PM

Philip Morris aims to launch IQOS in two US states in 2024

Credit: REUTERS/DADO RUVIC

adds CEO quotes in paragraphs 4-5, IQOS details in paragraphs 6-8, health and wellness details in paragraphs 9-11

LONDON, Sept 28 (Reuters) - Philip Morris International (PMI) PM.N said on Thursday it plans to launch its flagship heated tobacco device IQOS in two U.S. states in 2024, as the world's top tobacco company by market value doubles down on its shift away from cigarettes.

The Marlboro maker, listed in New York but whose business is focused on other continents, also said it aims for more than two thirds of its net revenues to come from "smoke-free" products by 2030, up from 50% by 2025.

A presence in the United States is critical to PMI's plan to shift to cigarette alternatives, Chief Executive Officer Jacek Olczak said.

PMI, whose top market in terms of revenues in 2022 was Japan, had no presence in the U.S. prior to the acquisition of oral nicotine company Swedish Match in 2022, as the rights to the Marlboro brand there were retained by former parent Altria MO.N when PMI was spun off in 2008.

"If we want to make this company a truly global leader in the nicotine category, you cannot ignore the most profitable and the most sizeable nicotine market," Olczak said during an investor day presentation.

PMI has poured billions into IQOS' development, and its entry into the U.S. market is being closely watched by investors.

Olczak said preparations were underway for a targeted 2024 launch in two unnamed U.S. states. Reuters reported on Wednesday that PMI is hiring lobbyists across a host of key U.S. states ahead of the launch.

The company also planned to seek approval to sell its newer iteration of the device, IQOS ILUMA, in October, Olczak continued.

PMI had initially planned to transform itself into a broader health and wellness company, including via the 1.1 billion pound purchase of asthma inhaler company Vectura.

But setbacks have prompted it to scrap an ambition for $1 billion in net revenues to come from non-nicotine products by 2025.

PMI will now narrow its focus and reprioritise resources behind IQOS and nicotine pouch brand ZYN, Olczak said, adding it had been too optimistic around acceptance of big tobacco companies operating outside of nicotine.

(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)

((Emma.Rumney@thomsonreuters.com; +27115952832;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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