PMI delivered another period of solid to strong operating performance in Q2 2024, led by continued momentum across its smoke-free portfolio and a combustible portfolio that benefited from pricing discipline and cost efficiencies. Organic net revenue rose 9.6% in Q2 (5.6% in reported dollars) as shipment growth (+2.8%) combined with favorable mix and higher pricing supported margin expansion. Smoke-free remains the growth engine with organic net revenue up 18% and gross profit up 22% in H1, while IQOS and ZYN contributed to double-digit organic OI growth of 12.5% in Q2 and 13.1% in H1. Management underscored ongoing deleveraging and cost efficiency initiatives that drove 230 bps of organic OI margin expansion, even in the face of currency headwinds exceeding 12% for H1.
In response to the first-half momentum, PMI raised full-year guidance across organic dimensions and adjusted EPS (currency-neutral and USD). The company now targets approximately $15 billion in smoke-free net revenue for 2024, with organic net revenue growth of roughly 7.5% to 9% and organic OI growth of 11% to 13%. Management also signaled a stronger H2 trajectory for IQOS IMS, ZYN volumes, and operating cash flow, while flagging Taiwan regulatory delays as a key, one-off headwind to IMS adjustments. The multi-category strategy—IQOS, ZYN, and VEEV—along with international expansion (90 markets, 36.5 million adult users at June 30) positions PMI to sustain a high-quality growth path into 2024-2026, albeit with notable regulatory and execution risks that require monitoring for investors.