Philip Morris Intl Q2 2026 Earnings Call: Complete Transcript

Philip Morris Intl (NYSE: PM ) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

6% in dollar terms, driven by strong international performance. 9% rise in gross profit, despite some market challenges in Japan. Cigarette volumes are expected to decline by 2-3% for the year, yet smoke-free product growth is anticipated to offset this decline, leading to stable to slightly positive total shipment volume. S.

market, particularly for the ZYN brand, with new product launches and a comprehensive marketing campaign aimed at enhancing market share. 5% and continuing strong cash flow generation. 9 billion. 16.

The strength of our international business which made up 93% of H1 group net revenues was naturally at the core of this remarkable performance. 9% in gross profit driving gross margin expansion of 190 basis points to reach 70%. This primarily reflect continued IQOS growth with further enhancement from our ozosmo free category. Especially Viv combustible also performed very well exceeding our midterm trajectory of low single digit organic top line growth and low to mid single digit gross profit growth.

8% despite negative geographic mix. 7% including the benefit of effective cost management. 6%. 7% all on an organic basis.

4% growth for the first half. 3% in H1 mainly fueled by IQOS HTUs with notable contribution from Taiwan, Global Travel Retail and Italy. E‑vapor shipments increased by a remarkable 55% in Q2 and plus 72% in H1 with Romania, Greece and Germany among the main drivers. 2% in the quarter, primarily reflecting industry decline and inventory impact for snus in the Nordics.

Despite a stable category share performance. 1% ahead of expectation. This reflects a combination of good category share performance, certain timing or comparison factors and more favorable industry dynamic in certain large markets, predominantly where smoke free products are banned or very small. Notable callouts include Indonesia, Turkey, Egypt and relative resilience in India and Mexico.

However, with industry volumes declining low to mid single digit in more developed smoke free market where the average unit economic of cigarette are more favorable, this generated an unfavorable mix impact on net revenue for H1. 9%. Given our Q2 performance and the latest industry dynamics, we now expect a more moderate full year decline in our cigarette volumes of around 2 to 3% versus 3% previously which remained consistent with the structural evolution of the category.

Taken together, we now expect total shipment volume to be around stable to slightly positive for the full year with high single digit growth in smoke free product broadly offsetting the decline in cigarettes. 2%. With low single digit smoke free pricing including around 3% from IQOS. The positive mix impact from international smoke free growth Contributed A further/2 points as the increasing weight of SFPs continues to enhance our revenue profile.

These drivers were partly offset by the US which had a negative impact of 1 point mainly due to Q1 comparison as well as international combustible geographic mix and other factors which reduce growth by 2 points. 8%. The composition of our growth once again highlight the consistency and sustainability of our model with with stable to growing volumes, durable pricing power and superior smoke free economics continuing to be the primary drivers of our performance. Moving down to H1 adjusted operating income margin which expanded by plus 40 basis points organically or plus 60 basis points in dollar term to reach close to 42%.

Gross margin expansion remained a key driver contributing plus 70 basis points supported by strong pricing, favorable smoke remix scale bene