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The tobacco giant, however, saw success in its line of electronic cigarettes and its Zyn nicotine pouches as it continues to pivot away from its traditional cigarette business.
CEO Jacek Olczak said the quarter was the first time the company has topped $9 billion in quarterly net revenue.
https://www.cnbc.com/2023/10/19/philip-morris-pm-earnings-q3-2023.html
https://ch-fr.zyn.com/
Cigar rates/ vapes etc is perfect for d2c. High value, but light, with high marketing budgets
*cigarettes
Couple more notes to add as potentially it may work out to be something of a surprise.
Investors not familiar with Phillip Morris may not know but they have committed to a smoke free future, one of their key products in achieving this is ZYN, from recent results:
"ZYN nicotine pouch (NP) shipment volume in the U.S. of 89.9 million cans, representing growth of 53.1% versus second-quarter 2022 Swedish Match shipments of 58.7 million cans"
Its worth having a look over their results as turnover last year was in excess of $80b
https://www.pmi.com/media-center/press-releases/press-details?newsId=26631
We know that Ingenuity has a 10 year partnership agreement with PM in multiple territories, its not easy confirming which sites use Ingenuity other than links posted, US and others have age verification process to go through making it a bit tricky.
ZYN UK
https://uk.zyn.com/about-zyn.list
ZYN Germany
https://ch-fr.zyn.com/
I was going to leave this post until the weekend but it feeds into this evenings posts on Ingenuity, could also serve as a template.
Some background on Zyn, tbh I dismissed the product without fully realising just how popular it is, starting with Philip Morris recent quarter results:
"The outstanding performance of Swedish Match – fuelled by the growth of ZYN in the U.S. – is accelerating our smoke-free transformation"
"ZYN nicotine pouch (NP) shipment volume in the U.S. of 89.9 million cans, representing growth of 53.1% versus second-quarter 2022 Swedish Match shipments of 58.7 million cans"
https://www.pmi.com/media-center/press-releases/press-details?newsId=26631
How much did it cost Philip Morris to enter this market:
"The company also made a huge move to acquire Swedish Match, which makes the oral nicotine pouch maker Zyn. The acquisition closed in late November and cost Philip Morris $16 billion"
"Zyn is immensely popular in the United States, where it has approximately 75.7% market share"
https://www.fool.com/investing/2023/03/17/a-bull-market-is-coming-3-reasons-to-buy-philip-mo/
GQ magazine commentary:
Why Are Zyn Nicotine Pouches Suddenly Everywhere?
https://www.gq.com/story/zyn-nicotine-pouches-suddenly-everywhere
Its easy to see where high GMV figures can be generated, just extrapolate quarter number of US sales for one year.
We only have a couple of sites confirmed Ingenuity at the moment as detailed below, this is a 10 year partnership until 2031 so plenty of onboarding time..
Great research as always. I also think it’s HUGE @1pencil that Ingenuity is rolling out for them in different territories. I’m amazed the market are not recognising this… ZYN Ingenuity UK Site below..
https://uk.zyn.com/
Hi @1Pencil
I think you are spot on.
No doubt MMM will mock me for this...but in 2013 I did my MBA thesis on nicotine replacement products with 2 pharmacists. We concentrated at the time on the fact that they were the domain of start up companies. No pharmaceuticals would touch them. We predicted the market would switch to tobacco companies stealing the charge on these, because they absolutely had to and pharma companies couldn't be seen to compromise their health credentials by majoring on them. Anyway...
That is now irrelevant. The market for these is huge. I've bought a few vapes in my time, which I'm not proud of, but amazon is the go to, which is pants for this. A defined product supply chain for these will be far better and if THG can be part of that it'd be great business sense. Nicotine replacement is not going to go away, no matter what anyone says.
Nice one Manc, I must admit this one completely passed me by.
Could be our 'Red Bull' moment..
(lol)
THG - Global distributor of nicotine replacement products...would. Make. A. Fortune.
Interesting on that ZYN Uk link most of the products are sold out! Better get a few million more in the warehouse Matt…
One more to add to the list, Shiro is the other leading brand owned by Phillip Morris.
Ingenuity also flagged for Shiro, site under construction (scroll to bottom)
https://storeleads.app/reports/thehutgroup/category/Smoking%20&%20Vaping
This is incredible research by 1pencil/ AS1/ Manc. Cigarette substitute products are perfect for d2c as high value/ low weight so perfect logistics, have very high marketing budgets to support through d2c and for customer acquisition, need explanation and education of the features, benefits and advantages (d2c is perfect where you as the brand owner can talk directly to your customer) and also get first party data to test and learn.
and it helps vivek background is tobacco (at BAT). this is a whale for sure, just need to get the lucrative US market, which the infastructure is all there for now
lots of new country websites under construction (play around with the country to see) like denmark/ canada/ sweden/ ****stan/ international etc
thg has uk and switzerland for now, with more markets hopefully being constructed by them
https://international.zyn.com/en/international/?_gl=1*wwf048*_ga*mtk3nza4ndgymc4xnjk4mzg0nzey*_ga_jkhs4w8m5c*mty5odm4ndcxmi4xljeumty5odm4ndgyoc4ymi4wlja.
All of this and yet the SP is going to be in the 50’s come the end of the day…
Well its a WIP so not baked into latest numbers. you can see most of it is new/ under construction with products out of stock whilst they gear up. guess PM are not allowing THG to press release it (which is very normal, and Moulding highlighted this). until the sales come in, the lazy LSE wont count it, but it will unlock high GMW and ebitda once fully operational and this will of course help the Share price eventually
*All of this and yet the SP is going to be in the 50’s come the end of the day…*
SP isn't the company and all that jazz.
Not sure it will close in the 50s.
There's a bit of support around 61p.
We're being sucked down by the US markets as far as I can tell.
Probably finish 5% up - that's about how predictable this SP is.
DYOR
From yesterday: "narrowing trading range of 65.68 to 60.72, which it breaks first is important."
It broke down just below that range at open. Would guess it's going to need some help to hold in the 60s today.
You guys get more deluded by the day...wake up from that fairy tale land you're living in. The Fund managers have ten times more data and sources of information than a bunch of amateur detectives on here. If anything significant was in the offing the SP would have shot up by now, not declined to 60p...Wake Up!
How dare you moniman, "a bunch of amateur detectives on here"?
You have it from Pmh yesterday that these are all "seasoned investors".
LMFAO.
"You guys get more deluded by the day...wake up from that fairy tale land you're living in. The Fund managers have ten times more data and sources of information than a bunch of amateur detectives on here. If anything significant was in the offing the SP would have shot up by now, not declined to 60p...Wake Up!"
So please explain why the vast majority of active funds with the data rich, well connected fund managers always underperform the passive funds and I imagine also underperform expericienced private investors ?
'In his speech to Parliament, King Charles said that the Government would 'introduce legislation to create a smoke-free generation by restricting the sale of tobacco… and restricting the sale and marketing of e-cigarettes to children'.
https://www.dailymail.co.uk/health/article-12719811/Rishi-Sunak-defies-Tory-revolt-vows-create-smoke-free-generation-law-banning-children-aged-14-buying-cigarettes.html
Take ZYN for your SINN.....stops smoking instantly
ZYN is very much fundamental to PM's future strategy
https://uk.investing.com/news/stock-market-news/philip-morris-internationals-expansion-in-smokefree-products-and-strong-zyn-momentum-reinforces-confidence-morgan-stanley-3177620
The Dinosaur Market can only value oil companies wouldn’t have a clue what ZYN is & probably thinks it’s a clothing brand!!! Joke market.. 70p!!
So why is shell even thinking of delisting to Dow?