Philip Morris International (PM) Barclays 18th Annual Global Consumer Staples Conference 2025 summary

Financial performance and guidance

• Reaffirmed 2025 adjusted diluted EPS guidance targeting 13–15% growth, the strongest since 2011 excluding post-pandemic recovery.

• Adjusted diluted EPS forecast for 2025 is $7.43–$7.56, up from $6.57 in 2024, with reported diluted EPS projected at $7.24–$7.37.

• Five consecutive years of positive volume growth, supported by strong pricing and a stable fiscal environment.

• Margin expansion is expected this year, overcoming previous margin hiccups, with smoke-free products driving higher gross margins and bottom-line accretion.

• Currency tailwinds are supporting deleveraging, with share repurchases likely as leverage approaches 2x, expected around 2026-2027.

Smoke-free product strategy and market dynamics

• Continued strong growth in IQOS, ZYN, and VEEV, with ZYN now present in 47 markets and expanding rapidly.

• ZYN maintains a significant price premium (65%+ per pouch) over competitors in the U.S., reflecting strong brand equity.

• Marketing and promotional support for ZYN is being increased to match intensified competition and drive further growth.

• Inventory normalization for ZYN is expected to be completed in Q3, with future growth driven by retail trends and marketing effectiveness.

• Oral nicotine pouches are seen as a major growth opportunity, with the U.S. market at only 6-7% penetration and significant upside potential.

Regulatory and competitive landscape

• New markets, such as Taiwan and Malta, are opening to heat-not-burn products, with broader regulatory acceptance expected to benefit growth from 2026.

• EU Tobacco Excise Directive discussions recognize smoke-free products and nicotine pouches, with tax changes likely phased in by 2030-2032.

• U.S. IQOS launch awaits PMTA approval, now expected more likely in 2026.

• Japan faces upcoming excise tax hikes in 2025, expected to result in price increases for both combustibles and heat-not-burn products.

• Competition is intensifying in key markets, notably for ZYN in the U.S. and IQOS in Japan.