoured e-cigs, while Massachusetts today announced a temporary ban on all vaping devices. The two companies will continue to work together on the US roll-out of PMI's IQOS system - which uses a different form of technology from other vaping devices.

Adbrands Daily Update 29th Aug 2019: Philip Morris International confirmed it is in advanced talks with former parent Altria to reunite the two separate Philip Morris tobacco businesses. These were split in 2008 to insulate the company's international operations against potential litigation in the US. A decade later, though, the risks of litigation have reduced and both companies are separately struggling to deal with the continuing decline in traditional tobacco consumption, while also aggressively marketing their own smoke-free "reduced risk" alternatives. PMI markets the iQOS heated tobacco system in international markets. Altria/Philip Morris USA owns the MarkTen vaping brand, acquired a large holding in high-profile e-cig brand Juul last year, and also recently gained FDA approval to begin marketing PMI's IQOS in the US under license. Any re-merger is likely to be an all-stock affair, with shareholders in PMI - the larger of the two by market value - gaining around 59% of the combined business. In all other respects, though, this would be presented as a merger of equals. Even so, neither company's investors welcomed the announcement of a possible merger, prompting a sharp sell-off of both sets of shares.

Adbrands Weekly Update 8th Dec 2016: In one of the most startling turnaround announcements for years by a major marketer, the head of the world's biggest international tobacco company has vowed to work towards the gradual elimination of conventional cigarettes in favour of less harmful alternatives. Launching the new IQOS smokeless ecig in the UK, Philip Morris International's CEO Andre Calantzopoulos told the BBC "I believe there will come a moment in time where I would say we have sufficient adoption of these alternative products to start envisaging, together with governments, a phase-out period for cigarettes. I hope this time will come soon." The IQOS system heats - but doesn't burn - actual tobacco to create a vapour, a process which appears to reduce toxins by 90% compared to conventional cigarettes. Other ecig products use a liquid derived from tobacco rather than the plant itself.

Subscribe to to access account assignments

All rights reserved © Mind Advertising Ltd 1998-2022