PMI’s growth is driven by continued momentum in its smoke-free portfolio.

Philip Morris International (PMI) delivered record second-quarter net revenues of more than US$11 billion, driven by continued momentum in its smoke-free portfolio, as the company raised its full-year adjusted diluted EPS outlook for currency.

Net revenues increased by 10.4% to US$11.2bn in the second quarter, while adjusted diluted earnings per share rose 15.2% to US$2.20, or 13.6% excluding currency effects. Reported diluted EPS fell 7.7% to US$1.80 following a non-cash impairment charge related to its investment in Canadian affiliate Rothmans, Benson & Hedges (RBH).

Group CEO Jacek Olczak said: “We delivered outstanding results in the second quarter, driving net revenues to over $11 billion for the first time with excellent growth across all headline metrics. With a robust first half under our belt, including continued momentum and strong results in our smoke-free business, we are well positioned to deliver on our full-year targets while investing for future growth.”

Smoke-free products accounted for approximately 42% of total net revenues during the quarter, with PMI’s portfolio now available in 109 markets. Smoke-free shipments increased by 7.5%, helping drive overall shipment growth of 2.5%.

IQOS remained the company’s primary growth engine, with heated tobacco unit shipments increasing by 7.6%. Excluding temporary headwinds in Japan and the impact of Poland’s flavour ban, adjusted in-market sales grew by 10%.

PMI said IQOS maintained around three-quarters of the global heated tobacco category by volume and increased its share of the combined cigarette and heated tobacco market to 9.2% across markets where it is present.

The company also reported strong momentum for its smoke-free portfolio beyond heated tobacco. VEEV e-vapour shipments rose by 55.1%, with the brand maintaining the leading position in Europe’s closed-pod segment, while ZYN nicotine pouches are now available in 60 markets.

In the US, PMI said it had expanded the ZYN portfolio with new nicotine strengths and flavours and highlighted the recent FDA Modified Risk Tobacco Product (MRTP) authorisation for 20 ZYN variants, the first such authorisation granted to a nicotine pouch product.

Within the combustible business, cigarette volumes increased by 1.1%, supported by growth in markets including Turkey, Indonesia and Egypt. Net revenues from combustibles rose by 9.5%, while Marlboro’s global market share reached a record 11%.

PMI said the ongoing conflict in the Middle East had so far had only a limited impact on trading, primarily through higher transport, energy and input costs, and that its full-year outlook assumes no prolonged disruption.

The company also recorded a US$511 million non-cash impairment charge relating to its investment in RBH after updated financial projections reduced the estimated value of the business. Despite the impairment, PMI said it remains well positioned to meet its full-year targets on the back of continued smoke-free growth.