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- **ZYN Leadership Solidified**: U.S. nicotine pouch category leader with 60%+ volume share, 39% Q3 growth. 
- **IQOS Resilience**: 15.5% HTU shipment growth, 70%+ gross margin despite competitive intensity. 
- **Investment Payoff**: $100M Q3 spend drives 31% consumer trial, 58% Nielsen-accelerated growth. 
- **FDA Advocacy**: Pushing for streamlined PMTA reviews to maintain innovation pipeline. 
- **2026 Outlook**: 6-8% organic growth, 40%+ adjusted OI margin, $11.5B+ operating cash flow.

**【CEO Summary Section】**
- CEO emphasized ZYN's leadership in the U.S. market, with a focus on premium positioning and innovation. 
- Highlighted IQOS ILUMA's potential to convert smokers and drive long-term growth. 
- Discussed strategic investments in R&D and brand engagement to maintain category leadership. 

**【CFO Financial Commentary】**
- Reported strong operating income growth (+17.3%) driven by pricing and cost efficiency. 
- Noted a 22% effective tax rate and $11.5 billion+ operating cash flow for the year. 
- Highlighted disciplined capital allocation, including a record dividend increase (+8.9%). 

**【Q&A Key Highlights】**
- **ZYN Promotional Strategy**: $100M one-time investment in Q3 to accelerate consumer trial and brand awareness. 
- **Inventory Management**: Expect 20-30M can inventory reduction in Q4 to align shipments with market demand. 
- **FDA Regulatory Outlook**: Advocated for a level playing field and faster PMTA reviews to sustain innovation. 
- **Competitive Landscape**: Confident in IQOS's 75%+ share stability despite intensified competition. 
- **VEEV Momentum**: Accelerated pod-to-kit ratio and 91% year-to-date shipment growth in e-vapor. 
- **Global Expansion**: Launches in Spain, Poland, and South Africa to diversify growth beyond the U.S. 
- **Sustainability**: Targeting 2x net debt/EBITDA by 2026 through disciplined capital deployment.

Philip Morris International Inc. (PM) Q3 2025 Earnings Call Transcript

- **Record Q2 Revenue**: $10.1 billion (7.1% YoY), with smoke-free net revenues up 17.3% to $8.1 billion.
- **EPS Beat**: Adjusted diluted EPS $1.91 (20% YoY growth), exceeding prior guidance.
- **ZYN Recovery**: U.S. offtake growth 36% in June, with 800-840M can shipment target reaffirmed.
- **Margin Expansion**: H1 OI margin 41.1% (250bps expansion), driven by smoke-free scale and combustible pricing.
- **Guidance Update**: Full-year EPS growth raised to 11.5-13.5%, with $11.5 billion operating cash flow.

**【CFO Financial Commentary】**
- **Q2 and H1 Performance**: Q2 net revenues reached $10.1 billion (up 7.1% YoY), with H1 at $19.8 billion (8.4% YoY growth). Adjusted diluted EPS was $1.91 (20% YoY growth), driven by smoke-free product profitability and combustible pricing.
- **Smoke-Free Growth**: Smoke-free net revenues grew 17.3% YoY to $8.1 billion, with IQOS HTU adjusted IMS up 11.4% (Europe +9.1%, Italy +11.4%). ZYN U.S. offtake growth accelerated to 26% Q2 and 36% in June, with shipments up 43% YoY. VEEV shipments doubled YoY.
- **Combustible Resilience**: Cigarette volumes declined 1.2% Q2 (2.5% H1), but gross profit grew 5% YoY. Full-year combustible volume decline expected at 2%.
- **Margin Expansion**: H1 adjusted OI margin expanded 250bps to 41.1%, with smoke-free gross margin at 70% (vs. 65.5% for combustibles). Cost savings of $1.2 billion YTD toward $2 billion target.
- **Updated Guidance**: Full-year adjusted EPS growth raised to 11.5-13.5% (vs. prior 10-12%), with H2 shipment volumes potentially down 2% YoY due to cigarette phasing. Operating cash flow forecast $11.5 billion.

**【Q&A Highlights】**
- **ZYN Restocking**: Q2 shipments included 14 million cans of restocking (vs. 10-20M earlier estimate). June offtake +36% (Nielsen), with Q3 shipments expected flat vs. Q2, and Q4 step-up to meet 800-840M can target.
- **EU TPD Concerns**: Proposed risk-based tax differentiation for smoke-free products welcomed, but lack of illicit trade measures criticized (9.2% EU cigarette market lost to illicit in 2024).
- **IQOS ILUMA U.S. Approval**: FDA PMTA review ongoing; H2 2025 approval possible, but 2026 risk acknowledged. Q3/Q4 IQOS HTU shipments expected 38.5-39.5 billion units.
- **Currency Impact**: $0.10 favorable EPS impact from weaker USD, offset by Swiss franc volatility. Full-year tax rate 22-23% (vs. prior 23-24%).

Philip Morris International Inc. (PM) Q2 2025 Earnings Conference Call Transcript

- **Q1 Revenue Beat**: 10.2% YoY growth ($9.3B) driven by smoke-free (+20%) and combustible pricing (+8.3%).
- **Smoke-Free Dominance**: 44% of gross profit, with IQOS gross margin >70% and ZYN shipments +53% YoY.
- **Margin Expansion**: 340bps organic improvement, led by smoke-free mix and cost savings ($180M+ in Q1).
- **ZYN Growth Acceleration**: Raised shipment forecast to 800-840M cans (prev. 700-740M), targeting replenishment completion by Q3.
- **IQOS Momentum**: Q1 IMS +9.4%, targeting +10-12% YoY despite EU flavor ban headwinds.
- **2025 Guidance**: +10.5-12.5% EPS growth reaffirmed, with H1 outperformance expected.

**【Management Opening Remarks】**
- Presented Q1 2025 results, highlighting strong performance across all business segments.
- Emphasized forward-looking statements and cautionary factors related to future projections.
- CFO Emmanuel Babeau led the financial review, focusing on smoke-free product growth, cost control, and margin expansion.

**【CFO Financial Review】**
- **Revenue Growth**: Organic net revenue up 10.2% YoY to $9.3 billion, driven by smoke-free products (20% growth) and combustible pricing (8.3%).
- **Smoke-Free Business**: 
  - IQOS shipments +14.4% YoY, with 33% gross profit growth and 70%+ gross margin.
  - ZYN shipments +53% YoY to 202 million cans, exceeding expectations due to production capacity expansion.
  - VEEV shipments doubled YoY, supported by global travel retail growth.
- **Gross Margin Expansion**: 340bps organic improvement, with smoke-free contributing 230bps (IQOS +230bps, ZYN +330bps).
- **Operating Income**: +16% YoY to $1.69 billion, driven by smoke-free mix and cost savings ($180M+ in Q1).
- **Guidance Update**: Raised ZYN shipment forecast to 800-840M cans (prev. 700-740M), targeting 12-14% SFP shipment growth.

**【Q&A Highlights】**
- **ZYN Inventory Restocking**: Expected normalization by Q3 2025; Q1 shipments included replenishment for distributors, limiting retail impact.
- **Margin Drivers**: Smoke-free mix (44% of gross profit), ZYN's high-margin U.S. sales, and IQOS scale benefits.
- **IQOS Growth**: Q1 IMS +9.4% vs. +8% Q4 2024, targeting +10-12% YoY growth; EU flavor ban impact annualizing but recovery observed in markets like Hungary.
- **Regulatory Risks**: Uncertainty around U.S. FDA ILUMA approval timeline, but no material impact expected on 2025 guidance.
- **Full Year Outlook**: Reaffirmed +10.5-12.5% currency-neutral EPS growth, with H1 outperformance expected due to favorable shipment timing.


Philip Morris International (PM)-23 Apr 25-2025 Q1 Earnings call transcript

- **Record Growth**: 2024 organic net revenue up 9.8%, smoke-free revenue nearly $15B (40% of total). IQOS IMS +15B units, ZYN U.S. +51% shipments despite supply constraints.
- **Profitability Surge**: 160bps gross margin expansion, smoke-free gross profit up 23% to $10B. 2025 EPS growth 10.5-12.5%, targeting 2x net debt/EBITDA by 2026.
- **Key Risks**: $0.22 EPS FX headwind, EU flavor ban impact of 1B units in 2025, and ZYN supply normalization in 2H25.
- **Strategic Focus**: Multi-category smoke-free expansion, cost efficiency ($750M+ savings in 2024), and deleveraging.


**【CEO Summary Section】**
- PMI delivered outstanding 2024 performance with 9.8% organic net revenue growth and 15.6% currency-neutral adjusted EPS growth. IQOS and ZYN drove smoke-free revenue to nearly $15 billion, accounting for 40% of total net revenues in Q4.
- IQOS achieved 13% HTU shipment growth, with Japan and Europe leading the charge despite EU flavor ban headwinds. ZYN U.S. shipments grew 51% to 581 million cans, though supply constraints limited growth.
- 2025 outlook: HTU adjusted IMS growth of 10-12%, ZYN shipments of 780-820 million cans, and 6-8% organic net revenue growth. Focus on multi-category strategy and deleveraging to 2x net debt/EBITDA by 2026.

**【CFO Financial Commentary】**
- 2024 results: $12.2 billion operating cash flow, $1.55 adjusted EPS (14% growth), and 160bps organic gross margin expansion. Smoke-free gross profit reached $10 billion, up 23% year-over-year.
- 2025 guidance: 10.5-12.5% currency-neutral EPS growth, $7.40-$7.70 EPS range, and $11 billion operating cash flow. Risks include $0.22 EPS FX headwind and EU flavor ban impacts.

**【Q&A Key Takeaways】**
- **ZYN Supply Normalization**: Targeting 2H25 for U.S. supply resolution, with 2025 shipments of 780-820 million cans (+200-240 million vs. 2024). FDA authorization of ZYN nicotine pouches reinforces leadership.
- **Europe IQOS Momentum**: Italy recovery slower than expected, but Poland, Greece, and Spain show strong growth. 2025 EU flavor ban impact estimated at 1 billion units.
- **ILUMA U.S. Potential**: If authorized, IQOS ILUMA could add 2-3 years of user acquisition, mirroring international success. Margins initially negative but accretive over time.
- **FX Hedging**: 60% yen hedged at JPY 138/USD, limiting yen volatility impact. Ruble weakness remains key risk.


Philip Morris International (PM)-6 Feb 25-2024 Q4 Earnings call transcript

Philip Morris International (PM)-22 Oct 24-2024 Q3 Earnings call transcript

Philip Morris International (PM)-23 Jul 24-2024 Q2 Earnings call transcript

Philip Morris International (PM)-23 Apr 24-2024 Q1 Earnings call transcript

Philip Morris International (PM)-8 Feb 24-2023 Q4 Earnings call transcript

Philip Morris International (PM)-19 Oct 23-2023 Q3 Earnings call transcript

Philip Morris International (PM)-20 Jul 23-2023 Q2 Earnings call transcript

Philip Morris International (PM)-20 Apr 23-2023 Q1 Earnings call transcript

Philip Morris International (PM)-9 Feb 23-2022 Q4 Earnings call transcript

Philip Morris International (PM)-20 Oct 22-2022 Q3 Earnings call transcript

Philip Morris International (PM)-21 Jul 22-2022 Q2 Earnings call transcript

Philip Morris International (PM)-25 Apr 22-2022 Q1 Earnings call transcript

Philip Morris International (PM)-10 Feb 22-2021 Q4 Earnings call transcript

Philip Morris International (PM)-19 Oct 21-2021 Q3 Earnings call transcript

Philip Morris International (PM)-20 Jul 21-2021 Q2 Earnings call transcript

Philip Morris International (PM)-20 Apr 21-2021 Q1 Earnings call transcript

Philip Morris International (PM)-4 Feb 21-2020 Q4 Earnings call transcript

Philip Morris International (PM)-20 Oct 20-2020 Q3 Earnings call transcript

Philip Morris International (PM)-21 Jul 20-2020 Q2 Earnings call transcript

Philip Morris International (PM)-21 Apr 20-2020 Q1 Earnings call transcript

Philip Morris International (PM)-6 Feb 20-2019 Q4 Earnings call transcript

Philip Morris International (PM)-17 Oct 19-2019 Q3 Earnings call transcript

Philip Morris International (PM)-18 Jul 19-2019 Q2 Earnings call transcript

Philip Morris International (PM)-18 Apr 19-2019 Q1 Earnings call transcript

Philip Morris International (PM)-8 Feb 19-2018 Q4 Earnings call transcript

Philip Morris International (PM)-18 Oct 18-2018 Q3 Earnings call transcript

Philip Morris International (PM)-19 Jul 18-2018 Q2 Earnings call transcript

Philip Morris International (PM)-19 Apr 18-2018 Q1 Earnings call transcript

Philip Morris International (PM)-8 Feb 18-2017 Q4 Earnings call transcript

Philip Morris International (PM)-19 Oct 17-2017 Q3 Earnings call transcript

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