Philip Morris International Inc. (PMI) is a leading international tobacco company committed to creating a smoke-free future by expanding its portfolio beyond traditional tobacco and nicotine products. The company primarily sells cigarettes and smoke-free products, which include heat-not-burn, e-vapor, and oral nicotine products, as well as wellness and healthcare products through its Vectura Fertin Pharma business . PMI has invested significantly in developing innovative smoke-free products, with brands like IQOS and ZYN leading their smoke-free portfolio . The company's operations are organized into several geographical segments, focusing on different regions worldwide .
- Smoke-Free Products - Includes heat-not-burn, e-vapor, and oral nicotine products, with leading brands such as IQOS and ZYN driving the company's transition to a smoke-free future.
- IQOS - A heat-not-burn product designed to provide a smoke-free alternative to traditional cigarettes.
- ZYN - An oral nicotine product offering a smoke-free experience.
- Wellness and Healthcare - Focuses on inhaled therapeutics and oral delivery systems through the Vectura Fertin Pharma business, expanding PMI's reach beyond traditional tobacco products.
- Combustible Tobacco Products - Comprises traditional cigarettes and other tobacco products, continuing to contribute to the company's revenue.
- Geographical Segments - Organized into Europe, South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa (SSEA, CIS & MEA), East Asia, Australia, and PMI Duty Free (EA, AU & PMI DF), and the Americas, allowing PMI to cater to diverse markets worldwide.
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| Name | Position | External Roles | Short Bio | |
|---|---|---|---|---|
André Calantzopoulos ExecutiveBoard | Executive Chairman | None | André Calantzopoulos has been with PM since 1985, serving as CEO from 2013 to 2021. He became Executive Chairman in May 2021. | |
Emmanuel Babeau Executive | Chief Financial Officer | Board member of Davide Campari-Milano N.V. | Emmanuel Babeau joined PM as CFO in May 2020. He oversees financial operations and compliance, with prior experience at Schneider Electric and Pernod Ricard. | |
Frederic de Wilde Executive | President, South and Southeast Asia, CIS, Middle East and Africa Region | None | Frederic de Wilde joined PM in 1992 and has held various roles, including President of the European Union Region. He became President of his current region in January 2023. | |
Jacek Olczak Executive | Chief Executive Officer | None | Jacek Olczak has been the CEO since May 2021, having joined PM in 1993. He has held various roles, including COO and CFO, and played a pivotal role in PM's transformation and growth of reduced-risk products. | |
Lars Dahlgren Executive | President, Smoke-Free Oral Products & CEO of Swedish Match | None | Lars Dahlgren joined PM following its acquisition of Swedish Match, where he was CEO. He has been President, Smoke-Free Oral Products & CEO of Swedish Match since January 2023. | |
Reginaldo Dobrowolski Executive | Vice President and Controller | None | Reginaldo Dobrowolski has held various finance roles at PM and became Vice President and Controller in August 2021. | |
Stacey Kennedy Executive | President, Americas Region & CEO of PMI's U.S. Business | None | Stacey Kennedy joined PM in 1995 and has held various roles, including President of South and Southeast Asia Region. She became President, Americas Region & CEO of PMI's U.S. Business in January 2023. | |
Stefano Volpetti Executive | President, Smoke-Free Inhalable Products & Chief Consumer Officer | None | Stefano Volpetti joined PM in 2019 and has led smoke-free transformation efforts. He became President, Smoke-Free Inhalable Products & Chief Consumer Officer in January 2023. | |
Vassilis Gkatzelis Executive | President, East Asia, Australia, and PMI Duty Free Region | None | Vassilis Gkatzelis joined PM in 2003 and has held various roles in marketing and management. He became President of his current region in May 2024. | |
Werner Barth Executive | President, Combustibles Category & Global Combustibles Marketing | None | Werner Barth joined PM in 1990 and has held various marketing and commercial roles. He became President of Combustibles Category & Global Combustibles Marketing in November 2021. | |
Yann Guérin Executive | Senior Vice President and General Counsel | None | Yann Guérin joined PM in 2006 and has held various legal roles. He became Senior Vice President and General Counsel in July 2023. | |
Juan José Daboub Board | Director | Chairman, President, and CEO of The Daboub Partnership of Arcis, LLC; Vice Chairman of Dorado Partners LLC; President of the HUGE Business and Investment Council | Juan José Daboub has been a director at PM since 2021, with expertise in governance and sustainability. | |
Kalpana Morparia Board | Director | Board member of HSBC Holdings plc, Dr. Reddy’s Laboratories Ltd., and Hindustan Unilever Limited | Kalpana Morparia has been a director at PM since 2011, with strong leadership experience in finance and international business. | |
Lisa A. Hook Board | Lead Independent Director | Board member of Fidelity National Information Services, Inc. and Nokia Corporation | Lisa A. Hook has been a director at PM since 2018 and became Lead Independent Director in May 2023. She has extensive experience in telecommunications and digital transformation. | |
Robert B. Polet Board | Director | Chairman of SFMS B.V. and Arica Holding B.V.; Board Member of Safilo Group S.p.A. | Robert B. Polet has been a director at PM since 2011, bringing experience in global luxury brands and consumer goods. |
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One of your peers highlighted that in Europe, vapor is seeing greater success in fully converting smokers than heated tobacco; what are your latest thoughts on this topic, and are you seeing an acceleration in vapor adoption as you roll out VEEV in several markets?
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Regarding the illicit nicotine pouches entering the U.S. market that may infringe on your patents, could you expand on what measures you are currently taking or expect to take, and how do you think this will differ from the current environment we see in vapor in the U.S.?
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Considering your increased pricing guidance of 8% to 9% and yet positive volumes in combustible cigarettes, shouldn't FY '25 also be a strong year for cigarette volumes and pricing internationally, and can you touch on any disruptive excise tax hikes expected in the next few months?
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It looks like you modestly took down the top end of your potential deleveraging for this year; could you address what drove that, and with sizable maturities over 2025, are you considering pulling some of that refinancing forward into the remainder of this year, given where markets are opportunistically?
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With the ongoing supply constraints for ZYN in the U.S., what measures are you taking to match consumer demand, and how confident are you in your capacity expansion plans to meet future growth?
Research analysts who have asked questions during Philip Morris International earnings calls.
Bonnie Herzog
Goldman Sachs
4 questions for PM
Eric Serotta
Morgan Stanley
3 questions for PM
Gaurav Jain
Barclays
3 questions for PM
Matthew Smith
Analyst
3 questions for PM
Faham Baig
UBS Group
2 questions for PM
Mirza Faham Baig
UBS
2 questions for PM
Priya Ohri-Gupta
Barclays Capital
2 questions for PM
Callum Elliott
Bernstein
1 question for PM
Gerald Pascarelli
Needham & Company
1 question for PM
Philip Spain
JPMorgan Chase & Co.
1 question for PM
Competitors mentioned in the company's latest 10K filing.
| Company | Description |
|---|---|
A competitor in the tobacco industry, which includes both traditional and innovative products. The company ended its commercial relationship with this competitor in the U.S. covering IQOS as of April 30, 2024. | |
A competitor in the tobacco industry, competing in both traditional and innovative product categories. | |
Japan Tobacco Inc. | A competitor in the tobacco industry, operating in both traditional and innovative product categories. |
Imperial Brands plc | A competitor in the tobacco industry, competing in both traditional and innovative product categories. |
Swedish Match AB | Acquired by the company in November 2022, this competitor was a leader in oral nicotine delivery with its ZYN brand. The acquisition has been a key milestone in the company's transformation to becoming a smoke-free company. |
State-owned tobacco enterprises | Competitors in various countries, including Algeria, Egypt, China, Taiwan, Thailand, and Vietnam, which may have different regulatory and market dynamics. |
New market entrants | Competitors in the non-combustible product category, which may alienate consumers through inappropriate marketing campaigns, messaging, and inferior product satisfaction. |
| Customer | Relationship | Segment | Details |
|---|---|---|---|
Europe Region Distributor | Distributor | Europe | Accounted for 12% in 2023 , 13% in 2022 , and 13% in 2021 of consolidated net revenues. |
EA, AU & PMI DF Region Distributor | Distributor | East Asia, Australia & PMI Duty Free | Accounted for 11% in 2023 , 12% in 2022 , and 15% in 2021 of consolidated net revenues. |
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
United Tobacco Company (UTC) | 2024 | PMI acquired a controlling interest of 54.25% in UTC via an incremental purchase priced at a total of $315 million (including cash, contingent consideration, and assumed loans), with a fair value allocation of $655 million that supports manufacturing synergies in Egypt. |
Eastern Company | 2024 | PMI acquired an indirect 14.7% economic interest in Eastern Company, Egypt’s largest cigarette manufacturer, and later guaranteed up to $385 million in credit facilities until 2034 to bolster its influence under the equity method. |
Swedish Match AB | 2023 | PMI, through its subsidiary PMHH, completed the 100% acquisition of Swedish Match AB for $883 million by compulsorily redeeming the remaining shares, thereby advancing its transformation into a smoke‑free company through an enhanced portfolio in oral nicotine products. |
Philip Morris Tütün Mamulleri Sanayi ve Ticaret A.Ş. | 2022 | PMI acquired the remaining 25% stake (along with a 24.75% stake in the related subsidiary) from Sabanci Holding for approximately $223 million, consolidating full ownership and adjusting its capital structure. |
Philip Morris Pazarlama ve Satış A.Ş. | 2022 | PMI acquired the remaining 24.75% stake for approximately $223 million, resulting in a $30 million decrease in additional paid-in capital and a $171 million increase in accumulated other comprehensive losses from reclassified currency translation losses. |
Recent press releases and 8-K filings for PM.
- Italy’s Antitrust Authority has launched an investigation into Philip Morris Italia over alleged misleading advertising of its “smoke-free” products.
- Regulator alleges that terms like “smoke-free” and “a future without smoke” may wrongly imply reduced harm, despite ongoing addiction and health risks.
- Inspections were carried out at Philip Morris Italia’s premises by antitrust officials alongside finance police.
- The probe also covers Philip Morris Manufacturing & Technology Bologna S.p.A., indicating a broader review of the company’s Italian operations.
- Philip Morris International is seeking modified risk classification from the FDA for its IQOS ILUMA heated tobacco system, citing reduced exposure to harmful chemicals compared to combustible cigarettes.
- The IQOS ILUMA model has been under FDA review for nearly two years and has demonstrated higher legal-age smoker conversion rates in evidence presented to the Tobacco Products Scientific Advisory Committee.
- Its 2023 acquisition of Swedish Match has expanded PMI’s U.S. portfolio, bolstering its strategy to market IQOS alongside other smoke-free products.
- The company’s strong financial profile—$39.06 billion revenue, 66.44% gross margin, 21.08% net margin, and 36.38% operating margin—underpins its regulatory efforts despite a five-year average annual decline in operating margin.
- Philip Morris International presented evidence to the FDA’s Tobacco Products Scientific Advisory Committee on October 7, 2025, urging a recommendation to continue marketing IQOS as a Modified Risk Tobacco Product.
- The FDA affirmed that switching completely from combustible cigarettes to IQOS significantly reduces users’ exposure to harmful or potentially harmful chemicals.
- As of June 30, 2025, PMI estimates approximately 34 million legal-age IQOS consumers globally, many of whom have moved away from cigarettes or reduced their consumption.
- PMI requested a timely scientific review process for smoke-free products, including IQOS ILUMA, which has been pending FDA review for nearly two years to further support adult smokers’ transition.
- $37 million investment to expand the Wilson, North Carolina manufacturing plant, reinforcing PMI U.S.’s commitment to American manufacturing and smoke-free alternatives.
- Addition of a new production line for TEREA consumables for the IQOS ILUMA heated tobacco system, pending FDA authorization.
- The facility employs over 80 full-time staff and currently produces HEETS for IQOS 3.0, with capacity to support an at-scale IQOS ILUMA launch.
- Builds on prior U.S. investments of $232 million in Owensboro, KY and $600 million in Aurora, CO, projects that together will create nearly 1,000 direct jobs.
- The Board declared a quarterly dividend of $1.47 per share, up from $1.35, equating to an annualized rate of $5.88 (8.9% increase).
- The dividend is payable on October 20, 2025 to shareholders of record as of October 3, 2025; ex-dividend date is October 3, 2025.
- PMI has increased its annual dividend every year since 2008, totaling a 219.6% increase (CAGR of 7.1%).
- Reaffirmed 13–15% EPS growth guidance for FY 2025 and projected margin expansion supported by smoke-free product mix and favorable fiscal environments.
- Reported five consecutive years of positive volume driven by smoke-free products; IQOS adding ~15 billion sticks annually and ZYN now in 47 markets with strong unit-revenue accretion.
- Highlighted U.S. ZYN dynamics: 65%+ price premium per pouch versus competitors, imminent inventory normalization in Q3, and intensified promotional support to sustain sell-through growth.
- Noted EU Tobacco Excise Directive draft offers tax differentiation for smoke-free products with derogations until 2030–32, representing a net positive but pending member-state approvals.
- Emphasized strong cash conversion, positive currency tailwind (+$0.10 EPS impact), and path toward sub-2x leverage by 2027 to potentially enable future shareholder returns.
- CEO Jacek Olczak said Zyn’s prior capacity constraints have been resolved, enabling ~40% sequential growth and full market supply in Q2.
- The company accelerated U.S. capacity expansion to meet rising retail demand and aims to deliver on heightened revenue and profitability expectations.
- Regulatory engagement with the FDA has increased, with hopes to secure PMTA approvals for IQOS ILUMA and other smoke-free products by early 2026.
- For its VEEV e-vapor product, Philip Morris is pursuing a selective market entry strategy in legitimate markets, driving volume growth and bottom-line accretion.
- Q1 2025 net revenues were $9.3 billion, up 10.2% organically (+5.8% reported) vs. prior year.
- Q1 adjusted diluted EPS of $1.69 grew 17.3% excluding currency effects (+12.7% including currency).
- Total shipment volume reached 187.8 billion units, up 3.9%, driven by 14.4% growth in smoke-free products.
- Smoke-free category organic net revenues grew 20.4% and operating income rose 16.0% vs. Q1 2024.
- 2025 adjusted diluted EPS is forecast at $7.36–$7.49, implying double-digit USD growth.
- Europe delivered FY 2024 shipment volume of 216.3 billion units (+0.8% vs. PY), net revenues of $15.7 billion (+7.2%), and adjusted operating income of $7.0 billion (+7.3%).
- Smoke-free products (HTUs, e-vapor & oral) generated ~$7 billion in Europe net revenues (≈45% of total) across 37 markets, reflecting rapid SFP adoption in under 10 years.
- IQOS achieved ~$6 billion in FY 2024 net revenues, outpacing the closest smoke-free competitor by over threefold in key EU markets and securing #1 nicotine brand status in Europe.
- PMI’s Europe footprint includes 21.5 thousand direct EU employees, 20 manufacturing sites, and an estimated €289 billion economic contribution to the EU (2019–2023).
- Phased rollout of IQOS ILUMA i devices expanded to 20 European markets (ILUMA i PRIME in Q4 2024; ILUMA i and ILUMA i ONE from Q1 2025), with full launch slated for H2 2025.
- The Board of Directors declared a $1.35 per share regular quarterly dividend with the record/ex-dividend date of June 27, 2025 and payable on July 15, 2025 .
- Achieved a forward dividend yield of 2.93%, underscoring its commitment to shareholder returns .
- Delivered a 220.66% total return over five years, outperforming the one-year U.S. market return of 11.7% but trailing the U.S. Tobacco industry’s 30.8% return .
- Accelerating its smoke-free transition with $14 billion invested since 2008 and securing FDA authorizations for IQOS, ZYN pouches, and Swedish Match snus .
- Smoke-free products represented 42% of Q1 2025 net revenues, highlighting PMI’s ongoing strategic shift .