Two of the largest tobacco companies reported positive earnings for 2021, boosted by the performance of alternative products.
Philip Morris International (PMI) and British American Tobacco (BAT) both reported positive earnings in their latest financial reports, with alternative products such as heated tobacco, oral nicotine, and vapes being a main contributor.
PMI reported a 9.4% increase in net revenues and a 7.6% increase in adjusted revenues for 2021. Net revenues from smoke-free products accounted for 29.1% of total adjusted net revenues. Cigarette shipment volume dropped by 0.6% while heated tobacco unit shipment volume went up by 24.8% to 95 billion units. Market share for PMI’s heated tobacco units in IQOS markets, excluding the US, went up by 1.2% to 6.8%.
Last year the US Internal Trade Commission (ITC) barred the importation of IQOS into the US as well as ordered to stop selling units that had already been imported. However, according to a recent Bloomberg report, PMI is planning to start manufacturing IQOS devices in the US and start selling them again in the first half of 2023.
For BAT, the company saw a 6.9% rise in full-year adjusted revenue led by pricing and a 51% growth in its “New Category”, which includes e-cigarettes, heated tobacco, and oral nicotine. Revenue from BAT’s vapor category increased by 59%, glo by 46%, and oral nicotine by 41%. Revenue from combustibles went up 4%, with price/mix of 4.3%, reflecting emerging market (EM) performance and Covid-19 recovery.