PresentationGood morning, everyone. Thank you for being here. I'm Gaurav Jain, Barclays Head of Global Tobacco. I'm thrilled to have Jacek Olczak here with me, CEO of Philip Morris. Thank you, Jacek, for giving us the opportunity to host you.Jacek OlczakCEO & Director Yes. I will not take much of the time because Gaurav has the long list of questions here. So we may need to have a day to go through all. But just a quick one, as always, the forward-looking cautionary statement, you are supposed to read and g ...

Financial Data and Key Metrics Changes - The company reaffirmed its guidance for a 13% to 15% growth in EPS for the closing year [1] - The company reported its strongest growth since 2011, excluding the post-pandemic recovery [2] - There is an expectation of margin expansions this year, with previous hiccups in margins now behind [12] Business Line Data and Key Metrics Changes - Strong growth in IQOS and ZYN volumes, with ZYN already in 47 markets and expanding [5] - The company is experiencing positive volume growth in the tobacco and nicotine industry for five consecutive years [3] - The smoke-free product mix is contributing positively to both top-line revenue and gross margins [4][11] Market Data and Key Metrics Changes - The U.S. market is seeing intensified competition, particularly for ZYN, which has a price premium of over 65% compared to competitors [9][19] - The company is normalizing inventory levels after a period of stock limitations due to undercapacity [7] - The company is observing a strong pricing environment for combustible cigarettes, supported by a favorable tax environment [3] Company Strategy and Development Direction - The company is focused on smoke-free transformation and sees significant growth potential in this category [2][26] - There is a strategic emphasis on multi-category presence, including heat-not-burn, e-vape, and oral nicotine pouches [36] - The company is committed to continuous product innovation to meet evolving consumer expectations [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the smoke-free product category's growth potential, despite regulatory challenges in some markets [14][42] - The company anticipates that the competitive landscape will remain challenging but believes ZYN has a strong brand position [33] - Management noted that the currency environment is favorable, which supports the company's financial trajectory [57] Other Important Information - The EU is recognizing nicotine pouches for tax purposes, which is seen as a positive development for the company [44] - The company is awaiting regulatory approvals for IQOS in the U.S., with expectations leaning towards a 2026 launch [48] Q&A Session Summary Question: How should one think about ZYN shipment numbers for 2H '25? - Management suggested that shipment numbers should be based on sell-through growth rates applied to previous shipment figures [15][16] Question: What is the pricing strategy for ZYN given the competitive landscape? - Management acknowledged the high price premium of ZYN and indicated that marketing efforts would be ramped up to maintain market presence [20][21] Question: What is the outlook for IQOS growth in light of the flavor ban in Europe? - Management indicated that the flavor ban is being adjusted, and IQOS is expected to return to its growth trajectory [39] Question: How does the company view potential M&A opportunities? - Management stated that the company is currently self-sufficient and does not see immediate gaps in its product portfolio that would necessitate M&A [59][60] Question: What is the expected impact of the EU Tobacco Excise Directive? - Management noted that while the directive is being discussed, it is not expected to create major disruptions for the company's smoke-free product support [43][46]

Financial Data and Key Metrics Changes - The company reaffirmed guidance for a 13% to 15% growth in EPS for the year, marking the strongest growth since 2011, excluding post-pandemic recovery [1][2] - The company reported continuous positive volume growth for five consecutive years, indicating strong revenue quality supported by robust pricing in combustible cigarettes [2][3] Business Line Data and Key Metrics Changes - Smoke-free products, including heat-not-burn and oral nicotine pouches, are contributing positively to both top-line growth and gross margins, with significant growth in IQOS and ZYN volumes [3][4] - ZYN is now available in 47 markets, with ongoing geographical expansion and strong international volume growth [3][4] Market Data and Key Metrics Changes - The company noted intensified competition in the U.S. market for ZYN, with a price premium of over 65% compared to competitors, indicating strong brand positioning [6][7] - The company is observing a normalization of inventory levels after a period of supply constraints, which is expected to stabilize in Q3 [5][6] Company Strategy and Development Direction - The company is focused on a smoke-free transformation, aiming to leverage its strong brand presence in the nicotine pouch market while addressing competitive pricing dynamics [6][39] - The company is committed to multi-category strategies, recognizing the importance of maintaining a presence across various product categories, including heat-not-burn, e-vapor, and oral nicotine pouches [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the smoke-free product category's growth potential, emphasizing the need to follow consumer trends and preferences [34][39] - The company anticipates that regulatory developments in markets like Taiwan and the EU will create opportunities for smoke-free products, although challenges remain [10][50] Other Important Information - The company is preparing for potential share repurchases once leverage is below 2X, supported by favorable currency trends and strong cash flow generation [68][69] - The company is not currently seeking M&A opportunities, feeling self-sufficient in product development capabilities [70][71] Q&A Session Summary Question: How should investors think about ZYN shipment numbers for 2H 2025? - Management indicated that shipment numbers should be calculated based on current inventory levels and expected marketing activities, with a focus on retail off-take [12][15] Question: What is the pricing strategy for ZYN compared to competitors? - Management confirmed that ZYN maintains a significant price premium over competitors, which reflects strong brand equity and market positioning [17][19] Question: What is the outlook for IQOS growth in light of the flavor ban in Europe? - Management noted that while the flavor ban has impacted growth, IQOS is expected to return to its growth trajectory as markets adjust [43][44] Question: How does the company view the competitive landscape for smoke-free products? - Management acknowledged the competitive dynamics but expressed confidence in ZYN's first-mover advantage and the company's ability to navigate challenges [39][40] Question: What are the implications of the EU Tobacco Excise Directive? - Management highlighted that while the directive may increase taxation on cigarettes, it also recognizes smoke-free products, which could be beneficial in the long term [49][50] Question: What is the timeline for the PMTA for IQOS in the U.S.? - Management indicated that the timeline for the PMTA remains uncertain, with expectations leaning towards a 2026 event rather than 2025 [52][53]

Key Takeaways MO's on! shipments rose 26.5% to 52.1M cans, gaining 8.7% share of the U.S. oral tobacco market.on! marketing reached 170K consumers in H1 2025, boosting brand awareness by 7 percentage points.Oral tobacco OCI rose 10.9% with margins up to 68.7%, reflecting on!'s earnings contribution.Altria Group, Inc. ((MO) is sharpening focus on the booming nicotine pouch category and its on! brand is leading the charge. In the second quarter of 2025, shipments rose 26.5% year over year to 52.1 million cans ...

Consumer staples makers are generally considered resilient businesses, but even Dividend Kings fall out of favor sometimes.The Motley Fool just updated its report on the 10 largest consumer staple companies. You probably know every name on the list, which includes retail giants like Walmart (NYSE: WMT), product makers like Procter & Gamble (NYSE: PG), and tobacco companies like Philip Morris International (NYSE: PM). Also on that list is a Dividend King food and beverage company that has a historically high ...

Coca-Cola, Altria, IBM, Cisco, and Realty Income are stable income plays.Dividend stocks are often considered slow-growth investments since companies generally start paying dividends only after they run out of places to invest their excess cash. Many dividend stocks also lost their luster in 2022 and 2023 as rising interest rates made risk-free CDs and U.S. Treasury bills more appealing to income investors.But as interest rates declined in 2024, many investors rotated back toward dividend stocks. The Federa ...

Even with its double-digit price increase YTD when I last checked on it in July, Altria Group, Inc. (NYSE: MO ), of Marlboro cigarettes, still lagged behind peers. But one month since has made aManika is a macroeconomist with over 20 years of experience in industries including investment management, stock broking, investment banking. She also runs the profile Long Term Tips [LTT], which focuses on the generational opportunity in the green economy. Her investing group, Green Growth Giants , takes the theme a ...

As has been widely noted, Philip Morris' Zyn US volumes came in a little under expectations for Q2. That was enough to bring the stock down and present us with another opportunity to buy.Striving to compound knowledge. Long-time fan of Warren and Charlie. Always invert. "To finish first, you must first finish". Investing own and family funds for +20 years. Senior finance roles at public and private corporations for most of that time.Analyst’s Disclosure:I/we have a beneficial long position in the shares of ...

Company Announcement No. 03/2025 Copenhagen, 27 August 2025 STG Global Finance B.V. – Interim Report, Scandinavian Tobacco Group A/S On 27 August 2025, Scandinavian Tobacco Group A/S published its interim report for 1 April – 30 June 2025. The Annual Report and company announcement of Scandinavian Tobacco Group A/S relating to the published reports are available at: https://www.st-group.com/investor/. For further information, please contact: Torben Sand, Director of IR & Communication, phone +45 5084 72 ...

Core Viewpoint - Scandinavian Tobacco Group A/S reported a decline in net sales and EBITDA margin for the second quarter of 2025, while reaffirming its full-year expectations despite challenging market conditions [1][5][8]. Financial Performance - Reported net sales for Q2 2025 were DKK 2.4 billion, reflecting an organic net sales growth of -4% [1][7]. - EBITDA before special items was DKK 499 million, with an EBITDA margin of 21.1%, down from 24.5% in the previous year [1][7]. - Free cash flow before acquisitions was DKK 119 million, compared to DKK 177 million in the same quarter last year [7]. - Adjusted EPS for Q2 2025 was DKK 3.3, down from DKK 4.1 year-on-year [7]. Market Dynamics - The addition of the Mac Baren business positively impacted reported net sales, while exchange rate fluctuations had a negative effect [2]. - Organic net sales growth was flat when excluding the discontinuation of ZYN distribution in the US, which contributed to a -3% decline [2]. - The product categories Handmade Cigars and Machine-Rolled Cigars & Smoking Tobacco showed recovery, and the nicotine pouch brand XQS continued to deliver double-digit growth [2]. Strategic Outlook - The EBITDA margin for the first half of 2025 was 18.8%, down from 21.2% in the previous year, influenced by product mix, market conditions, and investments to regain market share [3][5]. - The company aims to deliver free cash flow of DKK 800-1,000 million before acquisitions for the full year [5]. - The financial expectations for the full year 2025 remain unchanged, with reported net sales projected between DKK 9.1-9.5 billion and an EBITDA margin of 18-22% [8].