PMI(US:PM)2025-10-21 14:00Financial Data and Key Metrics Changes - The company reported a record adjusted diluted earnings per share (EPS) of $2.24, reflecting a growth of 17% year-over-year [6][12][48] - Adjusted operating income (OI) grew by 12.4% in dollar terms to $4.7 billion, with an adjusted OI margin expansion of 120 basis points to 43.1% [11][20][45] - Organic net revenue growth was 7.5%, driven by strong smoke-free performance and robust pricing [12][14][44] Business Line Data and Key Metrics Changes - The smoke-free business achieved over $3 billion in quarterly gross profit for the first time, with a gross margin of 70% [6][17][19] - IQOS saw a 9% growth in heated tobacco unit (HTU) adjusted in-market sales, with HTU shipments growing by 15.5% [7][13][24] - ZYN can shipments grew by 36% globally, with a strong presence in 47 markets [25][31] Market Data and Key Metrics Changes - The company’s smoke-free products are now commercialized in 100 markets, with a significant launch in Taiwan [6][7] - In the U.S., ZYN captured the majority of category growth in both volume and value terms, holding over 60% market share [31][38] - The nicotine pouch category in the U.S. has been growing at over 40% over the last 18 months [37][38] Company Strategy and Development Direction - The company is focused on geographic expansion and multi-category strategy to enhance growth, with all smoke-free brands now commercialized together in 25 markets [6][7][22] - Continued investment in marketing and brand equity for ZYN and IQOS is planned, with expectations for sustained growth in the U.S. market [21][78] - The company aims to maintain best-in-class margins for ZYN while normalizing promotional activities [67][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth in adjusted operating income and EPS for the year, despite anticipated slower growth in Q4 [43][45][46] - The company expects a continued strong performance from its smoke-free business, with an acceleration in IQOS sales growth [46][70] - Management acknowledged the impact of increased promotional activities and a higher tax rate on Q4 performance but remains optimistic about long-term growth [72][74] Other Important Information - The company raised its dividend by 8.9% to $5.88 per share, marking the largest increase since 2013 [49] - A one-off investment of $100 million was made in Q3 for promotional activities, which is not expected to recur [60][66] Q&A Session Summary Question: Clarification on ZYN's growth and October performance - Management confirmed ZYN's market leadership with over 60% share and noted that promotional activities were normalized in Q3, impacting growth dynamics [53][54][56] Question: Details on ZYN's margin structure and investment levels - Management clarified that the $100 million investment was a one-off related to promotional activities and that they expect to maintain best-in-class margins moving forward [66][67] Question: Drivers behind full-year dollar EPS growth guidance - Management indicated that strong operating income growth and favorable tax and interest cost dynamics contributed to the raised EPS guidance [81][82]