Business Strategy and Outlook
| Philip Gorham |Philip Morris International's, or PMI's, Unsmoke campaign signals an intent to go further in replacing cigarettes with reduced risk alternatives. The latest medium-term targets from management imply strong growth over the next three to five years, and the company aims to generate over half of its revenue from noncombustibles by 2025. We regard this as ambitious, perhaps a stretch goal, but we are in no doubt that if events go its way, PMI could be the first Big Tobacco firm since the 1990s to diversify half of its cash flow away from cigarettes. We regard this as a sound strategy from an environmental, social, and governance, or ESG, perspective, and because it's likely to accelerate profitable medium-term growth.