Q2 2025 Philip Morris International Inc Earnings Call Transcript
Key Points
- Philip Morris International Inc (PM) reported strong double-digit adjusted diluted earnings per share growth in both constant currency and dollar terms, driven by the smoke-free portfolio.
- The smoke-free portfolio reached a record $4 billion in net revenues, with significant growth in IQOS, ZYN, and VEEV products.
- The company achieved high single-digit organic H1 top-line growth and mid-teens adjusted operating income growth, resulting in a margin of over 41%.
- Philip Morris International Inc (PM) raised its adjusted diluted EPS full-year forecast to 13% to 15% growth, reflecting strong business fundamentals and a favorable tax rate.
- The company continues to generate best-in-class growth across the P&L, with strong performance from both smoke-free and combustible products driving adjusted operating income growth of approximately 15%.
- Cigarette volumes declined modestly in Q2, primarily due to contraction in Indonesia and Turkey, where supply chain issues and regulatory changes impacted performance.
- The company expects cigarette volumes to decline around 2% for the year, with a forecast decline of 3% to 4% in H2, particularly impacted by Turkey.
- Despite strong smoke-free growth, the company anticipates modest declines in total PMI volumes in H2 due to cigarette dynamics.
- The regulatory environment remains a challenge, with concerns about the lack of a plan to counter illicit trade in the EU Tobacco Excise Directive proposal.
- Currency volatility, particularly involving the Swiss Franc, impacted the company's financial results, leading to transactional losses.
Good day and thank you for standing by. Welcome to the Philip Morris International 2025 second-quarter results conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, James Bushnell, Vice President and Investor Relations. Please go ahead.
Welcome. Thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2025 second quarter results. The press release is available on our website at www.pmi.com.
A glossary of terms, including the definition for smoke-free products as well as adjustments, other calculations and reconciliations to the most directly comparable US GAAP measures for non-GAAP financial measures cited in this presentation are available in Exhibit 99.2 to the company's Form 8-K dated July 22, 2025, and on our Investor Relations website.
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