Delivered record Q3 and YTD results, with smoke-free products (IQOS, ZYN, VEEV) outgrowing the global industry, now present in 100 markets, and accounting for over 41% of net revenues and gross profit.
U.S. ZYN shipments grew 37% to 205 million cans, with international can volumes up 27% and VEEV shipments more than doubling year-to-date.
Net earnings attributable to shareholders rose 20.6% to $9.2 billion, with adjusted diluted EPS up 17.3% to $2.24 in Q3 and 16.4% to $5.83 for the first nine months.
Combustibles performed well, with strong pricing and better-than-expected volumes in Turkey and Egypt, and gross profit growth.
Significant investments in growth initiatives, including a $100 million one-off for ZYN relaunch and promotional activities in the U.S.
Q3 organic top-line growth of 5.9% (7.3% excluding Indonesia technical impact); Q3 net revenues rose 9.4% to $10.8B; gross profit up 12.4% to $7.4B.
Adjusted operating income grew 7.5% organically and 12.4% in dollar terms to $4.7B, with margin expansion of 120bps; Q3 adjusted operating margin at 43.1%.
Adjusted diluted EPS reached a record $2.24 in Q3 (up 17.3%), with YTD adjusted diluted EPS up 16.4% to $5.83.
Year-to-date organic net revenue growth of 7.5% (9% excluding Indonesia), adjusted operating income up 12.5% organically, and EPS growth of 16%.
Gross margin expanded to 67.9% in Q3, with smoke-free gross margin at 70%.
Full-year 2025 adjusted diluted EPS guidance raised to $7.46–$7.56 (up 13.5%–15.1% vs. 2024); organic net revenue growth forecast at 6%–8%.
Full-year shipment growth targeted at around 1%, with cigarette decline of ~2% and smoke-free volume growth of 12%–14%.
Operating cash flow expected to exceed $11.5B; capital expenditures around $1.6B, focused on smoke-free investments.
No share repurchases planned for 2025; targeting net debt/adjusted EBITDA ratio of ~2x by end of 2026.
Q4 expected to be slower due to shipment timing, pricing, declining combustibles, and higher tax rate.
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Philip Morris first saw the light of day when Mr. Philip Morris, in 1847, opened a shop on London’s Bond Street, selling tobacco and ready-made cigarettes.
Philip Morris is the leader in manufacturing and selling cigarettes, tobacco, and nicotine-containing products. They are the makers of Marlboro, the world’s best-selling cigarette. Despite operating in an industry plagued by scandal, health concerns, regulations, and taxation, Philip Morris has continuously posted record-breaking profits and sales year after year.
As this industry is highly controversial, Philip Morris, early on, diversified their interests and expanded into international markets. By acquiring Miller Brewing in 1970, General Foods in 1985, and Kraft Inc. in 1988, Philip Morris became the world’s largest food corporation and beverage company in North America by revenue. Philip Morris is, on their behalf, owned by Altria.
Further reading: The Rise of ZYN: Redefining Nicotine Consumption
Today’s Philip Morris expects a bright future for heat-not-burn (HNB) tobacco products sold under its “I Quit Original Smoking” (IQOS) brand. In 2021, the number of adults who have stopped smoking and switched to IQOS reached 15.3 million across 71 markets.
"We are investing behind innovation and delivering sustainable growth from our leading smoke-free products, which are a much better choice than continued smoking." – James Bushnell, Vice President, Investor Relations & Financial Communications
Other companies within the business are British American Tabacco, Japan Tabacco Inc, and Imperial Brands.
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