Philip Morris International (PM) Q4 2024 earnings summary

Executive summary

• Achieved strong organic top and bottom-line growth in 2024, with all business segments contributing and a fourth consecutive year of positive volumes, driven by smoke-free products, especially IQOS and ZYN.

• Smoke-free net revenues reached nearly $15 billion, accounting for 40% of total Q4 revenues and 42% of adjusted gross profit, with over 38.5 million adult users in 95 markets.

• Delivered robust cash flow and continued deleveraging, supporting ongoing investment in innovation and shareholder returns.

• U.S. FDA authorized all ZYN nicotine pouches currently marketed in the U.S., making ZYN the first FDA-authorized nicotine pouch.

• Surpassed $10 billion in adjusted net earnings for 2024.

Financial highlights

• FY24 organic net revenue grew 9.8% to $37.9 billion; shipment volume up 2.9% to 774 billion units.

• Adjusted operating income up 14.9% to $14.7 billion; adjusted diluted EPS up 15.6% currency-neutral and 9.3% in dollar terms to $6.57.

• Record operating cash flow of $12.2 billion, exceeding forecasts.

• Organic gross margin expanded by 330 basis points; smoke-free gross margin at 66.6%, 270 basis points above combustibles.

• Net debt-to-adjusted EBITDA ratio improved to 1.62 at year-end 2024, with a target of ~2x by end of 2026.

Outlook and guidance

• 2025 guidance: shipment volumes up to 2%, smoke-free product volume growth of 12%–14%, IQOS HTU IMS growth 10%–12%, and U.S. ZYN shipment volumes 780–820 million cans.

• Organic net revenue growth forecast at 6%–8%; adjusted operating income growth of 10.5%–12.5%.

• Adjusted diluted EPS guidance for 2025 is $7.04–$7.17, with currency-neutral growth of 10.5%–12.5% and dollar EPS growth of 7%–9%.

• Operating cash flow for 2025 expected around $11 billion, with $1 billion in non-recurring payments; capex at $1.5 billion focused on ZYN capacity.

• No share repurchases planned for 2025; targeting net debt/adjusted EBITDA ratio of ~2x by end of 2026.