Philip Morris (TABAK) H1 2024 earnings summary

Executive summary

• Net revenues rose 7.1% year-over-year to CZK 10.4 billion, driven by favorable pricing and smoke-free product growth, despite a ban on flavored heated tobacco in the Czech Republic.

• Profit from operations increased 18.7% to CZK 2.2 billion, and net income grew 11.9% to CZK 1.85 billion compared to H1 2023.

• The company maintained strong market positions in both the Czech Republic and Slovakia, with smoke-free alternatives gaining traction.

• Key product launches and portfolio expansions supported growth, including new IQOS ILUMA devices and VEEV e-cigarettes.

• Dividend of CZK 1,220 per share for 2023 was approved and paid in H1 2024.

Financial highlights

• Net revenues: CZK 10,404 million (+7.1% year-over-year); profit from operations: CZK 2,167 million (+18.7%).

• Net income: CZK 1,850 million (+11.9% year-over-year); EPS: CZK 674 (+12%).

• Czech Republic revenues up 2.4% to CZK 6.0 billion; Slovakia revenues up 17.1% to EUR 124 million.

• Shipments: 4.8 billion units (-3.2% year-over-year), with smoke-free product volumes stable or growing.

• Operating cash flow: CZK 2,533 million; cash and cash equivalents at period end: CZK 6,205 million.

Outlook and guidance

• Management expects continued improvement in consumer sentiment, stable energy prices, and inflation declining toward 2%.

• Cautious optimism for the remainder of 2024, with focus on productivity and cost management.

• Ongoing exposure to consumer down-trading and cross-border transactions remains a risk.