Tag: Philip Morris International

PMI Moves its Head Office to Connecticut

Photo: adempercem
Philip Morris International will relocate its corporate headquarters to Connecticut from New York. The new headquarters is expected to be operational by summer 2022.
“Connecticut offers a valuable mix of technological know-how, future-forward thinking and an open-minded approach to problem-solving,” said Jacek Olczak, CEO of PMI, in a statement. “We consider it an ideal location for our new U.S. head office, where we will be working to more quickly achieve our vision of a smoke-free future. We are excited about what the state has to offer our company, our employees and their families—and we very much look forward to integrating into the community in a meaningful way.”
“We are amid a profound transformation at PMI,” continued Olczak, “and our new base in Connecticut will serve to accelerate our progress. Beyond replacing cigarettes with better alternatives, we intend to draw on our expertise in life and medical sciences to develop solutions in areas that include respiratory drug delivery and botanicals. Through our product innovations, sustainability leadership, people-centered employment practices and community involvement, we intend to be a source of pride for the state.”

Connecticut offers a valuable mix of technological know-how, future-forward thinking and an open-minded approach to problem-solving.
Jacek Olczak, CEO, PMI
The new office—which is also PMI’s headquarters—will house the Americas teams and members of other corporate functions. PMI’s Operations Center will remain in Lausanne, Switzerland, to continue to support the business across the globe. The company employs a workforce of more than 71,000 worldwide.
The move, which was facilitated with the support of Connecticut Governor Ned Lamont’s office, will bring approximately 200 jobs to the state. “We are excited to welcome PMI to the state of Connecticut, showing once again that our state is a growing and thriving ecosystem for businesses,” said Lamont.
June 22, 2021
PMI Eyes Nicotine Gum Manufacturer

Photo: Gevorg Simonyan
Philip Morris International is interested in acquiring Fertin Pharma, a manufacturer of nicotine chewing gum, according to the Financial Post.
Financial analysts said that Fertin could be valued at about €600 million ($713.5 million), including debt, in a sale. Fertin, which is the world’s biggest contract development and manufacturing organization for nicotine chewing gum, also helps produce tablets, gum and lozenges used for pain medication, vitamins, cough treatments and sleeping aids.
Fertin has more than 800 employees spread across research and manufacturing facilities in Canada, Denmark and India that produce three billion units a year, according to its website. PMI has been working to expand its nontobacco offerings amid an increasing focus on health around the world.
June 18, 2021
Mishra to Lead PMI’s Americas Division

Deepak Mishra (Photo: PMI)
Philip Morris International has appointed former Chief Strategy Officer Deepak Mishra president of its Americas region effective July 1 as part of a restructuring initiative for that division. PMI’s Americas region covers the United States, Canada and Latin America.
The new structure in the Americas will focus on three areas: strengthening PMI’s leadership in Latin America and Canada as the company accelerates toward a smoke-free future; deepening efforts with partners to commercialize reduced-risk products in the U.S.; and building a vital launchpad for the company’s “beyond nicotine” strategy in the U.S. in coordination with PMI’s life sciences group through expanded partnerships and commercial deployment.
“I am thrilled to name Deepak Mishra, one of our top business leaders, to one of the most important roles for the future of our company,” said PMI CEO Jacek Olczak in a statement. “In less than three years with PMI, he has been instrumental in shaping our long-term strategy and bringing it to life through strategic partnerships and investments. Deepak brings to the role deep expertise in mergers and acquisitions, a likely component of our beyond nicotine strategy. He is both a visionary and a pragmatist, and I have high expectations for—and full confidence in—what he will accomplish in his new role.”
Prior to joining PMI, Mishra was managing director of portfolio operations at Centerbridge Partners, a private equity firm, where, from 2014, he led commercial, operational and digital transformations in investments in consumer services, renewable energy and distribution sectors.
Deepak brings to the role deep expertise in mergers and acquisitions, a likely component of our beyond nicotine strategy.
Jacek Olczak, CEO, PMI
Before Centerbridge, Mishra was a partner at McKinsey & Company in London. At McKinsey & Company, he was a member of the consumer goods, retail and operations leadership teams from 2001 to 2014 and supported clients in the fast-moving consumer goods, retail and private equity industries on commercial and operational transformations.
Mishra started his career as a marketing professional with Procter & Gamble in 1996 and then spent four years at Accenture’s strategy practice in India and Eastern Europe. He holds an undergraduate degree in computer science from BITS Pilani in India and a Master of Business Administration degree from the Indian Institute of Management Lucknow.

Martin King (Photo: PMI)
Martin King, who has been with PMI since 2003, most recently as CEO of PMI America and previously as chief financial officer, president of its Asia region, president of its Latin America and Canada region, and senior vice president of operations, will retire on Aug. 31, 2021. Prior to joining PMI, King served in various positions within Philip Morris USA between 1991 and 2003.
“We are deeply grateful to Martin King for his many years and many accomplishments at PMI and for the impact he has had in the U.S. in the year he spent getting the market ready for the push we plan to make in bringing both reduced-risk and, eventually, beyond nicotine products to consumers,” said Olczak. “Martin is an outstanding business leader and colleague, and we wish him the very best in the years to come.”
From July 1, PMI’s strategy and program delivery function, which formerly reported to Mishra, will report to Chief Financial Officer Emmanuel Babeau. Ankur Modi will assume the position of global head of strategy and program delivery. On Aug. 1, Reginaldo Dobrowolski will take on the role of vice president and controller, and Andreas Kurali will become deputy chief financial officer of finance transformation.
June 17, 2021
PMI to Repurchase up to $7 Billion in Shares

Photo: PMI
The board of directors of Philip Morris International (PMI) has authorized a new share repurchase program of up to $7 billion, with target spending of $5 billion to $7 billion over a three-year period expected to commence after the company’s second-quarter 2021 earnings call.
The board also declared a regular quarterly dividend of $1.20 per common share payable on July 12, 2021, to shareholders of record as of June 25, 2021. The ex-dividend date is June 24, 2021.
“Since our spinoff in March 2008, we have returned, on a cumulative basis, approximately $115 billion to our shareholders through dividends and share repurchases,” said PMI CEO Jacek Olczak in a statement.
“Our announcements today are further testament to our steadfast commitment to generously reward our shareholders as we transform into a smoke-free company.”
June 15, 2021
PMI Campaigns Against Black Market Trade

Photo: Tobacco Reporter archive
Philip Morris International (PMI) has launched a public education initiative titled United to Safeguard America from Illegal Trade to combat black market trade. Supported by a coalition of national and state private and public sector partners, the campaign will provide local officials, law enforcement and thought leaders with information and training programs to help tackle illegal trade and raise public awareness of the depth of the problem as well as the severe consequences inflicted on states and municipalities by black market profiteers.
The campaign will run through 2021 in eight states facing critical illegal trade issues: Arizona, California, Florida, Illinois, Louisiana, Michigan, Pennsylvania and Texas.
The coalition’s membership is made up of brand enforcement leaders and other organizations, including Levi Strauss & Co., Procter & Gamble Co. and the U.S. Chamber of Commerce.
“Illegal trade is a major problem that fuels serious organized criminal networks and damages our economy. No matter the commodity, these criminals will seize any opportunity to exploit markets and communities to bolster their nefarious activities,” said Martin King, CEO of PMI America. “PMI is pleased to be joined by so many cross-sector partners who are leading the fight against illegal trade and the black market criminals profiting at the expense of Americans’ security.”

Illegal trade is a major problem that fuels serious organized criminal networks and damages our economy.
Martin King, CEO, PMI America
Counterfeit and smuggled goods pose serious threats in many states, according to PMI. “The situation has only been exacerbated by the Covid-19 pandemic, with criminals seizing on opportunities to traffic all types of counterfeit and illegal products, including highly demanded personal protective equipment. Since January 2020, online counterfeited goods have jumped nearly 40 percent,” the company wrote in a press release.
“In today’s hyper-connected world, it’s only through open dialogue, cooperation and the sharing of best practices between parties in the public and private sectors as well as civil society that we can continuously improve and advance efforts against illegal trade and the criminal networks benefiting from it.”
June 9, 2021
PMI Solicits Ideas to Tackle Illegal Trade

Photo: Vitezslav Vylici
Philip Morris International (PMI) is calling for applications for the third funding round of PMI IMPACT, the global initiative supporting projects that aim to reduce or prevent illegal trade and counter its negative consequences for individuals, their families and communities. The third funding round will support a broad range of projects designed to tackle the multifaceted and multinational illicit trade—ranging from illicit tobacco products and other consumer goods to counterfeiting of pharmaceuticals and electronics—across different geographies. Now open for submissions, applicants from public, private or nonprofit organizations, including governmental organizations, international organizations, associations, academic institutions and private companies, are encouraged to submit their project proposals.
“Illicit trade knows no borders, and effective measures are needed to fight this international threat, which is a top priority for PMI as it undermines all our efforts toward delivering a smoke-free future—a future that can one day be without cigarettes,” said Alvise Giustiniani, vice president of illicit trade prevention, in a statement. “The pandemic has also impacted supply chains, border controls and cross-border interactions, and now, more than ever, we need programs like PMI IMPACT that exchange expertise and bring together organizations, ideas and solutions to eradicate illegal trade.”

The pandemic has impacted supply chains, border controls and cross-border interactions, and now, more than ever, we need programs like PMI IMPACT that exchange expertise and bring together organizations, ideas and solutions to eradicate illegal trade.
Alvise Giustiniani, vice president of illicit trade prevention, PMI
Applicants can be based anywhere; however, all proposals must address the funding round theme and focus on one of the following topics: border control; capacity building; restorative justice and victims’ protection; network engagements, awareness building and international cooperation; Covid-19 and the threat of illicit trade.
Bringing innovation and technological advancement in the fight against contraband and counterfeited goods is essential, especially in the midst of the Covid-19 pandemic, according to PMI. This is why PMI IMPACT will be open to projects aimed at limiting the threats of counterfeited and substandard vaccines, medicines, medical supplies and personal protective equipment.
Interested third parties can apply for the third funding round before one of the three deadlines for submission of applications: Sept. 15, 2021; Feb. 15, 2022; and Aug. 15, 2022.
“PMI IMPACT offers a platform for organizations to bring resolutions to tackle the problematic reality of illegal trade,” said Navi Pillay, human rights advocate and member of the PMI IMPACT expert council. “We are looking forward to evaluating the applications in the third funding round—the level of interest the initiative receives is truly remarkable. It is promising to see so many fantastic organizations working resolutely to fight illicit trade.”
June 9, 2021
PMI Releases Scientific Update
Philip Morris International (PMI) released the latest issue of its Scientific Update, a publication devoted to research efforts to develop and assess a range of smoke-free alternatives to cigarettes as well as products beyond nicotine.
In this issue, PMI reviews milestones from 2020, examines advances in multiple fields of research arising from its smoke-free product assessments and discusses the company’s new research initiatives. Announced in February of this year, these initiatives focus on products that contain neither tobacco nor nicotine, with initial areas of exploration including respiratory drug delivery and botanicals.

These efforts run in parallel to PMI’s ongoing work to phase out cigarettes by encouraging those adults who would otherwise continue to smoke to switch to less harmful smoke-free products.
“With our work in these new areas, we are looking to contribute to a better future. We have a lot to offer the world, and it would be inconsistent with our scientific mission not to use our knowledge to expand into new solutions-based areas such as respiratory drug delivery and botanical products,” said Jorge Insuasty, chief life sciences officer, in a statement. “We are leveraging those areas in which we have strong research and technology expertise to strengthen our business while making a difference for society.”
The May 2021 issue of the Scientific Update also details some of the ways in which PMI’s ongoing research is impacting various fields of science. These include developing a better understanding of the human airway, research and development on aerosols for inhalation, advancing methods in toxicology and working to minimize animal studies in scientific research, among other examples.
Several science-related milestones from 2020 are also reviewed, including the decision by the U.S. Food and Drug Administration to authorize the marketing of the IQOS tobacco-heating system as a modified-risk tobacco product with reduced exposure information. Another milestone is the creation of PMI’s Open Science online conference series, an ongoing program in which PMI scientists present their research and answer audience questions live. The next event—“The Challenge of Measuring the Use of Nicotine-Containing Products”—will take place on June 10.
May 27, 2021
PMI Reports Progress Toward ‘End of Smoking’

Photo: krsmanovic
Philip Morris International on May 18 published its Integrated Report, a comprehensive overview of the company’s environmental, social and governance (ESG) performance and its progress toward its purpose of delivering a smoke-free future.
This includes its 2025 ambitions to have switched more than 40 million adult smokers to its smoke-free products, with half from non-OECD countries, and for smoke-free products to account for more than 50 percent of PMI’s total net revenues.
Further accelerating PMI’s transformation, this year, the company introduced two new 2025 ambitions linked to its business transformation metrics: for its smoke-free products to be available in 100 markets and for at least $1 billion in annual net revenues to come from “beyond nicotine” products. The Integrated Report also outlines case studies of early indications of PMI’s smoke-free products’ impacts in markets where such products have a meaningful presence.
“I present this report with pride in what we have already achieved in just five years, such as smoke-free products accounting for nearly one-quarter of our total net revenues in 2020 from essentially zero in 2015. I also have a deep recognition of the immense work ahead. Our new ambitious goals signal our confidence in our ability to monumentally change our company’s long-term future,” said Jacek Olczak, chief executive officer, in a statement.

I present this report with pride in what we have already achieved in just five years, such as smoke-free products accounting for nearly one-quarter of our total net revenues in 2020.
Jacek Olczak, CEO, PMI
“PMI is committed to serving as an agent of change and advocate of positive values. Innovation and inclusiveness are key to solving our challenges, whether related to tobacco harm reduction, environmental impact or social impact. We aim to create a sustainable future that benefits our company, shareholders, consumers and society.”
PMI’s Integrated Report 2020 demonstrates how the organization’s strategy, governance and performance create value. To showcase impact, the company reports on progress in various ESG areas, including toward achieving its ambitious 2025 Roadmap—a set of forward-looking targets pertaining to all Tier 1 topics from PMI’s sustainability materiality assessment.
The report highlights PMI’s most material sustainability topics, including the health impacts of its products—an aspect often not captured by external ESG assessments—and describes how the company is working toward researching, developing and commercializing scientifically substantiated better alternatives to continued smoking for those adults who do not quit. It also includes a new section on the company’s business transformation—which extends beyond changing the product—and an update on its business transformation metrics (BTMs).
The company’s BTMs are a set of bespoke key performance indicators introduced in 2016 to complement its ESG disclosure. These metrics allow stakeholders to transparently assess both the pace and scale of PMI’s transformation. Since then, based on stakeholder feedback, PMI has expanded the number of metrics to 28, with three new metrics introduced in this report.
The report also outlines the company’s belief that sustainability strategy is corporate strategy and that ESG issues are business issues. Reflecting this commitment to sustainability, the global sustainability team is now part of the finance function, reporting directly to the chief financial officer. In addition, executive compensation is now more clearly linked to ESG performance, complementing the strong product transformation incentives already in place.
“Sustainability stands at the core of PMI’s transformation and drives our development of strong ESG programs to mitigate the risks associated with our value chain while spurring innovation and growth to secure our success over the long term,” said Emmanuel Babeau, chief financial officer. “It is our firm belief that sustainability and corporate performance do not follow separate paths, and I am proud that we have spent the last year continuing to strengthen our sustainability governance and ensuring that ESG is integrated into decision-making at all levels of our organization.”

I am proud that we have spent the last year continuing to strengthen our sustainability governance and ensuring that ESG is integrated into decision-making at all levels of our organization.
Emmanuel Babeau, CFO, PMI
Acknowledging the unique and difficult challenges of the past year, PMI dedicated sections throughout its Integrated Report to showing how it addressed the impacts of the Covid-19 pandemic on its workers, business and value chain as well as instances where the pandemic directly affected the company’s sustainability efforts and the adjustments made in response.
“Despite the unprecedented challenges brought on by the global pandemic, we have not deviated from our efforts to show care, support those in our orbit and continue our quest to become a more sustainable company,” said Jennifer Motles, chief sustainability officer. “As we continue to transform, stakeholder engagement and constructive dialogue remain paramount to this evolution. In 2020, multi-stakeholder partnerships were key to the significant progress we made toward addressing many of our priority sustainability topics, ranging from protecting the health and safety of our employees to safeguarding the human rights of those impacted by our business and accelerating efforts to mitigate our impact on climate change throughout our value chain.”
The report was prepared following the Integrated Reporting framework and is in accordance with the Global Reporting Initiative Standards (core option).
It aligns with the principles and standards of the U.N. Global Compact and indicates contributions to the U.N. Sustainable Development Goals and corresponding targets.
PMI’s Integrated Report addresses some recommendations of the Task Force on Climate-related Financial Disclosures, with its environmental reporting to CDP covering most of the remainder.
Despite the unprecedented challenges brought on by the global pandemic, we have not deviated from our efforts to show care, support those in our orbit and continue our quest to become a more sustainable company.
Jennifer Motles, chief sustainability officer, PMI
It also considers guidance from the Sustainability Accounting Standards Board (SASB). Furthermore, for the first time—and as a result of PMI’s business transformation—it cross-references most aspects of the SASB standards defined for technology and communications, more concretely the Hardware Standard, and it also describes alignment with some aspects of the standards developed for the healthcare industry, specifically the medical equipment and supplies standard.
Finally, the content of PMI’s Integrated Report 2020 is mapped against the 21 metrics defined by the International Business Council/World Economic Forum’s “Measuring Stakeholder Capitalism: Toward Common Metrics and Consistent Reporting of Sustainable Value Creation” white paper to further reflect the importance of stakeholders, as per PMI’s statement of purpose.
On June 2, PMI will host an ESG-focused webcast during which the company will offer additional insight into how integrating sustainability across its business creates value for its shareholders and stakeholders. PMI will also publish in the coming week an ESG Highlights document, which will provide a more data-focused executive summary of the Integrated Report and will be made available on PMI.com/investor-relations.
Stakeholders can download the full Integrated Report 2020 as well as indexes mapping the company’s disclosures to internationally recognized frameworks on PMI.com/sustainability, including details about the company’s 16 Tier 2 sustainability topics.
May 19, 2021
PMI Highlights IQOS Momentum at Forum

Jacek Olczak
Presenting at the Goldman Sachs Global Staples Forum on May 18, Philip Morris International CEO Jacek Olczak highlighted the next steps in the company’s strategy to becoming a majority smoke-free company in terms of net revenue by 2025.
Olczak highlighted IQOS’ strong and accelerating topline momentum and potentially lucrative opportunities to expand beyond nicotine into broader lifestyle/wellness markets, such as high-margin botanicals and respiratory drug delivery.
IQOS added more than 1.5 million users in the first quarter of 2021, according to Olczak—well above its historical average of 1 million new users per quarter. Robust conversions at 70 percent to 80 percent continue to dwarf the average conversion rates of many vapor products, which are in the mid-teens.
The heat-not-burn device is now available in 66 markets, with a user base of 19.1 million, of which 14 million have stopped smoking and fully converted to IQOS.
Olczak was particularly excited about the launch, scheduled for the second half of 2021, of PMI’s ILUMA IQOS product, which he believes could drive even higher conversion rates and margins as PMI continues to leverage its fixed cost base on IQOS while streamlining its customer acquisition and retention.
Olczak also reviewed management’s ongoing efforts to digitalize and simplify business processes, including PMI’s commercialization strategies around IQOS. According to him, these efforts have already yielded $60 million of gross savings in selling, general and administrative expenses toward management’s target of $1 billion in 2021–2023.
Olczak believes that PMI’s digitalization efforts will not only further reduce the cost of acquiring and retaining new users and ultimately drive more profitable growth but also accelerate conversion and customer acquisition, especially with the eventual global rollout of PMI’s digital customer experience.
Olczak also touched on PMI’s longer term opportunities beyond heat-not-burn and vaping, including nicotine pouches and next-generation devices.
Management is also looking into adjacencies, such as broader lifestyle/wellness markets, such as high-margin botanicals (including pure CBD) and respiratory drug delivery. The company aspires to achieve at least $1 billion in incremental net revenue from its beyond nicotine efforts by 2025.
Olczak expressed optimism about PMI’s competitive advantages in terms of its capabilities around product safety and efficacy and validating/substantiating scientific claims.
May 19, 2021
ITC: IQOS Infringes on Vuse Patents

Photo: JHVEPhoto
Philip Morris International’s IQOS device infringes two patents owned by British American Tobacco subsidiary Reynolds American Inc., reports Bloomberg, citing a note posted by Judge Clark Cheney on the U.S. International Trade Commission’s website.
The next step is a likely review by the full commission, which has the power to halt products at the U.S. border and is scheduled to complete the investigation by Sept. 15.
IQOS is the only heat-not-burn product authorized for sale in the U.S., where it’s sold by Altria. Last year, the U.S. Food and Drug Administration allowed the company to market IQOS as reducing consumers’ exposure to harmful chemicals found in cigarettes.
Reynolds claims PMI and Altria copied patented technology that it had developed for its Vuse Vibe and Vuse Solo vaping products, for which it’s filed for FDA approval. The company complained to the ITC in April 2020.
Altria responded with its own patent infringement claims and a separate suit against Reynolds in May. Altria also lodged petitions with the U.S. Patent and Trademark Office challenging the validity of a half-dozen Reynolds’ patents.

The judge has to make a determination on whether even temporarily removing such products is appropriate for public health and what alternatives there are for consumers.
Andre Calantzopoulos, executive chairman, PMI
Reynolds said it expects the judge will recommend an import ban, adding that the unauthorized use of its inventions “undermines our ability to invest and innovate and thereby reduce the health impact of our business.”
Philip Morris called the judge’s findings “one step in a long process that does not have an immediate effect” and it will present its position to the commission.
“BAT’s litigation in the U.S. is part of a worldwide attempt—which has been entirely unsuccessful to date—that is meant to undermine the heated-tobacco segment, where they lag far behind,” the company said.
PMI has also argued that, even if a patent violation is found, it’s not in the public’s interest to keep IQOS out of the U.S.
“The judge has to make a determination on whether even temporarily removing such products is appropriate for public health and what alternatives there are for consumers,” said PMI Executive Chairman Andre Calantzopoulos. “If we remove a product that exists, and the only alternative that people have are cigarettes, it’s a consideration of public health interest, and that has to be taken into account.”
May 18, 2021