Philip Morris International (PM) delivered a standout 2024 despite substantial currency headwinds and regulatory friction in select markets. The company reported organic net revenue growth of 9.8% for the year, supported by aggressive scale and margin expansion in its smoke-free portfolio, notably IQOS and ZYN, alongside a robust combustible franchise. Management highlighted that total smoke-free net revenues reached approximately $15 billion in 2024 and that smoke-free accounted for about 40% of PMI’s net revenues in Q4, with roughly 42% of adjusted gross profit coming from the segment. The fourth quarter showed continued momentum with organic net revenue growth of 7.3% and a total volume uptick, aided by pricing discipline and mix benefits, even as regulatory and timing effects (e.g., EU flavor ban headwinds and the Red Sea disruption) weighed on quarterly comparables.
Looking ahead to 2025, PMI guided a continued double-digit growth trajectory in the smoke-free category (roughly 12%–14%), with HTU shipments anticipated to 35–36 billion and US inhalation/heat-not-burn momentum supported by capacity expansions. The company projects up to ~2% organic volume growth for the group, with organic net revenue growth in the 6%–8% range and currency-neutral adjusted EPS growth around mid-teens (about 10.5% guidance); USD EPS growth is expected in the high single digits to low double digits. Management underscored continued operating leverage, ongoing cost efficiency, and a path to deleverage toward a net debt/EBITDA target near 2x by 2026. Key strategic drivers include US ZYN expansion, IQOS device enhancements (e.g., Iluma family), and international momentum in ZYN and ViV vapor outside the US. The narrative reflects PMI’s ongoing multi-category transformation and its intent to reinvest cash flow while returning capital to shareholders.