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Mar 31, 2024
Philip Morris Q1 2024 Earnings Report
Philip Morris' first quarter performance in 2024 showed strong top-line growth and significant margin expansion, leading to an increase in their full-year currency-neutral guidance.
Key Takeaways
Philip Morris International reported a strong first quarter in 2024, with reported diluted EPS growing by 7.8% to $1.38 and adjusted diluted EPS growing by 8.7% to $1.50 (23.2% excluding currency effects). The company's smoke-free business continues to drive growth, accounting for 39% of total net revenues, with significant increases in net revenue and gross profit. Strong pricing across markets also fueled growth in the combustibles category.
Smoke-free business accounted for 39% of total net revenues, with net revenues increasing by 21.1% and gross profit by 31.8%.
IQOS continues to strengthen its market position, exceeding 10% market share in Europe and increasing by over 3 percentage points to over 29% in Japan.
Oral smoke-free product shipment volume increased by 40.0%, driven by ZYN nicotine pouch growth in the U.S., where shipment volume reached 131.6 million cans, representing growth of 79.7%.
Combustibles net revenues grew by 3.5%, driven by strong pricing across markets, with Marlboro gaining 0.4 percentage points in category share.
Philip Morris
Philip Morris
Philip Morris Revenue by Segment
Philip Morris Revenue by Geographic Location
Revenue by Segment
Combustible Products Revenue
CapyFin.comSmoke-Free Products Revenue
CapyFin.comRevenue by Geographic Location
European Union Revenue
CapyFin.comSouth & SE Asia, CIS, MEA Revenue
CapyFin.comEast Asia & Australia Revenue
CapyFin.comAmericas Revenue
CapyFin.com Forward Guidance
Philip Morris International provided full-year 2024 forecasts, including a reported diluted EPS of $5.70 to $5.82. The forecast assumes international industry volume decline for cigarettes and HTUs, excluding China and the U.S., of -2% to flat, and net revenue growth of 7% to 8.5% on an organic basis.
Positive Outlook
- Total cigarette, HTU and oral smoke-free product shipment volume growth for PMI of flat to +1% driven by smoke-free products.
- 14% to 16% adjusted in-market sales volume growth for HTUs, including an approximate 2 billion units adverse impact for the full year from consumer adjustment to the EU characterizing flavor ban, resulting in HTU shipment volumes of more than 140 billion units.
- Nicotine pouch shipment volume in the U.S. of approximately 560 million cans.
- Organic operating income growth of 10% to 12%.
- Net debt to adjusted EBITDA ratio improvement of 0.3x to 0.5x at prevailing exchange rates as we continue to target a ratio of around 2x by the end of 2026.
Challenges Ahead
- An estimated total international industry volume decline for cigarettes and HTUs, excluding China and the U.S., of -2% to flat.
- Broadly unchanged net revenue and adjusted operating loss in Wellness and Healthcare segment.
- Full-year amortization of acquired intangibles of $0.43 per share, which includes an estimate of amortization of IQOS commercialization rights in the U.S. following the closing of the agreement to end our commercial relationship with Altria Group, Inc. covering IQOS in the U.S. effective May 1, 2024.
- Net financing costs of approximately $1.3 to $1.4 billion.
- No share repurchases in 2024.
Revenue & Expenses
Visualization of income flow from segment revenue to net income