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  • Brett Schafer

Deep Dive: Phillip Martinelli Talks Swedish Match

Listen On:

  1. Spotify

  2. Google Podcasts

  3. Apple Podcasts

Show Notes

It was a pleasure to have Phillip take the time to discuss Swedish Match on the show this week. Swedish Match is a nicotine manufacturer, with its flagship product being the Zyn nicotine pouches that are taking the United States by storm.

Here are some of the questions we asked Phillip on the show:

  1. Intro/Background

  2. Explanation of Swedish Match’s business segments and your thesis

  3. Difference between pouches and other nicotine products? Why are customers choosing to switch?

  4. Financials: What important metrics do you follow for Swedish Match?

  5. Valuation: At about a ~$16 billion EV, what are you expecting from this company in order to get good forward returns? How important is management/repurchases?

  6. Can you explain the proposed spin-off of the cigars segment? Do you like it, why or why not?

  7. Is European or Asian expansion realistic? How much growth could that bring to this business?

  8. Potential tax legislation: How could this impact Swedish Match? Is there any way that they can offset the tax hikes if they were to pass?

  9. Do you think nicotine pouches have durability concerns as a category?

  10. Do big tobacco competitors pose a risk? (and any other risks we missed)

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Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.

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