Categories Analysis, Consumer

A look at the performance of Philip Morris’ (PM) smoke-free business

PM targets close to $15 billion in smoke-free net revenues in 2024

Shares of Philip Morris International Inc. (NYSE: PM) stayed red on Monday. The stock has gained 7% over the past three months. The company has been seeing its smoke-free business gain momentum with growth in revenue and gross profit during its most recent quarter. Here’s a look at the performance of this business:

Smoke-free business

Philip Morris’ smoke-free business accounted for 39% of its total revenues in the first quarter of 2024. Revenues in this business grew 21% on a reported basis and 25% on an organic basis during the quarter, while gross profit increased 32% on a reported basis and 38% on an organic basis. Smoke-free volumes grew 22% in Q1. The momentum in smoke-free products was led by IQOS and ZYN.


PMI’s heated tobacco product IQOS continues to see strong momentum. In Q1, IQOS shipments grew 21%, driven mainly by IQOS ILUMA, which is now available in 64 markets. In addition, IQOS now generates more revenues than Marlboro.

As mentioned on the Q1 earnings call, the company’s heated tobacco units (HTU) currently have a market share of more than 10% and hold the leading position in 11 markets. In Europe, HTU share increased by 0.9 points, driven mainly by the growing availability and adoption of ILUMA.

Adjusted in-market sales (IMS) volume grew 9.4%, with strong growth in regions like Greece, Portugal, Germany, and the Netherlands. Regions like Poland saw slower growth due to economic pressures and price sensitivity.

In Japan, adjusted IMS volumes for HTU brands increased by 13% in Q1. Led by Japan and Korea, the East Asia & Australia region generated almost two-thirds of its revenues from smoke-free products during the first quarter.

Philip Morris is seeing growth in IQOS in many low and middle-income markets across the world. One example is Indonesia, where the company is seeing a pickup in user growth. The country is currently estimated to have over 150,000 IQOS users. Regions like Egypt, Malaysia and Lebanon are also showing encouraging signs of growth.


Another key driver of PMI’s momentum in smoke-free products is ZYN nicotine pouches, which saw its US volumes grow by 80% in the first quarter of 2024. The company’s share of the oral smoke-free product category in the US grew to over 74% in the quarter. Retail value share grew to 79.3%.

This growth was fueled by a rise in nationwide store velocities and an expansion in distribution as the category sees more adoption among users. The company is focused on the expansion of nicotine pouches into international markets. It has rolled out the product in 11 markets thus far and has more launches planned for later this year.


Philip Morris forecasts its US shipment volumes for ZYN to be around 560 million cans in 2024. The company expects to see strong growth in adjusted IMS and shipments of IQOS HTUs during the year. It targets close to $15 billion in smoke-free net revenues in 2024.

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