Business Strategy and Outlook
| Philip Gorham |Philip Morris International's, or PMI's, statement of purpose is to completely replace cigarettes with less harmful alternatives as soon as possible. The latest medium-term targets from management imply strong growth over the next three 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 will likely accelerate profitable medium-term growth.