Philip Morris International Inc. (PM) Q4 2024 Earnings Summary

Executive Summary

Strong Q4 with net revenues $9.706B (+7.3% reported; +7.3% organic) and adjusted diluted EPS $1.55 (+14% YoY), while reported EPS was -$0.38 due to a non-cash $2.3B Canada impairment (−$1.49 EPS) .
Smoke-free momentum: smoke-free net revenues $3.887B in Q4 (+9.2%), 40% of total; gross profit $2.626B (+15.1%), ~42% of total gross profit .
2025 guidance: adjusted EPS $7.04–$7.17 (ex-currency $7.26–$7.39); organic net revenue growth ~6–8%; organic OI growth ~10.5–12.5%; Q1 EPS $1.58–$1.63; U.S. ZYN shipments 780–820M cans .
Cash and leverage: 2024 operating cash flow $12.217B; net debt/EBITDA improved to 2.66x; targeting ~2x by end-2026 .
Catalysts: FDA authorization of all ZYN pouches in U.S., continued IQOS ILUMA adoption, and margin expansion plans offsetting cost headwinds .

IQOS strength: adjusted IMS up ~13% in Q4; Japan Q4 adjusted share rose +3.1pp to 30.6%; multiple EU city share milestones (Rome ~30%, Budapest >40%) .
ZYN growth despite constraints: U.S. shipments 165.1M cans in Q4 (+42% YoY); international pouch shipments more than doubled; FDA authorized all current ZYN pouches in U.S. .
Margin leverage: adjusted OI margin expanded to 36.3% in Q4 (vs 33.7% last year); smoke-free gross margin ~66.6% for 2024, higher than combustibles, with management targeting continued margin improvement in 2025 .

Quote: “2024 was a remarkable year for PMI… continued growth of IQOS and ZYN in addition to a robust combustibles performance” — CEO Jacek Olczak .

Reported EPS hit: recorded non-cash impairment of RBH investment ($2.3B; −$1.49 EPS) amid Canadian CCAA plan developments .
EU flavor ban drag: Europe’s HTU growth tempered; Italy recovery slower than expected in Q4; further annualization impact expected in Q1 2025 .
Ongoing ZYN supply constraints: retail out-of-stocks persisted; normalization targeted in H2 2025; retail pricing variability amid constrained supply .

Metric	Q2 2024	Q3 2024	Q4 2024
Net Revenues ($USD Billions)	$9.468	$9.911	$9.706
Adjusted Diluted EPS ($USD)	$1.59	$1.91	$1.55
Adjusted Operating Income ($USD Billions)	$3.656	$4.153	$3.519
Adjusted Operating Income Margin (%)	38.6%	41.9%	36.3%
Gross Profit ($USD Billions)	$6.1	$6.5	$6.283

Segment breakdown (Net Revenues, Gross Profit):

Segment Metric	Q2 2024	Q3 2024	Q4 2024
Net Revenues – Smoke-Free incl. W&H ($B)	$3.6	$3.8	$3.887
Net Revenues – Combustibles ($B)	$5.9	$6.1	$5.819
Gross Profit – Smoke-Free incl. W&H ($B)	$2.3	$2.6	$2.626
Gross Profit – Combustibles ($B)	$3.8	$3.9	$3.657

KPIs and volumes:

KPI	Q2 2024	Q3 2024	Q4 2024
Total Shipment Volume (units bn)	193.162	203.0	193.1
HTU Shipment Volume (units bn)	35.544	35.3	35.7
Oral SFP Shipment Volume (units bn; pouch eq.)	4.2	4.4	4.6
Cigarette Shipment Volume (units bn)	157.618	163.2	152.8
ZYN U.S. Shipments (million cans)	135.1	149.1	165.1

Notes:

Q4 reported EPS -$0.38 includes RBH impairment (−$1.49); adjusted EPS excludes special items and currency .
Q4 organic net revenue growth +7.3%; adjusted OI organic +11.8% .

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted Diluted EPS ($)	FY 2024	$6.45–$6.51	Actual $6.57	Raised vs guidance
Reported Diluted EPS ($)	FY 2024	$6.20–$6.26	Actual $4.52 (RBH −$1.49)	Lower due to impairment
Adjusted Diluted EPS ($)	FY 2025	N/A	$7.04–$7.17	New
Adjusted Diluted EPS ex currency ($)	FY 2025	N/A	$7.26–$7.39	New
Adjusted Diluted EPS ($)	Q1 2025	N/A	$1.58–$1.63	New
Organic Net Revenue Growth (%)	FY 2025	N/A	~6–8%	New
Organic Operating Income Growth (%)	FY 2025	N/A	~10.5–12.5%	New
U.S. ZYN Shipments (million cans)	FY 2025	N/A	780–820	New
Effective Tax Rate (%)	FY 2025	N/A	~22.5–23.5	New
Operating Cash Flow ($B)	FY 2025	N/A	~$11	New
Capital Expenditures ($B)	FY 2025	N/A	~$1.5	New
Dividend (per share)	Current	$1.35 (declared)	$1.35	Maintained

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
IQOS ILUMA adoption & HTU growth	Q2: Japan HTU share >29%, adjusted IMS +12.5% ; Q3: adjusted IMS +14.8%, EU reacceleration	Q4: adjusted IMS ~13% growth; Japan Q4 adjusted share +3.1pp to 30.6%	Sustained double-digit IQOS momentum
EU characterizing flavor ban impact	Q2: tempered growth; adjusted IMS +6.8% in Europe ; Q3: Italy recovering, annualization ahead	Q4: Italy recovery slower than expected; ~1B unit impact expected in 2025 with larger Q1 effect	Near-term headwind, gradual normalization
ZYN supply & FDA authorization	Q2: supply constraints but strong growth ; Q3: U.S. shipments 149.1M cans	Q4: U.S. shipments 165.1M; FDA authorized all ZYN currently marketed pouches; supply normalization targeted H2 2025	Regulatory tailwind; capacity ramp ongoing
Margins & cost headwinds	Q2: AOI margin 38.6% ; Q3: 41.9%	Q4: 36.3%; management targeting robust margin expansion in 2025; COGS headwinds easing	Positive margin outlook
Cash flow & leverage	Q3: Raised FY outlook	2024 OCF $12.217B; net debt/EBITDA 2.66x; target ~2x by 2026	Accelerated deleveraging

Strategic emphasis: “Our smoke-free business is large, profitable and growing fast… surpassed $10 billion in adjusted net earnings for the first time” — CEO .
Regulatory: “The long-awaited U.S. FDA authorization of all ZYN nicotine pouches… evidence of the compelling science supporting smoke-free products” — CEO .
2025 outlook: “We expect another year of strong growth… adjusted diluted EPS growth of +10.5% to +12.5% ex currency” — CFO .

Margin expansion drivers and ILUMA U.S.: Pricing, mix shift to smoke-free, easing COGS headwinds; initial U.S. ILUMA investments could be short-term margin negative but expected to be net contributor in 2–3 years; no cannibalization headwind in U.S. .
ZYN demand acceleration and retail pricing: Velocities accelerating despite supply constraints; expect retail pricing normalization as supply improves in H2 2025 .
EU ban & Poland timing: Italy recovery slower in Q4; Poland implementation likely later in 2025; expect annualization impact concentrated in Q1 2025 .
FX hedging detail: ~60% of 2025 JPY exposure hedged at ~JPY138; ~¼ EUR exposure at ~1.12; euro debt provides balance sheet hedge .

Wall Street consensus (S&P Global) was unavailable due to SPGI daily request limit exceeded; therefore, explicit comparisons vs consensus EPS/revenue cannot be provided at this time. Values retrieved from S&P Global were unavailable.*

Smoke-free mix expansion continues to drive structural margin and profit growth: Q4 smoke-free net revenues 40% of total; smoke-free gross profit ~42% of total .
ZYN is a key U.S. profit driver; FDA authorization de-risks regulatory trajectory; 2025 shipments guided to 780–820M cans, up ~200–240M cans YoY .
IQOS ILUMA maintains strong momentum (Japan Q4 adjusted share 30.6%); Europe growth continues with ban annualization expected; multi-category strategy offsets category shifts .
Margin outlook constructive: management targets robust 2025 margin expansion with pricing, mix, cost productivity and easing input cost headwinds .
Cash generation and deleveraging: 2024 OCF $12.217B and net debt/EBITDA down to 2.66x; path to ~2x by 2026 supports capital return and investment in capacity .
Near-term watch items: EU flavor ban annualization in Q1 2025, ZYN supply normalization progress, U.S. ILUMA authorization timing .
Dividend remains $1.35 per quarter; ongoing commitment to shareholder returns alongside smoke-free investments .