≡ Menu

Advertisement


Philip Morris’ Cigarette And HTU Sales Figures 2021

IQOS and heat stick. Pixabay Image.

Philip Morris International (PMI) is one of the world’s leading tobacco companies.

While PMI is still relying largely on cigarettes, the company is steadily transitioning to non-combustible products, hoping to help smokers to switch to less-harmful alternatives.

In the transformation, Philip Morris introduced several non-combustible products, including the IQOS blade which heats up but does not burn specially designed Heated Tobacco Units or HTUs, thereby providing users a smokeless experience.

Despite the effort and investment that has been poured in during the transformation, PMI’s cigarette sales still account for nearly 90% of the company’s total shipment volume as of fiscal 2021 3Q.

Can Philip Morris succeed in transitioning from a cigarette-based to a smokeless company?

Probably.

In this article, we will look at PMI’s shipment volume for cigarettes and heated tobacco units (HTU).

For your information, heater tobacco units or HTUs refer to heated tobacco consumables such as HEETS, also known as Heatsticks in some markets.

Besides, Philip Morris’ HTUs are proprietary products that can only work on the company-produced IQOS blade.

All told, let’s head out to the following topics!

Total Cigarette Shipment Volume (Yearly)

PMI's cigarette shipment volume by year

PMI’s cigarette shipment volume by year

* Total cigarette shipment volume by year is obtained directly from PMI’s earnings release.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

On a yearly basis, Philip Morris International’s total cigarettes sales have been on a decline in the last 3 years, reaching only 628 billion units as of fiscal 2020, a year-over-year decline of 11% and a 15% decline from fiscal 2018.

The declining trend of PMI’s cigarettes shipment volume indicates that fewer smokers take up smoking over the years and some may have totally quit or switched to less-harmful alternatives such as smokeless tobacco products.

Total HTU Shipment Volume (Yearly)

PMI's HTU shipment volume by year

PMI’s HTU shipment volume by year

* Total HTU shipment volume by year is obtained directly from PMI’s earnings release.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

As mentioned, HTUs or heated tobacco units are proprietary consumables that will only work on PMI’s IQOS devices.

Some of PMI’s HTUs include HEETS which are also referred to as HeatSticks in some markets.

For a complete definition of HTUs, please head out to this article – PMI’s HEETS.

All told, Philip Morris’ HTU sales have been increasing as seen in the chart above.

The growing trend of PMI’s heated tobacco unit shipment volume is in sharp contrast with that of the cigarette shipment volume.

As of fiscal 2020, PMI’s HTU sales reached a record high of 76 billion units, a year-on-year growth of 28% and a massive 84% increment from fiscal 2018.

In view of the growing sales of heater tobacco units, is Philip Morris’ transformation strategy working? Maybe.

Let’s look at more data.

Cigarette Shipment Volume By Region (Yearly)

PMI's cigarette shipment volume by region per annum

PMI’s cigarette shipment volume by region per annum

* Cigarette shipment volume by region is obtained directly from PMI’s earnings release.
* European Union’s key markets include France, Germany, Italy, Poland, and Spain.
* Eastern Europe’s key markets include Russia.
* Middle East & Africa’s key markets include Saudi Arabia and Turkey.
* South & Southeast Asia’s key markets include Indonesia and Philippines.
* East Asia & Australia’s key markets include Australia, Japan and Korea.
* Americas’ key markets include Argentina and Mexico.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

A notable trend worth pointing out is that Philip Morris’ cigarette shipment volumes in all regions have been on a decline since fiscal 2018 as shown in the chart above.

As of fiscal 2020, PMI’s cigarette sales in all regions in the world were at record lows, illustrating the fact that smokers are quitting is real.

In terms of the breakdown of cigarette shipment volume by region, the European Union region tops the chart at more than 160 billion cigarettes sales in fiscal 2020.

The 2nd place went to the Eastern Europe region in which a total of 145 billion cigarettes sales were recorded in fiscal 2020.

The smallest market for Philip Morris’ cigarettes was in the East Asia & Australia region where the company sold only a total of 45 billion sticks in fiscal 2020.

HTU Shipment Volume By Region (Yearly)

PMI's HTU shipment volume by region per annum

PMI’s HTU shipment volume by region per annum

* HTU shipment volume by region is obtained directly from PMI’s earnings release.
* European Union’s key markets include France, Germany, Italy, Poland, and Spain.
* Eastern Europe’s key markets include Russia.
* Middle East & Africa’s key markets include Saudi Arabia and Turkey.
* South & Southeast Asia’s key markets include Indonesia and Philippines.
* East Asia & Australia’s key markets include Australia, Japan and Korea.
* Americas’ key markets includs Argentina and Mexico.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

For PMI’s heated tobacco units (HTUs) shipment volume, the East Asia & Australia region recorded the highest number among all regions at nearly 34 billion units in fiscal 2020.

While the East Asia & Australia region contributed the least number of cigarette sales to Philip Morris, it was the biggest market for the company in non-combustible or smokeless products.

Similarly, the Eastern Europe region also has been one of the biggest markets for PMI’s heated tobacco units despite having a far lower cigarettes volume.

On the contrary, Philip Morris’ HTU shipment volume in the Middle East & Africa and South & Southeast Asia regions has been literally non-existent despite recording some of the highest cigarette volumes in the same regions.

Total Cigarette Shipment Volume (Quarterly)

PMI's cigarette shipment volume by TTM

PMI’s cigarette shipment volume by TTM

* Cigarette shipment volume by quarter is presented on a TTM basis.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

On a TTM basis, Philip Morris’ cigarette shipment volume has been declining since fiscal 2018 as seen in the chart above.

As of fiscal 3Q 2021, PMI’s cigarette sales reached only 620 billion units, down 4% from a year ago.

Over the last 3 years, Philip Morris’s total cigarette shipment volume was down 16% on a TTM basis which was roughly in line with the annual results.

Total HTU Shipment Volume (Quarterly)

PMI's HTU shipment volume by TTM

PMI’s HTU shipment volume by TTM

* HTU shipment volume by quarter is presented on a TTM basis.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

On the contrary, Philip Morris’ HTU sales have been going up as seen in the chart above.

As of fiscal 3Q 2021, PMI sold a total of 90 billion HTUs on a TTM basis, a record high for the company.

Over the last 3 years, PMI’s HTU shipment volume has nearly doubled from 40 billion units reported in fiscal 4Q 2018 to slightly above 90 billion units reported in fiscal 3Q 2021.

Cigarette And HTU Shipment Volume Breakdown By Percentage

PMI's cigarette and HTU shipment volume breakdown

PMI’s cigarette and HTU shipment volume breakdown

* Percentage figures are presented on a TTM basis.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

While Philip Morris has aimed to become a smokeless tobacco company, its cigarette volume is still contributing the majority of the sales to the company.

As seen in the chart above, PMI’s cigarette shipment volume still made up 87% of total volume as of fiscal Q3 2021.

On the other hand, Philip Morris’ HTU products contributed only 12.8% of sales as of fiscal Q3 2021 to total volume.

While HTU sales made up only 13% of total volume, the percentage has grown more than doubled since fiscal 2018.

In contrast, PMI’s cigarette volume has declined considerably, going from 95% reported in fiscal 4Q 2018 to 87% in the latest quarter.

Judging from the growth of PMI’s heated tobacco units and the decline of cigarette sales, it looks like that the transformation effort has been working.

Cigarette Shipment Volume By Region (Quarterly)

PMI's cigarette shipment volume by region (TTM)

PMI’s cigarette shipment volume by region (TTM)

* Cigarette shipment volume by region is presented on a TTM basis.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* European Union’s key markets include France, Germany, Italy, Poland, and Spain.
* Eastern Europe’s key markets include Russia.
* Middle East & Africa’s key markets include Saudi Arabia and Turkey.
* South & Southeast Asia’s key markets include Indonesia and Philippines.
* East Asia & Australia’s key markets include Australia, Japan and Korea.
* Americas’ key markets includs Argentina and Mexico.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

Looking at the breakdown of PMI’s cigarette sales volume by region, one may notice that the company’s cigarette sales volumes have indeed been decreasing in all regions in the last 3 years.

For example, PMI’s European Union cigarettes sales have gone from 180 billion units to only 158 billion units on a TTM basis as of fiscal 2021 3Q, a decline of 12%.

Similarly, PMI’s cigarette shipment volume has been one of the highest in the Eastern Europe region but the figures have gone from 109 billion units to only 90 billion units as of fiscal 2021 3Q, down 17% in 3 years.

While most European regions saw a decline of more than 10%, most regions in Asia saw an even greater decline in cigarette volume.

For example, Philip Morris’ cigarette sales in the South & Southeast Asian region have gone from 178 billion units to only 142 billion units as of fiscal 3Q 2021, a decline of 20% in the last 3 years.

Similarly, Philip Morris shipped 23% fewer cigarettes in East Asia and Australia region as of fiscal 3Q 2021 compared to 3 years ago.

HTU Shipment Volume By Region (Quarterly)

PMI's HTU shipment volume by region (TTM)

PMI’s HTU shipment volume by region (TTM)

* HTU shipment volume by region is presented on a TTM basis.
* TTM data consists of the sum of the quarterly data on a trailing 12-month or 4-quarter basis.
* European Union’s key markets include France, Germany, Italy, Poland, and Spain.
* Eastern Europe’s key markets include Russia.
* Middle East & Africa’s key markets include Saudi Arabia and Turkey.
* South & Southeast Asia’s key markets include Indonesia and Philippines.
* East Asia & Australia’s key markets include Australia, Japan and Korea.
* Americas’ key markets includs Argentina and Mexico.
* PMI’s fiscal year begins on Jan 1 and ends on Dec 31.

A first look at the chart shows that not all regions recorded a growth in HTU shipment volume in the last 3 years.

For example, Philip Morris sold significantly fewer HTUs in the Middle East & Africa region.

Similarly, Philip Morris’ HTU shipment volume in the South & Southeast Asia region, as well as the Americas region, has been insignificant in the last 3 years.

In contrast, Philip Morris’ HTU shipment volume was the highest in East Asia & Australia region, recording 37.5 billion units as of fiscal Q3 2021 on a TTM basis.

Moreover, shipment volume for HTU also has been increasing in East Asia & Australia region.

A similar trend has been reported for the European region where PMI’s heated tobacco units sales have been growing.

As of fiscal Q3 2021, PMI recorded a volume of 25 billion units for HTU sales in both the European Union and Eastern Europe regions, respectively.

Conclusion

To recap, Philip Morris International (PMI) has been transitioning to a non-combustible product-based company while still maintaining its legacy cigarette business.

As a result, we are seeing that PMI’s cigarette sales have been on a decline while heated tobacco units sales have been increasing in the last 3 years.

As of fiscal 3Q 2021, PMI’s cigarette volume clocked at 87% while HTU volume came in at 13% on a TTM basis, showing that the transformation effort may have been working for the firm.

Despite the effort and investment, Philip Morris is still pretty much a cigarette company as of fiscal 2021, with the majority of its sales volume still coming from smokeable products.

References and Credits

1. All financial figures in this article were obtained and referenced from PMI’s quarterly and annual filings available in Philip Morris International’s Reports And Filings.

2. Featured images in this article are obtained free and are used without any attribution from the following links: Pixabay

Useful Statistics For Your Reference

Disclosure

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

If you find the information in this article helpful, please consider sharing it on social media and also provide a link back to this article from any website so that more articles like this one can be created in the future. Thank you!

{ 0 comments… add one }

Leave a Comment


X

Forgot Password?

Join Us