PMI projects up to 12.5 per cent profit growth for 2025 amid strong smoke-free expansion

Philip Morris International (PMI) has forecast an increase of up to 12.5 per cent in adjusted diluted EPS for 2025, following a strong financial performance in 2024, driven by the continued expansion of its smoke-free product portfolio.

The company delivered a reported diluted EPS of $4.52 (£3.63), or $6.01 before a Canada non-cash impairment of $1.49, compared to $5.02 in 2023. Adjusted diluted EPS reached $6.57, representing growth of 9.3 per cent, and 15.6 per cent on a currency-neutral basis.

“2024 was a remarkable year for PMI,” said Jacek Olczak, PMI chief executive. “We delivered very strong full-year results driven by the continued growth of IQOS and ZYN in addition to a robust combustibles performance.”

Olczak highlighted the recent US FDA authorisation of all currently marketed ZYN nicotine pouches, calling it “further evidence of the compelling science supporting smoke-free products.” He also urged other countries to follow the US lead and embrace effective tobacco harm reduction measures, particularly where smoke-free alternatives are banned.

Quarterly shipments of heat-not-burn (HTU) and oral smoke-free products exceeded 40 billion units for the first time. Full-year net revenues for the Smoke-Free Business increased by 14.2 per cent (16.7 per cent organically), with gross profit up 18.7 per cent (22.7 per cent organically). Smoke-free products now account for 40 per cent of PMI's total net revenues and approximately 42 per cent of gross profit. The company estimates 38.6 million adult users of its smoke-free products.

IQOS continues to be a strong performer, strengthening its position as the second-largest nicotine ‘brand’ in markets where it is present. HTU adjusted in-market sales (IMS) volume was up an estimated 12.6 per cent for the full year. In Japan, ILUMA i fuelled IQOS growth, with adjusted IMS up around 13 per cent for both the full year and the fourth quarter. In Europe, IQOS HTU adjusted market share increased to 10.6 per cent in the fourth quarter. VEEV is also gaining traction as a top 3 pod brand in 13 European markets.

In the oral smoke-free products business, full-year shipment volume increased by nearly 28 per cent in cans (nearly 25 per cent in pouches). Fourth-quarter shipment volume increased by 25 per cent in cans (22 per cent in pouches), driven by ZYN nicotine pouch growth in the US.

Full-year net revenues grew by 4.0 per cent (5.9 per cent organically) in the combustibles business, primarily due to strong pricing.

For 2025 fiscal, PMI forecasts reported diluted EPS to be in the range of $6.55 to $6.68. Excluding adjustments, this reflects a 7.2 per cent to 9.1 per cent increase compared to 2024’s adjusted EPS of $6.57, or 10.5 per cent to 12.5 per cent growth on a currency-neutral basis.

The company anticipates total cigarette and smoke-free product shipment volume growth of up to 2 per cent, driven by smoke-free products. Net revenue growth is projected at around 6 per cent to 8 per cent on an organic basis.

“With strong momentum across all categories, we are confident that our smoke-free transformation and unparalleled brand portfolio will continue to deliver excellent performance and create value for our shareholders in 2025 and for the long term,” Olczak said.

The forecast assumes an estimated 1 per cent decline in international industry volume for cigarettes and HTUs (excluding China and the US), and an acceleration in US nicotine pouch shipment volume. It also factors in capital expenditures of approximately $1.5 billion, including further ZYN capacity investments in the US.