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Philip Morris International & Tobacco Companies

chi ha letto il bel "Barbarians at the gate" sull'incredibile fusione degli anni '80 tra RJR Reynolds e Nabisco non dovrebbe stupirsi :D:
footnoted*

Quick: what do you think about when you hear the words “game changer”? We doubt that it’s a hefty bonus for tobacco industry executives.
And yet, judging by this 8-K filed by Reynolds American Inc. yesterday, that’s exactly what it is. Needless to say it was buried in a lot of legalese (read: boring language). But the words “game changer” were actually used to describe the bonus, which is a first when it comes to SEC filings.
Based on yesterday’s filing, the new bonus was designed as a “one-time performance-based cash awards to all employees of RAI and its subsidiaries designed to maintain focus on the successful integration of the recently completed acquisition of Lorillard, Inc.” The company closed its $27 billion acquisition of Lorillard last month.
Given that RAI and its subsidiaries have about 5,300 employees (as of the most recent 10-K), this new bonus may very well be a game-changer for those employees. Of course, the filing doesn’t really provide enough details to figure out how much those folks will receive, or how much this will cost the company.
That’s not the case, however, for four top executives: CFO Andrew Gilchrist, former CFO Thomas Adams, Chief Commercial Officer Debra Crew and General Counsel Martin Holton, who will each receive 65% of their base salary under this new “game changer” bonus. Based on the most recent proxy, those salaries range from around $550K up to $725K.
Over the years of reading filings, we’ve come across a lot of crazy names to describe various bonuses. Up until yesterday’s filing, our favorite had been the “synergy bonus” which like the game-changer, is often tied to M&A activity.
Given RAI’s stock performance in the 6 weeks since the deal has closed, this deal may very well turn into a game-changer. Time will tell whether the name fits the bonus.
 
però a Milano non sono andate così bene:
Giappone, frontiera di Philip Morris elettronica e 3d per la sigaretta “pulita” - Repubblica.it

È boom in Giappone per la sigaretta del futuro. Con oltre 1 milione di dispositivi venduti IQos, la nuova sigaretta a potenziale rischio ridotto lanciata da Philip Morris International, sta spopolando. Contribuiscono alla sua popolarità diversi fattori: il contenuto tecnologico del prodotto, il design innovativo, l’attenzione al prossimo connaturata alla cultura giapponese, ed il trend verso una crescente attenzione al benessere e alla salute. Si può definire una via di mezzo fra una sigaretta elettronica e una sigaretta tradizionale. Si basa su una tecnologia elaborata nel centro di Ricerca e Sviluppo di Philip Morris a Neuchatel, in Svizzera. Con una serie di modifiche nella stessa struttura della sigaretta, si è creato un “oggetto” che non brucia e, quindi, è potenzialmente meno dannoso e produce un odore meno forte. Realizzata in parte in una fabbrica pilota a Bologna, e lanciata in anteprima a novembre dell’anno scorso a Milano e a Nagoya (Giappone), a differenza della sigaretta elettronica, IQos si compone di tabacco e ha il gusto della sigaretta. La novità è, appunto, nell’assenza di combustione, responsabile - secondo alcuni studi - del 90% circa della nocività della sigaretta. La temperatura necessaria a portare il tabacco ad esalare il suo aroma, viene raggiunta elettronicamente scaldando una lamina di ceramica e platino contenuta all’interno di un dispositivo ricaricabile, che somiglia più ad un telefonino di ultima generazione.
All’interno del dispositivo, l’utilizzatore inserirà di volta in volta delle vere e proprie sigarette di tabacco di dimensioni ridotte (“heatsticks”) che a contatto con la lamina si riscaldano offrendo un esperienza che è più simile a quella della normale sigaretta che non della sigaretta elettronica. L’azienda, che è stata protagonista di decine di cause multimilionarie per i danni del fumo soprattutto in America, dichiara di aver eliminato con questa nuova versione ben ottantamila sostanze nocive generate dalla combustione. Se è vero, sembrerebbe indubbia la riduzione del danno. Le dimensioni di tale riduzione, comunque, le stabilirà a breve la Food and Drugs Administration americana cui la Philip Morris ha sottoposto le evidenze scientifiche. C’è sempre la nicotina, ma l’azienda assicura di averne neutralizzato gli effetti peggiori. IQos è il frutto di un percorso di studio intrapreso da Philip Morris quindici anni fa, nel quale sono stati investitit, nel complessot, oltre 2 miliardi di dollari. Nel centro di Neuchatel lavorano circa 400 tra scienziati, ingegneri, oltre a esperti di tossicologia, impegnati con il loro staff nello sviluppo di prodotti a rischio potenzialmente ridotto alternativi alle sigarette. La scelta di costituire uno stabilimento a Bologna per la produzione degli heatsticks destinati a coprire l’intero fabbisogno globale dei consumatori IQos, trova ragione nelle competenze in termini di innovazione meccanica, elettronica e manifatturiera che trovano nella capitale emiliana un territorio tra i più competitivi al mondo. Non sorprende che la sigaretta del futuro abbia ricevuto un’accoglienza calorosa in un Giappone che, per tanti versi, appare a un occhio esterno come il paese del futuro. Sono circa 400 i punti vendita IQos nel Paese e includono caffè, ristoranti, uffici e hotel venues. Per chi visita un rivenditore IQos a Tokyo, la sensazione è quella di trovarsi in un moderno negozio d’elettronica. Sulla via principale di Harajuku, uno dei quartieri più popolari di Tokyo, a pochi mesi dal lancio del prodotto, la fila per entrare impone un sistema di prenotazione e numeretti come in farmacia. Il palazzo, a tre piani, si compone di una reception dove i clienti vengono introdotti al nuovo prodotto attraverso un sistema di maxi schermi touch che ne spiegano le caratteristiche. Per chi ancora non fosse soddisfatto, lo staff mette a disposizione degli occhiali 3d che conducono il cliente in un viaggio virtuale nel mondo IQos, dove una ragazza avvolta in un’atmosfera da cyberspazio illustra le caratteristiche del prodotto fino a portarlo all’interno del dispositivo stesso per osservarne il funzionamento. Al secondo piano, i clienti possono provare il nuovo prodotto seguiti individualmente da un membro dello staff. Per la prova, ai clienti è richiesto di prendere un appuntamento e lo staff riceve solamente due clienti ogni ora in modo da garantire il massimo livello di servizio. Al terzo piano, c’è una sorta di corrispettivo del Genius Bar dell’Apple nel caso il prodotto richiedesse assistenza, e all’ultimo piano, dulcis in fundo, i soci potranno gustare un caffè o un succo di frutta mentre fumano indisturbati la propria IQos. Tanta scenografia per la nuova frontiera del tabacco, un salto obbligato per un’industria altrimenti in calo, oltre che una speranza nuova per chi non vuole fare a meno della nicotina ma vuole comunque passare a un prodotto a rischio minore.
 
le ricariche dell'iqos sono passate da 396mln di unità nel 2015 a 7,4mld nel '16
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Buffett: “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”

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Ultima modifica:
sul passato recente dell'industria del tabacco in US:
Against All Odds, the U.S. Tobacco Industry Is Rolling in Money - WSJ
By Jennifer Maloney and Saabira Chaudhuri

It’s a great time to be a cigarette company again.
A flurry of consolidation has winnowed the U.S. tobacco market from seven big players to two: Altria and Newport maker Reynolds American Inc., which together sell eight out of every 10 cigarettes in the country. As companies combined, they squeezed out costs and increased pricing power, along with profits.
The operating profits of U.S. tobacco manufacturers have grown 77% since 2006 to $18.4 billion in 2016, according to Bank of America Merrill Lynch Global Research. Industry executives and analysts now figure the country generates more tobacco profits than any other market in the world outside China, where a state-run monopoly controls sales and prices.
Johnny Cagigas oversees the machines that spit out as many as 10,000 “sticks” a minute at Reynolds American’s plant here. He started out in the industry 20 years ago, and remembers the pressure and worries over an uncertain future.
When he tried to fill positions in the late 1990s at a Brown & Williamson factory in Macon, Ga., he says job candidates would ask, “Do you think they will shut you down?” Many refused offers.
“In a blessed way, I started at the right time, because now I’m getting to ride a wave that people were used to back in the ’60s and ’70s,” he says in his office, nestled inside a complex where overhead conveyor belts push along neatly stacked Newports. Robots squirt orange liquid into e-cigarette cartridges. “Uncertainty doesn’t faze us a whole lot now,” he says.
Investors are also cheering. In 2000, U.S. tobacco companies’ price-to-earnings ratios were about a third of their consumer-staples peers’. Today, they’re roughly 10% higher, according to Morgan Stanley. The S&P 500 Tobacco Index fell 22% between 1998 and 2002. Over the past decade, it’s up 178%, outperforming the broader S&P 500, which climbed 58%.
The industry sells 5.5 trillion cigarettes each year to the world’s one billion smokers. In many ways, the U.S. has become attractive again as opportunities around the rest of the globe wane.
Taxes are often lower in the U.S. than elsewhere in the developed world, according to World Health Organization data. About 42% of the average U.S. pack price is tax, according to TMA. In Britain, meanwhile, taxes make up 82% of the average pack, which sells for about $10.90, or about $4 more than the average U.S. price, according to Britain’s Tobacco Manufacturers’ Association.
Thanks partly to the First Amendment, U.S. tobacco makers also aren’t constricted by some of the more stringent branding and health-warning rules introduced elsewhere. In Britain and Australia, cigarettes are sold in drab, greenish-brown packs with a large health warning and a graphic photo illustrating smoking’s risks, from diseased lungs to blindness.
Some Middle Eastern and African markets are growing, thanks to rising populations and income. But in much of the rest of the emerging world, smoking is on the decline, with less opportunity than in the U.S. to boost prices to make up the difference.
Far fewer Americans are smoking, and yet U.S. tobacco revenue is soaring, thanks to years of steady price hikes. Americans spent more at retail stores on cigarettes in 2016 than they did on soda and beer combined, according to independent market-research firm Euromonitor International. Consolidation and cost cutting are boosting profit. Big Tobacco shares are on a roll.
Two decades ago, such a boom didn’t seem possible. The industry faced a future of increasing regulation and declining sales, as older smokers quit and fewer young people picked up the habit. States were suing for billions of dollars. Bankruptcies for some players seemed just around the corner.
Things didn’t turn out so badly, though. Costs from an avalanche of legal settlements and regulatory requirements have been heavy, but they haven’t put any big players out of business. Cigarette makers found they could more than make up for falling volumes with higher prices.
“We came out of a challenging period,” said Marty Barrington, chief executive of Marlboro maker Altria Group Inc., in an interview.
The number of cigarettes sold in the U.S. fell by 37% from 2001 to 2016, according to Euromonitor. Over the same period, though, companies raised prices, boosting cigarette revenue by 32%, to an estimated $93.4 billion last year. An average pack in the U.S. cost an estimated $6.42 in 2016, up from $3.73 in 2001, according to TMA, an industry trade group.
China is by far the world’s biggest market, where state-owned China National Tobacco Corp. sells 44% of the country’s cigarettes. In 2015, volumes fell there for the first time in two decades after big tax increases. Russia, the world’s second-biggest market, restricted advertising and banned smoking in public places in 2013. Those moves cut volumes sharply.
While all that makes the U.S. relatively more attractive, it also underscores the existential threat still hanging over the industry. No one expects volume declines anywhere to reverse, and price hikes can make up for that for only so long.
Tighter regulation and higher taxes remain big threats both in the U.S. and abroad. On April 1, California raised cigarette taxes by $2 a pack. And last week, New York Mayor Bill de Blasio threw his support behind proposals to raise the minimum price per pack to $13 from $10.50 and, through attrition, slash the number of retailers licensed to sell tobacco products.
A U.S. law passed in 2009 leaves open the possibility that the Food and Drug Administration could one day ban menthol cigarettes—a major revenue driver for Newport owner Reynolds—based on the agency’s 2013 finding that they likely pose a greater health risk than regular cigarettes. The law also gives the FDA the authority to mandate the reduction of nicotine levels in cigarettes to near zero.
Faced with these headwinds, tobacco executives know today’s boom won’t last forever, and are investing heavily to develop products they say are safer.
Altria and Reynolds both have diversified into smokeless tobacco—a market still growing by volume. Reynolds sells nicotine gum, while Altria owns a wine business in Washington state and has a 10% stake in Anheuser-Busch InBev NV, the world’s largest brewer.
Philip Morris International Inc., spun off by Altria in 2008 to pursue non-U.S. business, has spent $3 billion developing next-generation products, including a device, called IQOS, that delivers nicotine by heating sticks of tobacco instead of burning them. Philip Morris says its internal studies have shown that by avoiding combustion, the product prevents or reduces the release of many harmful compounds. The company has asked the FDA for authorization to market IQOS as less harmful than cigarettes through a partnership here with Altria.
British American Tobacco PLC, which makes Dunhill and Pall Mall, has spent $1 billion over the past five years developing so-called next-generation products, including its vapor brand Vype and its own heat-not-burn product.
For now, though, revenue from those products remains a tiny slice of overall sales. Until they start to catch on more broadly, tobacco executives must rely on traditional cigarettes for years to come.
“The focus really is, how do we sustain our revenues from combustible products, which fuel the innovation for next-generation products?” said David O’Reilly, BAT’s head of research and development, in a recent interview.
Back in 2004, London-based BAT was retreating from the U.S. It merged its Brown & Williamson unit with Reynolds to create Reynolds American, keeping a 42% stake. Now, BAT is doubling down again on the U.S. Earlier this year, it agreed to pay $49.4 billion for the other 58%.
Since that megadeal, analysts have been atwitter about the prospect that Altria might get back together with Philip Morris International. A combination would create a $300 billion-plus behemoth.
A Philip Morris spokeswoman said the company has “no further plans beyond” its existing cooperation with Altria on alternative products. Altria declined to comment.
“Many of the reasons BAT and Philip Morris cited for leaving have become more manageable,” said David Taylor, U.S. head of Imperial Brands PLC, another U.K.-based global player, in an interview. In 2015, Imperial bought four American cigarette brands, and an e-cigarette brand, boosting its market share here to 9.5% from about 3%.
Altria and Reynolds, meanwhile, have been cutting costs for years. Reynolds consolidated its cigarette manufacturing here in Tobaccoville after its 2004 merger with Brown & Williamson. In 2015, Reynolds bought Lorillard, at the time America’s No. 3 tobacco company, for $25 billion.
As part of those deals, Reynolds claims more than $1 billion in cost savings. Altria says it cut $2 billion in costs between 2007 and 2013.
Today’s boom is all the more remarkable considering the depth of the crisis Big Tobacco found itself in more than two decades ago. Back then, it was slashing prices to fend off cheaper competitors. In April 1993, Altria-predecessor Philip Morris Cos. cut the price of Marlboro by roughly 20%. Stock prices plunged across the industry.
A year later, the FDA said for the first time it was considering regulating tobacco. The following week, ABC aired an explosive investigation concluding that companies manipulated nicotine content to hook consumers.
At a congressional hearing in April 1994, the top executives of seven tobacco companies testified under oath that they didn’t believe nicotine was addictive. A flood of news reports followed, with leaked internal documents showing nicotine’s addictive qualities were widely known inside the industry.
In 1997, the then-chief executives of Philip Morris and RJR Nabisco Holdings Corp., the owner at the time of RJ Reynolds Tobacco Co., sat down with four attorneys general, a public-health advocate and a slew of attorneys in an Arlington, Va., hotel conference room to begin talks over settling the mounting legal woes. States were seeking billions in compensation for costs associated with treating smoking-related illnesses. They also wanted new marketing restrictions and money for youth-smoking prevention programs.
The industry reached a deal with 46 states, five U.S. territories and the District of Columbia. Companies agreed to make annual payments indefinitely, calculated using a complex formula that accounts for volume and inflation. At the time, both sides estimated that those payments would amount to a jaw-dropping $206 billion over the first 25 years. The four remaining states settled separately.
“There was the sense that the industry may be teetering at the time on the edge of distress if not bankruptcy,” recalls Phil Angelides, a former board member for the California Public Employees’ Retirement System, who as California state treasurer in 2000 spearheaded a tobacco divestment drive by the pension fund. “The industry was on its knees.”
But the settlement also drew a line under the biggest of the industry’s legal woes. States gave up future legal claims, reducing uncertainty. The industry’s payments toward the master settlement have amounted to $119.5 billion to date, according to data from the National Association of Attorneys General. Stiffer regulation also didn’t hurt as badly as some feared. In 2000, Philip Morris came out in favor of federal oversight. The company took part in negotiations on legislation, passed in 2009, giving the FDA regulatory control of tobacco products. Last year, the agency said it would assume the same authority over e-cigarettes.
Industry executives and analysts say the oversight ended up creating a high barrier to entry for new players. Former Rep. Henry Waxman, a Democrat from California who sponsored the legislation, said its goal wasn’t to hobble the industry but to reduce smoking.
The adult smoking rate in the U.S. fell to 15% in 2015, from 25% in 1995. The rate among high-school students dropped to 11% from 35%, according to the U.S. Centers for Disease Control and Prevention. “We were trying to lower the noise around tobacco issues,” Altria’s Mr. Barrington said. “We were trying to create a level playing field for manufacturers to compete.”
Firms also found they could easily pass on the costs to smokers. Altria figures the settlements with all 50 states equate to about 69 cents of the price of each pack.
“They took very little of an earnings hit,” said Richard Daynard, chairman of the Tobacco Products Liability Project at Northeastern University School of Law in Boston. The group was created in 1984 to use litigation to tackle tobacco-led public health issues.
Gary Fisketjon, an editor at publisher Alfred A. Knopf, remembers when a pack of unfiltered Camels cost a dollar. Now they go for $14 or more at Manhattan convenience stores. Mr. Fisketjon, 62, splits his time between New York and Nashville and stocks up on cigarettes in Tennessee, where they’re cheaper. Colleagues on smoke breaks often complain about the rising price of cigarettes, he says. “It’s like, ‘I can’t even afford to do this anymore, it’s so ridiculously expensive.’ But I say, ‘Well, here you are.’”
 
Leite ha scritto:
sul passato recente dell'industria del tabacco in US:
Against All Odds, the U.S. Tobacco Industry Is Rolling in Money - WSJ
By Jennifer Maloney and Saabira Chaudhuri

It’s a great time to be a cigarette company again.
A flurry of consolidation has winnowed the U.S. tobacco market from seven big players to two: Altria and Newport maker Reynolds American Inc., which together sell eight out of every 10 cigarettes in the country. As companies combined, they squeezed out costs and increased pricing power, along with profits.
The operating profits of U.S. tobacco manufacturers have grown 77% since 2006 to $18.4 billion in 2016, according to Bank of America Merrill Lynch Global Research. Industry executives and analysts now figure the country generates more tobacco profits than any other market in the world outside China, where a state-run monopoly controls sales and prices.
Johnny Cagigas oversees the machines that spit out as many as 10,000 “sticks” a minute at Reynolds American’s plant here. He started out in the industry 20 years ago, and remembers the pressure and worries over an uncertain future.
When he tried to fill positions in the late 1990s at a Brown & Williamson factory in Macon, Ga., he says job candidates would ask, “Do you think they will shut you down?” Many refused offers.
“In a blessed way, I started at the right time, because now I’m getting to ride a wave that people were used to back in the ’60s and ’70s,” he says in his office, nestled inside a complex where overhead conveyor belts push along neatly stacked Newports. Robots squirt orange liquid into e-cigarette cartridges. “Uncertainty doesn’t faze us a whole lot now,” he says.
Investors are also cheering. In 2000, U.S. tobacco companies’ price-to-earnings ratios were about a third of their consumer-staples peers’. Today, they’re roughly 10% higher, according to Morgan Stanley. The S&P 500 Tobacco Index fell 22% between 1998 and 2002. Over the past decade, it’s up 178%, outperforming the broader S&P 500, which climbed 58%.
The industry sells 5.5 trillion cigarettes each year to the world’s one billion smokers. In many ways, the U.S. has become attractive again as opportunities around the rest of the globe wane.
Taxes are often lower in the U.S. than elsewhere in the developed world, according to World Health Organization data. About 42% of the average U.S. pack price is tax, according to TMA. In Britain, meanwhile, taxes make up 82% of the average pack, which sells for about $10.90, or about $4 more than the average U.S. price, according to Britain’s Tobacco Manufacturers’ Association.
Thanks partly to the First Amendment, U.S. tobacco makers also aren’t constricted by some of the more stringent branding and health-warning rules introduced elsewhere. In Britain and Australia, cigarettes are sold in drab, greenish-brown packs with a large health warning and a graphic photo illustrating smoking’s risks, from diseased lungs to blindness.
Some Middle Eastern and African markets are growing, thanks to rising populations and income. But in much of the rest of the emerging world, smoking is on the decline, with less opportunity than in the U.S. to boost prices to make up the difference.
Far fewer Americans are smoking, and yet U.S. tobacco revenue is soaring, thanks to years of steady price hikes. Americans spent more at retail stores on cigarettes in 2016 than they did on soda and beer combined, according to independent market-research firm Euromonitor International. Consolidation and cost cutting are boosting profit. Big Tobacco shares are on a roll.
Two decades ago, such a boom didn’t seem possible. The industry faced a future of increasing regulation and declining sales, as older smokers quit and fewer young people picked up the habit. States were suing for billions of dollars. Bankruptcies for some players seemed just around the corner.
Things didn’t turn out so badly, though. Costs from an avalanche of legal settlements and regulatory requirements have been heavy, but they haven’t put any big players out of business. Cigarette makers found they could more than make up for falling volumes with higher prices.
“We came out of a challenging period,” said Marty Barrington, chief executive of Marlboro maker Altria Group Inc., in an interview.
The number of cigarettes sold in the U.S. fell by 37% from 2001 to 2016, according to Euromonitor. Over the same period, though, companies raised prices, boosting cigarette revenue by 32%, to an estimated $93.4 billion last year. An average pack in the U.S. cost an estimated $6.42 in 2016, up from $3.73 in 2001, according to TMA, an industry trade group.
China is by far the world’s biggest market, where state-owned China National Tobacco Corp. sells 44% of the country’s cigarettes. In 2015, volumes fell there for the first time in two decades after big tax increases. Russia, the world’s second-biggest market, restricted advertising and banned smoking in public places in 2013. Those moves cut volumes sharply.
While all that makes the U.S. relatively more attractive, it also underscores the existential threat still hanging over the industry. No one expects volume declines anywhere to reverse, and price hikes can make up for that for only so long.
Tighter regulation and higher taxes remain big threats both in the U.S. and abroad. On April 1, California raised cigarette taxes by $2 a pack. And last week, New York Mayor Bill de Blasio threw his support behind proposals to raise the minimum price per pack to $13 from $10.50 and, through attrition, slash the number of retailers licensed to sell tobacco products.
A U.S. law passed in 2009 leaves open the possibility that the Food and Drug Administration could one day ban menthol cigarettes—a major revenue driver for Newport owner Reynolds—based on the agency’s 2013 finding that they likely pose a greater health risk than regular cigarettes. The law also gives the FDA the authority to mandate the reduction of nicotine levels in cigarettes to near zero.
Faced with these headwinds, tobacco executives know today’s boom won’t last forever, and are investing heavily to develop products they say are safer.
Altria and Reynolds both have diversified into smokeless tobacco—a market still growing by volume. Reynolds sells nicotine gum, while Altria owns a wine business in Washington state and has a 10% stake in Anheuser-Busch InBev NV, the world’s largest brewer.
Philip Morris International Inc., spun off by Altria in 2008 to pursue non-U.S. business, has spent $3 billion developing next-generation products, including a device, called IQOS, that delivers nicotine by heating sticks of tobacco instead of burning them. Philip Morris says its internal studies have shown that by avoiding combustion, the product prevents or reduces the release of many harmful compounds. The company has asked the FDA for authorization to market IQOS as less harmful than cigarettes through a partnership here with Altria.
British American Tobacco PLC, which makes Dunhill and Pall Mall, has spent $1 billion over the past five years developing so-called next-generation products, including its vapor brand Vype and its own heat-not-burn product.
For now, though, revenue from those products remains a tiny slice of overall sales. Until they start to catch on more broadly, tobacco executives must rely on traditional cigarettes for years to come.
“The focus really is, how do we sustain our revenues from combustible products, which fuel the innovation for next-generation products?” said David O’Reilly, BAT’s head of research and development, in a recent interview.
Back in 2004, London-based BAT was retreating from the U.S. It merged its Brown & Williamson unit with Reynolds to create Reynolds American, keeping a 42% stake. Now, BAT is doubling down again on the U.S. Earlier this year, it agreed to pay $49.4 billion for the other 58%.
Since that megadeal, analysts have been atwitter about the prospect that Altria might get back together with Philip Morris International. A combination would create a $300 billion-plus behemoth.
A Philip Morris spokeswoman said the company has “no further plans beyond” its existing cooperation with Altria on alternative products. Altria declined to comment.
“Many of the reasons BAT and Philip Morris cited for leaving have become more manageable,” said David Taylor, U.S. head of Imperial Brands PLC, another U.K.-based global player, in an interview. In 2015, Imperial bought four American cigarette brands, and an e-cigarette brand, boosting its market share here to 9.5% from about 3%.
Altria and Reynolds, meanwhile, have been cutting costs for years. Reynolds consolidated its cigarette manufacturing here in Tobaccoville after its 2004 merger with Brown & Williamson. In 2015, Reynolds bought Lorillard, at the time America’s No. 3 tobacco company, for $25 billion.
As part of those deals, Reynolds claims more than $1 billion in cost savings. Altria says it cut $2 billion in costs between 2007 and 2013.
Today’s boom is all the more remarkable considering the depth of the crisis Big Tobacco found itself in more than two decades ago. Back then, it was slashing prices to fend off cheaper competitors. In April 1993, Altria-predecessor Philip Morris Cos. cut the price of Marlboro by roughly 20%. Stock prices plunged across the industry.
A year later, the FDA said for the first time it was considering regulating tobacco. The following week, ABC aired an explosive investigation concluding that companies manipulated nicotine content to hook consumers.
At a congressional hearing in April 1994, the top executives of seven tobacco companies testified under oath that they didn’t believe nicotine was addictive. A flood of news reports followed, with leaked internal documents showing nicotine’s addictive qualities were widely known inside the industry.
In 1997, the then-chief executives of Philip Morris and RJR Nabisco Holdings Corp., the owner at the time of RJ Reynolds Tobacco Co., sat down with four attorneys general, a public-health advocate and a slew of attorneys in an Arlington, Va., hotel conference room to begin talks over settling the mounting legal woes. States were seeking billions in compensation for costs associated with treating smoking-related illnesses. They also wanted new marketing restrictions and money for youth-smoking prevention programs.
The industry reached a deal with 46 states, five U.S. territories and the District of Columbia. Companies agreed to make annual payments indefinitely, calculated using a complex formula that accounts for volume and inflation. At the time, both sides estimated that those payments would amount to a jaw-dropping $206 billion over the first 25 years. The four remaining states settled separately.
“There was the sense that the industry may be teetering at the time on the edge of distress if not bankruptcy,” recalls Phil Angelides, a former board member for the California Public Employees’ Retirement System, who as California state treasurer in 2000 spearheaded a tobacco divestment drive by the pension fund. “The industry was on its knees.”
But the settlement also drew a line under the biggest of the industry’s legal woes. States gave up future legal claims, reducing uncertainty. The industry’s payments toward the master settlement have amounted to $119.5 billion to date, according to data from the National Association of Attorneys General. Stiffer regulation also didn’t hurt as badly as some feared. In 2000, Philip Morris came out in favor of federal oversight. The company took part in negotiations on legislation, passed in 2009, giving the FDA regulatory control of tobacco products. Last year, the agency said it would assume the same authority over e-cigarettes.
Industry executives and analysts say the oversight ended up creating a high barrier to entry for new players. Former Rep. Henry Waxman, a Democrat from California who sponsored the legislation, said its goal wasn’t to hobble the industry but to reduce smoking.
The adult smoking rate in the U.S. fell to 15% in 2015, from 25% in 1995. The rate among high-school students dropped to 11% from 35%, according to the U.S. Centers for Disease Control and Prevention. “We were trying to lower the noise around tobacco issues,” Altria’s Mr. Barrington said. “We were trying to create a level playing field for manufacturers to compete.”
Firms also found they could easily pass on the costs to smokers. Altria figures the settlements with all 50 states equate to about 69 cents of the price of each pack.
“They took very little of an earnings hit,” said Richard Daynard, chairman of the Tobacco Products Liability Project at Northeastern University School of Law in Boston. The group was created in 1984 to use litigation to tackle tobacco-led public health issues.
Gary Fisketjon, an editor at publisher Alfred A. Knopf, remembers when a pack of unfiltered Camels cost a dollar. Now they go for $14 or more at Manhattan convenience stores. Mr. Fisketjon, 62, splits his time between New York and Nashville and stocks up on cigarettes in Tennessee, where they’re cheaper. Colleagues on smoke breaks often complain about the rising price of cigarettes, he says. “It’s like, ‘I can’t even afford to do this anymore, it’s so ridiculously expensive.’ But I say, ‘Well, here you are.’”
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L'altra sera ho provato la iQQOS (si chiama così? ) della PM.

Mah....
 
nemo17 ha scritto:
L'altra sera ho provato la iQOS (si chiama così? ) della PM.
Mah....
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non fumo quindi non saprei :D un amico mi ha detto che c'è ancora un bel salto rispetto alla sigaretta, l'acronimo sta per "I quit out smoking" (ma in US Altria deve ancora avere l'approvazione della FDA per commercializzarlo)
le ricariche sono fabbricate in italia:
Chip malesi e stick bolognesi ecco il nuovo cavallo di Marlboro man - Repubblica.it
Philip Morris, il futuro e senza fumo - Repubblica.it
 
Imperial Brands Invests in Caffeine Products to Counter Smoking Slump - WSJ

LONDON Imperial Brands on Wednesday reported lower half-year operating profit and said it is investing in a caffeine-based, low-calorie product designed to give users a boost of energy as part of an effort to diversify.
The remarks come as Imperial—the least diversified of major tobacco companies—works to combat the impact of declining cigarette volumes. Imperial on Wednesday reported total tobacco volume fell 5.7% in the period to 126.3 billion sticks, a deterioration from the 3.1% decline in the same period a year earlier. Tobacco net revenue climbed 9.3% but dropped 5.5% at constant currency.
While rivals such as British American Tobacco and Philip Morris International Inc. are aggressively investing in future proofing their portfolio with so-called next-generation products, Imperial only owns one e-cigarette brand, Blu, which it bought in 2015 as part of Reynolds American Inc.’s $25 billion acquisition of Lorillard Inc.
Philip Morris has spent $3 billion developing next-generation products, including a device, called IQOS, that delivers nicotine. It also owns vapor brands Nicocigs and Vivid. BAT, which makes Dunhill and Pall Mall, has spent $1 billion over the past five on this area, including its vapor brand Vype and its own heat-not-burn product Glo. Overall, Imperial, which makes the JPS and Gauloises brands, said net profit rose to £675 million ($871 million) in the six months ended March 31 from £290 million a year earlier. Revenue rose to £14.3 billion from £12.81 billion. Earnings were boosted by investment income, which rose to £730 million from £290 million a year earlier. Without this, operating profit fell to £902 million from £1 billion.
Imperial, the third-largest cigarette company in the U.S., said its Winston and Kool brands had increased market share over the half while mass market cigars are performing well. Imperial in 2015 launched a trial version of the energy-boosting product, called Reon, sold in Manchester and online that was designed as a strip intended to melt in one’s mouth. On Wednesday, Imperial said it continues to invest in this product, which could be delivered through a variety of formats, including powders and liquids, but isn’t yet looking to commercialize it.
U.K.-based Imperial’s results come as the regulatory environment for traditional cigarettes continues to toughen. The country will later this month implement plain packaging, under which cigarettes will be sold in uniform packs stripped of distinctive logos and colors, and adorned with graphic health warnings. Australia and France also have plain packaging laws in place and other countries, such as Ireland and Hungary, are on a path to similar legislation.
Imperial’s Chief Executive Alison Cooper said the company is working to simplify its brand portfolio to better manage the impact of plain packaging but that it had increased sales and profit in Australia despite the industry no longer having the ability to brand cigarette packs there after a law passed in 2011. Imperial is on track to meet consensus analyst estimates for the full year, said Ms. Cooper. Analysts currently expect adjusted earnings of £2.77 a share on tobacco net revenue of £7.9 billion.
 
How an Old Flop Could Boost Big Tobacco - WSJ

What consumer good offers the best growth potential? It could be a product in long-term decline: the cigarette. Some stock-market valuations have yet to catch on. As unit cigarette sales have fallen in the U.S. and other rich countries, manufacturers have generated profit growth by ramping up prices and—helped by marketing bans—trimming costs. Meanwhile, spending on smokes in developing countries has risen with the middle classes. This formula has yielded huge gains for tobacco investors in recent years.
And now there’s an added source of growth: cigarette substitutes. The popularity of so-called heat-not-burn products in Japan has transformed the most recent quarterly results of Philip Morris International, the New York listed group that sells Marlboros outside the U.S. Unlike the vaping products popular in the U.S. and U.K., heat-not-burn cigarettes contain tobacco and generate a “throat hit” similar to traditional varieties. But instead of being lighted with a flame, they are heated by a sleek holder to generate a nicotine-laden inhalation whose health effects are widely debated. The holders are battery powered and come in iPhone-style boxes complete with chargers and the other trappings of millennial tech.
Heat-not-burn technology was a costly flop when pioneered in the 1980s by Reynolds, as the Wall Street classic Barbarians at the Gate recounted. Yet it sowed a seed that under Reynolds’s archrival Philip Morris has grown into a seemingly credible product: IQOS. Released in Japan in 2014, IQOS accounted for 7% of cigarettes sold in the country in the first quarter, up from less than 1% in the first quarter of 2016. Crucially, PMI gains even if IQOS replaces Marlboro, because heat-not-burn smokes are more lightly taxed than conventional cigarettes in most countries (though not the U.S., important for PMI’s sister company Altria ). Citibank estimates that a pack of IQOS generates 30% more revenues for PMI in Japan than a pack of Marlboros, even though consumers pay similar prices. The brokerage is therefore penciling in 8% organic sales growth at PMI this year, at least double what can be expected of consumer-products groups like Nestlé or Procter & Gamble . Unlike vaping products, which are easy to make and hard to make profitable, heat-not-burn cigarettes can improve manufacturers’ margins. Buying PMI stock is the obvious way to play this theme. But a smarter bet could be London-listed British American Tobacco (BAT), maker of Lucky Strikes. BAT’s valuation gap to PMI has ballooned to its widest in at least a decade over the past two years; investors are excited about IQOS, but give BAT no credit for its challenger product, glo. BAT’s lower margins also suggest potential for cost-cutting, particularly given the company’s merger with Reynolds, which is due to complete later this year. Buying PMI stock on 23 times prospective earnings amounts to a wager that IQOS finds converts beyond Japan. This isn’t certain. Japan’s consumer culture can be insular, and smokers in the country like lighter menthol cigarettes, for which IQOS is a good substitute. It may be harder to win over those used to stronger smokes. On less than 18 times earnings, well below not just PMI but also consumer-goods peers, BAT stock should prove a safe investment -- whether or not heat-not-burn cigarettes live up to their early promise.

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