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].

Key Takeaways Philip Morris' smoke-free shipments rose 11.8%, driving 15.2% revenue growth in Q2 2025.IQOS, ZYN and VEEV fueled smoke-free growth, lifting gross profit by 23.3% year over year.Cigarette shipments fell 1.5% to 155.2B units, but still delivered $6B in quarterly revenues.Philip Morris International Inc.’s (PM) second-quarter 2025 results spotlight the central question for its long-term transformation: Can smoke-free momentum truly outweigh persistent declines in cigarettes? Smoke-free products, ...

Key Takeaways Altria's on! shipments rose 26.5% in Q2, lifting oral tobacco share to 8.7% and boosting margins.Philip Morris lifted 2025 EPS guidance to $7.43-$7.56, targeting 13-15% year-over-year growth.Philip Morris achieved $500M in cost savings in H1 2025, advancing toward a $2B efficiency goal.Altria Group, Inc. ((MO) and Philip Morris International Inc. ((PM) stand as two of the most recognized names in the global tobacco industry. While Altria primarily operates within the United States, Philip Morr ...

Key Takeaways Philip Morris trades at a forward P/E of 20.93X, above the industry and sector averages.Smoke-free products made up 41% of revenues in Q2, growing 15.2% y/y, led by IQOS, ZYN and VEEV.Philip Morris targets $2B in cost efficiencies between 2024 and 2026.Philip Morris International Inc. ((PM) is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 20.93X, representing a significant premium compared with the Zacks Tobacco industry average of 15.31X and the broader Consumer ...

Core Insights - Altria Group, Inc. is experiencing significant growth in its smoke-free product segment, particularly with its oral nicotine pouch brand, on!, which saw a 26.5% increase in shipments year over year, reaching 52.1 million cans, and capturing an 8.7% share of the total oral tobacco category [1][7] - The nicotine pouch segment now constitutes over half of the oral tobacco category, indicating a shift in consumer preferences away from traditional moist smokeless tobacco [1] - Altria's oral tobacco segment reported a 10.9% increase in adjusted operating income, with margins expanding to 68.7%, despite a 10.2% decline in domestic cigarette shipments [2][3][7] Market Competition - Philip Morris International is aggressively expanding its smoke-free portfolio, with a 17.3% organic growth in smoke-free net revenues, driven by a 26% increase in ZYN U.S. offtake and a 65% rise in international pouch volumes [4] - Turning Point Brands is also making strides in the modern oral nicotine market, with white pouch sales growing nearly 10 times year over year, prompting an increase in full-year guidance to $80-$95 million [5] Stock Performance and Valuation - Altria's shares have increased by 3.8% over the past month, contrasting with a 1.6% decline in the industry [6] - The company is currently trading at a forward price-to-earnings ratio of 11.4X, which is lower than the industry's average of 14.9X [9] - The Zacks Consensus Estimate for Altria's earnings per share for 2025 and 2026 has risen by 2 cents each, now projected at $5.39 and $5.55 respectively [10]

Investment Rating - The report maintains an "Outperform" rating for the light industry sector [6][10]. Core Insights - Recent financial reports from major overseas tobacco companies for H1 2025 show overall stable performance, with new tobacco products continuing to drive growth. British American Tobacco, Philip Morris International, and Japan Tobacco have all raised their annual forecasts [18]. Summary by Relevant Sections British American Tobacco (BAT) - For H1 2025, BAT reported revenues of £12.069 billion, a decrease of 2.2% year-on-year, with new tobacco products accounting for 13.7% of total revenue [2][19]. - The revenue from heated tobacco products was £440 million, showing a slight increase of 0.8%, while the revenue from new oral tobacco products surged by 38.1% to £470 million [20][21]. Philip Morris International (PMI) - PMI's Q2 2025 net revenue reached $10.14 billion, reflecting a year-on-year increase of 7.1%, with smoke-free tobacco products making up 41.6% of total revenue [3][28]. - The global shipment of heated tobacco units was 38.8 billion, up 9.2% year-on-year, with IQOS market share in Japan increasing to 31.7% [29]. Japan Tobacco - Japan Tobacco reported Q2 2025 revenues of ¥907.6 billion, a 9.4% increase year-on-year, with heated tobacco product shipments rising by 31.2% [4][38]. - The company has adjusted its annual revenue growth forecast to 8.4% and operating profit growth to 14.6% [38]. Altria - Altria's Q2 2025 revenue was $6.1 billion, down 1.7% year-on-year, with oral tobacco product revenue increasing by 5.9% [5][12]. Market Overview - The light industry sector experienced a relative return of +0.16% last week, despite a decline of 1.59% in the overall sector [6][9]. - Furniture retail sales in June increased by 28.7% year-on-year, while building materials sales saw a decline of 8.9% [6][12]. Investment Recommendations - The report recommends focusing on leading companies in the home furnishing sector, such as Oppein Home, Sophia, and Kuka Home, as well as in the paper and packaging sectors, highlighting Sun Paper and Yutong Technology as key investment opportunities [9][16].

Key Takeaways PM's smoke-free business made up 41% of net revenues and more than 42% of gross profit in Q2 2025.IQOS saw 11.4% global sales growth, with notable market share gains in Japan and Europe.ZYN posted 26% U.S. growth in Q2 and 43% global shipment growth, led by strong U.S. demand.Philip Morris International’s (PM) smoke-free business is gaining scale, and the performance of its flagship products, IQOS and ZYN, is central to this trajectory. In the second quarter of 2025, the company’s smoke-free b ...

Investment Rating - The investment rating for the company is "Positive" [2] Core Insights - The company reported a revenue of $10.14 billion for Q2 2025, representing a year-on-year increase of 7.1%, with a gross margin of 68.3%, up by 4.1 percentage points [2] - Revenue from new tobacco products reached $4.16 billion, showing a year-on-year growth of 15.2%, accounting for 41% of total revenue, with a gross margin of 69.0%, an increase of 4.6 percentage points [2] - The new tobacco segment is viewed as the company's second growth curve, with continuous expansion in product and regional matrices, now available in 97 markets globally, with a total user base of 41.5 million, an increase of 5 million year-on-year [2] - The core product, IQOS, achieved a shipment volume of 39.9 billion units in Q2, a year-on-year increase of 9.2%, with revenue exceeding $3 billion and a market share of 76% in the HNB market [2][3] - The company anticipates a decline of 2% in global cigarette sales for 2025, while maintaining a growth forecast of 12% to 14% for new tobacco products, with HNB growth expected at 10% to 12% [3] Summary by Sections Financial Performance - Q2 2025 revenue was $10.14 billion, up 7.1% year-on-year, with a gross margin of 68.3% [2] - New tobacco revenue was $4.16 billion, a 15.2% increase, with a gross margin of 69.0% [2] Product Performance - IQOS shipments reached 39.9 billion units, a 9.2% increase, with revenue over $3 billion [2][3] - The nicotine pouch segment saw a 23.8% increase in sales, driven by the ZYN brand in the U.S. [3] - VEEV sales doubled in Q2 2025, primarily due to European market contributions [3] Market Outlook - The company expects a 2% decline in cigarette sales for 2025, while new tobacco products are projected to grow by 12% to 14% [3] - The introduction of IQOS ILUMA in the U.S. is anticipated to be a significant change in the new tobacco industry [3]

Core Insights - The tobacco sector presents two main investment options: Altria Group, Inc. and Philip Morris International Inc., each with distinct market strategies and growth trajectories towards a smoke-free future [1][2] Altria Group, Inc. - Altria focuses on the U.S. market, leveraging its Marlboro brand while expanding into alternatives like NJOY and oral nicotine pouches [2] - The company achieved a 10.8% net price realization in smokeable products in Q1 2025, contributing to a 2.7% increase in adjusted operating income [3][9] - Altria's oral nicotine pouch brand, on!, saw an 18% increase in shipments, capturing 8.8% of the oral tobacco category and 17.9% of the nicotine pouch segment [4][9] - Despite setbacks in the e-vapor category, Altria is refining its product pipeline and advocating for regulatory reforms to combat the rise of illicit disposable e-vapor products, which account for over 60% of the U.S. market [5] - The cigarette industry faces challenges, with shipment volumes declining due to macroeconomic pressures and the growth of illegal e-vapor products, impacting low-income smokers [6] Philip Morris International Inc. - Philip Morris is advancing its transformation strategy with a strong smoke-free portfolio, including IQOS, ZYN, and VEEV, and has approximately 41.5 million adult users by Q2 2025 [7][9] - IQOS is the primary driver of growth, with accelerated adoption in key markets supported by commercial initiatives and product innovations [8][10] - The company offers smoke-free products in 97 markets, with nearly half providing multiple product categories, enhancing its global reach [10] - Philip Morris faces challenges such as currency volatility and increasing regulatory risks, particularly regarding nicotine pouch marketing [11] Financial Performance and Valuation - Altria's forward P/E ratio is 10.96, appealing to income-focused investors, while Philip Morris has a higher multiple of 20.12, reflecting its global presence and momentum in smoke-free products [15] - Over the past month, Altria gained 2.1%, while Philip Morris dropped 11.6%, underperforming the S&P 500's 3.4% rise [14] Conclusion - Philip Morris is better positioned for long-term growth with its aggressive pivot towards a smoke-free future and strong global traction, while Altria's focus on domestic stability and pricing strength supports income-focused investors but faces more headwinds [16]

Core Insights - Philip Morris International (PM) raised its 2025 earnings per share (EPS) guidance to $7.43-$7.56, reflecting strong second-quarter performance driven by smoke-free products, indicating a year-over-year growth of 13-15% [1][10] Financial Performance - In Q2 2025, smoke-free net revenues increased by 15.2% year over year, with gross profit for this segment rising over 23%, contributing 41% to total net revenues and 42% to gross profit [2][10] - Adjusted operating income grew by 16.1% in the quarter, outpacing revenue gains, attributed to strong pricing, improved scale efficiencies, and a favorable category mix towards higher-margin smoke-free products [4][10] Product Performance - The multi-category smoke-free platform showed broad-based growth, with IQOS heated tobacco units' adjusted in-market sales rising by 11.4%, supported by global expansion and recovery in European markets [3] - ZYN experienced a significant rebound, with U.S. consumer offtake increasing by 26% in the quarter and 36% in June, driven by better in-store availability and renewed commercial activity [3] Market Strategy - The raised EPS guidance indicates management's confidence in the sustainability of recent smoke-free category growth, suggesting that the multi-category strategy is gaining traction faster than anticipated [5] Competitive Landscape - Altria Group's "on!" nicotine pouch brand saw an 18% increase in shipment volume, while Turning Point Brands reported nearly tenfold growth in modern oral nicotine pouch sales, contributing $22.3 million in revenues [6][7][8] Valuation Metrics - Philip Morris shares have declined by 10.2% in the past month, compared to the industry's decline of 2.2% [9] - The company trades at a forward price-to-earnings ratio of 20.16X, higher than the industry's average of 14.67X [12] - The Zacks Consensus Estimate for PM's earnings implies year-over-year growth of 14.2% for 2025 and 11.9% for 2026 [13]