Why did PM outperform forecasts in 2024?

Philip Morris International (PM) outperformed forecasts in 2024 due to several key factors:

1. Strong Performance in Smoke-Free Products: The company's smoke-free business (SFB) contributed significantly to the revenue growth, with quarterly shipments of HTU and oral smoke-free products exceeding 40 billion units for the first time. The full-year net revenues from the smoke-free business increased by 14.2% (16.7% organically), driven by strong performance in IQOS and ZYN.
2. Combustible Tobacco Performance: Despite the decline in cigarette volumes, the company's combustible tobacco business showed resilience, with net revenues increasing by 8.4% year-over-year. This was driven by high single-digit pricing and robust industry volumes.
3. Geographic Growth: Philip Morris International has seen significant growth in key markets such as Japan and Korea, where IQOS has been particularly successful. The company's international performance continues to strengthen, underpinned by robust demand for its heated-tobacco business.
4. Financial Outlook: The company's financial outlook for 2024 remained strong, with expectations of net revenue growth of 7% to 8.5% organically and organic operating income growth of 10% to 12%. These projections, coupled with the company's strategic initiatives, provided confidence to investors.
5. Dividend and Shareholder Returns: Philip Morris International maintained a consistent dividend payout, which is attractive for income-seeking investors. The company's dividend yield is substantial, indicating a commitment to returning value to shareholders.

In summary, Philip Morris International's outperformance in 2024 can be attributed to its successful smoke-free product expansion, strong combustible tobacco performance, geographic growth, robust financial outlook, and commitment to shareholder returns. These factors combined to drive the company's revenue and earnings above market expectations.