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LONDON, Sept 28 (Reuters) - Philip Morris
International (PMI) on Thursday signalled a slower than anticipated U.S.
roll out of its IQOS heated tobacco device, a choice analysts said was positive for
its competitors in the short term.
The New York-listed Marlboro maker also said it aims for more than two thirds of its net
revenues to come from "smoke-free" products by 2030, up from 50% in 2025, as it tries to transform its image from a cigarette purveyor
to a driver of the shift to healthier alternatives.
Investors have been closely watching IQOS' entry
into the U.S., the world's largest market for nicotine products, and had been expecting it from May 2024
next year. Reuters reported on Wednesday that PMI is hiring lobbyists
across a host of key U.S. states ahead of the launch.
Chief Executive Jacek Olczak said IQOS would launch in four cities in two unnamed
U.S. states from 2024, but a national launch would only come after
PMI receives approval to sell the latest version, known as IQOS ILUMA.
The company was planning to apply for approval in October and
expected it from 2025, he continued.
"We need to warm up the tyres," he said of the initial launch, which would help PMI fine tune its
approach.
A national roll-out of ILUMA would follow but in phases,
he continued, adding launching in 10 states in the first year would make sense.
Meaningful traction for PMI's heated tobacco products in the U.S.
"now looks delayed until ILUMA," Owen Bennett, equity analyst at
Jefferies, said in a note, adding this was a positive for PMI's rivals.
Olczak also signalled that PMI's push into non-nicotine products was no longer a priority.
It recently scrapped an ambition for $1 billion in net revenues to come
from sales of such products by 2025.
Instead, PMI will focus its resources on IQOS and nicotine pouch brand ZYN,
Olczak said, adding it had been too optimistic around acceptance of big tobacco
companies operating outside of nicotine.
PMI also announced updated medium-term targets including for revenue and earnings
per share, and ambitious volume targets for IQOS and ZYN.
ZYN and other oral nicotine products in the U.S. would
help drive an expected $2 billion in revenues there in 2024, even before IQOS
ILUMA, executives said.
PMI shares were up 1.5% on Thursday. (Reporting by Emma Rumney in London and
Granth Vanaik in Bengaluru; additional reporting by Ananya Mariam Rajesh in Bengaluru; Writing
by Emma Rumney; Editing by Elaine Hardcastle and Josie Kao)