Philip Morris International (PM) Morgan Stanley Global Consumer & Retail Conference 2025 summary

Strategic overview and smoke-free transition

• Smoke-free products now available in over 100 markets, with more than one proposition in 30+ markets, driving over 40% of sales and accelerating cigarette volume decline.

• All three platforms—heat-not-burn, pouches, and e-vapor—are essential to meet diverse smoker needs and maximize conversion from cigarettes.

• Smoke-free product growth is expected to be around 10-12%, outpacing the industry, with strong brand loyalty and high margins.

• Positive cash conversion and total smoke-free volumes now offset cigarette declines for the fifth consecutive year.

• Significant growth potential remains in large markets not yet open to smoke-free products, such as India, Vietnam, and Turkey.

ZYN and nicotine pouch performance

• ZYN experienced supply constraints in Q4, but capacity ramped up faster than expected, enabling full market supply and strong marketing support in Q3.

• Q3 saw a surge in ZYN volumes and brand equity, with ZYN capturing over 50% of category growth despite a premium price.

• Price gaps have normalized, and future growth is expected to be supported by FDA decisions on pending PMTAs, potentially adding new strengths and flavors.

• The US pouch category is the fastest-growing in tracked channels, with robust outlook through 2026 and regulatory sentiment more favorable than in the past.

• ZYN sources new users from oral tobacco, e-vapor, and cigarettes, with roughly one-third from each, supporting sustained growth.

IQOS and international smoke-free growth

• IQOS continues double-digit growth for 11 consecutive years, holding share despite regulatory and tax headwinds in markets like Japan and Europe.

• Regulatory changes, such as flavor bans and tax equalization, may cause short-term slowdowns but do not alter long-term growth trajectory.

• Innovation remains a key driver, with new IQOS models and improved user experience targeting both new and conservative smokers.

• The global rollout of IQOS benefits from established digital and retail ecosystems, leveraging learnings from over 100 markets.

• US launch of IQOS ILUMA is expected to achieve 10% share within five years, starting with the latest technology and higher consumer awareness.