Sum of the parts valuation of Philip Morris International
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Sum of the parts valuation of Philip Morris International Philip Morris International (PM) has been a special case in the tobacco world. The company has invested vast amounts in innovation over the past six years, to disrupt its own core cigarette business and created an entirely new heat-not-burn (HNB) category in the process. Cigarette business is still ~78% of the revenues but the company has a vision to move towards a smoke-free future through its portfolio of reduced risk products (primarily IQOS). PM has spent over $2billion commercialize IQOS over the last 4 years. This process of investment has been painful – margins were down 7% pts between 2012 and 2018 due to a step-up in IQOS investment. The fixed-cost infrastructure is now in place, and PM will be reaping the benefits as IQOS scales-up. Traditional cigarette business continues to be LSD revenue growth business. IQOS business (expected to be 25% of revenues in 2022) is the growth engine of the company with market and technological leadership in heat-not-burn category across the world. If you want to go through my thesis on PM please refer to my twitter thread (
Sum of the parts valuation of Philip Morris International
Sum of the parts valuation of Philip Morris…
Sum of the parts valuation of Philip Morris International
Sum of the parts valuation of Philip Morris International Philip Morris International (PM) has been a special case in the tobacco world. The company has invested vast amounts in innovation over the past six years, to disrupt its own core cigarette business and created an entirely new heat-not-burn (HNB) category in the process. Cigarette business is still ~78% of the revenues but the company has a vision to move towards a smoke-free future through its portfolio of reduced risk products (primarily IQOS). PM has spent over $2billion commercialize IQOS over the last 4 years. This process of investment has been painful – margins were down 7% pts between 2012 and 2018 due to a step-up in IQOS investment. The fixed-cost infrastructure is now in place, and PM will be reaping the benefits as IQOS scales-up. Traditional cigarette business continues to be LSD revenue growth business. IQOS business (expected to be 25% of revenues in 2022) is the growth engine of the company with market and technological leadership in heat-not-burn category across the world. If you want to go through my thesis on PM please refer to my twitter thread (