Philip Morris International Inc. (PM) — BATS 0/100 — 2026-07-22

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Summary based on Philip Morris International Inc. earnings call on 2026-07-22

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Presentation

(1/9) Q2 and H1 headline results
• 📈 Q2 delivered plus 8% organic net revenue growth and plus 11% organic operating income, with currency-neutral adjusted diluted EPS up plus 14% to $2.20.
• 🚀 International smoke-free powered results with high single-digit volume growth, double-digit top-line growth, and impressive gross margin expansion.
• 💪 Combustible performance exceeded expectations with growing volumes, strong pricing, stable category share, and gross profit growth.

(2/9) Financial detail and cost savings
• 💰 Organic net revenues grew plus 7.6% to over $11 billion in quarterly net revenues for the first time, with adjusted gross profit up plus 8.7% organically.
• 📊 H1 organic net revenue grew plus 5.3% and adjusted diluted EPS reached a first-half record of $4.16, up plus 9.4% excluding currency.
• 🏭 PMI delivered over $300 million of gross cost savings in H1 and remains on track for the $2 billion 2024–2026 savings target with more than $1.8 billion cumulative to date.

(3/9) Volume outlook and growth drivers
• 📦 Total shipment volumes rose plus 2.5% in Q2 and plus 0.4% in H1 as smoke-free growth outweighed combustible declines.
• 📉 Full-year cigarette volume decline is now expected around 2% to 3% versus 3% previously, with total shipment volume around stable to slightly positive.
• 💵 Pricing added plus 5.9 points to H1 organic growth, including combustible pricing of plus 9.2% and around plus 3% from IQOS.

(4/9) IQOS global momentum
• 🔥 IQOS adjusted in-market sales grew plus 5% in Q2 and plus 8% in H1 despite Japan excise and Poland flavor-ban headwinds, with ex-Japan/Poland Q2 growth at plus 10.2%.
• 🌍 Strong results spanned established markets such as Italy, Greece, and Romania and newer markets including Saudi Arabia, the Philippines, Mexico, and Taiwan.
• 🏆 PMI maintained about 76% global heat-not-burn category share in H1 and IQOS entered Kantar’s top 100 most valuable global brands.

(5/9) VEEV, ZYN international, and Europe multi-category
• 📱 VEEV H1 shipments grew plus 72% internationally and plus 81% in Europe, making VEEV the clear number-one closed-pod and combined pods-and-disposables brand in Europe.
• 📈 International ZYN shipments grew plus 6% in H1 or plus 32% excluding the Nordics, reaching more than 17% share of the international segment excluding the Nordics in Q2.
• 🇪🇺 In Europe, combined IMS rose plus 8% in H1 as ZYN and VEEV complemented IQOS despite flavor-ban disruption in markets such as Poland and Hungary.

(6/9) Japan IQOS dynamics
• ⚠️ Japan H1 adjusted IMS grew plus 3.4%, but Q2 declined 3.4% as pantry loading ahead of the April 1 excise-driven price increase reversed.
• 🛡️ Despite the largest HTU price increase to date, IQOS adjusted category share held in the high 60s and adjusted IMS recovered through the quarter.
• 📅 Further H2 volatility is expected around the October excise change, while PMI still targets full-year IQOS adjusted IMS volume growth.

(7/9) U.S. ZYN sequential recovery and investment step-up
• 🇺🇸 U.S. sequential net revenue and adjusted gross profit improved plus 38% and plus 46% versus a challenging Q1, with ZYN shipments up plus 2% to 2.9 billion pouches.
• 🆕 ZYN Ultra 9 and 11 mg variants launched at a lower per-pouch price than the flagship dry range, with further 1.5 mg and 8 mg dry formats planned in Q3.
• 📣 PMI will accelerate second-half U.S. investment across marketing, distribution, in-store execution, the When It Clicks campaign, and IQOS ILUMA launch preparation subject to FDA action.

(8/9) Combustibles strength and full-year outlook
• 🚬 Combustible H1 pricing variance was plus 9.2%, international category share held at 25.3% in Q2, and Marlboro matched a record 11% share.
• 🎯 Full-year targets remain organic net revenue growth of plus 5% to plus 7%, organic OI growth of plus 7% to plus 9%, and currency-neutral adjusted diluted EPS growth of plus 7.5% to plus 9.5%.
• 💸 Operating cash flow is still expected around $13.5 billion, supporting investment and progressive shareholder returns.

(9/9) CFO transition closing
• 👋 Emmanuel Babeau said this is his last earnings call as Group CFO after six years and thanked shareholders and analysts.
• 🔄 Massimo Andolina, Regional President for Europe, will succeed Babeau as Group CFO in August.
• 🤝 Andolina paid tribute to Babeau and pledged continued focus on superior long-term shareholder returns and smoke-free growth investment.

Q&A

(1/9) Q&A: Why maintain full-year guidance and what U.S. investments are planned?
• 🇺🇸 Guidance was held because PMI faces an exciting U.S. moment with a broader ZYN variant portfolio, the When It Clicks campaign, and MRTP authorization supporting a 360-degree acceleration.
• 📣 Investment will pull every lever including marketing and point-of-sale activity while keeping ZYN as the leading premium brand and optimizing volume and bottom-line growth.
• 💪 PMI has capacity to deliver very strong growth while accelerating U.S. investment after several quarters of U.S. frustration.

(2/9) Q&A: Early ZYN Ultra feedback and low-nicotine positioning
• 📊 First two weeks of ZYN Ultra show sequential growth, share gains, category capture, and positive consumer feedback, but management remains cautious given the short period.
• 🧪 The 1.5 mg offering is intended to help smokers switch by avoiding too-high nicotine that can create a bad first experience.
• 🔒 Detailed rollout plans for low-nicotine variants were not disclosed as sensitive competitive information.

(3/9) Q&A: Japan IQOS share mix and H2 excise phasing
• 🇯🇵 Japan dynamics played out as expected with Q1 pantry loading, early-Q2 pressure, then recovery, while the category slowed but continued growing after a culturally significant price shock.
• 🔄 TEREA was more impacted as the most expensive consumable, while SENTIA acted as a safety net and overall category share finished about 68% versus 69% prior.
• 📉 The largest pass-on is behind PMI, H2 pass-on is closer to JPY 20, and 2027–2029 equalized smaller excises should create a more favorable pricing landscape.

(4/9) Q&A: Japan competitive promotions after excise pass-through
• ⚔️ Competitors appear all-hands-on-deck absorbing the large two-step pass-on rather than running opportunistic promotions.
• 🏆 Maintaining roughly 68% versus 69% share shows PMI remaining largely ahead even if share moves occur between smaller competitors.
• ⏳ A clearer read on competitor strategy likely requires dust to settle toward year-end after the further price or excise step.

(5/9) Q&A: Japan Tobacco October pricing application
• 🚫 Management declined to comment on Japan Tobacco’s Ministry of Finance application or competitor strategy beyond public information.
• 📐 Excise equalization implied roughly a 10% price increase for PMI versus up to about 20% for competitors if fully passed on.
• 🤫 PMI’s own October pricing application is not public yet and was not disclosed on the call.

(6/9) Q&A: ZYN price-premium optimization and IQOS pricing algorithm
• 💵 Optimizing ZYN means positioning variants to maximize volume and bottom-line growth while remaining the premium leader and taking a fair profitable share of category growth.
• 📦 Near-term IQOS priority is optimizing volume because consumables carry higher revenue and gross profit per stick, with only tactical pricing when volume is not damaged.
• 🏷️ Longer term, IQOS brand strength—including top-100 brand recognition—should enable greater pricing power as the category matures.

(7/9) Q&A: Confidence in European IQOS re-acceleration after flavor bans
• 🇪🇺 Excluding Poland and Hungary flavor-ban hits, underlying European growth has not substantially changed, and prior ban markets reestablished growth after a couple of quarters.
• 🧰 Portfolio tiering with Delia and nontobacco Leva, plus rapid double-digit Leva mix in markets such as Hungary, supports acquisition and affordability after bans.
• 🔄 Europe’s multi-category engine with VEEV leadership and encouraging oral launches in Poland, the U.K., and Austria further underpins confidence despite disruptive bans.

(8/9) Q&A: Why group revenue guidance is unchanged despite better combustibles
• 🎯 H1 organic growth of 5.3% leaves ample headroom within the full-year plus 5% to plus 7% revenue range while still supporting a dynamic H2.
• ⚖️ Better cigarette volumes and more price are largely offset by adverse geographic mix, limiting net upside to the revenue algorithm.
• 📦 H1 shipments ran a bit above IMS, so H2 is expected to reverse with IMS above shipments, affecting revenue phasing even as OI growth is targeted to accelerate.

(9/9) Q&A: Combustible volume momentum and full-year conservatism
• 🚫 Management declined to comment on July or early Q3 combustible run-rates.
• 🌏 Q2 combustible strength was concentrated in large markets with no or limited smoke-free presence such as Turkey, India, Egypt, and Indonesia, aided by growing legal-age demographics.
• 📉 Full-year cigarette volume outlook was revised only modestly to a 2% to 3% decline, and Q2 magnitude is not assumed to repeat for the rest of the year.