The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Fortune Global 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Fortune 500

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are beverages, food consumer products, and food production.

Fortune Sector Leaders: Food, Beverages, and Tobacco

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Fortune collaborated with the Diligent Institute to rank the most innovative boards of directors among S&P 500.

Modern Board 2022-Philip Morris

Philip Morris International scored high on board independence, age dispersion, and nationality dispersion.  
 
Not to be confused with Philip Morris USA, a division of tobacco corporation Altria Group, PMI is the distributor of cigarette brands including Marlboro in international markets. Now heavily investing in smokeless nicotine devices, the company has taken to <a href="https://fortune.com/2021/07/26/cigarette-ban-uk-philip-morris-ceo-jacek-olczak/">advocating for a ban on cigarettes</a> within the next decade. “In 10 to 15 years, we think cigarettes can be out of the market entirely,” PMI America CEO Martin King told <a href="https://www.latimes.com/business/story/2021-04-16/q-a-with-the-ceo-of-philip-morris-international-america">the Los Angeles Times</a> in 2021. IQOS, PMI’s smoke-free tobacco product, is now available in over 60 markets. 
 
The company has a good track record in taking care of shareholders. Despite a setback from PMI’s recent decision to pull out of Russia, which accounted for 6% of PMI’s 2021 net revenue, <a href="https://seekingalpha.com/article/4497780-philip-morris-cutting-forecasts-reiterate-buy">analysts forecast</a> a total return of 49% through 2025. Analysts have <a href="https://seekingalpha.com/article/4495379-philip-morris-20-percent-off-recent-highs-but-still-not-a-bargain">also noted</a> that PMI’s dividend growth and $7 billion stock buyback plan, approved last June and resulting in 8.5 million repurchased stocks in the latter half of 2021, will enable significant return of capital to investors. 
 
Former PMI CEO André Calantzopoulos is the chair of the board. The roster of directors includes nine former or current CEOs including PMI’s own chief, Jacek Olczak; SoftBank Group International CEO Michel Combes; and Lucio Noto, chairman and CEO of Mobil prior to its 1999 merger with Exxon. Former Goldman Sachs general partner and managing director Jun Makihara is also on the board, along with Advent International partner and Goodyear Tire &amp; Rubber Co. board member Werner Geissler, and Dessi Temperley, former head of investor relations at Nestlé and current board member with Coca-Cola Europacific Partners, Corbion, and Cimpress.

Fortune Modern Board 25

This year’s Fortune 500 marks the 68th running of the list.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

After nearly two centuries of selling cigarettes, the holding company is investing heavily into smokeless nicotine devices. The company's tobacco heating system, IQOS, is now sold is more than 60 countries. “In 10 to 15 years, we think cigarettes can be out of the market entirely," CEO Martin King told the Los Angeles Times.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-101-Philip Morris International

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-421-Philip-Morris-International

This global conglomerate sells cigarettes and other tobacco products outside of the U.S.; more recently, it has begun focusing on smoke-free alternatives like "heat not burn" devices, which in July received FDA approval to be marketed as a safer alternative to cigarettes.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-107-Philip-Morris

This global conglomerate sells cigarettes and other tobacco products outside of the U.S.; more recently, it has begun focusing on smoke-free alternatives like "heat not burn" devices.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Founded in 1847 as a London tobacco shop, Philip Morris International is now one of the world’s largest tobacco companies and the conglomerate behind Marlboro and Parliament cigarettes, as well as Zyn nicotine pouches. In 2016, PMI set a goal for a “smoke-free future” for the company, planning to eventually eliminate the sale of its combustible tobacco products. Since then, PMI has pushed the expansion of noncombustible nicotine products like heat-not-burn tobacco products and e-cigarettes. It acquired Swedish Match, the creator of Zyn, in 2022.

Q2 2025

Q1 2025

Q4 2024

Philip Morris International (PM): Company Profile, Stock Price, News, Rankings

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Philip Morris International

philip morris international

Good day and thank you for standing by. Welcome to the Philip Morris International twenty twenty five First Quarter Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

You will then hear an automated message Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, James Bushnell, Vice President of Investor Relations and Financial Communications. Please go ahead.

Welcome. Thank you for joining us. Earlier today, we issued a press release containing detailed information on our twenty twenty five first quarter results. The press release is available on our website at pmi.com. A glossary of terms, including the definition for smoke free products as well as adjustments, other calculations and reconciliations to the most directly comparable US GAAP measures for non GAAP financial measures cited in this presentation are available in Exhibit 99.2 to the company's Form eight ks dated 04/23/2025, and on our Investor Relations website.

Today's remarks contain forward looking statements and projections of future results. I direct your attention to the forward looking and cautionary statements disclosure in today's presentation and press release for a review of the various factors that could cause actual results to differ materially from projections or forward looking statements. I'm joined today by Emmanuel Babeau, Chief Financial Officer. Over to you, Emmanuel.

Thank you, James, and welcome everyone. In Q1, we delivered a very strong start to the year with all key elements of the business contributing strongly to deliver double digit increases in organic net revenue, operating income and adjusted diluted EPS in both constant currency and dollar terms. Our smoke free business performed exceptionally well across all areas with shipment volumes up plus 14.4% year on year, organic net revenue growth of plus 20% and outstanding organic gross profit growth of plus 33% as all three smoke free categories extended gross margin. This was especially fueled by the rapid growth of ZYN and the continued volume momentum, operating leverage and scale benefit of IQOS. Our smoke free business now accounts for 44% of total gross profit as we continue to deploy our multi category strategy across markets and broaden our growth opportunities.

IQOS delivered close to plus 10% HTU adjusted IMS growth with continued strong performance both in Japan and Europe, despite the annualization impact of the EU characterizing flavor ban. We expect double digit growth for the rest of the year. ZYN once again delivered strong growth in The U. S. With shipments increasing by an impressive plus 53% to reach two zero two million cans, exceeding our initial expectations as demand remained strong and production capacity increased ahead of schedule in the latter part March, enabling some initial replenishment of trade inventories.

International nicotine pouch cans volumes also grew by plus 53% or by plus 182% excluding The Nordics, demonstrating the global dynamism of this emerging category. In e vapor, this Q1 performance was impressive, demonstrating its increasing contribution within our multi category offering. Shipments more than doubled year on year and gross margin further expanded driven by strong pod growth in Europe as we increased our distribution and commercial activities. Within combustible, overall volume growth coupled with strong pricing and ongoing cost initiative drove a robust performance despite notably negative geographic mix from increased volumes in lower margin markets. Overall, the very strong and increasingly profitable underlying growth of our smoke free business was coupled with very solid combustible results and the added benefit of favorable shipment timing.

This allowed us to deliver plus 16% organic operating income growth and plus two fifty basis points of expansion in adjusted OI margin to reach 40.7% and resulted in strong double digit adjusted diluted EPS growth in both currency neutral and dollar terms despite currency headwinds. While it is early in the year and there are a number of uncertainty in the global economic outlook, we remain confident that we will achieve another year of superior growth. As such, we now forecast double digit adjusted diluted EPS growth at prevailing exchange rates. Turning to the headline numbers. We delivered volume growth of plus 3.9%, reflecting the very strong dynamism of our smoke free business.

Combined with strong pricing and despite unfavorable combustible mix, we delivered double digit organic net revenue growth of plus 10.2%, reaching $9,300,000,000 in total. There was also a technical impact from the change in commercial model for the Indonesia below Tier one cigarette segment, where we now act as a handling agent. This results in lower net revenue and cost of goods sold, but has no meaningful impact on gross profit or operating income. Excluding this effect, which will notably affect the first three quarters of the year, organic net revenues grew by around plus 12%. And as I mentioned, our Smoke Free business was the primary driver behind our organic adjusted OI growth of plus 16% or plus 12.8% in dollar terms.

Q1 adjusted diluted EPS grew by plus 17.3% in constant currency and by plus 12.7% in dollar terms to $1.69 This includes a $07 unfavorable currency variance notably due to non recurring transactional losses in the quarter linked to currency volatility. This stronger than expected performance was primarily driven by the top line and gross margin result of our Smoke Free business. Excellent ZYN performance was further enhanced by the great work of our manufacturing team in accelerating capacity initiative. Strong IQOS HTU shipment growth include a robust performance in Europe and around 1,000,000,000 units in favorable shipment timing, which we expect to reverse in H2. This was complemented by the resilience of our combustible business.

Looking at category performance in more detail, our smoke free business grew net revenue by plus 20.4 and gross profit by plus 33.1%. This led to an impressive plus six seventy basis points of organic gross margin expansion to surpass 70%, more than five points above the gross margin of combustible at the current category and geographic mix of SFPs. As I mentioned, this reflects an acceleration in gross margin expansion for all three smoke free categories, notably combined with the positive mix impact of ZYN's accretive unit economics and pricing on both HTUs and ZYN. Very strong IQOS gross margin expansion reflects the powerful growth and scale effect of this large and growing business, manufacturing productivities and a comparison benefit from higher device shipment in the prior year when Illumi Eye was launched in Japan. On an organic basis, combustible net revenues and gross profit grew by plus 3.8% and plus 5.3% respectively.

While pricing was strong and volume were positive, there was a notably negative geographic mix this quarter due to growth in markets such as Turkey and Egypt, in addition to the technical impact from Indonesia. We expect both pricing and negative geographic mix to moderate over the rest of the year and target combustible gross margin expansion organically and in dollar terms. As expected, input cost headwinds eased compared to recent years and based on current assumption, we expect this to further improve in 2026. Taking a closer look at our volumes, shipment growth of plus 3.9 was primarily driven by our smoke free business with all categories contributing positively and placing us on track for a fifth consecutive year of total volume growth. Smoke free volumes grew by plus 14.4%, above our full year target range of plus 12% to plus 14%, reflecting very positive contribution from IQOS, ZYN and VIVE.

In addition to the growth of these three brands, which I covered earlier, I would also note that our all smoke free business include U. S. Moist Snuff and Scandinavian snus, which declined modestly in the quarter. Despite this, oral smoke free product shipment growth accelerated versus the prior quarter to plus 27%. Cigarette volumes were positive for the fourth consecutive quarter as we grew share in a modestly declining industry with continued growth in markets where smoke free products are not permitted such as Turkey and India.

You have heard us talk recently about our multi category strategy for smoke free product as we leverage on the strengths of the IQOS brand and commercial infrastructure in international market to accelerate incremental growth from ZYN and VIVE. This is evidenced by our strong smoke report result in Q1 with visible accretion across region and market. We have 46 markets with multiple Smooth Prix offerings, including 16 with all three PMI categories on offer. The execution of this three pronged strategy is generating positive results in markets such as The Czech Republic, Romania, Switzerland and our global Travel Retail business, in addition to promising starts in The UK and Italy. It is also helping to bolster our position as a global Smooth Free champion.

Double digit Q1 organic net revenue growth was again driven by all three key elements of our structural growth model, namely volumes, pricing and smokefree mix. Pricing contributed plus six points, reflecting over plus 8% combustible pricing and around plus 3% for smoke free excluding devices. The positive mix impact of the shift to smoke free product, including US smoke free mix, drove a further positive contribution of plus 3.1 points. Overall, combustible geographic mix and other factors had an unfavorable impact of 2.7 points. This was more negative than in prior quarters, reflecting the technical Indonesia impact and combustible market mix dynamics I explained earlier.

Currency had a negative impact of 3.9 points, with a further 0.5 points from acquisition and divestiture, which include the divestment of Vectura. Turning now to gross margin. We delivered very strong expansion of three forty basis points on an organic basis and plus three sixty basis points including currency acquisition and divestitures. This comprised plus 180 basis points from pricing, more than offsetting an 80 basis point unfavorable impact from cost inflation, net of productivities and other cost items. Smoke free growth delivered an excellent plus two thirty basis points with a flat contribution from combustible excluding pricing, but including the Indonesia impact.

This excellent gross margin performance supported strong adjusted operating income margin expansion of two fifty basis points or plus 200 basis points organically after accounting for the currency mix of our costs, the divestiture of Vectura and other scope effects. This impressive margin expansion was delivered despite a 140 basis point impact of higher SG and A costs driven by continued investment in our smoke free growth, including U. S. Investments, a low cost comparison in the prior year and the impact of 2025 investment phasing. As we continue to invest in top line growth, we target organic SG and A growth broadly in line with net revenue growth for the year.

We continue to drive manufacturing and back office efficiency and delivered over $180,000,000 in gross cost saving in Q1 across both cost of goods sold and SG and A. After more than $750,000,000 of savings in 2024, This places us nicely on track to achieve our $2,000,000,000 target over twenty twenty four-twenty twenty six. Focusing now on our IQOS business. As expected, calendar effects and EU flavor ban annualization impacted Q1 adjusted IMS. However, the delivery of plus 9.4% growth despite these factors marks continued strong underlying momentum.

We expect double digit progress in the balance of the year, in line with our target of plus 10% to plus 12% growth. Supporting these are commercial initiatives around brand building and continuous innovation on devices and consumables as we progressively roll out Illumi Eye and new consumable variants of Teria, Livia and Delia. Over the longer term, we have a rich IQOS innovation pipeline to further enhance the breadth and quality of the user experience with the iconic brand. As disclosed in our latest integrated report, over 99% of our 2024 adjusted R and D spend was on smoke free product, consistent with the last four years as we continue to drive consumer centered product development. Turning to Europe, where we are building on the strength of our IQOS business to create an integrated multi category portfolio to accelerate consumers switching and value creation.

Total shipments of our flagship Smokefree brand advanced by plus 17.5% in Q1, with an increasing contribution from both ZYN and VIVE. ICO's HTU shipments grew more than 15%, including a positive comparison impact from the prior year. Our investments in brand building initiatives are exemplified by the recent partnership with renowned Italian designer Celletti at Milan Design Week as part of the IQOS Curios X campaign. For IQOS, Q1 HTU adjusted IMS grew by plus 7.4% as we further accelerated our share of cigarettes and HTUs to a record 11.4%. Many markets in the region grew adjusted IMS by double digits including high teens growth or more in Spain, Germany, Bulgaria and Greece.

This dynamism more than compensated for plethable annualization which, as flagged last quarter, was especially pronounced in Q1 and most notably in Italy. I am particularly pleased to report that sequential market share in Italy is trending well, with a record high of 18.4% for Q1 and progressive increases through the quarter. Overall, regional Q1 adjusted IMS growth was in line with our expectations and we expect another robust quarter in Q2, followed by an acceleration in the second half. Our experience of the flavour ban impact remains unchanged, with a broadly consistent pattern of recovery across markets following implementation. We continue to expect an impact of around 1,000,000,000 units in 2025, primarily due to annualization with only Hungary and Slovakia implementing the ban so far this year.

The most notable remaining market is Poland, where the King's share date will be in early twenty twenty six. We also continue to roll out new and improved variants of our tobacco free conceivable Libya, which is driving promising results. This is well illustrated by Hungary, where Libya reached a double digit share of semi SKUs less than three months from launch. Our fundamental progress in the region is highlighted by the consistent growth in key city office sales. This also includes Hungary, where Budapest's share reached almost 42%, over four points higher than Tokyo.

Impressively, 24 of the 34 markets where IQOS is present in Europe have crossed the 10% CCT share mark, with six above 30%. Notable fallouts across the region include London, Vienna, Zurich, Lisbon and Athens. The regulatory landscape is an important determinant of smoke free progress and we are encouraged by recent policy developments in a number of markets which recognise the role of tobacco harm reduction in policy measures. This includes BRI, which introduced dedicated legislation supporting science based claims on smokefree products, and Hungary, where factual and science based communication to consumers on smokefree products is allowed versus the total advertising ban for combustibles. In Ukraine, an excise tax difference on HPU that the cigarette was reintroduced following a period of equal treatment.

In Japan, we delivered HTU adjusted IMS growth of plus 9.3%, effectively marking the tenth quarter of double digit growth after accounting for the mid year. HTU adjusted share increased by three percentage points year on year and plus 1.6 points sequentially to reach 32.2%, further highlighting the dynamism of the innovative IQOS brand and product portfolio in this key market. IQOS HTU captured more than three quarters of category growth in Q1, and combined with our cigarette business, CMI is now the market leader by volume, of which approximately 75% are at the unit. The overall smokefree category continues its progress, reaching almost 48% on a national off-site basis in March, with 13 cities and eight protectors now crossing the 50% threshold. Globally, we continue to see very strong IQOS performance, as illustrated by QCT of XL.

Highlights include impressive year on year growth in the capital of Indonesia and Mexico, with surpassed 5% share, robust progress in The Middle East and North Africa, and strong growth in Belgrade with 17.7% share, despite increased competitive activity. IQOS reached a new high in South Korea, with a 14.1% share in CERO, supported by the launch of ILUMA I in a highly competitive market. Perfect share performance in Cairo continues to be optically impacted by the growth of the combustible market where competitive supply has normalised. Also worth highlighting is the excellent growth of our global Travel Retail business, which is a leading space for our multi category offering. We recorded strong SGA growth across all regions with share of over 18% in airports where IQOS is present.

In The US, as planned, we commenced direct sales of IQOS three devices and SKUs in OC, Texas at the March, following targeted engagement with legal and nicotine consumers over recent months. While intentionally small scale, we have received strong interest with further ICOS three pilot plans in the coming months as we prepare for the at scale launch of ICOSilumab. As a reminder, we are not assuming any significant HPU volumes from The US in our full year forecast. Switching to ZYN, which continues to resonate strongly with adult nicotine users as a superior product with premium brand equity and deliver excellent results. Continued strong demand and increased production capacity enabled shipment volume growth of plus 53% to reach over 200,000,000 cans for the quarter.

This plus 70,000,000 year on year increase is impressive, though we should note the prior year first quarter featured notable depletion of retail and distributor stock levels and therefore accelerated volume higher than shipments, and this quarter included the beginning of a replenishment. As we continue to expand production at our Owensboro plant, we accelerated one planned step in this process in the March. This enabled increased shipment at quarter end and a pull forward of initial distributor restocking. With very limited flow through of this additional shipment to retail in the quarter, this did not yet have a meaningful impact on store availability. We target full normalization of the supply situation in Q3 this year.

ZIM continues to perform very robustly at retail given the circumstances, with strong double digit offset growth. According to Nielsen, Q1 offset volume grew by around plus 15% year on year, with category value share remaining strong at over 70% despite heavy competitor discounting. While Nielsen data is based on only a small sample of stores, it also shows our off-site volume sales has been held back by availability and declined by 1.45 points sequentially to 61.5%. We already observed our share on MSC data, which measures shipment from distributor to retail, recovered to almost 66% in March on the limited flow through I just mentioned. With category of tech growing at around plus 30% to plus 35%, while the leading brand is supply constrained, we expect ZYN OFF tech to gradually accelerate in the coming months as in store availability improves and will reactivate commercial and marketing initiatives.

We remain excited about the growth prospects of this dynamic category and its potential to switch illegal age consumers from cigarettes and other traditional forms of tobacco. ZYN remains the only nicotine pouch product authorized by the FDA, and this includes all variants in both three and six mg strengths currently commercialized in The US. As I would like at CAGNY, there is a large addressable market in the millions of legalized nicotine users in The US, and we plan to engage more actively beyond our existing consumer base to other Legal Aid mutating users. Indeed, with strong latent demand and capacity expansion ahead of target, we now raise our shipment forecast to 800 to eight forty million tonnes for the year. With the outstanding effort of our team on the ground, we continue to work on increasing capacity in our Kentucky facility.

Construction of our second US manufacturing site in Colorado is well underway with production due to commence in early twenty twenty six. We remain, as we have been since The US, committed to investing in US manufacturing. The substantial investments we have made in The US are expected to continue to result in significant job creation and economic contribution to the country. Outside The US now, we continue to roll out deals leveraging our presence with IQOS and DEE, drives awareness and trials with legalized nicotine users. The total international nicotine pouch category is nascent in almost all geographies and stands at around half the size of The US in volume terms.

We are now in 38 markets globally following Q1 launches in The UAE and Colombia, and ultimately see all addressable markets as meaningful opportunities given the unique characteristics of the category. Using the plus 53% growth of our international short term volume, shipments almost doubled outside of The Nordics, including promising momentum in European markets such as Austria, Switzerland and The UK where we commenced a national pre account rollout. In emerging markets, strong progress continues in Pakistan, Mexico and South Africa. CMI Global Travel Retail is a notable standout as it also increases global visibility and awareness of ZIMs within our multi category offering. Finally, closing our smoke free performance with e vapor.

This played an increasingly important role within our multi category universe, with growing volumes and gross margins. Shipments volume doubled year on year to €600,000,000 on an equivalent unit basis, driven by very good performance in Europe, whereas the product segment continues to grow strongly, partially at the expense of disposables given increased demand and restriction for this format. We observed increasing V1 adoption rate and low abandonment across key markets, which is testament to the quality and presentation of this premium product to legal expertise. Turning to combustibles. Our business performed robustly in Q1 with organic net revenue growth of plus 3.8% or closer to plus 7% excluding the Indonesia technical impact.

This was driven by strong pricing of plus 8.3%, with notable contributions from Turkey, Poland and Germany. With less favorable timing dynamics in H2, we continue to expect full year comparable pricing of plus 5% to plus 6%. The cigarette industry declined by 1.3% in Q1, due to growth in geographies where smokefree products are nascent or not present, more than offset by accelerated CI declines and sales. Where SSDs are not currently accepted as in Turkey or India, we expect this divergence to continue, supported in some cases by demographic trends. Nonetheless, we continue to expect a low single digit rate industry decline for the year.

Category share was strong, growing 0.4 points in Q1, partly due to positive market mix. Both Marlboro and our global brands portfolio reached zero point times first quarter highs. We continue to target broadly stable category share over time, with our main priorities being maximizing value and supporting the growth of smoke free products. Most importantly, combustible organic growth continued to grow robustly at plus 5.2% following the recovery of 2024. This brings me to our outlook for 2025.

We delivered a very strong first quarter, including better than expected margins, and we remain confident we will achieve another year of superior growth. As such, we are reconfirming the currency neutral growth outlook we provided in February, despite the backdrop of increased uncertainty in the global macroeconomic environment. As a global company with broadly diversified Egyptian and the worldwide supplier network, including an established US entertainment base, we believe we are well positioned to mitigate potential supply chain challenges. While the situation is volatile, we do not currently anticipate a material impact on our business from recently introduced or discussed tariffs. We expect a continuation of strong momentum from our smoke free business, including the benefit of further multi category deployment.

As I explained, we are raising our forecast for US zinc shipments to 800 to eight forty million cans. This further supports our forecast of plus 12 to plus 14% SFP shipment growth, which incorporates unchanged from growth assumptions for ICOS. We also continue to expect total CMI organic net revenue growth in the range of plus 6% to plus 8%, organic operating income growth of plus 10.5% to plus 12.5% and currency neutral adjusted EPS growth of plus 10.5% to plus 12.5%. As announced in this morning's press release, we are raising our 2025 adjusted EBITA forecast to 7.36 to 7.49 This now reflects the 12% to 14% growth in dollar terms and includes a favorable estimated currency impact of 10¢ at prevailing exchange rates. This reflects recent strength in the Euro, Japanese Yen and Russian Rubles, partly offset by a stronger coupon.

Function two. We assume HTU shipment volume of $37,500,000,000 to $38,500,000,000 with another strong quarter of HTU adjusted IMS growth of around plus 10%. For US ZYN, we expect shipments to be at a similar level in Q1 as trade restocking continues and OpEx gradually accelerates. We forecast adjusted diluted EPS of $1.8 to $1.85 including a favorable currency variance of $06 at prevailing rates. We expect a strong H1 overall, with organic net revenue growth around the high end of our target range for the full year and organic OI growth slightly above.

With regard to our balance sheet, deleveraging remains a key priority and we continue to target further reduction in 2025, placing us on track for our target ratio of around two times by the end of twenty twenty six. We believe our growth profile is best in class within large cap consumer goods, as shown by our three year target target, which we are well on track to meet or exceed Adjusted diluted EPS growth in dollar terms is a key priority and as demonstrated in 2024, we are committed to taking proactive steps to manage potential currency volatility, including through our hedging activities. Behind the delivery of our growth lies the enormous effort we have made to transform our business over the last few years, and the continued drive towards our ambition to become substantially more free. This quarter coincides with the publication of the fifth edition of our annual integrated report, which provides a comprehensive view of our company's performance across both financial and non financial dimensions. Highlights include the important efforts and actions we are taking with regard to youth access prevention, as well as the progress we have made on our operational efficiency, strengthening our resilience, driving innovation and ultimately future proofing our business.

As explained in the report, our approach to sustainability is fundamentally business driven, with the objective of both strengthening and enhancing the growth of our flow through transformation to drive continued value creation. I would encourage anyone with an interest in how and why we are transforming to RIVID. I will now conclude today's presentation with some key messages. Following an excellent start to the year, we are now on track for another year of strong performance in 2025. While no company is immune to macroeconomic volatility, we believe we are well positioned to navigate external dynamics.

We have three powerful growth drivers with pricing power and positive smoke free categories on top of volume growth, where we target our fifth consecutive year of expansion led by IQOS, ZYN and ZYN. As we continue to invest strongly behind our smoke free brand, These drivers are also profit accretive and combined with our proactive measures on pricing and cost, we have great confidence in sustainable adjusted EBITDA growth in both currency neutral and dollar terms. Finally, we remain a highly cash generative business with an unwavering commitment to our progressive dividend policy. We look forward to further rewarding our shareholders as our transformation delivers sustainable growth. Thank you, and we are now very happy to answer your questions.

And our first question comes from Bonnie Herzog of Goldman Sachs. Your line is open.

All right, thank you. Hi, Emmanuel and everyone.

Could you maybe give us some more color on the out of stock issues you might still be experiencing in The U. S? I know you touched on this, but then just curious how long you think it will take for retailers to rebuild their inventories. And I know you raised your shipment guidance for ZYN for the year, but it does still imply that growth will decelerate year over year to around, I think, 5% for the rest of the year. This is at the low end of your range versus, I guess, the 53% you reported this quarter.

So just hoping you could talk through the thinking behind this, maybe just the phasing. Thank you.

Sure, happy to do that. So of course, we are facing a particular year in 2025 with ZYN in The U. S. Because it's going to be a mix of continuation of strong growth and strong consumer offtake growth. Of course, when you look at the shipment, be careful and I flagged that in my remarks because last year, we had clearly consumer offtake in Q1, which was much, much stronger than our shipment.

That was the time when the consumer started to empty the shelves. So we need to be cautious when we look at the shipment if they are now reflecting the consumer offtake and take that into account. And next to this strong growth that we expect from consumer offtake and we have a very dynamic category, percent to 35% growth, despite the fact that the leader ZYN was constrained. We're going to add on top of that this replenishment, this restocking. I'm not going to speculate on exactly what it is, but it's certainly few tens of million cans.

And we have started because of this good performance on production that I explained to send more product to, first of all, wholesalers, distributors and themselves, they're going to start to ship to retailers. So it's going to be a very gradual process. There are still, of course, very, I would say, material situation of out of stock. We're going to continue the replenishment in the second quarter, maybe part of the third quarter as well. And we've been explaining that we explained we are expecting to be back to a normalized situation, if I may say.

Therefore, no more material out of stock situation in the third quarter of twenty twenty five. So in terms of shipment, that's going to be this profile through the year of an accelerating growth for our shipment. That's what we expect, which is going to reflect first the consumer effect that is going to accelerate. And then, of course, replenishment impact that is going to decrease as we fulfill this replenishment, if you want. So it's a particular profile and the replenishment, if you want, to some extent is going to hide the fact that there is a growth in the consumer offtake that we're going to experience for the year.

Okay. That's helpful. I appreciate it. And then just maybe a second question from me on margins. You delivered robust margin expansion in the quarter.

So how should we think about the drivers of continued margin expansion for the remaining of the year? I guess, in the context of what you mentioned as it relates to continued SG and A growth and the investments, etcetera. And then on the back of that, I know we've talked about this before, but how should we also think about the margin gap you're seeing between your combustible business and then smoke free products today and then possibly key drivers of further expansion of that gap over the next couple of years? Thank you.

Look Bonnie, obviously we are very pleased with our margin expansion. That's something we are targeting for 25% we are very positive about our expectation. We have a clear illustration in Q1 of the strong performance in terms of margin expansion. Clearly, our smoke free products are here driving this first and foremost this margin expansion. You have an impressive six seventy basis points organic expansion in Q1 for our smoke free business.

Don't take that as a reference for the full year, but that means that we are now above 70 gross margin rate for the smoke free business. It's five percentage points higher than combustible. So as we are growing of course very fast our smoke free business and faster than combustible, that means that we are benefiting at the margin level of a very positive mix evolution. And we believe that the difference through '20 '5 should stay between smoke free and combustible. I'm not saying it's to stay exactly at the same level, but we're going to keep a very material difference between the two and we're going to continue to benefit from this positive mix effect.

I think for the future, there are a number of drivers that will continue to play on the margin for our Smoothree portfolio. There is, of course, a mix coming from ZYN. ZYN in The U. S. Is the best in class gross profit margin.

So when we grow ZYN fast in The U. S, that has a positive impact. You have all the scale impact that we are generating on IQOS. And if you look at the last two to three years, you've seen on a very consistent basis a gradual improvement on the margin on IQOS. This is certainly magnified in the first quarter because we have a less sale of device.

Last year, we had big device sale in Japan as we were launching in LUMI. So that is helping the margin. But fundamentally, we are benefiting from scale impact, productivity and a better performance on device. And then we have some pricing that you have seen 3% on consumable for our smoke free business. So we are increasing price as well.

And last element, is more marginal today, but we are also improving the margin on Vive. So that is also helping. So as you can see, we have many positive drivers behind our smoke free business and smoke free business is the driver for or the third driver for margin improvement.

Okay, perfect. Thank you so much. I'll pass it on.

Thank you. And our next question comes from Matt Smith of Stifel. Your line is open.

Hi, Emmanuel. Thank you for the question.

If we could first talk about the guidance outlook, with the strong first quarter and now the second quarter guidance, the first half EPS growth on a constant currency basis is a few points above the high end of the full year outlook. Can you talk about the factors in the second half that we should take into consideration with the constant currency EPS growth outlook implied to be a couple of points below the full year average by my math, just the shape of the year there?

Sure, Matt. Happy to take that one. So yes, we are saying that we expect to be well positioned versus the overall bracket for the year in terms of revenue growth. We expect to be a bit above on OI. Now, are the traditional difference that you can see during a year between H1 and H2.

You may have some comparison basis that can play. There is potentially some phasing on how we're going to position SG and A. So there is here nothing to be read, I think, in terms of change in the underlying business between H1 and H2. These are more how a number of things are positioned in terms of shipment through the year, in terms of investments. But I would say we expect a strong year through the as we go through the quarters.

And we've been flagging the fact for instance that we expect in some area an acceleration for IQOS in the second half in terms of IMS. But that's not going to necessarily translate into shipment as the phasing for shipment can be a bit different. So again, I think we expect strong momentum through the year for our smoke free portfolio. We've been saying the fact that on combustible, we are positive in volume in Q1. But for the year, we expect a low single digit decline.

So that could mean that the second part of the year will have more negative volume for our combustible. But clearly, expect strength through the year.

Thank you for that. And as a follow-up, I wanted to talk about the IMS growth you referenced for IQOS. You had nice growth in the first quarter, think it was above 9%. But if we look back to the fourth quarter, it was around 13%. Now you're expecting a reacceleration in those IMS in ICOS IMS growth across the remainder of 2025.

So can you talk about some of the underlying benefits to IMS growth reaccelerating across the rest of 2025? Thank you. I'll leave it there.

Yes. So indeed 9.4% was in line They are and Europe was below the average. So there are always a turbulence coming from the Flavor Ban implementation in Europe. We believe that the impact will be lower in H2 as we go through annualization.

And therefore, we expect in H2 an acceleration, as I mentioned in the IMS growth in the second half in Europe. But otherwise, we are expecting this 10% to 12% adjusted IMS growth to the year. So we expect overall a continuation of a nice double digit growth. Q4 was very strong after a few quarters that have been weaker last year, so you can have some phasing through the year. But after this Q1, which was in line with expectation, we expect continuation of very good growth in Europe, in Japan.

And I took some time in my remarks to talk about the other markets where we see also some very promising growth in several markets.

And our next question comes from Eric Serotta of Morgan Stanley. Your line is open.

Great. Thanks for the question. In terms of the full year guidance, you did raise the ZYN shipment volumes. And obviously, that's a very high margin product. You kept the constant currency EPS guidance the same.

You delivered some very, very robust margin expansion in the first half. Are there any specific offsets that you could point to that cause you to reiterate the guidance rather than flow some more through to the full year? Or is it more of a factor that we're early in the year and there's obviously a lot of macro and geopolitical uncertainty?

Thank you, Eric for the question. So indeed we were targeting a year of very strong growth and performance. And I think Q1 is flagging the fact that we are well on track to deliver a year of strong growth. So we are confirming that we expect a year of very strong growth across the board for PMI. What we've seen in Q1 is indeed very reassuring on the fact that we're going to deliver this strong year.

We are raising the guidance for the volume for ZYN in The U. S. By on average 20,000,000 cans. So yes, it is a very profitable brand, but not to the extent to dramatically change the outlook for the year. So I would say that goes into various scenario with which we are playing to give the guidance for the year.

And obviously, after only one quarter and in this uncertain volatile environment, we need to of course be cautious and say this is the beginning of the year. And we are happy to confirm the guidance. Again, think Q1 is showing that we are well on track to deliver a very good 2025.

Great. And then a quick follow-up. How are you guys thinking about what the unconstrained growth for what the unconstrained offtake growth for ZYN theoretically looks like. Obviously, you can't observe it. You could estimate it.

But how are you thinking about how that evolves, where it is today and sort of how it evolves as you get into the second half and next year where the business is obviously a lot larger than when you bought it. So really, you can't give a precise answer, but any color there would be helpful.

Eric, frankly, we don't know, of course, what is the unconstrained demand because the demand is still constrained. So I'm not able to provide an answer. What I can say is that certainly, as we are removing the limitation and the out of stock situation, we expect an acceleration in the consumer offtake. And we are very much encouraged by the very nice dynamism of the category, which shows the appeal, the attraction for the consumer and all these legal age nicotine users that are discovering the category and understand the benefit. So we expect the acceleration.

We're going to be gradually back to normal life because it's true we've been mentioning that we had very limited commercial marketing activities. So we were trying to service the existing ZYN consumer and we knew that it was not reasonable to try to acquire new consumers at that time that we could not serve and supply. So obviously that's going to be also another leg of the growth in the coming quarter. And I guess that's certainly something you include in unconstrained demand. But frankly, don't want to speculate on what this unconstrained demand is going to be.

We are expecting a gradual acceleration of the consumer uptake for ZYN in the coming months.

Fair enough. And then just one quick last one. You did cite the Nielsen data in terms of ZYN. Are you seeing different trends or diverging trends when you look at some of the non tracked channels that you would have a better read on than we would?

Well, I mean, certainly don't want to say that Nielsen is not an interesting data point. But of course, it's 3,000 sales points and on the Universe that probably is close to 200,000. And when you are in out of stock situation, you can create some distortion on the perception of the consumer offtake. So I'm not able to say whether the 15% I mean, we know it's an estimate. What I was reporting is the MSA, so the very nice acceleration towards the March of the sales from wholesaler and distributor to the retailers.

But that's the other data point that we have. But we don't have any other, I would say reliable data we could share with you. We can sense in the market the very strong underlying demand for ZYN. That's very clear. And I also flag the fact that the consumer of text, what Nissan measured last year for first quarter then probably significantly higher than the 130,000,000 cans that we reported for the quarter, the first quarter of twenty twenty four.

So that was the basis on which you should apply the 15% if the 15% is accurate to have an idea of the consumer offtake today.

Terrific. Thank you so much. I'll pass it on.

Thank you. Our next question comes from Faham Baig of UBS. Your line is open.

Good morning, guys. For taking the question. Hey, Emmanuel. A couple of questions from me as well. Just coming back to the growth ads in and the offtake, are in a position to potentially share what the MSA data highlights is the growth rate for ZYN and how it really compares to this sort of 30% to 35% growth you highlight the category.

The second question, sticking with The US and IQOS, I just wanted to get your views on the recent movements at the CDP and how that impacts the timing of Illumina's launch in the market or whether it does impact the timing of the launch would be helpful. And the final question is really housekeeping. Net interest guidance for the year would be helpful.

interest cost guidance for the year would be helpful, please.

Yeah, so taking your question in the order, growth of the I think we said that the share was close to 66% on MSA in March. It's probably a growth around or close to 30%, but take that with a pinch of salt. I'm not sure I have a very precise data. But clearly, MSA was showing this acceleration as more products was coming. So that's one thing.

On the new situation at the CTP and what it means for IQOS, no, it's too early to say. So we have nothing to report. And I don't know what is going to happen. I think we are still hoping for an efficient process to be put in place and for the FDA to comply with the mandate which was to give answer after six months. But I have nothing at that stage new to report on this situation.

Philip Morris International Q1 2025 Earnings Call Transcript | Fortune

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Philip Morris International (PM) Q1 2025 Earnings Call Transcript

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